<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                -----------------
                                    FORM 10-K
                                -----------------

              Annual Report Pursuant to Section 13 or 15 (d) of the
                         Securities Exchange Act of 1934

                   For the fiscal year ended December 31, 2002

                   Commission File Numbers: 333-57285-01
                                            333-57285

                                  MEDIACOM LLC
                          MEDIACOM CAPITAL CORPORATION*
           (Exact names of Registrants as specified in their charters)

               NEW YORK                        06-1433421
               NEW YORK                        06-1513997
    (State or other jurisdiction of         (I.R.S. Employer
     incorporation or organization)       Identification Numbers)

                              100 Crystal Run Road
                           Middletown, New York 10941
                    (Address of principal executive offices)

                                 (845) 695-2600
                         (Registrants' telephone number)

      Securities registered pursuant to Section 12(b) of the Exchange Act:
                                      None

      Securities registered pursuant to Section 12(g) of the Exchange Act:
                                      None

     Indicate by check mark whether the Registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrants' knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K: Not Applicable.

     Indicate by checkmark whether the registrants are accelerated filers (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]

     State the aggregate market value of the common equity held by
non-affiliates of the Registrants: Not Applicable

     Indicate the number of shares outstanding of the Registrants' common stock:
Not Applicable

     *Mediacom Capital Corporation meets the conditions set forth in General
Instruction I (1) (a) and (b) of Form 10-K and is therefore filing this form
with the reduced disclosure format.

<PAGE>

                                  MEDIACOM LLC
                          2002 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                     PART I
                                                                                           PAGE
                                                                                           ----
  <S>                                                                                       <C>
  Item 1.     Business.................................................................      4
  Item 2.     Properties...............................................................     22
  Item 3.     Legal Proceedings........................................................     22
  Item 4.     Submission of Matters to a Vote of Security Holders......................     22

                                    PART II

  Item 5.     Market for Registrants' Common Equity and Related Stockholder Matters....     23
  Item 6.     Selected Financial Data..................................................     24
  Item 7.     Management's Discussion and Analysis of Financial Condition and
                Results of Operations..................................................     28
  Item 7A.    Quantitative and Qualitative Disclosures About Market Risk...............     43
  Item 8.     Financial Statements and Supplementary Data..............................     44
  Item 9.     Changes in and Disagreements with Accountants on Accounting and
                Financial Disclosure...................................................     63

                                   PART III

  Item 10.    Directors and Executive Officers of the Registrants......................     64
  Item 11.    Executive Compensation...................................................     67
  Item 12.    Security Ownership of Certain Beneficial Owners and Management
                and Related Stockholder Matters........................................     67
  Item 13.    Certain Relationships and Related Transactions...........................     67
  Item 14.    Controls and Procedures..................................................     67

                                     PART IV

  Item 15.    Exhibits, Financial Statement Schedules and Reports on Form 8-K..........     69
</TABLE>

                                        2

<PAGE>

     Mediacom LLC was organized as a New York limited liability company in 1995
and is a wholly-owned subsidiary of Mediacom Communications Corporation, a
Delaware Corporation. Mediacom Capital Corporation was organized as a New York
corporation in 1998 and is a wholly-owned subsidiary of Mediacom LLC. Mediacom
Capital was formed for the sole purpose of acting as co-issuer with Mediacom LLC
of debt securities and does not conduct operations of its own.

     References in this Annual Report to "we," "us," or "our" are to Mediacom
LLC and its direct and indirect subsidiaries, unless the context specifies or
requires otherwise. References in this Annual Report to "MCC" are to Mediacom
Communications Corporation.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     You should carefully review the information contained in this Annual Report
and in other reports or documents that we file from time to time with the
Securities and Exchange Commission (the "SEC"). In this Annual Report, we state
our beliefs of future events and of our future financial performance. In some
cases, you can identify those so-called "forward-looking statements" by words
such as "may," "will," "should," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," or "continue" or the negative of those
words and other comparable words. You should be aware that those statements are
only our predictions. Actual events or results may differ materially. In
evaluating those statements, you should specifically consider various factors,
including the risks discussed in this Annual Report and other reports or
documents that we file from time to time with the SEC. Those factors may cause
our actual results to differ materially from any of our forward-looking
statements. All forward-looking statements attributable to us or a person acting
on our behalf are expressly qualified in their entirety by this cautionary
statement.

                                        3

<PAGE>

                                     PART I

ITEM 1.     BUSINESS

OUR MANAGER

     Mediacom Communications Corporation, our parent and manager, is currently
the nation's eighth largest cable television company based on customers served
and the leading cable operator focused on serving the smaller cities and towns
in the United States. Mediacom Communications provides its customers with a wide
array of broadband products and services, including traditional analog video
services, digital television, high-speed Internet access, video-on-demand and
high-definition television. As of December 31, 2002, our manager's cable
systems, which are owned and operated through the operating subsidiaries of
Mediacom LLC and Mediacom Broadband LLC, passed approximately 2.7 million homes
and served approximately 1.6 million basic subscribers in 23 states. A basic
subscriber is a customer that subscribes to a package of basic cable television
services. Our manager was founded in July 1995 by Rocco B. Commisso, its
Chairman and Chief Executive Officer, and its Class A common stock is traded on
The Nasdaq National Market under the symbol MCCC.

MEDIACOM LLC

     We are a wholly-owned subsidiary of our manager. As of December 31, 2002,
our cable systems passed approximately 1.3 million homes and served
approximately 752,000 basic subscribers in 22 states. Since commencement of our
operations in March 1996, we have experienced significant growth by deploying a
disciplined strategy of acquiring underperforming cable systems and improving
their operating and financial performance. As of December 31, 2002, we had
completed 24 acquisitions of cable systems for an aggregate purchase price of
approximately $1.3 billion. Many of our cable systems are located in markets
that are contiguous with, or in close proximity to, cable systems owned and
operated by Mediacom Broadband LLC, a wholly-owned subsidiary of our manager.

     We believe that our high-speed, interactive broadband network is the
superior platform for the delivery of video, voice and data services to the
homes and businesses in the communities we serve. Available service offerings
depend on the bandwidth capacity of the broadband network. Bandwidth, expressed
in megahertz (MHz), is a measure of information-carrying capacity that can be
used to distribute telecommunication services. The greater the bandwidth, the
greater the capacity of the system to deliver service offerings. We are now in
the final stages of an aggressive network upgrade program that we expect to
substantially complete by June 30, 2003. As of December 31, 2002, approximately
98% of our cable network was upgraded with 550MHz to 870MHz bandwidth capacity
and about 95% of our homes passed were activated with two-way communications
capability.

     As a result of our upgrade program, we have seen a significant increase in
our cable systems' network capacity, quality and reliability, facilitating the
widespread introduction of additional programming and other services, such as
digital video and high-speed Internet access, and the recent deployment of
video-on-demand and a limited high-definition television offering. We believe
our network has the capability for additional services such as telephony. As of
December 31, 2002, our digital cable service was available to about 702,000
basic subscribers, or 93% of our total basic subscribers, and we served 133,000
digital customers. As of the same date, our high-speed Internet access, or cable
modem service, was marketed to approximately 1.1 million homes passed by our
cable systems, or 88% of our total homes passed, and we served 81,000 data
customers.

     Our manager's principal executive offices are located at 100 Crystal Run
Road, Middletown, New York 10941, and our manager's telephone number at that
address is (845) 695-2600. Our manager's website is located at
www.mediacomcc.com. We have made available free of charge through our manager's
website (follow the Corporate Info link to the Investor Relations tab to "Annual
Reports/SEC Filings") our annual report on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934 as soon as reasonably practicable after such material was electronically
filed with, or furnished to, the Securities and Exchange Commission. The
information on our manager's website is not part of this Annual Report.

                                        4

<PAGE>

DESCRIPTION OF OUR BUSINESS

     We offer our customers a full array of traditional analog video services,
also referred to as our core cable television services. In addition, we offer to
a significant portion of our customer base advanced broadband products and
services such as digital cable television and high-speed Internet access. We
launched video-on-demand service in one of our cable systems in 2002 and
recently deployed a limited high-definition television service in another of our
cable systems. We plan to expand the availability of these services during 2003.
We are also exploring other opportunities in interactive video, Internet
protocol telephony, or IP telephony, and other broadband services.

   Traditional Analog Video Services

     We receive the majority of our revenues from subscription services.
Subscribers typically pay us on a monthly basis and generally may discontinue
services at anytime. Monthly subscription rates and related charges vary
according to the type of service selected and the type of equipment used by
subscribers.

     We design both our basic channel line-up and our additional channel
offerings for each system according to demographics, programming preferences,
channel capacity, competition, price sensitivity and local regulation. Our core
cable television service offerings are presented in an analog format and include
the following most of our cable systems:

     Limited Basic Service. Our limited basic service includes, for a monthly
fee, local broadcast channels, network and independent stations, limited
satellite-delivered programming, and local public, government, home-shopping and
leased access channels.

     Expanded Basic Service. Our expanded basic service includes, for an
additional monthly fee, various satellite-delivered channels such as CNN, MTV,
USA Network, ESPN, Lifetime, Nickelodeon and TNT.

     Premium Service. Our premium services are satellite-delivered channels
consisting principally of feature films, original programming, live sports
events, concerts and other special entertainment features, usually presented
without commercial interruption. These services include HBO, Cinemax, Showtime,
The Movie Channel and Starz/Encore. Such premium programming services are
offered by our systems both on a per-channel basis and as part of premium
service packages designed to enhance customer value.

     Pay-Per-View Service. Our pay-per-view services allow customers to pay to
view a single showing of a feature film, live sporting event, concert and other
special event, on an unedited, commercial-free basis. Such pay-per-view services
are offered by us on a per-viewing basis, with subscribers only paying for
programs which they select for viewing.

   Digital Cable Services

     Digital video technology has significantly enhanced and expanded the video
and other service offerings we provide to our customers. This technology has
enabled us to improve picture quality and reliability, and to greatly increase
our channel offerings through the use of compression, which converts one analog
channel into eight to 12 digital channels. We now offer over 200 analog and
digital channels in many of our cable systems.

     We currently offer our customers several digital cable programming packages
that include:

     .    up to 22 digital basic channels;

     .    up to 61 multichannel premium services;

     .    up to 38 pay-per-view movie and sports channels;

     .    up to 45 channels of digital music; and

     .    an interactive on-screen program guide to help them navigate their
          viewing choices.

     Subscribers typically pay us on a monthly basis for digital cable services
and generally may discontinue services at any time. Monthly rates vary generally
according to the level of service and the number of digital converters selected
by the subscriber.

                                        5

<PAGE>

We first introduced digital cable service in our cable systems in June 1999. As
of December 31, 2002, our digital service was available to 702,000 basic
subscribers, or approximately 93% of our total subscriber base, and we served
133,000 digital customers.

   High-Speed Internet Access

     Our broadband cable network enables our high-speed Internet customers, also
referred to as cable modem customers, to transmit data up to 100 times faster
than traditional telephone modem technologies. Our cable modem customers can
receive and transmit large files over the Internet in a fraction of the time
required when using the traditional telephone modem. Our high-speed Internet
access service also allows much quicker response times when surfing the
Internet, providing a richer experience for the customer that capitalizes on the
significant capacity of our broadband cable network. In addition, cable modem
service eliminates the need to use a telephone line to access the Internet. It
is also always activated and as a result, the customer does not need to dial
into an Internet service provider and await authorization.

     Monthly subscription rates and related charges vary according to whether
the customer leases or owns the cable modem and whether the customer subscribes
to our video services.

     We recently began providing commercial high-speed Internet access services
to small and medium-sized businesses. Our commercial data service offerings
allow businesses with multiple users to select faster data transmission speeds
than our residential service.

        We first introduced two-way, high-speed Internet access service in our
cable systems in November 1999. As of December 31, 2002, our cable modem service
was marketed to approximately 1.1 million homes passed by our cable systems, or
88% of our homes passed, and we served 81,000 data customers.

   Video-on-Demand

     Video-on-demand is an interactive television service that provides access
to movies or special events on demand with the ability to fast forward, pause
and rewind selected programming. Customers can watch their selected feature
repeatedly during the viewing window, which typically runs up to 24 hours, or
stop the selection before it is completed and return to it at a later time
during the viewing window. Fees are typically charged on a per-selection basis,
although certain individual categories of programming are also available for a
flat monthly fee. The provision of video-on-demand services requires the use of
servers at the headend facility of a cable systems. We currently offer
video-on-demand service to approximately 5% of our digital customers.

   High-Definition Television

     High-definition television provides picture quality at a higher resolution
than standard television. A television set capable of receiving and displaying
high-definition signals is required to utilize this service. We are currently
offering limited high-definition television service in a cable system that
serves approximately 5% of our basic subscribers. During 2003, we expect to
expand the number of channels broadcast in high-definition in the cable system
where we already provide this service.

   Telecommunications Services

     We are exploring technologies using IP telephony as well as traditional
switching technologies that are currently available to transmit telephony
signals over our cable network. Our manager is currently conducting in one of
its cable systems, a technical trial of hybrid IP telephony service which
combines the technology of IP telephony with traditional phone technology. As
part of our headend consolidation plans, we have deployed over 5,500 route miles
of fiber optic cable resulting in the creation of large, high-capacity regional
networks. We have constructed our networks with excess fiber optic capacity,
thereby affording us the flexibility to pursue new data and telecommunications
opportunities.

                                        6

<PAGE>

DESCRIPTION OF OUR CABLE SYSTEMS

   Overview

     The following table provides an overview of selected operating and
technical statistics for our cable systems for the years ended:

<TABLE>
<CAPTION>
                                            2002            2001            2000            1999           1998
                                         -----------    -----------      -----------     -----------    ----------
OPERATING DATA:
<S>                                      <C>            <C>              <C>             <C>            <C>
Homes passed/(1)/.....................     1,252,000      1,200,000        1,173,000       1,071,500       520,000
Basic subscribers/(2)/................       752,000        771,000          779,000         719,000       354,000
Basic penetration/(3)/................          60.1%          64.3%            66.4%           67.1%         68.1%
Average monthly revenues
   per basic subscriber/(4)/..........   $     46.95    $     40.88      $     38.34     $     35.01    $    32.88

DIGITAL CABLE:
Digital-ready basic subscribers/(5)/..       702,000        600,000          400,000         168,000             -
Digital customers.....................       133,000         88,000           40,000           5,300             -
Digital penetration/(6)/..............          18.9%          14.7%            10.0%            3.2%            -

DATA:
Data-ready homes passed/(7)/..........     1,190,000        965,000          550,000         120,000             -
Data-ready homes marketed/(8)/........     1,100,000        610,000          486,000         105,500             -
Data customers........................        81,000         38,000           15,600           5,100         4,729
Data penetration/(9)/.................           7.4%           6.2%             3.2%            4.8%            -

Revenue Generating Units:/(10)/.......       966,000        897,000          834,600         729,400       358,729

Customer Relationships:/(11)/.........       760,000        774,000              N/A             N/A           N/A

CABLE NETWORK DATA:
Miles of plant........................        25,500         25,000           24,500          22,444        11,950
Density/(12)/.........................            49             48               48              48            44
Percentage of cable network at
   550MHz to 870MHz...................            98%            90%              74%             57%           45%
</TABLE>

----------
(1)  Represents the number of single residence homes, apartments and condominium
     units passed by the cable distribution network in a cable system's service
     area.
(2)  Represents a dwelling with one or more television sets that receives a
     package of over-the-air broadcast stations, local access channels or
     certain satellite-delivered cable television services. Accounts that are
     billed on a bulk basis, which typically receive discounted rates, are
     converted into full-price equivalent basic subscribers by dividing total
     bulk billed basic revenues of a particular system by the applicable
     combined limited and expanded cable rate charged to basic subscribers in
     that system. Basic subscribers include connections to schools, libraries,
     local government offices and employee households that may not be charged
     for limited and expanded cable services, but may be charged for premium
     units, pay-per-view events or high-speed Internet service. Customers who
     exclusively purchase high-speed Internet service are not counted as basic
     subscribers. Our methodology of calculating the number of basic subscribers
     may not be identical to those used by other cable companies.
(3)  Represents basic subscribers as a percentage of homes passed.
(4)  Represents average monthly revenues for the last three months of the period
     divided by average basic subscribers for such period. Includes the revenues
     from cable systems acquired during the last three months of the period as
     if such acquisitions were completed at the beginning of the three month
     period.
(5)  A subscriber is digital-ready if the subscriber is in a cable system where
     digital cable services are available.
(6)  Represents digital customers as a percentage of digital-ready basic
     subscribers.
(7)  A home passed is data-ready if it is in a cable system with two-way
     communications capability.
(8)  Represents data-ready homes passed where cable modem service is available.
(9)  Represents the number of total data customers as a percentage of data-ready
     homes marketed.
(10) Represents the sum of basic subscribers, digital customers and data
     customers.
(11) Represents the total number of customers that receive at least one level of
     service, encompassing video and data services, without regard to which
     service(s) customers purchase. This information is not available for
     periods prior to 2001.
(12) Represents homes passed divided by miles of plant.

                                        7

<PAGE>

TECHNOLOGY OVERVIEW

     As part of our commitment to maximize customer satisfaction, to improve our
competitive position and to introduce new and enhanced products and services to
our customers, we continue to make significant investments to upgrade our cable
network. The primary objectives of our upgrade program are to:

     .    increase the bandwidth capacity to 870MHz;

     .    activate two-way communications capability;

     .    consolidate our headend facilities, through the extensive deployment
          of fiber optic networks; and

     .    allow us to provide digital cable television, high-speed Internet
          access, interactive video and other telecommunications services.

     We expect to substantially complete our cable network upgrade program by
June 30, 2003. The following table describes the technological state of our
cable network as of December 31, 2001 and 2002 and the projected state of our
cable network as of June 30, 2003, based on our current upgrade plans:

                                          PERCENTAGE OF CABLE NETWORK
                                    ---------------------------------------
                                    LESS THAN        550MHZ-        TWO-WAY
                                      550MHZ         870MHZ         CAPABLE
                                    ---------        -------        -------
     December 31, 2001..........       10%             90%            80%
     December 31, 2002..........        2%             98%            95%
     June 30, 2003..............        2%             98%            98%

     A central feature of our upgrade program is the deployment of high
capacity, hybrid fiber-optic coaxial architecture. The hybrid fiber-optic
coaxial architecture combines the use of fiber optic cable, which can carry
hundreds of video, data and voice channels over extended distances, with coaxial
cable, which requires a more extensive signal amplification in order to obtain
the desired levels for delivering channels. We design our network to connect
fiber optic cable to individual nodes serving an average of 350 homes or
commercial buildings. A node is a single connection to a cable system's main,
high-capacity fiber optic cable that is shared by a number of customers. Coaxial
cable is then connected from each node to the individual homes or buildings. Our
network design generally provides for six strands of fiber to each node, with
two strands active and four strands reserved for future services. We believe
hybrid fiber-optic coaxial architecture provides higher capacity, superior
signal quality, greater network reliability, reduced operating costs and more
reserve capacity for the addition of future services than traditional coaxial
network design.

     Two-way communications capability permits our customers to send and receive
signals over the cable network so that interactive services, such as
video-on-demand, are accessible and high-speed Internet access does not require
a separate telephone line. This capability will also positions us to offer cable
telephony, using either IP telephony as it becomes commercially feasible, or the
traditional switching technologies that are currently available. Our plans for
two-way communications capability, together with hybrid fiber-optic coaxial
architecture, enhances our cable network's ability to provide advanced
telecommunications services.

     As of December 31, 2002, our cable systems were operated from 142 headend
facilities. Fiber optics and advanced transmission technologies make it cost
effective to consolidate our headend facilities, allowing us to realize
operating efficiencies and resulting in lower fixed capital costs on a per home
basis as we introduce new products and services. We plan to eliminate up to 33
headend facilities by June 2003.

     As part of our headend consolidation program, we have deployed over 5,500
route miles of fiber optic cable, creating large regional fiber optic networks
with the potential to provide advanced telecommunications services. We are
constructing our regional networks with excess fiber optic capacity to
accommodate new and expanded products and services in the future.

                                        8

<PAGE>

SALES AND MARKETING

     We seek to be the premier provider of entertainment, information and
telecommunications services in the markets we serve. Our marketing programs and
campaigns offer a variety of cable services, creatively packaged and tailored to
appeal to each of our local markets and to segments within each market. We
routinely survey our customers to ensure that we are meeting their demands and
our customer surveys keep us abreast of our competition so that we can
effectively counter competitors' service offerings and promotional campaigns.

     We use a coordinated array of marketing techniques to attract and retain
customers and to increase premium service penetration, including door-to-door
and direct mail solicitation, telemarketing, media advertising, local
promotional events, typically sponsored by programming services and
cross-channel promotion of new services and pay-per-view.

     We build awareness of our brand through a variety of promotional campaigns.
As a result of our branding efforts, our emphasis on customer service and our
investments in the cable network, we believe we have developed a reputation for
quality, reliability and timely introduction of new products and services.

     We invest a significant amount of time, effort and financial resources in
the training and evaluation of our marketing professionals and customer sales
representatives. Our customer sales representatives customize their sales
presentation to fit each of our customers' specific needs by conducting focused
consumer research and are given the incentive to use their frequent contact with
our customers as opportunities to sell our new products and services.

PROGRAMMING SUPPLY

     We have various contracts to obtain basic and premium programming for our
cable systems from program suppliers whose compensation is typically based on a
fixed monthly fee per customer. Our programming contracts are generally for a
fixed period of time.

     We are a member of the National Cable Television Cooperative, Inc., a
programming cooperative consisting of small to medium-sized multiple system
operators serving, in the aggregate, over 12 million cable subscribers. The
cooperative may help create efficiencies in the areas of obtaining and
administering programming contracts, as well as securing, in some cases, more
favorable programming rates and contract terms for small to medium-sized cable
operators. Our manager negotiates programming contract renewals both directly
and through the cooperative.

     From time to time, the contracts covering the programming services carried
on our cable systems expire, and we generally provide such services to our
customers without written contracts with the respective program suppliers as our
manager negotiates contract renewals.

                                        9

<PAGE>

     We expect our programming costs to rise in the future due to increased
costs to purchase programming, particularly sports programming, additional
programming being provided to our customers, and other factors affecting the
cable television industry. Although we will legally be able to pass through
expected increases in our programming costs to customers, there can be no
assurance that competitive conditions or other factors in the marketplace will
allow us to do so.

