##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
 
 Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2008
 Commission File Number: 0-29227
 Mediacom Communications Corporation
 (Exact name of Registrant as specified in its charter)
 Delaware
    
    06-1566067(State of incorporation)
    
    (I.R.S. Employer
Identification Number)
 100 Crystal Run Road
Middletown, NY 10941  (Address of principal executive offices)
 (845) 695-2600  (Registrants telephone number)
  þ o
  o Large accelerated filer
    
    þ Accelerated filer
    
    o Non-accelerated filer
    
    o Smaller reporting company
  o þ




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##### 



MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2008
 TABLE OF CONTENTS
 PagePART IItem 1. Financial Statements
    
    
    4Consolidated Balance Sheets (unaudited) March 31, 2008 and December 31, 2007
    
    
    4Consolidated Statements of Operations (unaudited) Three Months Ended March 31, 2008 and 2007
    
    
    5Consolidated Statements of Cash Flows (unaudited) Three Months Ended March 31, 2008 and 2007
    
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    19Item 4. Controls and Procedures
    
    
    19PART IIItem 1. Legal Proceedings
    
    
    20Item 1A. Risk Factors
    
    
    20Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    20Item 3. Defaults upon Senior Securities
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders
    
    
    20Item 5. Other Information
    
    
    20Item 6. Exhibits
    
    
    20Exhibit 31.1Exhibit 32.1
   2




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Cautionary Statement Regarding Forward-Looking Statements
    3




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##### Table of Contents



PART I
 
 ITEM 1. FINANCIAL STATEMENTS
 MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
   March 31,
    
    
    December 31,2008
    
    
    2007ASSETSCURRENT ASSETSCash
    
    $
    21,890
    
    
    $
    19,388Accounts receivable, net of allowance for doubtful accounts of $1,574 and $2,107
    
    
    74,795
    
    
    
    82,096Prepaid expenses and other current assets
    
    
    19,750
    
    
    
    20,692Deferred tax assets
    
    
    2,338
    
    
    
    2,424Total current assets
    
    
    118,773
    
    
    
    124,600Investment in cable television systems:Property, plant and equipment, net of accumulated depreciation of $1,678,263 and $1,624,811
    
    
    1,441,199
    
    
    
    1,436,427Franchise rights
    
    
    1,798,188
    
    
    
    1,798,188Goodwill
    
    
    220,645
    
    
    
    220,646Subscriber lists and other intangible assets, net of accumulated amortization of $161,880,
and $161,248
    
    
    9,900
    
    
    
    10,532Total investment in cable television systems
    
    
    3,469,932
    
    
    
    3,465,793Other assets, net of accumulated amortization of $21,814 and $27,172
    
    
    23,627
    
    
    
    24,817Total assets
    
    $
    3,612,332
    
    
    $
    3,615,210LIABILITIES AND STOCKHOLDERS DEFICITCURRENT LIABILITIESAccounts payable, accrued expenses and other current liabilities
    
    $
    262,141
    
    
    $
    247,485Deferred revenue
    
    
    52,904
    
    
    
    51,015Current portion of long-term debt
    
    
    101,125
    
    
    
    94,533Total current liabilities
    
    
    416,170
    
    
    
    393,033Long-term debt, less current portion
    
    
    3,129,250
    
    
    
    3,120,500Deferred tax liabilities
    
    
    331,083
    
    
    
    316,602Other non-current liabilities
    
    
    31,611
    
    
    
    38,164Total liabilities
    
    
    3,908,114
    
    
    
    3,868,299Commitments and contingencies (Note 8)STOCKHOLDERS DEFICITClass A common stock, $.01 par value; 300,000,000 shares authorized; 94,610,560 shares
issued and 69,512,857 shares outstanding as of March 31, 2008 and 94,293,185 shares issued
and 72,011,963 shares outstanding as of December 31, 2007
    
    
    943
    
    
    
    943Class B common stock, $.01 par value; 100,000,000 shares authorized; 27,001,944 shares issued
and outstanding
    
    
    270
    
    
    
    270Additional paid-in capital
    
    
    998,717
    
    
    
    997,404Accumulated deficit
    
    
    (1,151,877
    )
    
    
    (1,121,242
    )Treasury stock, at cost, 25,097,703 and 22,281,222 shares of Class A common stock
    