     We also have various retransmission consent arrangements with commercial
broadcast stations, which generally expire in December 2005. In some cases,
retransmission consents have been contingent upon our carriage of satellite
delivered cable programming offered by companies affiliated with the stations'
owners or the broadcast network carried by such stations.

CUSTOMER SERVICE AND COMMUNITY RELATIONS

     System reliability and customer satisfaction represent a cornerstone of our
business strategy. We expect that ongoing investments in our cable network and
our regional calling centers will significantly strengthen customer service,
enhancing the reliability of our cable network and allowing us to introduce new
products and services to our customers. We maintain regional calling centers
which service virtually all of our customers. They are staffed with dedicated
personnel who provide service to our customers 24 hours a day, seven days a
week, on a toll-free basis. We believe our regional calling centers allow us to
coordinate more effectively installation appointments and reduce response time
to customer inquiries. We continue to invest in both personnel and equipment of
our regional calling centers to ensure that these operating units are
professionally managed and employ state-of-the-art technology.

     In addition, we are dedicated to fostering strong community relations in
the communities served by our cable systems. We support local charities and
community causes in various ways, including staged events and promotional
campaigns to raise funds and supplies for persons in need and in-kind donations
that include production services and free airtime on cable networks. We
participate in the "Cable in the Classroom" program, which is a national effort
by cable companies to provide schools with free cable television service and,
where available, Internet access. We also install and provide free cable
television service to government buildings and not-for-profit hospitals in our
franchise areas. We believe that our relations with the communities in which our
cable systems operate are generally good.

FRANCHISES

     Cable systems are generally operated under non-exclusive franchises granted
by local governmental authorities. These franchises typically contain many
conditions, such as: time limitations on commencement and completion of
construction; conditions of service, including number of channels, types of
programming and the provision of free service to schools and other public
institutions; and the maintenance or posting of insurance or indemnity bonds by
the cable operator. Many of the provisions of local franchises are subject to
federal regulation under the Communications Act of 1934, as amended.

     As of December 31, 2002, our cable systems were subject to 1,033
franchises. These franchises, which are non-exclusive, provide for the payment
of fees to the issuing authority. In most of the cable systems, such franchise
fees are passed through directly to the customers. The Cable Communications
Policy Act of 1984, or the 1984 Cable Act, prohibits franchising authorities
from imposing franchise fees in excess of 5% of gross revenues from cable
services and also permits the cable operator to seek renegotiation and
modification of franchise requirements if warranted by changed circumstances.

     Substantially all of the basic subscribers of our cable systems are in
service areas that require a franchise. The table below groups the franchises of
our cable systems by year of expiration and presents the approximate number and
percentage of basic subscribers for each group as of December 31, 2002.

<TABLE>
<CAPTION>
                                                                  PERCENTAGE OF     NUMBER OF      PERCENTAGE OF
                                                    NUMBER OF         TOTAL           BASIC         TOTAL BASIC
     YEAR OF FRANCHISE EXPIRATION                   FRANCHISES      FRANCHISES     SUBSCRIBERS      SUBSCRIBERS
     -------------------------------------------    ----------    -------------    -----------     -------------
     <S>                                               <C>             <C>             <C>             <C>
     2003 through 2006..........................         232            22.5%          199,000          26.5%
     2007 and thereafter........................         801            77.5           553,000          73.5
                                                    ----------    -------------    -----------     -------------
          Total.................................       1,033           100.0%          752,000         100.0%
                                                    ==========    =============    ===========     =============
</TABLE>

                                       10

<PAGE>

     The 1984 Cable Act provides, among other things, for an orderly franchise
renewal process in which franchise renewal will not be unreasonably withheld or,
if renewal is denied and the franchising authority acquires ownership of the
cable system or effects a transfer of the cable system to another person, the
cable operator generally is entitled to the fair market value for the cable
system covered by such franchise. In addition, the 1984 Cable Act established
comprehensive renewal procedures, which require that an incumbent franchisee's
renewal application be assessed on its own merits and not as part of a
comparative process with competing applications.

     We believe that we generally have good relationships with our franchising
communities. We have never had a franchise revoked or failed to have a franchise
renewed. In addition, substantially all of our franchises eligible for renewal
have been renewed or extended prior to their stated expirations, and no
franchise community has refused to consent to a franchise transfer to us.

COMPETITION

     We, like most cable systems, compete on the basis of several factors,
including price and the quality and variety of products and services offered. We
face competition from various communications and entertainment providers, the
number and type of which we expect to increase as we expand the products and
services offered over our broadband network. In recent years, Congress has
passed legislation and the Federal Communications Commission (the "FCC") has
adopted policies authorizing new technologies and a more favorable operating
environment for certain existing technologies that provide, or may provide,
substantial additional competition for cable systems. The extent to which a
cable television service is competitive depends in significant part upon the
cable system's ability to provide a greater variety of programming, superior
technical performance and superior customer service than are available over the
air or through competitive alternative delivery sources. We believe our ability
to package multiple services, such as digital television, two-way, high-speed
Internet access and video-on-demand is an advantage in our competitive business
environment.

   Providers of Broadcast Television and Other Entertainment

     The extent to which a cable system competes with over-the-air broadcasting,
which provides signals that a viewer is able to receive directly, depends upon
the quality and quantity of the broadcast signals available by direct antenna
reception compared to the quality and quantity of such signals and alternative
services offered by a cable system. Cable systems also face competition from
other sources of entertainment such as live sporting events, movie theaters and
home video products, including videotape recorders and videodisc players.

   Direct Broadcast Satellite Providers

     Individuals can purchase home satellite dishes, which allow them to receive
satellite-delivered broadcast and non-broadcast program services, commonly known
as DBS, that formerly were available only to cable television subscribers.
According to recent industry reports, DBS providers currently sell video
programming services to over 20 million individual households, condominiums,
apartments and office complexes in the United States. Two companies, DIRECTV and
EchoStar, provide service to substantially all of these DBS customers.

     DBS service can be received virtually anywhere in the continental United
States through the installation of a small rooftop or side-mounted antenna. DBS
providers use video compression technology to increase channel capacity and
digital technology to improve the quality of the signals transmitted to their
customers, and typically offer more than 300 channels of programming. In
addition to the non-broadcast programming services we offer in our cable
systems, under legislation enacted in 1999, DBS providers also deliver local
broadcast signals in certain markets that we serve. This change in law
eliminated a significant competitive advantage which cable system operators had
over DBS providers, as previously DBS providers were not permitted to retransmit
local broadcast signals. We believe our digital cable service is competitive
with the services delivered to customers by DBS systems.

     DBS providers are also developing ways to bring advanced communications
services to their customers. They are currently offering two alternatives of
satellite-delivered high-speed Internet access service. One alternative is a
one-way service that utilizes a telephone return path, in contrast to our
two-way, high-speed service, which does not require a telephone line. The other
alternative is a two-way, high-speed service, which requires additional
equipment purchases by the consumer and is offered at higher prices than our own
equivalent service.

                                       11

<PAGE>

   Multichannel Multipoint Distribution Systems

     Multichannel multipoint distribution systems deliver programming services
over microwave channels licensed by the FCC and received by subscribers with
special antennas. These wireless cable systems are less capital intensive and
subject to fewer regulatory requirements than cable systems, and are not
required to obtain local franchises or pay franchise fees. To date, the ability
of wireless cable services to compete with cable systems has been limited by a
channel capacity of up to 35 channels and the need for unobstructed
line-of-sight over-the-air transmission. Although relatively few wireless cable
systems in the United States are currently in operation or under construction,
virtually all markets have been licensed or tentatively licensed. The use of
digital compression technology, and the FCC's recent amendment to its rules to
permit reverse path or two-way transmission over wireless facilities, may enable
multichannel multipoint distribution systems to deliver more channels and
additional services, including Internet related services. Digital compression
technology refers to the conversion of the standard video signal into a digital
signal and the compression of that signal to facilitate multiple channel
transmissions through a single channel's signal.

   Private Cable Television Systems

     Private cable television systems compete with conventional cable television
systems for the right to service condominiums, apartment complexes and other
multiple unit residential developments. The operators of these private systems,
known as satellite master antenna television (SMATV) systems, provide improved
reception of local television stations and several of the same
satellite-delivered programming services offered by franchised cable systems.
SMATV system operators often enter into exclusive agreements with apartment
building owners or homeowners' associations that preclude franchised cable
television operators from serving residents of such private complexes and
typically are not subject to regulation like local franchised cable operators.
However, the 1984 Cable Act gives franchised cable operators the right to use
existing compatible easements within their franchise areas on nondiscriminatory
terms and conditions. Accordingly, where there are preexisting compatible
easements, cable operators may not be unfairly denied access or discriminated
against with respect to access to the premises served by those easements.
Conflicting judicial decisions have been issued interpreting the scope of the
access right granted by the 1984 Cable Act, particularly with respect to
easements located entirely on private property. Under the Telecommunications Act
of 1996, satellite master antenna television systems can interconnect
non-commonly owned buildings without having to comply with local, state and
federal regulatory requirements that are imposed upon cable systems providing
similar services, as long as they do not use public rights of way. The FCC has
held that the latter provision is not violated so long as interconnection across
public rights of way is provided by a third party.

   Traditional Overbuilds

     Cable television systems are operated under non-exclusive franchises
granted by local authorities. More than one cable system may legally be built in
the same area by another cable operator, a municipal-owned utility or another
service provider. Some of these competitors may be granted franchises on more
favorable terms or conditions or enjoy other advantages such as exemptions from
taxes or regulatory requirements to which we are subject. Well financed
businesses from outside the cable industry, such as public utilities which
already possess or are developing fiber optic and other transmission facilities
in the areas they serve, may over time become competitors. We believe that
various entities are currently offering cable service to an estimated 7.0% of
the homes passed in the service areas of our franchises.

   Internet Access

     We offer high-speed Internet access in many of our cable systems. This kind
of service is sometimes called "cable modem service." Our cable systems compete
with a number of other companies, many of which have substantial resources, such
as existing Internet service providers, commonly known as ISPs, DBS providers,
and local and long distance telephone companies.

     The deployment of digital subscriber line technology, known as DSL, allows
Internet access to subscribers at data transmission speeds equal to or greater
than that of standard telephone line modems, putting it in direct competition
with cable modem service. Numerous companies, including telephone companies,
have introduced DSL service and certain telecommunications companies are seeking
to provide high-speed broadband services, including interactive online services,
without regard to present service boundaries and other regulatory restrictions.
DBS providers currently offer satellite-delivered high-speed Internet access
with a telephone return path through a one-way service or a two-way interactive
high-speed service.

                                       12

<PAGE>

     A number of ISP's have asked local authorities and the FCC to give them
rights of access to cable systems' broadband infrastructure so that they can
deliver their services directly to cable systems' customers. This kind of access
is often called "open access." Many local franchising authorities have examined
the issue of open access and a few have required cable operators to provide such
access. Several Federal courts have ruled that localities are not authorized to
require open access. The FCC is presently considering this issue. If we were
required to provide open access to ISP's as a result of FCC action or court
decisions, other companies could use our cable system infrastructure to offer
Internet services competitive with our own.

    Other Competition

     Advances in communications technology, as well as changes in the
marketplace and the regulatory and legislative environment, are constantly
occurring. The FCC has authorized a new interactive television service which
permits non-video transmission of information between an individual's home and
entertainment and information service providers. This service, which can be used
by direct broadcast satellite systems, television stations and other video
programming distributors, including cable television systems, is an alternative
technology for the delivery of interactive video services. It does not appear at
the present time that this service will have a material impact on the operations
of cable television systems.

     The FCC has allocated spectrum in the 28GHz range for a new multichannel
wireless service that can be used to provide video and telecommunications
services. The FCC completed the process of awarding licenses to use this
spectrum via a market-by-market auction. We do not know whether such a service
would have a material impact on the operations of cable television systems.

     The 1996 Telecom Act directed the FCC to establish, and the FCC has
adopted, regulations and policies for the issuance of licenses for digital
television to incumbent television broadcast licensees. Digital television can
deliver high-definition television pictures and multiple digital-quality program
streams, as well as CD-quality audio programming and advanced digital services,
such as data transfer or subscription video. The FCC also has authorized
television broadcast stations to transmit text and graphic information that may
be useful to both consumers and businesses. The FCC also permits commercial and
non-commercial FM stations to use their subcarrier frequencies to provide
non-broadcast services, including data transmission.

EMPLOYEES

     As of December 31, 2002, we employed 1,403 full-time employees and 126
part-time employees. None of our employees are represented by a labor union. We
consider our relations with our employees to be generally good.

                                       13

<PAGE>

                           LEGISLATION AND REGULATION

GENERAL

     A federal law known as the Communications Act of 1934, as amended (the
"Communications Act"), establishes a national policy to guide the regulation,
development and operation of cable communications systems.

     The Communications Act allocates principal responsibility for enforcing the
federal policies among the FCC, and state and local governmental authorities.
The FCC and state regulatory agencies regularly conduct administrative
proceedings to adopt or amend regulations implementing the statutory mandate of
the Communications Act. At various times, interested parties to these
administrative proceedings challenge the new or amended regulations and policies
in the courts with varying levels of success. We expect that further court
actions and regulatory proceedings will occur and will refine the rights and
obligations of various parties, including the government, under the
Communications Act. The results of these judicial and administrative proceedings
may materially affect the cable industry and our business and operations. In the
following paragraphs, we summarize the federal laws and regulations materially
affecting the growth and operation of the cable industry. We also provide a
brief description of certain state and local laws.

FEDERAL REGULATION

     The Communications Act and the regulations and policies of the FCC affect
significant aspects of our cable system operations, including:

     .    subscriber rates;

     .    the content of the programming we offer to subscribers, as well as the
          way we sell our program packages to subscribers;

     .    the use of our cable systems by the local franchising authorities, the
          public and other unrelated companies;

     .    our franchise agreements with local governmental authorities;

     .    cable system ownership limitations and prohibitions; and

     .    our use of utility poles and conduit.

   SUBSCRIBER RATES

        The Communications Act and the FCC's regulations and policies limit the
ability of cable systems to raise rates for basic services and equipment. No
other rates can be regulated. Federal law exempts cable systems from rate
regulation of cable services and customer equipment only in communities that are
subject to effective competition, as defined by federal law.

     Where there is no effective competition to the cable operator's services,
federal law gives local franchising authorities the responsibility to regulate
the rates charged by the operator for:

     .    the lowest level of programming service offered by cable operator,
          typically called basic service, which includes the local broadcast
          channels and any public access or governmental channels that are
          required by the operator's franchise;

     .    the installation of cable service and related service calls; and

     .    the installation, sale and lease of equipment used by subscribers to
          receive basic service, such as converter boxes and remote control
          units.

     Local franchising authorities who wish to regulate basic service rates and
related equipment rates must first obtain FCC certification to regulate by
following a simplified FCC certification process and agreeing to follow
established FCC rules and policies when regulating the cable operator's rates.

                                       14

<PAGE>

     Several years ago, the FCC adopted detailed rate regulations, guidelines
and rate forms that a cable operator and the local franchising authority must
use in connection with the regulation of basic service and equipment rates. The
FCC adopted a benchmark methodology as the principal method of regulating rates.
However, if this methodology produces unacceptable rates, the operator may also
justify rates using a detailed cost-of-service methodology. The FCC's rules also
require franchising authorities to regulate equipment rates on the basis of
actual cost plus a reasonable profit, as defined by the FCC.

     If the local franchising authority concludes that a cable operator's rates
are too high under the FCC's rate rules, the local franchising authority may
require the cable operator to reduce rates and to refund overcharges to
subscribers, with interest. The cable operator may appeal adverse local rate
decisions to the FCC.

     The FCC's regulations allow a cable operator to modify regulated rates on a
quarterly or annual basis to account for changes in:

     .    the number of regulated channels;

     .    inflation; and

     .    certain external costs, such as franchise and other governmental fees,
          copyright and retransmission consent fees, taxes, programming fees and
          franchise-related obligations.

     The Communications Act and the FCC's regulations also:

     .    require cable operators to charge uniform rates throughout each
          franchise area that is not subject to effective competition;

     .    prohibit regulation of non-predatory bulk discount rates offered by
          cable operators to subscribers in commercial and residential
          developments; and

     .    permit regulated equipment rates to be computed by aggregating costs
          of broad categories of equipment at the franchise, system, regional or
          company level.

   Content Requirements

     The Communications Act and the FCC's regulations contain broadcast signal
carriage requirements that allow local commercial television broadcast stations:

     .    to elect once every three years to require a cable system to carry the
          station, subject to certain exceptions; or

     .    to negotiate with us on the terms by which we carry the station on our
          cable systems, commonly called retransmission consent.

     The Communications Act requires a cable operator to devote up to one-third
of its activated channel capacity for the mandatory carriage of local commercial
television stations. The Communications Act also gives local non-commercial
television stations mandatory carriage rights; however, such stations are not
given the option to negotiate retransmission consent for the carriage of their
signals by cable systems. Additionally, cable operators must obtain
retransmission consent for:

     .    all distant commercial television stations, except for commercial
          satellite-delivered independent superstations such as WGN;

     .    commercial radio stations; and

     .    certain low-power television stations.

                                       15

<PAGE>

     The FCC has recently adopted regulations for mandatory carriage of digital
television signals offered by local television broadcasters. Under these
regulations, local television broadcast stations transmitting solely in a
digital format are entitled to request carriage in their choice of digital or
converted analog format. Stations transmitting in both digital and analog
formats, which is permitted during the current several-year transition period,
have no carriage rights for the digital format during the transition unless and
until they turn in their analog channel. We are unable to predict the impact of
these new carriage requirements on the operations of our cable systems.

     The Communications Act requires our cable systems, other than those systems
which are subject to effective competition, to permit subscribers to purchase
video programming we offer on a per channel or a per program basis without the
necessity of subscribing to any tier of service other than the basic cable
service tier.

     To increase competition between cable operators and other video program
distributors, the Communications Act and the FCC's regulations:

     .    preclude any satellite video programmer affiliated with a cable
          company, or with a common carrier providing video programming directly
          to its subscribers, from favoring an affiliated company over
          competitors;

     .    require such programmers to sell their programming to other
          unaffiliated video program distributors; and

     .    limit the ability of such programmers to offer exclusive programming
          arrangements to their related parties.

     The FCC actively regulates other aspects of our programming, involving such
areas as:

     .    our use of syndicated and network programs and local sports broadcast
          programming;

     .    advertising in children's programming;

     .    political advertising;

     .    origination cablecasting;

     .    adult programming;

     .    sponsorship identification; and

     .    closed captioning of video programming.

   Use of Our Cable Systems by the Government and Unrelated Third Parties

     The Communications Act allows local franchising authorities and unrelated
third parties to have access to our cable systems' channel capacity for their
own use. For example, it:

     .    permits franchising authorities to require cable operators to set
          aside channels for public, educational and governmental access
          programming; and

     .    requires a cable system with 36 or more activated channels to
          designate a significant portion of its channel capacity for commercial
          leased access by third parties to provide programming that may compete
          with services offered by the cable operator.

     The FCC regulates various aspects of third party commercial use of channel
capacity on our cable systems, including:

     .    the maximum reasonable rate a cable operator may charge for third
          party commercial use of the designated channel capacity;

     .    the terms and conditions for commercial use of such channels; and

     .    the procedures for the expedited resolution of disputes concerning
          rates or commercial use of the designated channel capacity.

                                       16

<PAGE>

   Franchise Matters

     We have non-exclusive franchises in virtually every community in which we
operate that authorize us to construct, operate and maintain our cable systems.
Although franchising matters are normally regulated at the local level through a
franchise agreement or a local ordinance, the Communications Act provides
oversight and guidelines to govern our relationship with local franchising
authorities.

     For example, the Communications Act:

     .    affirms the right of franchising authorities, which may be state or
          local, depending on the practice in individual states, to award one or
          more franchises within their jurisdictions;

     .    generally prohibits us from operating in communities without a
          franchise;

     .    encourages competition with existing cable systems by:

          .    allowing municipalities to operate their own cable systems
               without franchises, and

          .    preventing franchising authorities from granting exclusive
               franchises or from unreasonably refusing to award additional
               franchises covering an existing cable system's service area;

     .    permits local authorities, when granting or renewing our franchises,
          to establish requirements for cable-related facilities and equipment,
          but prohibits franchising authorities from establishing requirements
          for specific video programming or information services other than in
          broad categories;

     .    permits us to obtain modification of our franchise requirements from
          the franchise authority or by judicial action if warranted by
          commercial impracticability; and

     .    generally prohibits franchising authorities from:

          .    imposing requirements during the initial cable franchising
               process or during franchise renewal that require, prohibit or
               restrict us from providing telecommunications services,

          .    imposing franchise fees on revenues we derive from providing
               telecommunications services over our cable systems,

          .    restricting our use of any type of subscriber equipment or
               transmission technology, and

     .    limits our payment of franchise fees to the local franchising
          authority to 5.0% of our gross revenues derived from providing cable
          services over our cable system.

     The Communications Act contains renewal procedures designed to protect us
against arbitrary denials of renewal of our franchises although, under certain
circumstances, the franchising authority could deny us a franchise renewal.
Moreover, even if our franchise is renewed, the franchising authority may seek
to impose upon us new and more onerous requirements, such as significant
upgrades in facilities and services or increased franchise fees as a condition
of renewal to the extent permitted by law. Similarly, if a franchising
authority's consent is required for the purchase or sale of our cable system or
franchise, the franchising authority may attempt to impose more burdensome or
onerous franchise requirements on the purchaser in connection with a request for
such consent. Historically, cable operators providing satisfactory services to
their subscribers and complying with the terms of their franchises have almost
always obtained franchise renewals. We believe that we have generally met the
terms of our franchises and have provided quality levels of service. We
anticipate that our future franchise renewal prospects generally will be
favorable.

     Various courts have considered whether franchising authorities have the
legal right to limit the number of franchises awarded within a community and to
impose substantive franchise requirements. These decisions have been
inconsistent and, until the U.S. Supreme Court rules definitively on the scope
of cable operators' First Amendment protections, the legality of the franchising
process generally and of various specific franchise requirements is likely to be
in a state of flux.

                                       17

<PAGE>

   Ownership Limitations

     The Communications Act generally prohibits us from owning or operating a
satellite master antenna television system or multichannel multipoint
distribution system in any area where we provide franchised cable service and do
not have effective competition, as defined by federal law. We may, however,
acquire and operate a satellite master antenna television system in our existing
franchise service areas if the programming and other services provided to the
satellite master antenna television system subscribers are offered according to
the terms and conditions of our local franchise agreement.

     The Communications Act also authorizes the FCC to adopt nationwide limits
on the number of subscribers under the control of a cable operator and to impose
limits on the number of channels which can be occupied on a cable system by a
video programmer in which a cable operator has an interest. The U.S. Court of
Appeals for the District of Columbia Circuit overturned the FCC's rules
implementing these statutory provisions and remended the case to the FCC for
further proceedings.

     The 1996 amendments to the Communications Act eliminated the statutory
prohibition on the common ownership, operation or control of a cable system and
a television broadcast station in the same service area. The identical FCC
regulation has been invalidated by a federal appellate court. The FCC has
eliminated its regulatory restriction on cross-ownership of cable systems and
national broadcasting networks.

     The 1996 amendments to the Communications Act also made far-reaching
changes in the relationship between local telephone companies and cable service
providers. These amendments:

     .    eliminated federal legal barriers to competition in the local
          telephone and cable communications businesses, including allowing
          local telephone companies to offer video services in their local
          telephone service areas;

     .    preempted legal barriers to telecommunications competition that
          previously existed in state and local laws and regulations;

     .    set basic standards for relationships between telecommunications
          providers; and

     .    generally limited acquisitions and prohibited joint ventures between
          local telephone companies and cable operators in the same market.

     Local telephone companies may provide service as traditional cable
operators with local franchises or they may opt to provide their programming
over open video systems, subject to certain conditions, including, but not
limited to, setting aside a portion of their channel capacity for use by
unaffiliated program distributors on a non-discriminatory basis. The decision as
whether an operator of an open video system must obtain a local franchise is
left to each community.

   Pole Attachment Regulation

     The Communications Act requires the FCC to regulate the rates, terms and
conditions imposed by public utilities, other than municipally or
cooperatively-owned utilities, for cable systems' use of utility pole and
conduit space unless state authorities have demonstrated to the FCC that they
adequately regulate pole attachment rates, as is the case in certain states in
which we operate. In the absence of state regulation, the FCC administers pole
attachment rates on a formula basis. The FCC adopted a new rate formula that
became effective in 2001 which governs the maximum rate certain utilities may
charge for attachments to their poles and conduit by companies providing
telecommunications services, including cable operators.

     Increases in attachment rates due to the FCC's new rate formula are phased
in over a five-year period in equal annual increments, beginning in February
2001. A federal appellate court found that the provision of Internet access by a
cable system was neither a cable service or a telecommunications service, thus
the FCC lacked authority to regulate pole attachment rates for cable systems
which offer Internet access. The Supreme Court recently reversed the federal
appellate court decision and upheld the FCC's authority to regulate pole
attachment rates. We are unable to predict the ultimate impact of any revised
FCC rate formula or of any new pole attachment rate regulations on our business
and operations.

                                       18

<PAGE>

   Other Regulatory Requirements of the Communications Act and the FCC

     The FCC has adopted cable inside wiring rules to provide a more specific
procedure for the disposition of residential home wiring and internal building
wiring that belongs to an incumbent cable operator that is forced by the
building owner to terminate its cable services in a building with multiple
dwelling units.

     The Communications Act includes provisions, among others, regulating and
the FCC actively regulates other parts of our cable operations, involving such
areas as:

     .    equal employment opportunity;

     .    consumer protection and customer service;

     .    technical standards and testing of cable facilities;

     .    consumer electronics equipment compatibility;

     .    registration of cable systems;

     .    maintenance of various records and public inspection files;

     .    microwave frequency usage; and

     .    antenna structure notification, marking and lighting.

     The FCC may enforce its regulations through the imposition of fines, the
issuance of cease and desist orders or the imposition of other administrative
sanctions, such as the revocation of FCC licenses needed to operate transmission
facilities often used in connection with cable operations. The FCC has ongoing
rulemaking proceedings that may change its existing rules or lead to new
regulations. We are unable to predict the impact that any further FCC rule
changes may have on our business and operations.

   Copyright

     Our cable systems typically include in their channel line-ups local and
distant television and radio broadcast signals, which are protected by the
copyright laws. We do not obtain a license to use this programming directly from
the owners of the programming, but instead comply with an alternative federal
compulsory copyright licensing process. In exchange for filing certain reports
and contributing a percentage of our revenues to a federal copyright royalty
pool, we obtain blanket permission to retransmit the copyrighted material
carried on these broadcast signals. The nature and amount of future copyright
payments for broadcast signal carriage cannot be predicted at this time.

     In a report to Congress, the U.S. Copyright Office recommended that
Congress make major revisions to both the cable television and satellite
compulsory licenses. Congress recently modified the satellite compulsory license
in a manner that permits DBS providers to become more competitive with cable
operators. The possible simplification, modification or elimination of the cable
communications compulsory copyright license is the subject of continuing
legislative review. The elimination or substantial modification of the cable
compulsory license could adversely affect our ability to obtain suitable
programming and could substantially increase the cost of programming that
remains available for distribution to our subscribers. We are unable to predict
the outcome of this legislative activity.

     Copyrighted material in programming supplied to cable television systems by
pay cable networks and basic cable networks is licensed by the networks through
private agreements with the copyright owners. These entities offer
through-to-the-viewer licenses to the cable networks that cover the
retransmission of the cable networks' programming by cable television systems to
their customers.

     Our cable television systems also utilize music in other programming and
advertising that we provide to subscribers. The rights to use this music are
controlled by various music performing rights organizations from which
performance licenses must be obtained. Cable industry representatives recently
negotiated standard license agreements with the three largest music performing
rights organizations covering locally originated programming, including
advertising inserted by the cable operator in programming produced by other
parties. These standard agreements require the payment of music license fees for
earlier time periods, but such license fees have not had a significant impact on
our business and operations.

                                       19

<PAGE>

   Cable Modem Service

     There are currently few laws or regulations which specifically regulate
communications or commerce over the Internet. Section 230 of the Communications
Act declares it to be the policy of the United States to promote the continued
development of the Internet and other interactive computer services and
interactive media, and to preserve the vibrant and competitive free market that
presently exists for the Internet and other interactive computer services,
unfettered by federal or state regulation. One area in which Congress did
attempt to regulate content over the Internet involved the dissemination of
obscene or indecent materials.

     The Digital Millennium Copyright Act is intended to reduce the liability of
online service providers for listing or linking to third-party Websites that
include materials that infringe copyrights or other rights or if customers use
the service to publish or disseminate infringing materials. The Children's
Online Protection Act and the Children's Online Privacy Protection Act are
intended to restrict the distribution of certain materials deemed harmful to
children and impose additional restrictions on the ability of online services to
collect user information from minors. In addition, the Protection of Children
From Sexual Predators Act of 1998 requires online service providers to report
evidence of violations of federal child pornography laws under certain
circumstances.

     A number of ISP's have asked local authorities and the FCC to give them
rights of access to cable systems' broadband infrastructure so that they can
deliver their services directly to cable systems' customers. This kind of access
is often called "open access." Many local franchising authorities examined the
issue of open access and a few have required cable operators to provide such
access. Several Federal courts have ruled that localities are not authorized to
require open access.

     On March 14, 2002, the FCC announced that it was classifying Internet
access service provided through cable modems as an interstate information
service. At the same time, the FCC initiated a rulemaking proceeding designed to
address a number of issues resulting from this regulatory classification,
including the following:

     .    the FCC confirmed that there is no current legal requirement for cable
          operators to grant open access now that cable modem service is
          classified as an information service. The FCC is considering, however,
          whether it has the authority to impose open access requirements and,
          if so, whether it should do so, or whether to permit local authorities
          to impose such a requirement.

     .    the FCC confirmed that because cable modem service is an information
          service, not a cable service, local franchise authorities may not
          collect franchise fees on cable modem service revenues under existing
          law and regulations.

     .    the FCC concluded that federal law does not permit local franchise
          authorities to impose additional franchise requirements on cable modem
          service. It is considering, however, whether local franchise
          authorities nonetheless have the authority to impose restrictions,
          requirements or fees because cable modem service is delivered over
          cable using public rights of way.

     .    the FCC is considering whether cable operators providing cable modem
          service should be required to contribute to a "universal service fund"
          designed to support making service available to all consumers,
          including those in low income, rural and high-cost areas at rates that
          are reasonably comparable to those charged in urban areas.

     .    the FCC is considering whether it should take steps to ensure that the
          regulatory burdens on cable systems providing cable modem service are
          comparable to those of other providers of Internet access service,
          such as telephone companies. One method of achieving comparability
          would be to make cable operators subject to some of the regulations
          that do not now apply to them, but are applicable to telephone
          companies.

     Challenges to the FCC's classification of cable Internet access service
have been filed in federal courts. In previous actions over the regulatory
classification of cable modem service, the courts issued conflicting decisions.
These conflicting rulings and the new court proceedings increase the possibility
that the classification of cable Internet service could be decided by the
Supreme Court.

                                       20

<PAGE>

STATE AND LOCAL REGULATION

     Our cable systems use local streets and rights-of-way. Consequently, we
must comply with state and local regulation, which is typically imposed through
the franchising process. Our cable systems generally are operated in accordance
with non-exclusive franchises, permits or licenses granted by a municipality or
other state or local government entity. Our franchises generally are granted for
fixed terms and in many cases are terminable if we fail to comply with material
provisions. The terms and conditions of our franchises vary materially from
jurisdiction to jurisdiction. Each franchise generally contains provisions
governing:

     .    franchise fees;

     .    franchise term;

     .    system construction and maintenance obligations;

     .    system channel capacity;

     .    design and technical performance;

     .    customer service standards;

     .    sale or transfer of the franchise;

     .    territory of the franchise;

     .    indemnification of the franchising authority;

     .    use and occupancy of public streets; and

     .    types of cable services provided.

     In the process of renewing franchises, a franchising authority may seek to
impose new and more onerous requirements, such as upgraded facilities, increased
channel capacity or enhanced services, although protections available under the
Communications Act require the municipality to take into account the cost of
meeting such requirements. The Communications Act also contains renewal
procedures and criteria designed to protect incumbent franchisees against
arbitrary denials of renewal.

     A number of states subject cable systems to the jurisdiction of centralized
state governmental agencies, some of which impose regulation of a character
similar to that of a public utility. Attempts in other states to regulate cable
systems are continuing and can be expected to increase. To date, other than
Delaware, no state in which we operate has enacted such state-level regulation.
State and local franchising jurisdiction is not unlimited; it must be exercised
consistently with federal law. The Communications Act immunizes franchising
authorities from monetary damage awards arising from regulation of cable systems
or decisions made on franchise grants, renewals, transfers and amendments.

OTHER REGULATION

     Existing federal, state and local laws and regulations and state and local
franchise requirements are currently the subject of judicial proceedings,
legislative hearings and administrative proposals which could change, in varying
degrees, the manner in which cable systems operate. Neither the outcome of these
proceedings nor their impact upon the cable industry or our business or
operations can be predicted at this time.

                                       21

<PAGE>

ITEM 2.     PROPERTIES

     Our principal physical assets consist of cable television operating plant
and equipment, including signal receiving, encoding and decoding devices,
headend facilities and distribution systems and equipment at or near customers'
homes for each of the systems. The signal receiving apparatus typically includes
a tower, antenna, ancillary electronic equipment and earth stations for
reception of satellite signals. Headend facilities are located near the
receiving devices. Our distribution system consists primarily of coaxial and
fiber optic cables and related electronic equipment. Customer premise equipment
consists of decoding converters and cable modems.

     Our cable television plant and related equipment generally are attached to
utility poles under pole rental agreements with local public utilities, although
in some areas the distribution cable is buried in underground ducts or trenches.
The physical components of the cable systems require maintenance and periodic
upgrading to improve system performance and capacity.

     We own and lease the real property housing our regional call centers,
business offices and warehouses throughout our operating regions. Our headend
facilities, signal reception sites and microwave facilities are located on owned
and leased parcels of land, and we generally own the towers on which certain of
our equipment is located. We own most of our service vehicles. We believe that
our properties both owned and leased, are in good condition and are suitable and
adequate for our operations.

ITEM 3.     LEGAL PROCEEDINGS

     There are no material pending legal proceedings to which we are a party or
to which any of our properties are subject.


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 2002.

                                       22

<PAGE>

                                     PART II

ITEM 5.     MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER
            MATTERS

     There is no public trading market for our equity, all of which is held by
MCC.

                                       23

<PAGE>

ITEM 6.     SELECTED FINANCIAL DATA

     Mediacom LLC was formed as a New York limited liability company in July
1995 and since that time our taxable income or loss has been included in the
federal and certain state income tax returns of our members.

     In the table below, we provide you with selected historical consolidated
financial and operating data for the years ended December 31, 1998 through 2002
and balance sheet data as of December 31, 1998 through 2002, which are derived
from our audited consolidated financial statements. We have significantly
expanded our business through acquisitions. In 2000, we acquired cable systems
serving approximately 53,000 basic subscribers for an aggregate purchase price
of $109.2 million. In 1999, we acquired cable systems serving approximately
358,000 basic subscribers for an aggregate purchase price of $759.6 million.

     See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

<TABLE>
<CAPTION>
                                                                        YEARS ENDED DECEMBER 31,
                                             -------------------------------------------------------------------------------
                                                 2002            2001            2000              1999             1998
                                             ------------    ------------    -------------     ------------      -----------
                                                           (dollars in thousands, except per subscriber data)
                                                                              (unaudited)
<S>                                          <C>             <C>             <C>               <C>               <C>
STATEMENT OF OPERATIONS DATA:
 Revenues                                    $    410,241    $    369,275    $     328,258     $    174,961      $   129,297
 Costs and expenses:
   Service costs(1)                               152,684         130,473          110,442           56,967           43,849
   Selling, general and
    administrative expenses                        68,563          63,846           55,820           32,949           25,596
   Management fee expense(2)                        5,785           5,830            6,029            6,951            5,797
   Depreciation and amortization                  194,862         221,645          177,928          101,065           65,793
   Non-cash stock charges relating to
    management fee expense(3)                       5,323           2,904           28,254           15,445                -
                                             -------------   -------------   --------------    ------------      -----------
Operating loss                                    (16,976)        (55,423)         (50,215)         (38,416)         (11,738)
 Interest expense, net(4)                         102,458          93,823           68,973           37,817           23,994
 (Gain) loss on derivative instruments,
    net(5)                                         (1,172)          8,441                -                -                -
 Investment income from affiliate(6)              (18,000)         (8,120)               -                -                -

 Other expenses (income)(7)                         4,845         (23,885)          30,036            5,087            4,058
                                             ------------    ------------    -------------     ------------      -----------
Net loss before cumulative effect of
    accounting change                            (105,107)       (125,682)        (149,224)         (81,320)         (39,790)
 Cumulative effect of accounting change(8)              -          (1,642)               -                -                -
                                             -------------   -------------   --------------    ------------      -----------
 Net loss                                    $   (105,107)   $   (127,324)   $    (149,224)    $    (81,320)     $   (39,790)
                                             =============   =============   ==============    ============      ===========

Balance Sheet Data (end of period):
 Total assets                                $  1,567,240    $  1,566,045    $   1,375,772     $  1,272,881      $   451,152
 Total debt                                     1,548,500       1,425,500          987,000        1,139,000          337,905
 Total member's equity                            (85,793)         13,991          262,997           54,615           78,651
</TABLE>

                                                        (continued on next page)

                                       24

<PAGE>

<TABLE>
<CAPTION>
                                                                      YEARS ENDED DECEMBER 31,
                                             -------------------------------------------------------------------------------
                                                 2002            2001            2000             1999              1998
                                             ------------    ------------    -------------     ------------      -----------
                                                         (dollars in thousands, except per subscriber data)
                                                                            (unaudited)
<S>                                          <C>             <C>             <C>               <C>               <C>
OTHER DATA:
 System cash flow(9)                         $    190,289    $    177,868    $     161,996     $     85,045      $    59,852
 System cash flow margin(10)                         46.4%           48.2%            49.4%            48.6%            46.3%
 Operating cash flow(9)                      $    184,504    $    172,038    $     155,967     $     78,094      $    54,055
 Operating cash flow margin(11)                      45.0%           46.6%            47.5%            44.6%            41.8%
 Net cash flows provided by(used in):
    Operating activities                     $     67,433    $    102,191    $      93,218     $     54,216      $    53,556
    Investing activities                         (176,599)       (398,946)        (295,613)        (851,548)        (397,085)
    Financing activities                          122,678         300,040          202,015          799,593          344,714

OPERATING DATA
(END OF PERIOD, EXCEPT AVERAGE):
 Homes passed(12)                               1,252,000       1,200,000        1,173,000        1,071,500          520,000
 Basic subscribers(13)                            752,000         771,000          779,000          719,000          354,000
 Basic penetration(14)                               60.1%           64.3%            66.4%            67.1%            68.1%
 Digital customers(15)                            133,000          88,000           40,000            5,300                -
 Data customers(16)                                81,000          38,000           15,600            5,100            4,729
 Average monthly revenues per
    basic subscriber(17)                     $      46.95    $      40.88    $       38.34     $      35.01      $     32.88
</TABLE>

---------------------

(1)  Service costs for the year ended December 31, 2002 and 2001 include $1.3
     million and $2.9 million, respectively, of non-recurring incremental
     expenses related to the transition from Excite@Home to Mediacom Online(SM).

(2)  Represents fees paid to MCC subsequent to its initial public offering and
     to Mediacom Management Corporation, a Delaware corporation, prior to MCC's
     initial public offering, for management services rendered to our operating
     subsidiaries. The management agreements with Mediacom Management were
     terminated upon the completion of MCC's initial public offering and were
     replaced with new agreements between MCC and our operating subsidiaries.
     See Note 7 of our consolidated financial statements.

(3)  Non-cash stock charges relating to management fee expense:

     .    for the years ended December 31, 2002 and 2001 resulting from the
          vesting of equity grants made during 1999 to certain members of our
          management team;

     .    for the year ended December 31, 2000 consist of a one-time $24.5
          million charge resulting from the termination of the management
          agreements with Mediacom Management upon completion of MCC's initial
          public offering in February 2000 and a $3.8 million charge related to
          the vesting of equity grants made during 1999 to certain members of
          our management team;

     .    for the year ended December 31, 1999 consist of a $0.6 million charge
          relating to amendments to our management agreements with Mediacom
          Management and a $14.8 million charge related to the vesting of equity
          grants to certain members of our management team

     See  Notes 7 and 13 of our consolidated financial statements.

(4)  Net of interest income. Interest income for the periods presented was not
     material.

(5)  Loss on derivative instruments, net, represents the change in fair value of
     our interest rate derivatives as a result of the decrease in market
     interest rates.

(6)  Investment income from affiliate represents the investment income on our
     $150.0 million preferred equity investment in Mediacom Broadband. See Note
     12 of our consolidated financial statements.

(7)  Includes $30.0 million of deferred revenue recognized during the year ended
     December 31, 2001 resulting from the termination of our relationship with
     SoftNet Systems, Inc. During the year ended December 31, 2000, a $28.5
     million non-cash charge was recorded relating to the decline in value of
     our investment in shares of SoftNet

                                       25

<PAGE>

     Systems common stock that was deemed other than temporary. See Note 10 of
     our consolidated financial statements.

(8)  Relates to our adoption of Statements of Financial Accounting Standards No.
     133, "Accounting for Derivative Instruments and Hedging Activities."

(9)  Operating cash flow and system cash flow represent non-GAAP measures and
     are included in this report because our management believes that operating
     cash flow and system cash flow are meaningful measures of performance
     commonly used in the cable television industry and by the investment
     community to analyze and compare cable television companies. Our
     definitions of operating cash flow and system cash flow may not be
     identical to similarly titled measures reported by other companies.

     The following represents a reconciliation of operating loss to operating
cash flow and system cash flow:

<TABLE>
<CAPTION>
                                                                   YEARS ENDED DECEMBER 31,
                                             -------------------------------------------------------------------------------
                                                 2002            2001             2000             1999             1998
                                             ------------    ------------    -------------     ------------      -----------
                                                                         (dollars in thousands)
                                                                               (unaudited)
<S>                                          <C>             <C>             <C>               <C>               <C>
Operating loss                               $    (16,976)   $    (55,423)   $     (50,215)    $    (38,416)     $   (11,738)
Adjustments:
  Depreciation and amortization                   194,862         221,645          177,928          101,065           65,793
  Non-cash stock charges relating to
   management fee expense                           5,323           2,904           28,254           15,445                -
  Non-recurring incremental expenses                1,295           2,912                -                -                -
                                             ------------    ------------    -------------     ------------      -----------
Operating cash flow                               184,504         172,038          155,967           78,094           54,055
  Management fee expense                            5,785           5,830            6,029            6,951            5,797
                                             ------------    ------------    -------------     ------------      -----------
System cash flow                             $    190,289    $    177,868    $     161,996     $     85,045      $    59,852
                                             ============    ============    =============     ============      ===========
</TABLE>

     These measurements of operating cash flow and system cash flow are:

     .    not intended to be a performance measure that should be regarded as an
          alternative either to operating loss or net loss as an indicator of
          operating performance or to the statement of cash flows as a measure
          of liquidity;

     .    not intended to represent funds available for debt service, dividends,
          reinvestment or other discretionary uses; and

     .    should not be considered in isolation or as a substitute for measures
          of performance prepared in accordance with generally accepted
          accounting principles.

(10) Represents system cash flow as a percentage of revenues. This measurement
     is used by us, and is commonly used in the cable television industry, to
     analyze and compare cable television companies on the basis of operating
     performance, for the reasons discussed in note 9 above.

(12) Represents operating cash flow as a percentage of revenues. This
     measurement is used by us, and is commonly used in the cable television
     industry, to analyze and compare cable television companies on the basis of
     operating performance, for the reasons discussed in note 9 above.

(13) Represents the number of single residence homes, apartments and condominium
     units passed by the cable distribution network in a cable system's service
     area.

(14) Represents a dwelling with one or more television sets that receives a
     package of over-the-air broadcast stations, local access channels or
     certain satellite-delivered cable television services. Accounts that are
     billed on a bulk basis, which typically receive discounted rates, are
     converted into full-price equivalent basic subscribers by dividing total
     bulk billed basic revenues of a particular system by the applicable
     combined limited and expanded cable rate charged to basic subscribers in
     that system. Basic subscribers include connections to schools, libraries,
     local government offices and employee households that may not be charged
     for limited and expanded cable services, but may be charged for premium
     units, pay-per-view events or high-speed Internet service. Customers

                                       26

<PAGE>

     who exclusively purchase high-speed Internet service are not counted as
     basic subscribers. Our methodology of calculating the number of basic
     subscribers may not be identical to those used by other cable companies.

(15) Represents basic subscribers as a percentage of homes passed.