    
    (143,835
    )
    
    
    (130,464
    )Total stockholders deficit
    
    
    (295,782
    )
    
    
    (253,089
    )Total liabilities and stockholders deficit
    
    $
    3,612,332
    
    
    $
    3,615,210
 
  4




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
   Three Months EndedMarch 31,2008
    
    
    2007Revenues
    
    $
    339,679
    
    
    $
    307,876Costs and expenses:Service costs (exclusive of depreciation and amortization)
    
    
    140,544
    
    
    
    132,392Selling, general and administrative expenses
    
    
    66,942
    
    
    
    62,565Corporate expenses
    
    
    7,733
    
    
    
    6,791Depreciation and amortization
    
    
    59,844
    
    
    
    53,801Operating income
    
    
    64,616
    
    
    
    52,327Interest expense, net
    
    
    (54,589
    )
    
    
    (58,990
    )Loss on derivatives, net
    
    
    (24,074
    )
    
    
    (4,395
    )(Loss) gain on sale of cable systems, net
    
    
    (170
    )
    
    
    10,781Other expense, net
    
    
    (1,849
    )
    
    
    (2,708
    )Loss before income taxes
    
    
    (16,066
    )
    
    
    (2,985
    )Provision for income taxes
    
    
    (14,569
    )
    
    
    (13,895
    )Net loss
    
    $
    (30,635
    )
    
    $
    (16,880
    )Basic and diluted weighted average shares outstanding
    
    
    97,645
    
    
    
    109,890Basic and diluted loss per share
    
    $
    (0.31
    )
    
    $
    (0.15
    )
 
  5




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
   Three Months EndedMarch 31,2008
    
    
    2007OPERATING ACTIVITIES:Net loss
    
    $
    (30,635
    )
    
    $
    (16,880
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    59,844
    
    
    
    53,801Loss on derivatives, net
    
    
    24,074
    
    
    
    4,395Loss (gain) on sale of cable systems, net
    
    
    170
    
    
    
    (10,781
    )Amortization of deferred financing costs
    
    
    1,190
    
    
    
    1,398Share-based compensation
    
    
    1,312
    
    
    
    1,321Deferred income taxes
    
    
    14,568
    
    
    
    13,838Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable, net
    
    
    7,131
    
    
    
    8,222Prepaid expenses and other assets
    
    
    947
    
    
    
    (1,613
    )Accounts payable, accrued expenses and other current liabilities
    
    
    (28,172
    )
    
    
    (14,914
    )Deferred revenue
    
    
    1,889
    
    
    
    1,284Other non-current liabilities
    
    
    (814
    )
    
    
    (910
    )Net cash flows provided by operating activities
    
    $
    51,504
    
    
    $
    39,161INVESTING ACTIVITIES:Capital expenditures
    
    
    (63,990
    )
    
    
    (49,857
    )Acquisition of cable system
    
    
    
    
    
    
    (7,274
    )Proceeds from sales of cable systems
    
    
    
    
    
    
    22,948Net cash flows used in investing activities
    
    $
    (63,990
    )
    
    $
    (34,183
    )FINANCING ACTIVITIES:New borrowings
    
    
    91,000
    
    
    
    52,000Repayment of debt
    
    
    (75,657
    )
    
    
    (62,203
    )Net settlement of restricted stock units
    
    
    (433
    )
    
    
    (326
    )Repurchases of Class A common stock
    
    
    (12,938
    )
    
    
    Other financing activities  book overdrafts
    
    
    13,016
    
    
    
    (7,019
    )Net cash flows provided by (used in) financing activities
    
    $
    14,988
    
    
    $
    (17,548
    )Net increase (decrease) in cash
    
    
    2,502
    
    
    
    (12,570
    )CASH, beginning of period
    
    
    19,388
    
    
    
    36,385CASH, end of period
    
    $
    21,890
    
    
    $
    23,815SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for interest, net of amounts capitalized
    
    $
    57,984
    
    
    $
    65,047
 
  6




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. STATEMENT OF ACCOUNTING PRESENTATION AND OTHER INFORMATION
 Basis of Preparation of Unaudited Consolidated Financial Statements
 Fair Value Measurements.
 Reclassifications
  2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Fair
Value Measurements.
  