(16) Represents customers that receive digital cable services.

(17) Represents customers that access the Internet through cable modem service
     or a conventional modem and telephone line connection.

(18) Represents average monthly revenues for the last three months of the period
     divided by average basic subscribers for such period. Average monthly
     revenues per basic subscriber includes the revenues of acquisitions of
     cable systems made during the last three months of the period as if such
     acquisitions were completed at the beginning of the three month period.
     This measurement is commonly used in the cable television industry to
     analyze and compare cable television companies on the basis of operating
     performance.

                                       27

<PAGE>

ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

     Reference is made to the "Risk Factors" below for a discussion of important
factors that could cause actual results to differ from expectations and any of
our forward-looking statements contained herein. The following discussion should
be read in conjunction with our audited consolidated financial statements as of
and for the years ended December 31, 2002, 2001 and 2000.

ORGANIZATION

     We were organized as a New York limited liability company in July 1995 and
serve as a holding company for our operating subsidiaries. Mediacom Capital
Corporation, our wholly-owned subsidiary, was organized as a New York
corporation in March 1998 for the sole purpose of acting as our co-issuer of
public debt securities and does not conduct operations of its own. Mediacom
Communications Corporation ("MCC") was organized as a Delaware corporation in
November 1999 and completed an initial public offering in February 2000.
Immediately prior to the completion of MCC's initial public offering, MCC issued
shares of its common stock in exchange for all of our outstanding membership
interests and became our sole member and manager.

     Until MCC's initial public offering in February 2000, Mediacom Management
Corporation, a Delaware corporation, provided management services to our
operating subsidiaries and received annual management fees. Such management
agreements were terminated upon the date of MCC's initial public offering and
were replaced with new agreements between MCC and our operating subsidiaries. At
that time, Mediacom Management's employees became MCC's employees. See Note 7 of
our consolidated financial statements.

ACQUISITIONS

     We have expanded our business through acquisitions. All acquisitions have
been accounted for under the purchase method of accounting and, therefore, our
historical results of operations include the results of operations for each
acquired system subsequent to its respective acquisition date. In 2000, we
acquired cable systems serving a total of 53,000 basic subscribers as of their
respective dates of acquisition, for an aggregate purchase price of $109.2
million (the "2000 Acquisitions"). These acquisitions affect the comparability
of our historical results of operations.

GENERAL

     We have generated significant increases in revenues principally as a result
of our acquisition activities and increases in monthly revenues per basic
subscriber. Approximately 92.6% of our revenues for the year ended December 31,
2002 are attributable to video revenues from monthly subscription fees charged
to customers for our core cable television services, including basic, expanded
basic and premium programming, digital cable television programming services,
wire maintenance, equipment rental and services to commercial establishments,
pay-per-view charges, installation and reconnection fees, late payment fees and
other ancillary revenues. Data revenues from cable modem service and advertising
revenues represent 6.3% and 1.1% of our revenues, respectively. Franchise fees
charged to customers are included in their corresponding revenue category.

     Our operating expenses consist of service costs and selling, general and
administrative expenses directly attributable to our cable systems. Service
costs include fees paid to programming suppliers, expenses related to copyright
fees, wages and salaries of technical personnel, high-speed Internet costs and
plant operating costs. Programming costs have historically increased at rates in
excess of inflation due to the introduction of new programming services to our
basic subscribers and to increases in the rates charged for existing programming
services. Under the Federal Communication Commission's existing cable rate
regulations, we are allowed to increase our rates for cable television services
to more than cover any increases in the programming and copyright costs.
However, competitive conditions or other factors in the marketplace may limit
our ability to increase our rates. Selling, general and administrative expenses
include wages and salaries for customer service and administrative personnel,
franchise fees and expenses related to billing, marketing, bad debt, advertising
and office administration. Management fee expense reflects charges incurred
under our management agreements with MCC.

                                       28

<PAGE>

     The high level of depreciation and amortization associated with our
acquisition activities and capital investment program, as well as the interest
expense related to our financing activities, have caused us to report net
losses. We believe that such net losses are common for cable television
companies and anticipate that we will continue to incur net losses for the
foreseeable future.

ACTUAL RESULTS OF OPERATIONS

   Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

     Basic subscribers were 752,000 at December 31, 2002, as compared to 771,000
at December 31, 2001. We acquired 3,000 basic subscribers during the first
quarter of 2002.

     Digital customers were 133,000 at December 31, 2002, as compared to 88,000
at December 31, 2001.

     Data customers were 81,000 at December 31, 2002, as compared to 38,000 at
December 31, 2001.

     Revenues. Revenues increased 11.1% to $410.2 million for the year ended
December 31, 2002 as compared to $369.3 million for the year ended December 31,
2001. Revenues by service offering were as follows (dollars in millions):

                                         YEAR ENDED DECEMBER 31,
                        ------------------------------------------------------
                                 2002                           2001
                        -----------------------        -----------------------
                                         % of                           % of
                         Amount        Revenues         Amount        Revenues
                        ---------      --------        --------       --------
     Video..........    $   379.8          92.6%       $  355.3           96.2%
     Data...........         25.7           6.3             9.8            2.7
     Advertising....          4.7           1.1             4.2            1.1
                        ---------      --------        --------       --------
                        $   410.2         100.0%       $  369.3          100.0%
                        =========      ========        ========       ========

     Video revenues increased 6.9% to $379.8 million for the year ended December
31, 2002, as compared to $355.3 million for the year ended December 31, 2001.
Video revenues increased primarily due to rate increases in our video services
and to customer growth in our digital cable services, partially offset by a
decline in basic subscribers.

     Data revenues increased 162.2% to $25.7 million for the year ended December
31, 2002, as compared to $9.8 million for the year ended December 31, 2001. Data
revenues increased primarily due to customer growth in our high-speed Internet
access service.

     Advertising revenues increased 11.9% to $4.7 million for the year ended
December 31, 2002, as compared to $4.2 million for the year ended December 31,
2001. Advertising revenues increased primarily due to a general improvement in
local and national advertising markets.

     Service costs. Service costs increased 17.0% to $152.7 million for the year
ended December 31, 2002, as compared to $130.5 million for the year ended
December 31, 2001. Service costs increased due to higher programming expenses,
including rate increases by programming suppliers for existing services and the
costs of new channel additions, and greater technical employee support and other
operating costs directly related to customer growth in our high-speed Internet
access services. As a percentage of revenues, service costs were 37.2% for the
year ended December 31, 2002, as compared with 35.3% for the year ended December
31, 2001.

     Selling, general and administrative expenses. Selling, general and
administrative expenses increased 7.4% to $68.6 million for the year ended
December 31, 2002, as compared to $63.8 million for the year ended December 31,
2001. Selling, general and administrative expenses increased primarily as a
result of higher marketing expenses related to our digital and high-speed
Internet access services, customer service expenses and billing costs. As a
percentage of revenues, selling, general and administrative expenses were 16.7%
for the year ended December 31, 2002 as compared with 17.3% for the year ended
December 31, 2001.

                                       29

<PAGE>

     Management fee expense. Our management fee expense was $5.8 million for the
years ended December 31, 2002 and December 31, 2001. As a percentage of
revenues, management fee expense was 1.4% for the year ended December 31, 2002
as compared with 1.6% for the year ended December 31, 2001.

     Depreciation and amortization. Depreciation and amortization decreased
12.1% to $194.9 million for the year ended December 31, 2002, as compared to
$221.6 million for the year ended December 31, 2001. This decrease reflected the
adoption of SFAS 142, effective January 1, 2002, which reduced amortization
expense by $44.7 million during the year ended December 31, 2002, partially
offset by depreciation expense associated with our ongoing investments in our
cable systems.

     Non-cash stock charges relating to management fee expense. Non-cash stock
charges relating to management fee expense increased 83.3% to $5.3 million for
the year ended December 31, 2002, as compared to $2.9 million for the year ended
December 31, 2001. This charge represents vesting in equity interests granted to
certain members of MCC's management team in 1999. During the year ended December
31, 2002, the vesting in the equity interests was accelerated, and accordingly,
the remainder of the related charges were expensed.

     Interest expense, net. Interest expense, net, increased 9.2% to $102.5
million for the year ended December 31, 2002, as compared to $93.8 million for
the year ended December 31, 2001. This was due to higher average borrowings
under our bank credit facilities, partially offset by lower interest rates on
our variable rate debt.

     (Gain) loss on derivative instruments, net. Gain on derivative instruments,
net, was $1.2 million for the year ended December 31, 2002, as compared to loss
on derivative instruments, net, of $8.4 million for the year ended December 31,
2001. This gain was primarily due to a shorter average time to maturity of our
interest rate exchange agreements.

     Investment income from affiliate. Investment income from affiliate was
$18.0 million for the year ended December 31, 2002, as compared to $8.1 million
for the year ended December 31, 2001. This amount represents the investment
income on our $150.0 million preferred equity investment in Mediacom Broadband
LLC. See "Liquidity and Capital Resources"-"Investing Activities."

     Other expenses (income). Other expenses were $4.8 million for the year
ended December 31, 2002, as compared to other income of $23.9 million for the
year ended December 31, 2001. Other expenses represented fees on unused credit
commitments under our bank credit facilities and amortization of deferred
financing costs. Other income in 2001 reflected the recognition of the remaining
$30.0 million of deferred revenue resulting from the termination of our contract
with SoftNet Systems, partially offset by fees on unused credit commitments and
amortization of deferred financing costs.

     Net loss. Due to the factors described above, we generated a net loss of
$105.1 million for the year ended December 31, 2002 as compared to a net loss of
$127.3 million for the year ended December 31, 2001.

   Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

     The following historical information includes the results of operations of
the 2000 Acquisitions, only for that portion of the respective period that such
cable systems were owned by us.

     Basic subscribers were 771,000 at December 31, 2001, as compared to 779,000
at December 31, 2000.

     Digital customers were 88,000 at December 31, 2001, as compared to 40,000
at December 31, 2000.

     Data customers were 38,000 at December 31, 2001, as compared to 15,600 at
December 31, 2000.

                                       30

<PAGE>

     Revenues. Revenues increased 12.5% to $369.3 million for the year ended
December 31, 2001 as compared to $328.3 million for the year ended December 31,
2000. Of the revenue increase of $41.0 million, $18.4 million was attributable
to the 2000 Acquisitions. Excluding the effect of such acquisitions, revenues
increased primarily due to basic rate increases associated with new programming
introductions in our core cable television services and to customer growth in
our digital cable and high-speed Internet access services, partially offset by a
slight decline in basic subscribers. Revenues by service offering were as
follows (dollars in millions):

                                      YEAR ENDED DECEMBER 31,
                        ------------------------------------------------------
                                 2001                           2000
                        -----------------------        -----------------------
                                         % of                           % of
                         Amount        Revenues         Amount        Revenues
                        ---------      --------        --------       --------
     Video..........    $   355.3          96.2%       $  317.9           96.8%
     Data...........          9.8           2.7             5.9            1.8
     Advertising....          4.2           1.1             4.5            1.4
                        ---------      --------        --------       --------
                        $   369.3         100.0%       $  328.3          100.0%
                        =========      ========        ========       ========

     Video revenues increased 11.6% to $355.3 million for the year ended
December 31, 2001, as compared to $317.9 million for the year ended December 31,
2000. Video revenues increased primarily due to basic rate increases largely
associated with new programming introductions and to customer growth in our
digital cable services, partially offset by a decline in basic subscribers.

     Data revenues increased 78.2% to $9.8 million for the year ended December
31, 2001, as compared to $5.9 million for the year ended December 31, 2000. Data
revenues increased primarily due to customer growth in our high-speed Internet
access service.

     Advertising revenues decreased 6.7% to $4.2 million for the year ended
December 31, 2001, as compared to $4.5 million for the year ended December 31,
2000. Advertising revenues decreased primarily due to a general decline in local
and national advertising markets.

     Service costs. Service costs increased 18.1% to $130.5 million for the year
ended December 31, 2001 as compared to $110.4 million for the year ended
December 31, 2000. Service costs for the year ended December 31, 2001 include
$2.9 million of incremental expenses related to the transition Excite@Home to
MCC's Mediacom OnlineSM high-speed Internet service. Of the increase in service
costs of $20.1 million, $7.6 million was attributable to the 2000 Acquisitions.
Excluding the 2000 Acquisitions, these costs increased primarily as a result of
higher programming expenses, including rate increases by programming suppliers
for existing services and the cost of new channel additions. As a percentage of
revenues, service costs were 35.3% for the year ended December 31, 2001, as
compared with 33.6% for the year ended December 31, 2000.

     Selling, general and administrative expenses. Selling, general and
administrative expenses increased 14.4% to $63.8 million for the year ended
December 31, 2001 as compared to $55.8 million for the year ended December 31,
2000. Of the increase in selling, general and administrative expenses of $8.0
million, $3.0 million was attributable to the 2000 Acquisitions. Excluding the
2000 Acquisitions, these costs increased primarily as a result of higher bad
debt and customer service employee expenses, and increased marketing costs
associated with the promotion of our digital cable and high-speed Internet
access services. As a percentage of revenues, selling, general and
administrative expenses were 17.3% for the year ended December 31, 2001, as
compared with 17.0% for the year ended December 31, 2000.

     Management fee expense. Management fee expense decreased 3.3% to $5.8
million for the year ended December 31, 2001 as compared to $6.0 million for the
year ended December 31, 2000. The decrease was primarily due to the sharing of
MCC's overhead with Mediacom Broadband LLC, a Delaware limited liability company
and wholly-owned subsidiary of MCC that commenced operations in June 2001. As a
percentage of revenues, management fee expense was 1.6% for the year ended
December 31, 2001 as compared with 1.8% for the year ended December 31, 2000.

                                       31

<PAGE>

     Depreciation and amortization. Depreciation and amortization increased
24.6% to $221.6 million for the year ended December 31, 2001 as compared to
$177.9 million in the year ended December 31, 2000. This increase was primarily
due to capital expenditures associated with the upgrade of our cable systems and
our purchase of the 2000 Acquisitions.

     Non-cash stock charges relating to management fee expense. Non-cash stock
charges relating to management fee expense decreased 89.7% to $2.9 million for
the year ended December 31, 2001 as compared to $28.3 million in the year ended
December 31, 2000. This decrease is primarily due to a one-time $24.5 million
charge which occurred in February 2000, resulting from the termination of the
management agreements with Mediacom Management on the date of MCC's initial
public offering.

     Interest expense, net. Interest expense, net, increased 36.0% to $93.8
million for the year ended December 31, 2001 as compared to $69.0 million for
the year ended December 31, 2000. This increase was due primarily to a higher
interest rate associated with our 9 1/2% senior notes, which were issued in
January 2001, and borrowings under our operating subsidiary credit facilities to
fund a $125.0 million cash dividend to MCC and a $150.0 million preferred equity
investment in Mediacom Broadband LLC in July 2001. This cash dividend and
preferred equity investment funded a portion of the purchase price for Mediacom
Broadband LLC's acquisitions of cable systems from AT&T Broadband, LLC in June
and July 2001.

     Loss on derivative instruments, net. Loss on derivative instruments, net,
was $8.4 million for the year ended December 31, 2001, due to the change in the
fair value of our interest rate exchange agreements as a result of the decrease
in market interest rates.

     Investment income from affiliate. Investment income from affiliate was $8.1
million for the year ended December 31, 2001. This amount represents the
investment income on our $150.0 million preferred equity investment in Mediacom
Broadband LLC.

     Other expenses (income). Other income of $23.9 million for the year ended
December 31, 2001 was principally due to the recognition of the remaining $30.0
million of deferred revenue resulting from the termination of our contract with
SoftNet Systems, offset in part by other expenses. Other expenses of $30.0
million for the year ended December 31, 2000 were principally due to non-cash
loss of $28.5 million resulting from the decline in the value of our investment
in shares of SoftNet Systems common stock that was seemed other than temporary.

     Cumulative Effect of Accounting Change. Effective January 1, 2001, we
adopted Statement of Financial Accounting Standards No. 133 ("SFAS 133"),
"Accounting for Derivative Instruments and Hedging Activities". As a result, we
recorded an after tax charge of approximately $1.6 million, as a change in
accounting principle, in the first quarter of 2001.

     Net loss. Despite increases in depreciation and amortization expense and
interest expense, net, net loss declined to $127.3 million for the year ended
December 31, 2001 as compared to a net loss of $149.2 million for the year ended
December 31, 2000, primarily due to the change in other (income) expenses.

LIQUIDITY AND CAPITAL RESOURCES

     Our business requires substantial capital for the upgrade, expansion and
maintenance of our cable network. In addition, we have pursued, and will
continue to pursue, a business strategy that includes selective acquisitions. We
have funded and will continue to fund our working capital requirements, capital
expenditures and acquisitions through a combination of internally generated
funds and long-term borrowings.

   Operating Activities

     Cash provided by operations for the years ended December 31, 2002 and 2001
was $67.4 million and $102.2 million, respectively. The decrease was due to
payments related to working capital accounts.

                                       32

<PAGE>

   Investing Activities

     Cash used in investing activities for the years ended December 31, 2002 and
2001 was $176.6 million and $398.9 million, respectively. The decrease was
primarily due to lower capital expenditures in 2002 and the preferred investment
in an affiliated company in 2001.

     Our capital expenditures were $167.8 million, $244.9 million and $182.6
million for the years ended December 31, 2002, 2001 and 2000, respectively. As
of December 31, 2002, as a result of our cumulative capital investment in our
network upgrade program, approximately 98% of our cable network was upgraded
with 550MHz to 870MHz bandwidth capacity and approximately 95% of our homes
passed were activated with two-way communications capability. At year end 2002,
our digital cable service was available to 702,000 basic subscribers, and our
cable modem service was marketed to about 1.1 million homes passed by our cable
systems.

     We expect to complete our planned network upgrade program by June 2003, at
which time we anticipate that approximately 98% of our cable network will be
upgraded with 550MHz to 870MHz bandwidth capacity with two-way communications
capability. To achieve these targets and to fund other requirements, including
the infrastructure for our high-speed Internet service, cable modems, digital
converters, new plant construction, headend eliminations, regional fiber
interconnections and network replacement, we expect to invest between $120.0
million and $130.0 million in capital expenditures in 2003.

     In 2000, we acquired cable systems that served approximately 53,000 basic
subscribers as of their respective dates of acquisition, for an aggregate
purchase price of $109.2 million.

     On July 18, 2001, we made a $150.0 million preferred equity investment in
Mediacom Broadband that was funded with borrowings under our bank credit
facilities. The preferred equity investment has a 12% annual dividend, payable
quarterly in cash. For the year ended December 31, 2002 and 2001, we received in
aggregate $18.0 million and $8.1 million, respectively, in cash dividends on the
preferred equity.

   Financing Activities

     Cash provided by financing activities for the years ended December 31, 2002
and 2001 was $122.7 million and $300.0 million, respectively. The decrease was
primarily due to the dividend payment to MCC in 2001.

     To finance our prior acquisitions and our network upgrade program and to
provide liquidity for future capital needs we completed the undernoted financing
arrangements.

     On January 24, 2001, we and our wholly-owned subsidiary, Mediacom Capital,
a New York corporation, completed an offering of $500.0 million of 9 1/2% senior
notes due January 2013. Interest on the 9 1/2% senior notes is payable
semi-annually on January 15 and July 15 of each year, which commenced on July
15, 2001. Approximately $467.5 million of the net proceeds were used to repay a
substantial portion of the indebtedness outstanding under our bank credit
facilities and related accrued interest. The balance of the net proceeds was
used for general corporate purposes.

     On July 17, 2001, we paid a $125.0 million cash dividend to MCC. This
dividend indirectly funded a portion of the purchase price for Mediacom
Broadband LLC's acquisitions of cable systems from AT&T Broadband, LLC. See Note
11 to our consolidated financial statements.

     We have two bank credit facilities, each in the amount of $550.0 million.
These credit facilities expire in September 2008 and December 2008, however
their final maturities are subject to earlier repayment on dates ranging from
June 2007 to December 2007 if we do not refinance our $200.0 million 8 1/2%
senior notes due April 2008 prior to March 31, 2007.

     We have entered into interest rate exchange agreements, which expire from
April 2003 through March 2007, to hedge $440.0 million of floating rate debt,
including $50.0 million completed subsequent to December 31, 2002. Under the
terms of all of our interest rate exchange agreements, we are exposed to credit
loss in the event of nonperformance by the other parties to the interest rate
exchange agreements. However, we do not anticipate their nonperformance. As of
the date of this report, about 82% of our outstanding indebtedness was at fixed
interest rates or subject to interest rate protection.

                                       33

<PAGE>

     For the three months ended December 31, 2002, our leverage ratio (defined
as total debt at period end divided by annualized operating cash flow) was 7.4
times. The interest coverage ratio (defined as operating cash flow divided by
total interest expense, net) for such period was 2.0 times. Pursuant to our debt
arrangements, for purposes of calculating such ratios, operating cash flow
includes investment income received in cash. For the three months ended December
31, 2002 operating cash flow, interest expense and investment income received in
cash were $52.4 million, $25.8 million and $4.5 million, respectively. As of
December 31, 2002, we were in compliance with all debt covenants.

     As of December 31, 2002, our total debt was approximately $1.55 billion and
we had unused credit commitments of about $347.0 million under our bank credit
facilities and our annualized cost of debt capital was approximately 6.9%. As of
January 1, 2003, after giving effect to scheduled step downs in the maximum
leverage covenants in our bank credit facilities, approximately $276.0 million
could be borrowed and used for general corporate purposes under the most
restrictive covenants in our debt arrangements. As of December 31, 2002, we were
in compliance with all debt covenants.

     Although we have not generated earnings sufficient to cover fixed charges,
we have generated cash and obtained financing sufficient to meet our short-term
requirements, including our debt service, working capital, capital expenditure
and acquisition requirements. We expect that we will continue to be able to
generate funds and obtain financing sufficient to meet our long-term business
plan, service our debt obligations and complete any future acquisitions.
However, there can be no assurance that we will be able to obtain sufficient
financing, or, if we were able to do so, that the terms would be favorable to
us.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

        The table below summarizes our contractual obligations and commercial
commitments for the five years subsequent to December 31, 2002 and thereafter.
The amounts represent the maximum future contractual obligations.

<TABLE>
<CAPTION>
                                        LONG-TERM
                                           DEBT           OPERATING LEASES          TOTAL
                                      --------------      ----------------      -------------
                                                        (dollars in thousands)
     <S>                              <C>                 <C>                   <C>
     2003.......................      $        2,000      $        1,574        $       3,574
     2004.......................               2,000               1,201                3,201
     2005                                     22,000               1,060               23,060
     2006                                    168,750                 902              169,652
     2007                                    182,000                 761              182,761
     Thereafter.................           1,171,750               4,043            1,175,793
                                      --------------      --------------        -------------
     Total cash obligations.....      $    1,548,500      $        9,541        $   1,558,041
                                      ==============      ==============        =============
</TABLE>

CRITICAL ACCOUNTING POLICIES

     The foregoing discussion and analysis of our financial condition and
results of operations is based upon our consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements requires us
to make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. Periodically we evaluate our estimates, including those related
to doubtful accounts, long-lived assets, capitalized costs and accruals. We base
our estimates on historical experience and on various other assumptions that we
believe are reasonable. Actual results may differ from these estimates under
different assumptions or conditions.

     We believe the following represent the most significant and subjective
estimates used in the preparation of our consolidated financial statements. For
a detailed description of our significant accounting policies, please see Note 2
of our consolidated financial statements.

                                       34

<PAGE>

   Property, Plant and Equipment

     In accordance with Statement of Financial Accounting Standards No. 51,
"Financial Reporting by Cable Television Companies," we capitalize a portion of
direct and indirect costs related to the construction, replacement and
installation of property, plant and equipment, including certain costs related
to new video and new high-speed Internet subscriber installations. Capitalized
costs are recorded as additions to property, plant and equipment and depreciated
over the life of the related assets. We perform periodic evaluations of the
estimates used to determine the amount of costs that are capitalized.

   Impairment of Long-Lived Assets

     We follow the provisions of Statement of Financial Accounting Standards No.
144 ("SFAS 144"), "Accounting for the Impairment or Disposal of Long-Lived
Assets" SFAS 144 addresses financial accounting and reporting for the impairment
or disposal of long-lived assets and provides guidance on classification and
accounting for such assets when held for sale or abandonment. Based on our
review, there has been no impairment of long-lived assets under SFAS 144.

   Goodwill and Other Intangible Assets

     Effective January 1, 2002, we adopted Statement of Financial Accounting
Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets." The
provisions of SFAS 142 prohibit the amortization of goodwill and
indefinite-lived intangible assets and require such assets to be tested annually
for impairment, or more frequently if impairment indicators arise. We have
determined that our cable franchise costs are indefinite-lived assets. Upon
adoption, we performed initial impairment tests and we determined that there was
no impairment. We conducted our annual impairment tests as of September 30,
2002, utilizing discounted cash flow analysis, and they did not result in any
impairment of goodwill or indefinite-lived intangible assets. The impact of
adopting SFAS 142 was to reduce amortization expense by $44.7 million for the
year ended December 31, 2002.

INFLATION AND CHANGING PRICES

     Our systems' costs and expenses are subject to inflation and price
fluctuations. Such changes in costs and expenses can generally be passed through
to subscribers. Programming costs have historically increased at rates in excess
of inflation and are expected to continue to do so. We believe that under the
Federal Communications Commission's existing cable rate regulations we may
increase rates for cable television services to more than cover any increases in
programming and copyright costs. However, competitive conditions and other
factors in the marketplace may limit our ability to increase our rates.

RISK FACTORS

   We have a history of net losses and may not be profitable in the future.

     We have had a history of net losses and expect to continue to report net
losses for the foreseeable future, which could adversely affect our ability to
finance our business in the future. We reported net losses of $149.2 million,
$127.3 million and $105.1 million for the years ended December 31, 2000, 2001
and 2002, respectively. The principal reasons for our prior and anticipated net
losses include the depreciation and amortization expenses associated with our
acquisitions, the capital expenditures related to expanding and upgrading our
cable systems and interest costs on borrowed money.

   We are a holding company with no operations and we depend on our operating
subsidiaries for cash to fund our obligations.

     As a holding company, we do not have any operations or hold any assets
other than our investments in and our advances to our operating subsidiaries.
Consequently, our subsidiaries conduct all of our consolidated operations and
own substantially all of our consolidated assets. The only source of cash we
have to pay interest on, and repay the principal of, our indebtedness and to
meet our other obligations is the cash that our subsidiaries generate from their
operations and their borrowings. Our subsidiaries are not obligated to make
funds available to us. Our subsidiaries' ability to make payments to us will
depend upon their operating results and will be subject to applicable laws and
contractual restrictions, including the agreements governing our subsidiary
credit facilities and other indebtedness.

                                       35

<PAGE>

Those agreements permit our subsidiaries to distribute cash to us under certain
circumstances, but only so long as there is no default under any of such
agreements.

     We have grown rapidly and have a limited history of operating our current
cable systems, which may make it difficult for you to evaluate our performance.

     We began operations in 1996 and have grown rapidly since then, principally
through acquisitions. In late 1999, we completed acquisitions that doubled the
number of subscribers served by our cable systems. As a result, you have limited
information upon which to evaluate our performance in managing our current cable
systems, and our historical financial information may not be indicative of the
future results we can achieve with our cable systems.

     We have substantial existing debt and may incur substantial additional
debt, which could adversely affect our ability to obtain financing in the future
and require our operating subsidiaries to apply a substantial portion of their
cash flow to debt service.

     Our total debt as of December 31, 2002 was approximately $1.55 billion. Our
interest expense for the year ended December 31, 2002 was $102.5 million. We
cannot assure you that our business will generate sufficient cash flows to
permit us, or our subsidiaries, to repay indebtedness or that refinancing of
that indebtedness will be possible on commercially reasonable terms or at all.

     This high level of debt and our debt service obligations could have
material consequences, including that:

     .    our ability to access new sources of financing for working capital,
          capital expenditures, acquisitions or other purposes may be limited;

     .    we may need to use a large portion of our revenues to pay interest on
          borrowings under our subsidiary credit facilities and our senior
          notes, which will reduce the amount of money available to finance our
          operations, capital expenditures and other activities;

     .    some of our debt has a variable rate of interest, which may expose us
          to the risk of increased interest rates;

     .    we may be more vulnerable to economic downturns and adverse
          developments in our business; and

     .    we may be less flexible in responding to changing business and
          economic conditions, including increased competition and demand for
          new products and services;

     .    we may be at a disadvantage when compared to those of our competitors
          that have less debt;

     .    we may not be able to implement our strategy.

     We anticipate incurring additional debt to fund the expansion, maintenance
and upgrade of our cable systems. If new debt is added to our current debt
levels, the related risks that we now face could intensify.

   A default under our indentures or our subsidiary credit facilities could
result in an acceleration of our indebtedness and other material adverse
effects.

     The agreements and instruments governing our own and our subsidiaries'
indebtedness contain numerous financial and operating covenants. The breach of
any of these covenants could cause a default, which could result in the
indebtedness becoming immediately due and payable. If this were to occur, we
would be unable to adequately finance our operations. In addition, a default
could result in a default or acceleration of our other indebtedness subject to
cross-default provisions. If this occurs, we may not be able to pay our debts or
borrow sufficient funds to refinance them. Even if new financing is available,
it may not be on terms that are acceptable to us. The membership interests of
our operating subsidiaries are pledged as security under the respective
subsidiary credit facilities. A default under one of our subsidiary credit
facilities could result in a foreclosure by the lenders on the membership
interests pledged under that facility. Because we are dependent upon our
operating subsidiaries for all of our revenues, a foreclosure would have a
material adverse effect on our business, financial condition and results of
operations.

                                       36

<PAGE>

   The terms of our indebtedness could materially limit our financial and
operating flexibility.

     Several of the covenants contained in agreements and instruments governing
our own and our subsidiaries' indebtedness could materially limit our financial
and operating flexibility by restricting, among other things, our ability and
the ability of our operating subsidiaries to:

     .    incur additional indebtedness;

     .    create liens and other encumbrances;

     .    pay dividends and make other payments, investments, loans and
          guarantees;

     .    enter into transactions with related parties;

     .    sell or otherwise dispose of assets and merge or consolidate with
          another entity;

     .    repurchase or redeem equity interests or debt;

     .    pledge assets; and

     .    issue equity interests.

     Complying with these covenants could cause us to take actions that we
otherwise would not take or cause us not to take actions that we otherwise would
take.

   We may not be able to obtain additional capital to continue the development
of our business.

     Our business has required substantial capital for the upgrade, expansion
and maintenance of our cable systems and the launch and expansion of new or
additional services. While we have substantially completed our planned system
upgrades, if there is accelerated growth in our digital cable and data
customers, or we decide to introduce new advanced services, or the cost to
provide these services increases, we may need to make unplanned additional
capital expenditures. We may not be able to obtain the funds necessary to
finance our capital improvement program or any additional capital requirements
through internally generated funds, additional borrowings or other sources. If
we are unable to obtain these funds, we would not be able to implement our
business strategy and our results of operations would be adversely affected.

   If we are unable to keep pace with technological change, our business and
results of operations could be adversely affected.

     The cable business is characterized by rapid technological change and the
introduction of new products and services. We cannot assure you that we will be
able to fund the capital expenditures necessary to keep pace with technological
developments. We also cannot assure you that we will successfully anticipate the
demand of our customers for products and services requiring new technology. This
type of rapid technological change could adversely affect our plans to upgrade
or expand our systems and respond to competitive pressures. Our inability to
upgrade, maintain and expand our systems and provide advanced services in a
timely manner, or to anticipate the demands of the market place, could adversely
affect our ability to compete. Consequently, our business and results of
operations could suffer materially.

                                       37

<PAGE>

   If we are unable to successfully implement our business strategy, our
business, financial condition and results of operations could be adversely
affected.

     The implementation of our business strategy will place significant demands
on our and our manager's management and operational, financial and marketing
resources. We cannot assure you that our manager or we will be successful in
operating our cable systems. The successful implementation of our business
strategy involves the following principal risks that could materially adversely
affect our business, financial condition and results of operations:

     .    the operation of our cable systems places significant demands on our
          manager's management team and may result in significant unexpected
          operating difficulties, liabilities or contingencies;

     .    our manager may be unable to recruit additional qualified personnel
          which may be required to integrate and manage our cable systems; and

     .    some of our manager's operational, financial and management systems
          may be incompatible with or inadequate to effectively implement our
          business strategy.

     In addition, each of the above risks may apply to any future acquisition
of cable systems.

   If we are unsuccessful in implementing our growth strategy, our business and
results of operations could be adversely affected.

     We expect that a substantial portion of our future growth in revenues will
come from the expansion of relatively new services, such as high-speed Internet
access service, digital cable services and video-on-demand, and acquisitions of
additional cable systems. We may not be able to successfully expand these
services, and it is possible that they will not generate significant revenue
growth. As of the date of filing this report, there were no material pending
acquisitions. We may not be successful in identifying attractive acquisition
targets or obtaining the financing necessary to complete future acquisitions.
Among other things, in recent years, the cable television industry has undergone
dramatic consolidation, which has reduced the number of future acquisition
prospects and may increase the purchase price for any acquisitions we pursue.

   Our programming costs are increasing, and our business and results of
operations will be adversely affected if we cannot pass through a sufficient
part of the additional costs to subscribers.

     Our programming costs have been, and are expected to continue to be, one of
our largest single expense items. In recent years, the cable and satellite video
industries have experienced a rapid increase in the cost of programming,
particularly sports programming. This increase in programming costs is expected
to continue, and we may not be able to pass programming cost increases on to our
customers. In addition, as we add programming to our basic and expanded basic
programming tiers, we may not be able pass all of our costs of the additional
programming on to our customers without the potential loss of basic subscribers.
To the extent that we are unable to pass increased or additional programming
costs through to subscribers, our cash flow and operating margins will be
adversely affected.

     We also expect to be subject to increasing financial and other demands by
broadcasters to obtain the required consents for the transmission of broadcast
programming to our subscribers. We cannot predict the impact of these
negotiations on our business and results of operations or the effect on our
subscribers should we be required to suspend the carriage of this programming.

   Failure to renew programming contracts could adversely affect our business
and results of operations.

     From time to time, the contracts covering the programming services carried
on our cable systems expire, and we generally provide such services to our
customers without written contracts with the respective program suppliers as our
manager negotiates contract renewals. While we could obtain access to most of
these programming services through a national programming purchasing cooperative
or by relying on certain protective provisions of the Communications Act, we are
unable to guarantee that we will be able to provide without interruption any
programming service that is not covered by a written contract. Prolonged loss of
access to certain of these programming services could result in our customers
switching to our competitors or have other material adverse effects on our
business and results of operations.

                                       38

<PAGE>

   We may not be able to compete effectively in the highly competitive media and
telecommunications industries.

     The communications industry in which we operate is highly competitive and
is often subject to rapid and significant changes and developments in the
marketplace and in the regulatory and legislative environment. In some
instances, we compete against companies with fewer regulatory burdens, easier
access to financing, greater resources and operating capabilities, greater brand
name recognition and long-standing relationships with regulatory authorities.
Our traditional cable television business faces direct competition from other
cable companies, municipal-owned utilities, telephone companies, and, most
significantly, from direct broadcast satellite operators. Our high-speed
Internet access service is subject to competition from telephone companies using
digital subscriber line technology, direct broadcast satellite operators and
other Internet service providers. We also face competition from over-the-air
television and radio broadcasters and from other communications and
entertainment media such as movie theaters, live entertainment and sports
events, newspapers and home video products.

     We anticipate that future advances in communications technology could lead
to the introduction of new competitors, products and services that may compete
with our businesses. We cannot assure you that upgrading our cable systems will
allow us to compete effectively. Additionally, if we expand and introduce new
and enhanced telecommunications services, we will be subject to competition from
new and established telecommunications providers. We cannot predict the extent
to which competition may affect our business and results of operations in the
future.

   Continued growth of direct broadcast satellite operators could adversely
affect our business and results of operations.

     Direct broadcast satellite operators have grown at a rate far exceeding the
cable television industry growth rate and have emerged as a significant
competitor to cable operators. Direct broadcast satellite service consists of
television programming transmitted via high-powered satellites to individual
homes, each served by a small satellite dish. Legislation permitting direct
broadcast satellite operators to transmit local broadcast signals was enacted on
November 29, 1999. This eliminated a significant competitive advantage that
cable system operators had over direct broadcast satellite operators. Direct
broadcast satellite operators deliver local broadcast signals in many markets
that we serve. These companies and others are also developing ways to bring
advanced communications services to their customers. They are currently offering
satellite-delivered high-speed Internet access services.

   We may not be able to obtain critical items at a reasonable cost or when
required, which could adversely affect our business, financial condition and
results of operations.

     We depend on third-party suppliers for equipment, software, services and
other items that are critical for the operation of our cable systems and the
provision of advanced services, including analog and digital set-top converter
boxes, servers and routers, fiber-optic cable, telephone circuits, software, the
"backbone" telecommunications network for our Internet access service and
construction services for expansion and upgrades of our cable systems. These
items are available from a limited number of suppliers. Demand for these items
has increased with the general growth in demand for Internet and
telecommunications services. We typically do not carry significant inventories
of equipment. Moreover, if there are no suppliers that are able to provide
set-top converter boxes that comply with evolving Internet and
telecommunications standards or that are compatible with other equipment and
software that we use, our business, financial condition and results of
operations could be materially adversely affected. If we are unable to obtain
critical equipment, software, services or other items on a timely basis and at
an acceptable cost, our ability to offer our products and services and roll out
advanced services may be impaired, and our business, financial condition and
results of operations could be materially adversely affected.

   We depend on our manager for the provision of essential management functions.

     We do not have separate senior management and are dependent on our manager
for the operation of our business. Our manager also manages Mediacom Broadband's
operating subsidiaries. Following the completion of Mediacom Broadband's
acquisitions of cable systems from AT&T Broadband in June and July 2001, the
number of customers served by our manager's cable systems increased
significantly and our manager devotes a significant portion of its personnel and
other resources to the management of Mediacom Broadband's cable systems. As a
result, the attention of our manager's senior executive officers may be diverted
from the management of our cable systems and the allocation of resources between
our cable systems and Mediacom Broadband's cable systems could give rise to
conflicts of interest.

                                       39

<PAGE>

     The successful execution of our business strategy depends on the ability of
our manager to efficiently manage our cable systems. If our manager were to
experience any material adverse change in its business, the risks described in
this risk factor could intensify and our business, financial condition and
results of operations could be materially adversely affected. In addition, we
are also dependent on our manager to operate Mediacom Broadband's cable systems
effectively in order to enable us to achieve operating synergies, such as the
joint purchasing of programming. Mediacom Broadband's operating subsidiaries
have substantial indebtedness that, among other things, could make our manager
more vulnerable to economic downturns and to adverse developments in its
business. Although our manager charged management fees to our operating
subsidiaries in an amount equal to 1.4% of our subsidiaries' gross operating
revenues for the year ended December 31, 2002, we cannot assure you that it will
not exercise its right under its management agreements with our operating
subsidiaries to increase the management fees, which under such agreements may
not exceed 4.5% of each subsidiary's gross operating revenues.

   If our manager were to lose key personnel, our business could be adversely
affected.

     If any of our manager's key personnel ceases to participate in our business
and operations, our profitability could suffer. Our success is substantially
dependent upon the retention of, and the continued performance by, our manager's
key personnel, including Rocco B. Commisso, the Chairman and Chief Executive
Officer of our manager. Our manager has not entered into an employment agreement
with Mr. Commisso. Neither our manager nor we currently maintains key man life
insurance on Mr. Commisso or other key personnel.

     In addition, our subsidiary credit facilities provide that a default will
result if any person or group, other than Mr. Commisso and certain of his
affiliates, becomes the beneficial owner of an amount of aggregate voting power
of our manager's common stock on a fully-diluted basis that equals or exceeds
the greater of: (i) 35% and (ii) the amount of aggregate voting power of our
manager's common stock on a fully diluted basis owned by Mr. Commisso and such
affiliates at the time.

   The Chairman and Chief Executive Officer of our manager has the ability to
control all major decisions, which could inhibit or prevent a change of control
or change in management. A sale of his stock in our manager could result in a
change of control that could have unpredictable effects.

     Rocco B. Commisso, the Chairman and Chief Executive Officer of our manager,
beneficially owned common stock of our manager representing approximately 80.4%
of the combined voting power of all of its common stock as of December 31, 2002.
As a result, Mr. Commisso generally has the ability to control the outcome of
all matters requiring approval by stockholders of our manager, including the
election of its entire board of directors, and Mr. Commisso may be deemed to
control our company.

     We cannot assure you that Mr. Commisso will maintain all or any portion of
his ownership in our manager or that he would continue as an officer or director
of our manager if he sold a significant part of his stock. The disposition by
Mr. Commisso of a sufficient number of his shares of our manager's stock could
result in a change in control of our manager and of us, and we cannot assure you
that a change of control would not adversely affect our business, financial
condition and results of operations. As noted above, it could also result in a
default under our bank credit facilities.

   Our cable television business is subject to extensive governmental
regulation.

     The cable television industry is subject to extensive legislation and
regulation at the federal and local levels, and, in some instances, at the state
level, and many aspects of such regulation are currently the subject of judicial
and administrative proceedings and legislative and administrative proposals. We
expect that court actions and regulatory proceedings will continue to refine our
rights and obligations under applicable federal, state and local laws. The
results of these judicial and administrative proceedings and legislative
activities may materially affect our business operations. Local authorities
grant us non-exclusive franchises that permit us to operate our cable systems.
We will have to renew or renegotiate these franchises from time to time. Local
franchising authorities may demand concessions, or other commitments, as a
condition to renewal, which concessions or other commitments could be costly to
obtain. The Communications Act contains renewal procedures and criteria designed
to protect incumbent franchisees against arbitrary denials of renewal, and
although such Act requires the local franchising authorities to take into
account the costs of meeting such concessions or commitments, there is no
assurance that we will not be required to meet their demands in order to obtain
renewals. We cannot predict whether any of the markets in which we operate will
expand the regulation of our cable systems in the future or the impact that any
such expanded regulation may have upon our business.

     Similarly, due to the increasing popularity and use of commercial online
services and the Internet, it is possible that a number of laws and regulations
may be adopted with respect to commercial online services and the Internet,
including laws covering such issues as privacy, access to some types of content
by minors, pricing, bulk e-mail or "spam," encryption standards, consumer
protection, electronic commerce, taxation of e-commerce, copyright infringement
and other intellectual property matters. The adoption of such laws or
regulations in the future may decrease the growth of such services and the
Internet, which could in turn decrease the demand for our cable modem service,
increase our costs of providing such service or have other adverse effects on
our business, financial condition and results of operations.

                                       40

<PAGE>

     Our franchises are non-exclusive and local franchising authorities may
grant competing franchises in our markets.

     Our cable systems are operated under non-exclusive franchises granted by
local franchising authorities. As a result, competing operators of cable systems
and other potential competitors, such as municipal utility providers, may be
granted franchises and may build cable systems in markets where we hold
franchises. Any such competition could adversely affect our business. The
existence of multiple cable systems in the same geographic area is generally
referred to as an "overbuild". As of December 31, 2002, approximately 7.0% of
the homes passed by our cable systems were overbuilt by other cable operators.
We cannot assure you that competition will not develop in other markets that we
now serve or that we will serve after any future acquisitions.

   Pending FCC and court proceedings could adversely affect our Internet access
service.

     The legal and regulatory status of providing high-speed Internet access
service by cable television companies is uncertain. The adoption of new rules by
the FCC or rulings in court proceedings could place additional costs and
regulatory burdens on us, reduce our anticipated revenues or increase our
anticipated costs for this service, complicate the franchise renewal process,
result in greater competition or otherwise adversely affect our business.
Although the FCC has issued a declaratory ruling that cable modem service, as it
is currently offered, is properly classified as an interstate information
service that is not subject to common carrier regulation, the FCC is still
considering whether to require cable companies to provide capacity on their
systems to other entities to deliver high-speed Internet directly to customers,
also known as "open access", whether certain other regulatory requirements do or
should apply to cable modem service, and whether and to what extent this service
may be subject to local franchise authorities' regulatory requirements or
franchise fees. There can be no assurance that regulatory authorities will not
impose "open access" or similar requirements on us as part of an industry-wide
requirement. Such requirements could have a negative impact on our business and
results of operations.

   We may be subject to legal liability because of the acts of our Internet
service customers or because of our own negligence.