    
    Level 1  Quoted market prices in active markets for identical assets or liabilities.
    
    Level 2  Observable market based inputs or unobservable inputs that are corroborated by
market data.
    
    Level 3  Unobservable inputs that are not corroborated by market data.
  The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115.
  7




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##### Table of Contents



Business Combinations,
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51.
 Disclosures about Derivative Instruments and Hedging
Activitiesan amendment of FASB Statement No. 133.
 3. LOSS PER SHARE
 Earnings per Share
  4. PROPERTY, PLANT AND EQUIPMENT
  March 31,
    
    
    December 31,2008
    
    
    2007Cable systems, equipment and subscriber devices
    
    $
    2,941,799
    
    
    $
    2,889,287Vehicles
    
    
    71,292
    
    
    
    68,998Furniture, fixtures and office equipment
    
    
    57,037
    
    
    
    53,814Buildings and leasehold improvements
    
    
    42,087
    
    
    
    41,893Land and land improvements
    
    
    7,247
    
    
    
    7,2463,119,462
    
    
    
    3,061,238Accumulated depreciation
    
    
    (1,678,263
    )
    
    
    (1,624,811
    )Property, plant and equipment, net
    
    $
    1,441,199
    
    
    $
    1,436,427
  8




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5. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
  March 31,
    
    
    December 31,2008
    
    
    2007Accrued programming costs
    
    $
    43,866
    
    
    $
    43,596Accrued interest
    
    
    36,149
    
    
    
    39,588Book overdrafts(1)
    
    
    29,987
    
    
    
    16,971Liability
under interest rate exchange agreements
    
    
    29,812
    
    
    
    Accrued payroll and benefits
    
    
    27,419
    
    
    
    25,165Accrued taxes and fees
    
    
    20,695
    
    
    
    27,678Accrued service costs
    
    
    16,900
    
    
    
    18,114Accrued property, plant and equipment
    
    
    14,436
    
    
    
    11,421Subscriber advance payments
    
    
    12,505
    
    
    
    11,750Accrued telecommunications costs
    
    
    6,664
    
    
    
    15,687Accounts payable
    
    
    4,561
    
    
    
    18,611Other accrued expenses
    
    
    19,147
    
    
    
    18,904Accounts payable, accrued expenses and other current liabilities
    
    $
    262,141
    
    
    $
    247,485
 (1)
    
    Book overdrafts represent outstanding checks in excess of funds on deposit at our
disbursement accounts. We transfer funds from our depository accounts to our disbursement
accounts upon daily notification of checks presented for payment. Changes in book overdrafts
are reported as part of cash flows from financing activities in our consolidated statement of
cash flows. 6. DEBT
  March 31,
    
    
    December 31,2008
    
    
    2007Bank credit facilities
    
    $
    2,105,375
    
    
    $
    2,090,00077/8% senior notes due 2011
    
    
    125,000
    
    
    
    125,00091/2% senior notes due 2013
    
    
    500,000
    
    
    
    500,00081/2% senior notes due 2015
    
    
    500,000
    
    
    
    500,000Capital lease obligations
    
    
    
    
    
    
    333,230,375
    
    
    
    3,215,033Less: Current portion
    
    
    101,125
    
    
    
    94,533Total long-term debt
    
    $
    3,129,250
    
    
    $
    3,120,500
 Bank Credit Facilities
   Interest Rate Exchange Agreements
   9




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7. STOCKHOLDERS DEFICIT
 Stock Repurchase Plans
  Share-based Compensation
  Three Months Ended March 31,2008
    
    
    2007Share-based compensation expense by type of award:Employee stock options
    
    $
    445
    
    
    $
    618Employee stock purchase plan
    
    
    73
    
    
    
    69Restricted stock units
    
    
    794
    
    
    
    634Total share-based compensation expense
    
    $
    1,312
    
    
    $
    1,321
  Employee Stock Purchase Plan
   10




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8. COMMITMENTS AND CONTINGENCIES
 Legal Proceedings
 Gary Ogg and Janice Ogg v. Mediacom LLC
  9. INCOME TAXES
 Accounting for Income Taxes Interim Financial Reporting
  Accounting for Uncertainty in Income Taxes  An
Interpretation of FASB Statement No. 109. Accounting for Income Taxes,
   11