     Our cable modem service enables individuals to access the Internet and to
exchange information, generate content, conduct business and engage in various
online activities on an international basis. The law relating to the liability
of providers of these online services for activities of their users is currently
unsettled both within the United States and abroad. Potentially, third parties
could seek to hold us liable for the actions and omissions of our cable modem
service customers, such as defamation, negligence, copyright or trademark
infringement, fraud or other theories based on the nature and content of
information that our customers use our service to post, download or distribute.
We also could be subject to similar claims based on the content of other
Websites to which we provide links or third-party products, services or content
that we may offer through our Internet service. Due to the global nature of the
Web, it is possible that the governments of other states and foreign countries
might attempt to regulate its transmissions or prosecute us for violations of
their laws.

                                       41

<PAGE>

     It is also possible that, if any information provided directly by us will
contain errors or otherwise be negligently provided to users, resulting in third
parties making claims against us. For example, we offer Web-based email
services, which expose us to potential risks, such as liabilities or claims
resulting from unsolicited email, lost or misdirected messages, illegal or
fraudulent use of email, or interruptions or delays in email service.

     To date, no one has filed a claim of any of these kinds against us, but
someone may file a claim of that type in the future in either domestic or
international jurisdictions, and may be successful in imposing liability on us.
Our defense of any such actions could be costly and involve significant
distraction of our management and other resources. If we are held or threatened
with significant liability, we may decide to take actions to reduce our exposure
to this type of liability. This may require us to spend significant amounts of
money for new equipment and may also require us to discontinue offering some
features or our cable modem service.

     Since our manager launched its proprietary Mediacom OnlineSM Internet
service in February 2002, we from time to time receive notices of claimed
infringements by our cable modem service users. The owners of copyrights and
trademarks have been increasing active in seeking to prevent use of the Internet
to violate their rights. In many cases, their claims of infringement are based
on the acts of customers of an Internet service provider--for example, a
customer's use of an Internet service or the resources it provides to post,
download or disseminate copyrighted music or other content without the consent
of the copyright owner or to seek to profit from the use of the goodwill
associated with another person's trademark. In some cases, copyright and
trademark owners have sought to recover damages from the Internet service
provider, as well as or instead of the customer. The law relating to the
potential liability of Internet service providers in these circumstances is
unsettled. In 1996, Congress adopted the Digital Millennium Copyright Act, which
is intended to grant ISPs protection against certain claims of copyright
infringement resulting from the actions of customers, provided that the ISP
complies with certain requirements. So far, Congress has not adopted similar
protections for trademark infringement claims.

  If we offer telecommunications services, we may become subject to additional
regulatory burdens.

     If we provide telecommunications services over our communications
facilities, we may be required to obtain additional federal, state and local
permits or other governmental authorizations to offer these services. This
process, together with accompanying regulation of these services, would place
additional costs and regulatory burdens on us.

                                       42

<PAGE>

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     In the normal course of business, we use interest rate exchange agreements
in order to fix the interest rate on our floating rate debt. As of December 31,
2002, we had interest rate exchange agreements with various banks pursuant to
which the interest rate on $390.0 million is fixed at a weighted average rate of
approximately 4.4%, plus the average applicable margin over the eurodollar rate
option under our bank credit agreements. Under the terms of the interest rate
exchange agreements, which expire from 2003 through 2007, we are exposed to
credit loss in the event of nonperformance by the other parties. However, we do
not anticipate their nonperformance. At December 31, 2002, we would have paid
approximately $8.9 million if we terminated these agreements, inclusive of
accrued interest. The table below provides information on our long-term debt.
See Note 6 to our consolidated financial statements.

<TABLE>
<CAPTION>
                                                  EXPECTED MATURITY
                      ---------------------------------------------------------------------------
                                          (All dollar amounts in thousands)
                        2003         2004        2005         2006          2007       THEREAFTER       TOTAL        FAIR VALUE
                      --------     --------    --------     ---------     ---------    ----------     ----------     ----------
<S>                   <C>          <C>         <C>          <C>           <C>          <C>            <C>            <C>
Fixed rate            $      -     $      -    $     -      $       -     $       -    $  200,000     $  200,000     $  181,000
Weighted average
  interest rate            8.5%         8.5%        8.5%          8.5%          8.5%          8.5%           8.5%

Fixed rate            $      -     $      -    $     -      $       -     $       -    $  125,000     $  125,000     $  104,000
Weighted average
  interest rate            7.9%         7.9%        7.9%          7.9%          7.9%          7.9%           7.9%

Fixed rate            $      -     $      -    $     -      $       -     $       -    $  500,000     $  500,000     $  456,000
Weighted average
  interest rate            9.5%         9.5%        9.5%          9.5%          9.5%          9.5%           9.5%

Variable rate         $  2,000     $  2,000    $ 22,000     $ 168,750     $ 182,000    $  346,750     $  723,500     $  723,500
Weighted average
  interest rate            3.7%         3.7%        3.7%          3.7%          3.7%          3.7%           3.7%
</TABLE>

                                       43

<PAGE>

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          MEDIACOM LLC AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                    Contents
<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
    <S>                                                                                                          <C>
     Report of Independent Accountants - PricewaterhouseCoopers LLP..........................................    44
     Report of Independent Public Accountants - Arthur Andersen LLP..........................................    47
     Consolidated Balance Sheets as of December 31, 2002 and 2001............................................    48
     Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000..............    49
     Consolidated Statements of Changes in Member's (Deficit) Equity and Comprehensive Loss for the Years
      Ended December 31, 2002, 2001, and 2000................................................................    50
     Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000..............    51
     Notes to Consolidated Financial Statements..............................................................    52
     Financial Statement Schedule:  Schedule II-Valuation and Qualifying Accounts............................    62
</TABLE>

                                       44

<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Member of Mediacom LLC:

In our opinion, the accompanying consolidated balance sheet as of December 31,
2002 and the related consolidated statements of operations, of changes in
stockholders' equity, and of cash flows present fairly, in all material
respects, the financial position of Mediacom LLC and its subsidiaries (the
Company) at December 31, 2002, and the results of their operations and their
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audit. We
conducted our audit of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion. The
Company's consolidated financial statements as of December 31, 2001, and for
each of the two years in the period ended December 31, 2001, were audited by
other independent accountants who have ceased operations. Those independent
accountants expressed an unqualified opinion on those financial statements in
their report dated February 13, 2002.

As discussed above, the Company's consolidated financial statements as of
December 31, 2001, and for each of the two years in the period ended December
31, 2001, were audited by other independent accountants who have ceased
operations. As described in Note 2, those financial statements have been revised
to include the transitional disclosures required by Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets", which was
adopted by the Company as of January 1, 2002. We audited the transitional
disclosures for 2001 and 2000 included in Note 2. In our opinion, the
transitional disclosures for 2001 and 2000 in Note 2 are appropriate. However,
we were not engaged to audit, review, or apply any procedures to the 2001 or
2000 financial statements of the Company other than with respect to such
disclosures and, accordingly, we do not express an opinion or any other form of
assurance on the 2001 or 2000 financial statements taken as a whole.

As discussed in Note 2 to the consolidated financial statements, the Company
changed its method of accounting for goodwill effective January 1, 2002.

/s/ PricewaterhouseCoopers LLP

New York, New York
February 24, 2003

                                       45

<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS
                         ON FINANCIAL STATEMENT SCHEDULE

To the Member of Mediacom LLC:

Our audit of the consolidated financial statements referred to in our report
dated February 24, 2003 appearing in this Annual Report on Form 10-K also
included an audit of the financial statement schedule [previously referred to as
Schedule II - Valuation and Qualifying Accounts by the predecessor auditor] for
the year ended December 31, 2002 listed in Item 8 of this Form 10-K. In our
opinion, the financial statement schedule for the year ended December 31, 2002
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements. The
financial statement schedules of Mediacom LLC and its subsidiaries for the years
ended December 31, 2001 and December 31, 2000, were audited by other independent
accountants who have ceased operations. Those independent accountants expressed
an unqualified opinion on those financial statement schedules in their report
dated February 13, 2002.

/s/ PricewaterhouseCoopers LLP

New York, New York
February 24, 2003

                                       46

<PAGE>

THE FOLLOWING REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN
LLP AND HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP.

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Member of Mediacom LLC:

We have audited the accompanying consolidated balance sheets of Mediacom LLC (a
New York limited liability company) and subsidiaries as of December 31, 2001 and
2000, and the related consolidated statements of operations, changes in member's
equity and comprehensive loss and cash flows for each of the three years in the
period ended December 31, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mediacom LLC and subsidiaries
as of December 31, 2001 and 2000, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2001 in
conformity with accounting principles generally accepted in the United States.

As explained in Note 2 to the consolidated financial statements, effective
January 1, 2001, the Company changed its method of accounting for derivative
instruments.

Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. Schedule II--Valuation and
Qualifying Accounts is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not part of the basic consolidated
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic consolidated financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic consolidated financial
statements taken as a whole.

                                                         /s/ ARTHUR ANDERSEN LLP

Stamford, Connecticut
February 13, 2002

                                       47

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                          (All dollar amounts in 000's)

<TABLE>
<CAPTION>
                                                                                                 DECEMBER 31,
                                                                                            2002           2001
                                                                                        ------------     ------------
<S>                                                                                     <C>              <C>
                                         ASSETS

Cash and cash equivalents........................................................       $     20,890     $      7,378
Investments......................................................................              4,070            4,070
Subscriber accounts receivable, net of allowance for doubtful accounts
   of $1,106 and $1,095, respectively............................................             20,709           19,691
Prepaid expenses and other assets................................................             15,256            6,917
Preferred investment in affiliated company.......................................            150,000          150,000
Investment in cable television systems:
   Inventory.....................................................................             13,512           29,012
   Property, plant and equipment, at cost........................................          1,233,276        1,056,525
   Less: accumulated depreciation................................................           (498,514)        (338,930)
                                                                                        ------------     ------------
     Property, plant and equipment, net..........................................            734,762          717,595
   Intangible assets, net of accumulated amortization of $224,669 and
     $197,860, respectively......................................................            585,144          605,053
                                                                                        ------------     ------------
     Total investment in cable television systems................................          1,333,418        1,351,660
Other assets, net of accumulated amortization of $13,044 and $9,733,
   respectively..................................................................             22,897           26,329
                                                                                        ------------     ------------
     Total assets................................................................       $  1,567,240     $  1,566,045
                                                                                        ============     ============
                       LIABILITIES AND MEMBER'S (DEFICIT) EQUITY

LIABILITIES
   Debt..........................................................................       $  1,548,500     $  1,425,500
   Accounts payable and accrued expenses.........................................             89,643          113,150
   Deferred revenue..............................................................             14,890           13,404
                                                                                        ------------     ------------
     Total liabilities...........................................................          1,653,033        1,552,054
                                                                                        ------------     ------------
   Commitments and Contingencies (Note 9)

MEMBER'S (DEFICIT) EQUITY
   Capital contributions.........................................................            548,521          543,198
   Accumulated deficit...........................................................           (634,314)        (529,207)
                                                                                        ------------     ------------
     Total member's (deficit) equity.............................................            (85,793)         13,991
                                                                                        ------------     ------------
     Total liabilities and member's (deficit) equity.............................       $  1,567,240     $  1,566,045
                                                                                        ============     ============
</TABLE>

                                       48

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             (All amounts in 000's)

<TABLE>
<CAPTION>
                                                                                   YEARS ENDED DECEMBER 31,
                                                                               2002            2001           2000
                                                                            -----------    -------------    -----------
<S>                                                                         <C>            <C>              <C>
Revenues...............................................................     $   410,241    $     369,275    $  328,258

Costs and expenses:
     Service costs.....................................................         152,684          130,473        110,442
     Selling, general and administrative expenses......................          68,563           63,846         55,820
     Management fee expense............................................           5,785            5,830          6,029
     Depreciation and amortization.....................................         194,862          221,645        177,928
     Non-cash stock charges relating to management fee expense.........           5,323            2,904         28,254
                                                                            -----------    -------------    -----------
Operating loss.........................................................         (16,976)         (55,423)       (50,215)

Interest expense, net..................................................         102,458           93,823         68,973
(Gain) loss on derivative instruments, net.............................          (1,172)           8,441              -
Investment income from affiliate.......................................         (18,000)          (8,120)             -
Other expenses (income)................................................           4,845          (23,885)        30,036
                                                                            -----------    -------------    -----------
Net loss before cumulative effect of accounting change.................        (105,107)        (125,682)      (149,224)
Cumulative effect of accounting change.................................               -           (1,642)             -
                                                                            -----------    -------------    -----------
Net loss...............................................................     $  (105,107)   $    (127,324)   $  (149,224)
                                                                            ===========    =============    ===========
</TABLE>

           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.

                                       49

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CHANGES IN
                MEMBER'S (DEFICIT) EQUITY AND COMPREHENSIVE LOSS
                          (All dollar amounts in 000's)

<TABLE>
<CAPTION>
                                                           ACCUMULATED
                                             CAPITAL      COMPREHENSIVE     ACCUMULATED
                                          CONTRIBUTIONS        LOSS           DEFICIT         TOTAL
                                          -------------   -------------    ------------     -----------
<S>                                       <C>             <C>              <C>              <C>
Balance, December 31, 1999                $     182,013   $         261    $   (127,659)    $    54,615
   Comprehensive loss:
     Net loss                                         -               -        (149,224)
     Unrealized loss on investments                   -            (675)              -
     Comprehensive loss                                                                        (149,899)
   Equity contribution from MCC                 354,500               -               -         354,500
   Vesting of equity granted to
     management, net of forfeiture                3,781               -               -           3,781
                                          -------------   -------------    ------------     -----------
Balance, December 31, 2000                $     540,294   $        (414)   $   (276,883)    $   262,997
   Comprehensive loss:
     Net loss                                         -               -        (127,324)
     Unrealized gain on investments                   -             414               -
     Comprehensive loss                               -               -               -        (126,910)
   Dividend payment to parent                         -               -        (125,000)       (125,000)
   Vesting of equity granted to
      management, net of forfeiture               2,904               -               -           2,904
                                          -------------   -------------    ------------     -----------
Balance, December 31, 2001                $     543,198   $           -    $   (529,207)    $    13,991
   Net loss                                           -               -        (105,107)       (105,107)
   Vesting of equity granted to
      management, net of forfeiture               5,323               -               -           5,323
                                          -------------   -------------    ------------     -----------
Balance, December 31, 2002                $     548,521   $           -    $   (634,314)    $   (85,793)
                                          =============   =============    ============     ===========
</TABLE>

           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.

                                       50

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (All dollar amounts in 000's)

<TABLE>
<CAPTION>
                                                                                      YEARS ENDED DECEMBER 31,
                                                                               -----------------------------------------
                                                                                   2002          2001           2000
                                                                               -----------   ------------   ------------
<S>                                                                            <C>           <C>            <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
   Net loss............................................................        $  (105,107)  $   (127,324)  $   (149,224)
   Adjustments to reconcile net loss to net cash flows from operating
     activities:
     Depreciation and amortization.....................................            194,862        221,645        177,928
     (Gain) loss on derivative instruments, net........................             (1,172)        10,083              -
     Impairment of available-for-sale securities.......................                  -            329         28,488
     Vesting of management stock.......................................              5,323          2,904         28,254
     Amortization of SoftNet Systems revenue                                             -           (287)        (2,502)
     Termination of SoftNet Systems agreement..........................                  -        (29,957)             -
     Amortization of deferred financing costs..........................              3,754          3,984              -
     Changes in assets and liabilities, net of effects from acquisitions:
       Subscriber accounts receivable, net.............................             (1,033)         1,186           (980)
       Prepaid expenses and other assets...............................             (8,339)       (47,894)        (2,276)
       Accounts payable and accrued expenses...........................            (22,341)        70,321         13,855
       Deferred revenue................................................              1,486         (2,799)          (325)
                                                                               -----------   ------------   ------------
         Net cash flows provided by operating activities...............             67,433        102,191         93,218
                                                                               -----------   ------------   ------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
   Capital expenditures................................................           (167,789)      (244,890)      (182,552)
   Acquisitions of cable television systems............................             (6,548)             -       (112,142)
   Preferred investment in affiliated company..........................                  -       (150,000)             -
   Other investing activities..........................................             (2,262)        (4,056)          (919)
                                                                               -----------   ------------   ------------
         Net cash flows used in investing activities...................           (176,599)      (398,946)      (295,613)
                                                                               -----------   ------------   ------------

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
   New borrowings......................................................            356,750        941,500        318,000
   Repayment of debt...................................................           (233,750)      (503,000)      (470,000)
   Dividend payment....................................................                  -       (125,000)             -
   Capital contributions...............................................                  -              -        354,500
   Financing costs.....................................................               (322)       (13,460)          (485)
                                                                               -----------   ------------   ------------
         Net cash flows provided by financing activities...............            122,678        300,040        202,015
                                                                               -----------   ------------   ------------
         Net increase (decrease) in cash and cash equivalents..........             13,512          3,285           (380)

CASH AND CASH EQUIVALENTS, beginning of year...........................              7,378          4,093          4,473
                                                                               -----------   ------------   ------------
CASH AND CASH EQUIVALENTS, end of year.................................        $    20,890   $      7,378   $      4,093
                                                                               -----------   ------------   ------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash during the year for interest...................................        $   107,047   $     78,751   $     74,811
                                                                               ===========   ============   ============
</TABLE>

           The accompanying notes to consolidated financial statements
                    are an integral part of these statements.

                                       51

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  LIMITED LIABILITY COMPANY

   Organization

     Mediacom LLC ("Mediacom," and collectively with its subsidiaries, the
"Company"), a New York limited liability company wholly-owned by Mediacom
Communications Corporation ("MCC"), is involved in the acquisition and
development of cable systems serving smaller cities and towns in the United
States. Through these cable systems, the Company provides entertainment,
information and telecommunications services to its subscribers. As of December
31, 2002, the Company was operating cable systems in 22 states, principally
Alabama, California, Delaware, Florida, Illinois, Indiana, Iowa, Kentucky,
Minnesota, Missouri, North Carolina and South Dakota.

     On February 9, 2000, MCC, a Delaware corporation organized in November
1999, completed an initial public offering of its Class A common stock.
Immediately prior to the completion of its initial public offering, MCC issued
shares of its Class A and Class B common stock in exchange for all of the
outstanding membership interests in Mediacom and became the sole member and
manager of Mediacom.

     Prior to February 9, 2000, Mediacom conducted its affairs pursuant to an
amended and restated operating agreement among its members. Pursuant to this
amended and restated operating agreement, net losses were generally allocated
first to the Commisso Members (the "Primary Members"), as defined therein,
including the Chairman and Chief Executive Officer of MCC (the "Manager"), and
the balance of the net losses to the other members ratably in accordance with
their respective membership units.

     Mediacom serves as a holding company for the Company's operating
subsidiaries. Each operating subsidiary is wholly-owned by Mediacom, except for
a 1.0% ownership interest in a subsidiary, Mediacom California LLC, that is held
by Mediacom Management Corporation ("Mediacom Management"), a Delaware
corporation.

     Mediacom Capital Corporation ("Mediacom Capital"), a New York corporation
wholly-owned by Mediacom, was organized in March 1998 for the sole purpose of
acting as co-issuer with Mediacom of public debt securities. Mediacom Capital
has nominal assets and does not conduct operations of its own.

   Capitalization

     On February 9, 2000, Mediacom received an equity contribution from MCC of
$354.5 million. For the years ended December 31, 1999 and 1998, Mediacom
received equity contributions from its members of $10.5 million and $94.0
million, respectively.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   Basis of Preparation of Consolidated Financial Statements

     The consolidated financial statements include the accounts of Mediacom and
its subsidiaries. All significant intercompany transactions and balances have
been eliminated. The preparation of the consolidated financial statements in
conformity with generally accepted accounting principles in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

   Revenue Recognition

     Revenues include amounts billed to customers for services provided,
installations, advertising and other services. Revenues from basic, premium,
pay-per-view and data services are recognized when the services are provided to
the customers. Installation revenues are recognized to the extent of direct
installation costs incurred. Advertising sales

                                       52

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

are recognized in the period that the advertisements are exhibited. Franchise
fees are collected on a monthly basis and are periodically remitted to local
franchise authorities. Franchise fees collected and paid are reported as
revenues and expenses.

   Cash and Cash Equivalents

     The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.

   Concentration of Credit Risk

     The Company's accounts receivable are comprised of amounts due from
subscribers in varying regions throughout the United States. Concentration of
credit risk with respect to these receivables is limited due to the large number
of customers comprising the Company's customer base and their geographic
dispersion. The Company invests its cash with high quality financial
institutions.

   Investments

     Investments consist of equity securities. Management classifies these
securities as available-for-sale securities under the provisions defined in the
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Available-for-sale securities are
carried at market value, with unrealized gains and losses reported as a
component of accumulated comprehensive income (loss). If a decline in the fair
value of the security is judged to be other than temporary, a realized loss will
be recorded.

   Inventory

     Inventory consists primarily of fiber-optic cable, coaxial cable,
electronics, hardware and miscellaneous tools and is stated at the lower of cost
or market. Cost is determined using the first-in first-out (FIFO) method.

   Property, Plant and Equipment

     Property, plant and equipment is recorded at cost. The Company capitalizes
a portion of direct and indirect costs related to the construction, replacement
and installation of property, plant and equipment, including certain costs
related to new video and new high-speed Internet subscriber installations. The
Company also capitalized interest in connection with cable system construction
of approximately $2.7 million and $3.9 million for the years ended December 31,
2002 and 2001, respectively. Capitalized costs are charged to property, plant
and equipment and depreciated over the life of the related assets. The Company
performs periodic evaluations of the estimates used to determine the amount of
costs that are capitalized.

     Amounts incurred for repairs and maintenance are charged to operations in
the period incurred.

     Depreciation is calculated on a straight-line basis over the following
useful lives:

     Buildings....................................   40 years
     Leasehold improvements.......................   Life of respective lease
     Cable systems and equipment..................   5 to 10 years
     Subscriber devices...........................   5 years
     Vehicles.....................................   5 years
     Furniture, fixtures and office equipment.....   5 to 10 years

                                       53

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   Definite-Lived Intangible Assets

     Definite-lived intangible assets include subscriber lists and covenants not
to compete. Amortization of definite-lived intangible assets is calculated on a
straight-line basis over the following lives:

        Subscriber lists.............................   5 years
        Covenants not to compete.....................   3 to 7 years

     As of December 31, 2002, these amortizable definite-lived intangible assets
had a gross value of $139.8 million, with accumulated amortization of $118.9
million. The Company's estimated aggregate amortization expense for the year of
2003 is $20.9 million and during 2003 the assets will be fully amortized.

   Indefinite-Lived Intangible Assets

     Indefinite-lived intangible assets include franchise costs and goodwill.
The Company has adopted Statement of Financial Accounting Standards No. 141
("SFAS 141") "Business Combinations" and No. 142 ("SFAS 142") "Goodwill and
Other Intangible Assets". SFAS 141 requires all business combinations initiated
after June 30, 2001 to be accounted for using the purchase method. Adoption of
SFAS 141 had no effect on the Company's results of operations or financial
position as the Company accounts for all acquisitions under the purchase method.
The provisions of SFAS 142, which were adopted by the Company on January 1,
2002, prohibit the amortization of goodwill and indefinite-lived intangible
assets and require such assets to be tested annually for impairment, or more
frequently if impairment indicators arise. The Company has determined that its
cable franchise costs are indefinite-lived assets. Upon adoption, the Company
performed initial impairment tests and determined that there was no impairment.
The Company conducted its annual impairment tests as of September 30, 2002,
utilizing discounted cash flow analysis, and they did not result in any
impairment of goodwill or indefinite-lived intangible assets. The impact of
adopting SFAS 142 was to reduce amortization expense by $44.7 million for the
year ended December 31, 2002.

     The following table provides a reconciliation of the results of operations
for the years ended December 31, 2001 and 2000 to the net loss that would have
been reported had franchise cost and goodwill amortization not been recorded as
of January 1, 2000:

                                                        2001           2000
                                                    ------------   ------------
                                                       (dollars in thousands)
                                                            (unaudited)
     Reported net loss............................  $   (127,324)  $   (149,224)
       Add back:  franchise cost amortization.....        43,751         43,751
       Add back:  goodwill amortization...........           913            913
                                                    ------------   ------------
     Adjusted pro forma net loss..................  $    (82,660)  $   (104,560)
                                                    ============   ============

   Impairment of Long-Lived Assets

     The Company follows the provisions of Statement of Financial Accounting
Standards No. 144 ("SFAS 144"), "Accounting for the Impairment or Disposal of
Long-Lived Assets" SFAS 144 addresses financial accounting and reporting for the
impairment or disposal of long-lived assets and provides guidance on
classification and accounting for such assets when held for sale or abandonment.
There has been no impairment of long-lived assets of the Company under SFAS 144.
The Company adopted SFAS 144 as of January 1, 2002.

   Other Assets

     Other assets include debt financing costs of approximately $22.9 million
and $26.3 million as of December 31, 2002 and 2001, respectively. Financing
costs incurred to raise debt are deferred and amortized over the expected term
of such financings and are included in other expense (income).

                                       54

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   Accounting for Derivative Instruments

     Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities." As a result, the Company recorded a charge
of approximately $1.6 million, as a change in accounting principle, in the first
quarter of 2001. The Company uses interest rate exchange agreements in order to
fix the interest rate for the duration of the contract to hedge against interest
rate volatility.

   Comprehensive Loss

     The Company adopted Statement of Financial Accounting Standards No. 130
("SFAS 130"), "Reporting Comprehensive Income," which establishes standards for
reporting and displaying comprehensive loss and its components in the
consolidated financial statements. In accordance with SFAS 130, the Company
records temporary unrealized gains and losses on investments as a component of
accumulated comprehensive loss.

   Income Taxes

Since the Company is a limited liability company, it is not subject to federal
or state income taxes and no provision for income taxes relating to its
operations has been reflected in the accompanying consolidated financial
statements. Income or loss of the limited liability company is reported in MCC's
income tax returns.

   Segment Reporting

     In accordance with Statement of Financial Accounting Standards No. 131,
"Disclosure about Segments of an Enterprise and Related Information," segments
have been identified based upon management responsibility. Management has
identified cable services as the Company's one reportable segment.

   Reclassifications

     Certain reclassifications have been made to prior year's amounts to conform
to the current year's presentation.


(3)  ACQUISITIONS

     The Company has made acquisitions of cable systems to increase the number
of customers and markets it serves. These acquisitions were accounted for using
the purchase method of accounting, and accordingly, the purchase price of the
acquired systems has been allocated to the assets acquired and liabilities
assumed at their estimated fair values at their respective dates of acquisition.
The results of operations of the acquired systems have been included with those
of the Company since the dates of acquisition.

   2000

     During 2000, the Company completed nine acquisitions of cable systems
serving 53,000 basic subscribers for an aggregate purchase price of $109.2
million. The cable systems serve communities in the states of Alabama, Illinois,
Iowa, Kentucky, Minnesota and South Dakota. The aggregate purchase price has
been allocated as follows: approximately $49.4 million to property, plant and
equipment and approximately $59.8 million to intangible assets. These
acquisitions were financed with borrowings under the Company's bank credit
facilities (See Note 6).

                                       55

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4)  PROPERTY, PLANT AND EQUIPMENT

     As of December 31, 2002 and 2001, property, plant and equipment consisted
of:

<TABLE>
<CAPTION>
                                                                      2002               2001
                                                                ---------------     ---------------
                                                                       (dollars in thousands)
     <S>                                                        <C>                 <C>
     Land and land improvements............................     $         1,015     $           931
     Buildings and leasehold improvements..................              16,686              12,736
     Cable systems, equipment and subscriber devices.......           1,174,948           1,009,247
     Vehicles..............................................              28,541              24,142
     Furniture, fixtures and office equipment..............              12,086               9,469
                                                                ---------------     ---------------
                                                                      1,233,276           1,056,525
     Accumulated depreciation..............................            (498,514)           (338,930)
                                                                ---------------     ---------------
     Property, plant and equipment, net....................     $       734,762     $       717,595
                                                                ===============     ===============
</TABLE>

     Depreciation expense for the years ended December 31, 2002, 2001 and 2000
was approximately $168.1 million, $148.3 million and $106.8 million,
respectively.

(5)  INTANGIBLE ASSETS

     The following table summarizes the net asset value for each intangible
asset category as of December 31, 2002 and 2001 (dollars in thousands):

<TABLE>
<CAPTION>
                                                    GROSS ASSET    ACCUMULATED       NET ASSET
     2002                                              VALUE       AMORTIZATION        VALUE
     -------------------------------------------   ------------    ------------     -----------
     <S>                                           <C>             <C>              <C>
     Franchise costs............................   $    656,268    $    103,026     $   553,242
     Goodwill...................................         13,699           2,682          11,017
     Subscriber lists...........................        134,151         113,652          20,499
     Covenants not to compete...................          5,695           5,309             386
                                                   ------------    ------------     -----------
                                                   $    809,813    $    224,669     $   585,144
                                                   ============    ============     ===========

<CAPTION>
                                                    GROSS ASSET    ACCUMULATED       NET ASSET
     2001                                              VALUE       AMORTIZATION        VALUE
     -------------------------------------------   ------------    ------------     -----------
     <S>                                           <C>             <C>              <C>
     Franchise costs............................    $   649,364    $    103,026     $   546,338
     Goodwill...................................         13,699           2,682          11,017
     Subscriber lists...........................        134,150          87,641          46,509
     Covenants not to compete...................          5,700           4,511           1,189
                                                   ------------    ------------     -----------
                                                   $    802,913    $    197,860     $   605,053
                                                   ============    ============     ===========
</TABLE>

     Amortization expense for the years ended December 31, 2002, 2001 and 2000
was approximately $26.8 million, $73.3 million and $71.1 million, respectively.

                                       56

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(6)  DEBT

     As of December 31, 2002 and 2001, debt consisted of:

<TABLE>
<CAPTION>
                                                                   2002               2001
                                                               --------------    --------------
                                                                   (dollars in thousands)
         <S>                                                   <C>               <C>
         Bank credit facilities...........................     $      723,500    $      600,500
         8 1/2% senior notes..............................            200,000           200,000
         7 7/8% senior notes..............................            125,000           125,000
         9 1/2% senior notes..............................            500,000           500,000
                                                               --------------    --------------
                                                               $    1,548,500    $    1,425,500
                                                               ==============    ==============
</TABLE>

   Bank Credit Facilities

     On September 30, 1999, operating subsidiaries of Mediacom entered into a
$550.0 million senior secured credit facility, consisting of a $450.0 million
reducing revolving credit facility and a $100.0 million term loan (the "Mediacom
USA Credit Agreement"). The revolving credit facility expires on March 31, 2008,
and is subject to earlier expiration on June 30, 2007 if Mediacom does not
refinance the 8 1/2% Senior Notes by March 31, 2007. The revolving credit
facility makes available a maximum commitment amount for a period of up to eight
and one-half years, which is subject to quarterly reductions, beginning
September 30, 2002, ranging from 1.25% to 17.50% of the original commitment
amount. As of December 31, 2002, the maximum commitment amount available under
the revolving credit facility was $438.8 million, and $245.5 million was
outstanding under such facility. For the year ended December 31, 2003, the
maximum commitment amount under the revolving credit facility will be reduced by
$22.5 million, or 5% of the original commitment amount. The Mediacom USA Credit
Agreement requires mandatory reductions of the revolving credit facility from
excess cash flow, as defined therein, which began on December 31, 2002. The term
loan matures on September 30, 2008, and is subject to repayment on September 30,
2007 if Mediacom does not refinance the 8 1/2% Senior Notes by March 31, 2007.
The term loan is payable in quarterly installments which began on September 30,
2002. As of December 31, 2002, the outstanding debt under the term loan was
$99.5 million. For the year ended December 31, 2003, the term loan will be
reduced by $1.0 million or 1% of the original amount of the term loan. The
Mediacom USA Credit Agreement provides for interest at varying rates based upon
various borrowing options and the attainment of certain financial ratios, and
for commitment fees of 1/4% to 3/8% per annum on the unused portion of
available credit under the reducing revolver credit facility. Interest on
outstanding revolver loans is payable at either a eurodollar rate plus a
floating percentage ranging from 0.75% to 2.25% or the base rate plus a floating
percentage ranging from 0% to 1.25%. Interest on the term loans is payable at
either the eurodollar rate plus a floating percentage ranging from 2.50% to
2.75% or the base rate plus a floating percentage ranging from 1.50% to 1.75%.

     On November 5, 1999, operating subsidiaries of Mediacom entered into a
$550.0 million senior secured credit facility, consisting of a $450.0 million
reducing revolving credit facility and a $100.0 million term loan (the "Mediacom
Midwest Credit Agreement", together with the Mediacom USA Credit Agreement, the
"Bank Credit Agreements"). The revolving credit facility expires on June 30,
2008, and is subject to earlier expiration on September 30, 2007 if Mediacom
does not refinance the 8 1/2% Senior Notes by March 31, 2007. The revolving
credit facility makes available a maximum commitment amount for a period of up
to eight and one-half years, which is subject to quarterly reductions, beginning
September 30, 2002, ranging from 1.25% to 8.75% of the original commitment
amount. As of December 31, 2002, the maximum commitment amount available under
the revolving credit facility was $438.8 million, and $278.7 million was
outstanding under such facility. For the year ended December 31, 2003, the
maximum commitment amount under the revolving credit facility will be reduced by
$22.5 million, or 5% of the original commitment amount. The Mediacom Midwest
Credit Agreement requires mandatory reductions of the revolver facility from
excess cash flow, as defined therein, which began on December 31, 2002. The term
loan matures on December 31, 2008, and is subject to repayment on December 31,
2007 if Mediacom does not refinance the 8 1/2% Senior Notes by March 31, 2007.
The term loan is payable in quarterly installments which began on September 30,
2002. As of December 31, 2002, the outstanding debt under the term loan was
$99.8 million. For

                                       57

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the year ended December 31, 2003, the term loan will be reduced by $1.0 million
or 1% of the original amount of the term loan. The Midwest Credit Agreement
provides for interest at varying rates based upon various borrowing options and
the attainment of certain financial ratios, and for commitment fees of 1/4% to
3/8% per annum on the unused portion of available credit under the reducing
revolver credit facility. Interest on the outstanding revolver loans is payable
at either a eurodollar rate plus a floating percentage ranging from 0.75% to
2.25% or the base rate plus a floating percentage ranging from 0% to 1.25%.
Interest on the term loans is payable at either the eurodollar rate plus a
floating percentage ranging from 2.50% to 2.75% or the base rate plus a floating
percentage ranging from 1.50% to 1.75%.

     The Bank Credit Agreements require compliance with certain financial
covenants including, but not limited to, leverage, interest coverage and pro
forma debt service coverage ratios, as defined therein. The Bank Credit
Agreements also require compliance with other covenants including, but not
limited to, limitations on mergers and acquisitions, consolidations and sales of
certain assets, liens, the incurrence of additional indebtedness, certain
restricted payments, and certain transactions with affiliates. The Company was
in compliance with all covenants of the Bank Credit Agreements as of December
31, 2002.

     The Bank Credit Agreements are collateralized by Mediacom's pledge of all
its ownership interests in its operating subsidiaries and is guaranteed by
Mediacom on a limited recourse basis to the extent of such ownership interests.

     The average interest rate on debt outstanding under the Bank Credit
Agreements was 3.7% and 5.5% for the year ended December 31, 2002 and December
31, 2001, respectively, before giving effect to the interest rate exchange
agreements discussed below. As of December 31, 2002, the Company had
approximately $347.0 million of unused bank commitments under the Bank Credit
Agreements.

     The Company uses interest rate exchange agreements to fix the interest rate
on its floating rate debt. As of December 31, 2002, the Company had entered into
interest rate exchange agreements with various banks pursuant to which the
interest rate on $390.0 million of outstanding debt under its bank credit
facilities is fixed at a weighted average rate of approximately 4.4%, plus the
average applicable margin over the eurodollar rate option under such credit
facilities. Under the terms of the interest rate exchange agreements, which
expire from 2003 through 2006, the Company is exposed to credit loss in the
event of nonperformance by the other parties. However, the Company does not
anticipate their nonperformance.

     The fair value of the interest rate exchange agreements is the estimated
amount that the Company would receive or pay to terminate such agreements,
taking into account current interest rates and the current creditworthiness of
the Company's counterparties. At December 31, 2002, the Company would have paid
approximately $8.9 million if these agreements were terminated, inclusive of
accrued interest.

   Senior Notes

     On April 1, 1998, Mediacom and Mediacom Capital, jointly issued $200.0
million aggregate principal amount of 8 1/2% senior notes due on April 2008 (the
"8 1/2% Senior Notes"). The 8 1/2% Senior Notes are unsecured obligations of
Mediacom, and the indenture for the 8 1/2% Senior Notes stipulates, among other
things, restrictions on incurrence of indebtedness, distributions, mergers and
asset sales and has cross-default provisions related to other debt of Mediacom.
Mediacom was in compliance with the indenture governing the 8 1/2% Senior Notes
as of December 31, 2002.

     On February 26, 1999, Mediacom and Mediacom Capital jointly issued $125.0
million aggregate principal amount of 7 7/8% senior notes due on February 2011
(the "7 7/8% Senior Notes"). The 7 7/8% Senior Notes are unsecured obligations
of Mediacom, and the indenture for the 7 7/8% Senior Notes stipulates, among
other things, restrictions on incurrence of indebtedness, distributions, mergers
and asset sales and has cross-default provisions related to other debt of
Mediacom. Mediacom was in compliance with the indenture governing the 7 7/8%
Senior Notes as of December 31, 2002.

                                       58

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     On January 24, 2001, Mediacom and Mediacom Capital jointly issued $500.0
million aggregate principal amount of 9 1/2% senior notes due January 2013 (the
"9 1/2% Senior Notes"). The 9 1/2% Senior Notes are unsecured obligations of
Mediacom, and the indenture for the 9 1/2% Senior Notes stipulates, among other
things, restrictions on incurrence of indebtedness, distributions, mergers and
asset sales and has cross-default provisions related to other debt of Mediacom.
Mediacom was in compliance with the indenture governing the 9 1/2% Senior Notes
as of December 31, 2002.

   Fair Value and Debt Maturities

     The fair value of the Company's bank credit facilities approximate the
carrying value. The fair value at December 31, 2002 of the 8 1/2% Senior Notes,
the 7 7/8% Senior Notes and the 9 1/2% Senior Notes was approximately $181.0
million, $104.0 million and $456.0 million, respectively.

     The stated maturities of all debt outstanding as of December 31, 2002 are
as follows (dollars in thousands):

     2003.............................................    $         2,000
     2004.............................................              2,000
     2005.............................................             22,000
     2006.............................................            168,750
     2007                                                         182,000
     Thereafter.......................................          1,171,750
                                                          ---------------
                                                          $     1,548,500
                                                          ===============

(7)  RELATED PARTY TRANSACTIONS

     Prior to MCC's initial public offering in February 2000, separate
management agreements between Mediacom Management Corporation ("Mediacom
Management"), a Delaware corporation and each of Mediacom's operating
subsidiaries provided for Mediacom Management to be paid compensation for
management services performed for the Company. Upon MCC's initial public
offering, all management agreements with Mediacom Management were terminated and
were replaced with new agreements between MCC and the Company's operating
subsidiaries. Under such agreements, MCC is entitled to receive annual
management fees in amounts not to exceed 4.5% of the Company's gross operating
revenues. Management fees for the years ended December 31, 2002, 2001 and 2000,
amounted to approximately $5.8 million, $5.8 million and $5.4 million,
respectively. The Company incurred management fees under the agreements with
Mediacom Management of approximately $0.6 million for the years ended December
31, 2000.

     Prior to MCC's initial public offering, the Company recorded a deferred
stock expense in 1999 of approximately $25.1 million relating to additional
ownership units of Mediacom that were issued to the Manager. This deferred
expense represented the future benefit of reduced management fees. During 1999,
the Company recorded a non-cash stock charge of approximately $0.6 million in
its consolidated statements of operations for the amortization of this future
benefit.


(8)  EMPLOYEE BENEFIT PLANS

     Substantially all employees of the Company are eligible to participate in a
defined contribution plan pursuant to the Internal Revenue Code Section 401(k)
(the "Plan"). Under such Plan, eligible employees may contribute up to 15% of
their current pre-tax compensation. The Plan permits, but does not require,
matching contributions and non-matching (profit sharing) contributions to be
made by the Company up to a maximum dollar amount or maximum percentage of
participant contributions, as determined annually by the Company. The Company
presently matches 50% on the first 6% of employee contributions. The Company's
contributions under the Plan totaled approximately $0.6 million for each of the
years ended December 31, 2002, 2001 and 2000.

                                       59

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(9)  COMMITMENTS AND CONTINGENCIES

     Under various lease and rental agreements for offices, warehouses and
computer terminals, the Company had rental expense of approximately $2.4
million, $2.4 million and $2.5 million for the years ended December 31, 2002,
2001 and 2000, respectively. Future minimum annual rental payments are as
follows (dollars in thousands):

     2003.................................................  $       1,574
     2004.................................................          1,201
     2005.................................................          1,060
     2006.................................................            902
     2007.................................................            761
     Thereafter...........................................          4,043

     In addition, the Company rents utility poles in its operations generally
under short-term arrangements, but the Company expects these arrangements to
recur. Total rental expense for utility poles was approximately $4.1 million,
$3.3 million and $3.0 million for the years ended December 31, 2002, 2001 and
2000, respectively.

     As of December 31, 2002, approximately $6.5 million of letters of credit
were issued in favor of various parties to secure the Company's performance
relating to insurance and franchise requirements and pole rentals.

   Legal Proceedings

     There are no material pending legal proceedings to which the Company is a
party or to which any of the Company's properties are subject.

(10) SOFTNET SYSTEMS

     As of January 31, 2001, the Company formally terminated its relationship
with SoftNet Systems in all material respects. The Company recognized revenue of
approximately $0.3 million for the period ended January 31, 2001 and recognized
the remaining deferred revenue of approximately $30.0 million as other income in
the consolidated statements of operations in the first quarter of 2001.

(11) EQUITY

     On July 17, 2001, the Company paid a $125.0 million cash dividend to MCC
that was funded with borrowings under its bank credit facilities. (See Note 12).

(12) INVESTMENTS

     On July 18, 2001, the Company made a $150.0 million preferred equity
investment in Mediacom Broadband LLC, a Delaware limited liability company
wholly-owned by MCC, that was funded with borrowings under the Company's bank
credit facilities. The preferred equity investment has a 12% annual cash
dividend, payable quarterly in cash. For the years ended December 31, 2002 and
2001, the Company received in aggregate $18.0 million and $8.1 million,
respectively, in cash dividends on the preferred equity.

                                       60

<PAGE>

                          MEDIACOM LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(13) EMPLOYMENT ARRANGEMENTS

     During 1999, the Company recorded a deferred non-cash stock expense of
approximately $27.0 million relating to the grant of membership units of
Mediacom to certain employees for past and future services. These units vest
over five years. Upon MCC's initial public offering, all outstanding membership
units were redeemed and converted to common shares of MCC. During 2002, the
vesting of the deferred non-cash stock expense was accelerated, and accordingly,
the remainder of the related charges were expensed. For the years ended December
31, 2002, 2001, and 2000, the Company recorded a non-cash stock charge of
approximately $5.3 million, $2.9 million and $3.8 million, respectively, in its
consolidated statements of operations, relating to the vested and
non-forfeitable shares or membership units.

                                       61

<PAGE>

                                                                     SCHEDULE II
                          MEDIACOM LLC AND SUBSIDIARIES

                        VALUATION AND QUALIFYING ACCOUNTS
                          (All dollar amounts in 000's)

<TABLE>
<CAPTION>
                                            BALANCE AT        ADDITIONS
                                           BEGINNING OF     CHARGED TO COSTS                         BALANCE AT
                                              PERIOD          AND EXPENSES        DEDUCTIONS        END OF PERIOD
                                           ------------     ----------------      ----------        -------------
<S>                                        <C>                <C>                 <C>               <C>
DECEMBER 31, 2000
     Allowance for doubtful accounts
         Current receivables...........    $        772       $       4,292       $    4,132        $         932
     Acquisition reserves(1)
         Accrued expenses..............    $      5,650       $       2,134       $    2,402        $       5,382

DECEMBER 31, 2001
     Allowance for doubtful accounts
         Current receivables...........    $        932       $       6,349       $    6,186        $       1,095
     Acquisition reserves(1)
         Accrued expenses..............    $      5,382       $           -       $    5,382        $           -

DECEMBER 31, 2002
     Allowance for doubtful accounts
         Current receivables...........    $      1,095       $       6,776       $    6,765        $       1,106
     Acquisition reserves(1)
         Accrued expenses..............    $          -       $         127       $        -        $         127
</TABLE>

--------------------
/(1)/ Additions were charged in connection with purchase accounting.

                                       62

<PAGE>

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE

     We have previously reported in a current report on Form 8-K, dated April
19, 2002, that we terminated our engagement of Arthur Andersen LLP.

                                       63

<PAGE>

                                    PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS

     MCC is our sole member and manager. MCC serves as manager of our operating
subsidiaries. The executive officers of Mediacom LLC and the directors and
executive officers of MCC and Mediacom Capital are:

<TABLE>
<CAPTION>
     Name                                    Age    Position
     -----------------------------------   ------   ------------------------------------------
     <S>                                     <C>    <C>
     Rocco B. Commisso..................     53     Chairman and Chief Executive Officer
                                                    of Mediacom LLC and MCC and President and
                                                    Chief Executive Officer of Mediacom Capital

     Mark E. Stephan....................     46     Senior Vice President, Chief Financial
                                                    Officer and Treasurer of Mediacom LLC and
                                                    MCC, Director of MCC and Treasurer and
                                                    Secretary of Mediacom Capital

     James M. Carey.....................     51     Senior Vice President, Operations of MCC

     John G. Pascarelli.................     41     Senior Vice President, Marketing and
                                                    Consumer Services of MCC

     Joseph Van Loan....................     61     Senior Vice President, Technology of MCC

     Italia Commisso Weinand............     49     Senior Vice President, Programming and
                                                    Human Resources of MCC

     Charles J. Bartolotta..............     48     Senior Vice President, Customer Operations
                                                    of MCC

     Calvin G. Craib....................     48     Senior Vice President, Business
                                                    Development of MCC

     William I. Lees, Jr. ..............     44     Senior Vice President, Corporate
                                                    Controller of MCC

     Joseph E. Young....................     54     Senior Vice President, General Counsel and
                                                    Secretary of MCC

     Craig S. Mitchell..................     44     Director of MCC

     William S. Morris III..............     68     Director of MCC

     Thomas V. Reifenheiser.............     67     Director of MCC

     Natale S. Ricciardi................     54     Director of MCC

     Robert L. Winikoff.................     56     Director of MCC
</TABLE>

     Rocco B. Commisso has 25 years of experience with the cable television
industry and has served as our Chairman and Chief Executive Officer since
founding our predecessor company in July 1995. From 1986 to 1995, he served as
Executive Vice President, Chief Financial Officer and a director of Cablevision
Industries Corporation. Prior to that time, Mr. Commisso served as Senior Vice
President of Royal Bank of Canada's affiliate in the United States from 1981,
where he founded and directed a specialized lending group to media and
communications companies. Mr. Commisso began his association with the cable
industry in 1978 at The Chase Manhattan Bank, where he managed the bank's
lending activities to communications firms including the cable industry. He
serves on the board of directors of the National Cable Television Association,
Cable Television Laboratories, Inc. and C-SPAN. Mr. Commisso holds a Bachelor of
Science in Industrial Engineering and a Master of Business Administration from
Columbia University.

     Mark E. Stephan has 16 years of experience with the cable television
industry and has served as our Senior Vice President, Chief Financial Officer
and Treasurer since the commencement of our operations in March 1996. Before
joining us, Mr. Stephan served as Vice President, Finance for Cablevision
Industries from July 1993. Prior to that time, Mr. Stephan served as Manager of
the telecommunications and media lending group of Royal Bank of Canada.

                                       64

<PAGE>

     James M. Carey has 21 years of experience in the cable television industry.
Before joining our manager in September 1997, Mr. Carey was founder and
President of Infinet Results, a telecommunications consulting firm, from
December 1996. Mr. Carey served as Executive Vice President, Operations at
MediaOne Group from August 1995 to November 1996, where he was responsible for
MediaOne's Atlanta cable operations. Prior to that time, he served as Regional
Vice President of Cablevision Industries' Southern region. Mr. Carey is a member
of the board of directors of the American Cable Association and the Cable
Television Association of Georgia.

     John G. Pascarelli has 22 years of experience in the cable television
industry. Before joining our manager in March 1998, Mr. Pascarelli served as
Vice President, Marketing for Helicon from January 1996 to February 1998 and as
Corporate Director of Marketing for Cablevision Industries from 1988 to 1995.
Prior to that time, Mr. Pascarelli served in various marketing and system
management capacities for Continental Cablevision, Cablevision Systems and
Storer Communications. Mr. Pascarelli is a member of the board of directors of
the Cable and Telecommunications Association for Marketing.

     Joseph Van Loan has 30 years of experience in the cable television
industry. Before joining our manager in November 1996, Mr. Van Loan served as
Senior Vice President, Engineering for Cablevision Industries from 1990. Prior
to that time, he managed a private telecommunications consulting practice
specializing in domestic and international cable television and broadcasting and
served as Vice President, Engineering for Viacom Cable. Mr. Van Loan received
the 1986 Vanguard Award for Science and Technology from the National Cable
Television Association.

     Italia Commisso Weinand has 26 years of experience in the cable television
industry. Before joining our manager in April 1996, Ms. Weinand served as
Regional Manager for Comcast Corporation from July 1985. Prior to that time, Ms.
Weinand held various management positions with Tele-Communications, Times Mirror
Cable and Time Warner. Ms. Weinand is the sister of Mr. Commisso.

     Charles J. Bartolotta has 20 years of experience in the cable television
industry. Before joining our manager in October 2000, Mr. Bartolotta served as
Division President for AT&T Broadband, LLC from July 1998, where he was
responsible for managing an operating division serving nearly three million
customers. Prior to that time, he served as Regional Vice President of
Telecommunications, Inc. from January 1997 and as Vice President and General
Manager for TKR Cable Company from 1989. Prior to that time, Mr. Bartolotta held
various management positions with Cablevision Systems Corporation.

     Calvin G. Craib has 21 years of experience in the cable television
industry. Before joining our manager in April 1999 as Vice President, Business
Development, Mr. Craib served as Vice President, Finance and Administration for
Interactive Marketing Group from June 1997 to December 1998 and as Senior Vice
President, Operations, and Chief Financial Officer for Douglas Communications
from January 1990 to May 1997. Prior to that time, Mr. Craib served in various
financial management capacities at Warner Amex Cable and Tribune Cable.

     William I. Lees, Jr. joined our manager in October 2001 as Senior Vice
President, Corporate Controller. Previously, Mr. Lees served as Executive Vice
President and Chief Financial Officer for Regus Business Centre Corp., a
multinational real estate services company, from July 1999 to September 2001.
Prior to that time, he served as Corporate Controller and Director for Formica
Corporation from September 1998 to July 1999, and as Chief Financial Officer for
Imperial Schrade Corporation from September 1993 to September 1998. He was
previously employed for 13 years by Ernst & Young.

     Joseph E. Young has 18 years of experience with the cable television
industry. Before joining our manager in November 2001 as Senior Vice President
and General Counsel, Mr. Young served as Executive Vice President, Legal and
Business Affairs, for LinkShare Corporation, an Internet-based provider of
marketing services, from September 1999 to October 2001. Prior to that time, he
practiced corporate law with Baker & Botts, LLP from January 1995 to September
1999. Previously, Mr. Young was a partner with the Law Offices of Jerome H. Kern
and a partner with Shea & Gould.

     Craig S. Mitchell has held various management positions with Morris
Communications Company LLC for more than the past five years. He currently
serves as its Vice President of Finance and Treasurer and is also a member of
its board of directors.

                                       65

<PAGE>

     William S. Morris III has served as the Chairman and Chief Executive
Officer of Morris Communications for more than the past five years. He was the
Chairman of the board of directors of the Newspapers Association of America for
1999-2000.

     Thomas V. Reifenheiser served for more than five years as a Managing
Director and Group Executive of the Global Media and Telecom Group of Chase
Securities Inc. until his retirement in September 2000. He joined Chase in 1963
and had been the Global Media and Telecom Group Executive since 1977. He also
had been a director of the Management Committee of The Chase Manhattan Bank. Mr.
Reifenheiser is a member of the board of directors of Cablevision Systems
Corporation and Lamar Advertising Company, a leading owner and operator of
outdoor advertising and logo sign displays.

     Natale S. Ricciardi has held various management positions with Pfizer Inc.
for more than the past five years. Mr. Ricciardi joined Pfizer in 1972 and
currently serves as its Vice President, U.S. Manufacturing, with responsibility
for all of Pfizer's U.S. manufacturing facilities.

     Robert L. Winikoff has been a partner of the law firm of Sonnenschein Nath
& Rosenthal since August 2000. Prior thereto, he was a partner of the law firm
of Cooperman Levitt Winikoff Lester & Newman, P.C. for more than five years.
Sonnenschein Nath & Rosenthal currently serves as MCC's outside general counsel
and prior to such representation Cooperman Levitt Winikoff Lester & Newman, P.C.
served as MCC's outside general counsel since 1995.

                                       66

<PAGE>

ITEM 11.    EXECUTIVE COMPENSATION

     The executive officers and directors of MCC are compensated exclusively by
MCC and do not receive any separate compensation from Mediacom LLC or Mediacom
Capital. MCC acts as our manager and in return receives a management fee.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
            RELATED STOCKHOLDER MATTERS

     Mediacom Capital is a wholly-owned subsidiary of Mediacom LLC. MCC is the
sole member of Mediacom LLC. The address of MCC is 100 Crystal Run Road,
Middletown, New York 10941.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MANAGEMENT AGREEMENTS

     Pursuant to management agreements between MCC and our operating
subsidiaries, MCC is entitled to receive annual management fees in amounts not
to exceed 4.5% of our gross operating revenues. For the year ended December 31,
2002, MCC received $7.9 million of such management fees.

OTHER RELATIONSHIPS

     J.P. Morgan Securities Inc., Credit Suisse First Boston Corporation,
Salomon Smith Barney Inc., BNY Capital Markets, Inc. and other investment
banking firms or their affiliates have in the past engaged in transactions with
and performed services for us and our affiliates in the ordinary course of
business, including commercial banking, financial advisory and investment
banking services. Furthermore, these companies or their affiliates may perform
similar services for us and our affiliates in the future. Affiliates of certain
of these companies are agents and lenders under our bank credit facilities. The
Bank of New York, an affiliate of BNY Capital Markets, Inc., acts as trustee for
our senior notes.

     On July 17, 2001, we paid a $125.0 million cash dividend to our manager
that was funded with borrowings under our bank credit facilities.

     On July 18, 2001, we made a $150.0 million preferred equity investment in
Mediacom Broadband LLC that was funded with borrowings under our bank credit
facilities. The preferred equity investment has a 12% annual cash dividend,
payable quarterly in cash. For the years ended December 31, 2002 and 2001, we
received in aggregate $18.0 million and $8.1 million, respectively, in cash
dividends on the preferred equity.

ITEM 14.    CONTROLS AND PROCEDURES

MEDIACOM LLC

     Within the 90 days prior to the filing date of this report, Mediacom LLC
("Mediacom") carried out an evaluation, under the supervision and with the
participation of Mediacom's management, including Mediacom's Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of Mediacom's disclosure controls and procedures pursuant to Rule
13a-14 under the Securities Exchange Act of 1934. Based upon that evaluation,
the Chief Executive Officer and Chief Financial Officer concluded that
Mediacom's disclosure controls and procedures are effective in timely alerting
them to material information relating to Mediacom (including Mediacom's
consolidated subsidiaries) required to be included in Mediacom's periodic SEC
filings.

                                       67

<PAGE>

     There have been no significant changes in Mediacom's internal controls or
in other factors which could significantly affect internal controls subsequent
to the date Mediacom carried out its evaluation.

MEDIACOM CAPITAL CORPORATION

     Within the 90 days prior to the filing date of this report, Mediacom
Capital Corporation ("Mediacom Capital") carried out an evaluation, under the
supervision and with the participation of Mediacom Capital's management,
including Mediacom Capital's Chief Executive Officer and Principal Financial
Officer, of the effectiveness of the design and operation of Mediacom Capital's
disclosure controls and procedures pursuant to Rule 13a-14 under the Securities
Exchange Act of 1934. Based upon that evaluation, the Chief Executive Officer
and Principal Financial Officer concluded that Mediacom Capital's disclosure
controls and procedures are effective in timely alerting them to material
information relating to Mediacom Capital required to be included in Mediacom
Capital's periodic SEC filings.

     There have been no significant changes in Mediacom Capital's internal
controls or in other factors which could significantly affect internal controls
subsequent to the date Mediacom Capital carried out its evaluation.

                                       68

<PAGE>

                                     PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A)  FINANCIAL STATEMENTS

     Our financial statements as set forth in the Index to Consolidated
Financial Statements under Part II, Item 8 of this Form 10-K are hereby
incorporated by reference.

(B)  EXHIBITS

        The following exhibits, which are numbered in accordance with Item 601
of Regulation S-K, are filed herewith or, as noted, incorporated by reference
herein:

    EXHIBIT
     NUMBER                       EXHIBIT DESCRIPTION
    ---------   ----------------------------------------------------------------
      2.1       Asset Purchase Agreement, dated April 29, 1999 between Mediacom
                LLC and Triax Midwest Associates, L.P./(1)/

      2.2       Stock Purchase Agreement, dated May 25, 1999 among Mediacom LLC,
                Charles D. Zylstra, Kara M. Zylstra and Trusts created under the
                Will dated June 3, 1982 of Roger E. Zylstra, deceased, for the
                benefit of Charles D. Zylstra and Kara M. Zylstra /(2)/

      4.1       Indenture relating to 8 1/2% senior notes due 2008 of Mediacom
                LLC and Mediacom Capital Corporation /(3)/

      4.2       Indenture relating to 7 7/8% senior notes due 2011 of Mediacom
                LLC and Mediacom Capital Corporation /(4)/

      4.3       Indenture relating to 9 1/2% senior notes due 2013 of Mediacom
                LLC and Mediacom Capital Corporation /(5)/

      10.1(a)   Credit Agreement dated as of September 30, 1999 for the Mediacom
                USA Credit Facility /(6)/

      10.1(b)   Amendment No. 1 dated December 17, 1999 between Mediacom
                Southeast LLC, Mediacom California LLC, Mediacom Delaware LLC,
                Mediacom Arizona LLC and The Chase Manhattan Bank, as
                administrative agent for the lenders. /(5)/

      10.1(c)   Amendment No. 2 dated February 4, 2000 between Mediacom
                Southeast LLC, Mediacom California LLC, Mediacom Delaware LLC,
                Mediacom Arizona LLC and The Chase Manhattan Bank, as
                administrative agent for the lenders. /(5)/

      10.1(d)   Amendment No. 3 dated September 12, 2002 between Mediacom
                Southeast LLC, Mediacom California LLC, Mediacom Delaware LLC,
                Mediacom Arizona LLC and JPMorgan Chase Bank, as administrative
                agent for the lenders. /(7)/

      10.2(a)   Credit Agreement dated as of November 5, 1999 for the Mediacom
                Midwest Credit Facility /(6)/

      10.2(b)   Amendment No. 2 dated December 17, 1999 between Mediacom
                Illinois LLC, Mediacom Indiana LLC, Mediacom Iowa LLC, Mediacom
                Minnesota LLC, Mediacom Wisconsin LLC, Zylstra Communications
                Corporation and The Chase Manhattan Bank, as administrative
                agent for the lenders. /(5)/

                                       69

<PAGE>

      10.2(c)   Amendment No. 2 dated February 4, 2000 between Mediacom Illinois
                LLC, Mediacom Indiana LLC, Mediacom Iowa LLC, Mediacom Minnesota
                LLC, Mediacom Wisconsin LLC, Zylstra Communications Corporation
                and The Chase Manhattan Bank, as administrative agent for the
                lenders. /(5)/

      10.2(d)   Amendment No. 3 dated September 12, 2002 between Mediacom
                Illinois LLC, Mediacom Indiana LLC, Mediacom Iowa LLC, Mediacom
                Minnesota LLC, Mediacom Wisconsin LLC, Zylstra Communications
                Corporation and JPMorgan Chase Bank, as administrative agent for
                the lenders. /(7)/

      10.3      Form of Amended and Restated Registration Rights Agreement by
                and among Mediacom Communications Corporation, Rocco B.
                Commisso, BMO Financial, Inc., CB Capital Investors, L.P., Chase
                Manhattan Capital, L.P., Morris Communications Corporation,
                Private Market Fund, L.P. and U.S. Investor, Inc. /(6)/

      10.4      Fifth Amended and Restated Operating Agreement of Mediacom LLC
                /(8)/

      21.1      Subsidiaries of Mediacom LLC /(5)/

      23.1      Consent of PricewaterhouseCoopers LLP

      23.2      Consent of Arthur Andersen LLP /(9)/

(C)  FINANCIAL STATEMENT SCHEDULE

     None.

(D)  REPORTS ON FORM 8-K

     The Company filed the following report on Form 8-K during the three months
ended December 31, 2002:

<TABLE>
<CAPTION>
    <S>                   <C>                           <C>
     DATE OF REPORT       DATE REPORT FILED WITH SEC         ITEM REPORTED
    -----------------     --------------------------    ------------------------
    November 13, 2002         November 13, 2002         Item 9 - Regulation FD Disclosure
</TABLE>

--------------------

/(1)/   Filed as an exhibit to the Quarterly Report on Form 10-Q for the
        quarterly period ended March 31, 1999 of Mediacom LLC and Mediacom
        Capital Corporation and incorporated herein by reference.

/(2)/   Filed as an exhibit to the Quarterly Report on Form 10-Q for the
        quarterly period ended June 30, 1999 of Mediacom LLC and Mediacom
        Capital Corporation and incorporated herein by reference.

/(3)/   Filed as an exhibit to the Registration Statement on Form S-4 (File No.
        333-57285) of Mediacom LLC and Mediacom Capital Corporation and
        incorporated herein by reference.

/(4)/   Filed as an exhibit to the Registration Statement on Form S-4 (File No.
        333-85893) of Mediacom LLC and Mediacom Capital Corporation and
        incorporated herein by reference.

/(5)/   Filed as an exhibit to the Annual Report on Form 10-K for the fiscal
        year ended December 31, 2000 of Mediacom Communications Corporation and
        incorporated herein by reference.

/(6)/   Filed as an exhibit to the Registration Statement on Form S-1 (File No.
        333-90879) of Mediacom Communications Corporation and incorporated
        herein by reference.

/(7)/   Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
        ended September 30, 2002 of Mediacom Communications Corporation and
        incorporated herein by reference.

                                       70

<PAGE>

/(8)/ Filed as an exhibit to the Annual Report on Form 10-K for the fiscal
      year ended December 31, 1999 of Mediacom LLC and incorporated herein by
      reference.

/(9)/ The consolidated financial statements of Mediacom LLC and Mediacom Capital
      Corporation (the "Registrants") as of December 31, 2001 and 2000 and for
      the years then ended included in this Annual Report on Form 10-K which
      are incorporated by reference into the Registrants' Registration
      on Form S-3/A (File Nos. 333-82124-01 and 333-82124-04), have been audited
      Statement by Arthur Andersen LLP, independent public accountants ("AA").
      However, after reasonable efforts, the Registrants have been unable to
      obtain the written consent of AA with respect to the incorporation by
      reference of such financial statements in the Registration Statement.
      Therefore, the Registrants have dispensed with the requirement to file the
      written consent of AA in reliance upon Rule 437a of the Securities Act of
      1933. As a result, you may not be able to recover damages from AA under
      the Securities Act of 1933, for any untrue statements of material fact or
      Section 11 of any omissions to state a material fact, if any, contained
      in the aforementioned financial statements of the Registrants which are
      incorporated in the Registration Statement by reference.

                                       71

<PAGE>

                                   SIGNATURES

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

                                                        MEDIACOM LLC

March 31, 2003                                      BY:  /s/ Rocco B. Commisso
                                                        ------------------------
                                                         Rocco B. Commisso
                                                         Manager, Chairman and
                                                         Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
          Signature                                       Title                                Date
---------------------------------       --------------------------------------------       --------------
      <S>                               <C>                                                <C>
      /s/ Rocco B. Commisso             Manager, Chairman and                              March 31, 2003
---------------------------------       Chief Executive Officer (principal
        Rocco B. Commisso                 executive officer)

       /s/ Mark E. Stephan              Senior Vice President,                             March 31, 2003
---------------------------------       Chief Financial Officer and Treasurer
         Mark E. Stephan                  (principal financial officer and principal
                                        accounting officer)
</TABLE>

                                       72

<PAGE>

                                   SIGNATURES

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

                                                  MEDIACOM CAPITAL CORPORATION

March 29, 2003                                By:  /s/ Rocco B. Commisso
                                                  ------------------------------
                                                  Rocco B. Commisso
                                                   President, Chief Executive
                                                   Officer and Director

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
           Signature                                    Title                                  Date
---------------------------------       --------------------------------------------       --------------
     <S>                                <C>                                                <C>
     /s/ Rocco B. Commisso              President, Chief Executive Officer                 March 31, 2003
---------------------------------         and Director (principal executive officer)
       Rocco B. Commisso

      /s/ Mark E. Stephan               Treasurer and Secretary                            March 31, 2003
---------------------------------        (principal financial officer
        Mark E. Stephan                  and principal accounting officer)
</TABLE>

                                       73

<PAGE>

                                 CERTIFICATIONS

I, Rocco B. Commisso, certify that:

(1)  I have reviewed this annual report on Form 10-K of Mediacom LLC;

(2)  Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

(4)  The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

(5)  The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)  all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

     b)  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         controls; and

(6)  The registrant's other certifying officer and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

March 31, 2003                                    BY:   /s/ Rocco B. Commisso
                                                        ------------------------
                                                        Rocco B. Commisso
                                                         Chief Executive Officer

                                       74

<PAGE>

I, Rocco B. Commisso, certify that:

(1)  I have reviewed this annual report on Form 10-K of Mediacom Capital
     Corporation;

(2)  Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

(4)  The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

(5)  The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

(6)  The registrant's other certifying officer and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

March 31, 2003                                    BY:   /s/ Rocco B. Commisso
                                                        ------------------------
                                                        Rocco B. Commisso
                                                         Chief Executive Officer

                                       75

<PAGE>

I, Mark E. Stephan, certify that:

(1)  I have reviewed this annual report on Form 10-K of Mediacom LLC;

(2)  Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

(4)  The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

(5)  The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

(6)  The registrant's other certifying officer and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

March 31, 2003                                    BY:   /s/ Mark E. Stephan
                                                        ------------------------
                                                        Mark E. Stephan
                                                         Chief Financial Officer

                                       76

<PAGE>

I, Mark E. Stephan, certify that:

(1)  I have reviewed this annual report on Form 10-K of Mediacom Capital
     Corporation;

(2)  Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

(4)  The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

(5)  The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

(6)  The registrant's other certifying officer and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

March 31, 2003                                BY:   /s/ Mark E. Stephan
                                                    ------------------------
                                                    Mark E. Stephan
                                                     Principal Financial Officer

                                       77