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10. RELATED PARTY TRANSACTIONS
   11. SUBSEQUENT EVENT
   12




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
    Retransmission Consent
   Adjusted OIBDA
    13




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Actual Results of Operations
 Three Months Ended March 31, 2008 compared to Three Months Ended March 31, 2007
  Three Months EndedMarch 31,2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeRevenues
    
    $
    339,679
    
    
    $
    307,876
    
    
    $
    31,803
    
    
    
    10.3
    %Costs and expenses:Service costs (exclusive of depreciation
and amortization)
    
    
    140,544
    
    
    
    132,392
    
    
    
    8,152
    
    
    
    6.2
    %Selling, general and administrative expenses
    
    
    66,942
    
    
    
    62,565
    
    
    
    4,377
    
    
    
    7.0
    %Corporate expenses
    
    
    7,733
    
    
    
    6,791
    
    
    
    942
    
    
    
    13.9
    %Depreciation and amortization
    
    
    59,844
    
    
    
    53,801
    
    
    
    6,043
    
    
    
    11.2
    %Operating income
    
    
    64,616
    
    
    
    52,327
    
    
    
    12,289
    
    
    
    23.5
    %Interest expense, net
    
    
    (54,589
    )
    
    
    (58,990
    )
    
    
    4,401
    
    
    
    (7.5
    %)Loss on derivatives, net
    
    
    (24,074
    )
    
    
    (4,395
    )
    
    
    (19,679
    )
    
    NM(Loss) gain on sale of cable systems
    
    
    (170
    )
    
    
    10,781
    
    
    
    (10,951
    )
    
    NMOther expense, net
    
    
    (1,849
    )
    
    
    (2,708
    )
    
    
    859
    
    
    
    (31.7
    %)Income before income taxes
    
    
    (16,066
    )
    
    
    (2,985
    )
    
    
    (13,081
    )
    
    NMProvision for income taxes
    
    
    (14,569
    )
    
    
    (13,895
    )
    
    
    (674
    )
    
    
    4.9
    %Net loss
    
    $
    (30,635
    )
    
    $
    (16,880
    )
    
    $
    (13,755
    )
    
    NMAdjusted OIBDA
    
    $
    125,772
    
    
    $
    107,449
    
    
    $
    18,323
    
    
    
    17.1
    %
 Three Months EndedMarch 31,2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeAdjusted OIBDA
    
    $
    125,772
    
    
    $
    107,449
    
    
    $
    18,323
    
    
    
    17.1
    %Non-cash, share-based compensation
    
    
    (1,312
    )
    
    
    (1,321
    )
    
    
    9
    
    
    
    NMDepreciation and amortization
    
    
    (59,844
    )
    
    
    (53,801
    )
    
    
    (6,043
    )
    
    
    11.2
    %Operating income
    
    $
    64,616
    
    
    $
    52,327
    
    
    $
    12,289
    
    
    
    23.5
    %
  14




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Revenues
  Three Months EndedMarch 31,2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeVideo
    
    $
    228,506
    
    
    $
    215,628
    
    
    $
    12,878
    
    
    
    6.0
    %HSD
    
    
    76,903
    
    
    
    65,548
    
    
    
    11,355
    
    
    
    17.3
    %Phone
    
    
    19,546
    
    
    
    11,546
    
    
    
    8,000
    
    
    
    69.3
    %Advertising
    
    
    14,724
    
    
    
    15,154
    
    
    
    (430
    )
    
    
    (2.8
    %)Total Revenues
    
    $
    339,679
    
    
    $
    307,876
    
    
    $
    31,803
    
    
    
    10.3
    %
 Three Months EndedMarch 31,
    
    
    Increase/2008
    
    
    2007
    
    
    (Decrease)
    
    
    % ChangeBasic subscribers
    
    
    1,326,000
    
    
    
    1,362,000
    
    
    
    (36,000
    )
    
    
    (2.6
    %)Digital customers
    
    
    584,000
    
    
    
    530,000
    
    
    
    54,000
    
    
    
    10.2
    %HSD customers
    
    
    688,000
    
    
    
    600,000
    
    
    
    88,000
    
    
    
    14.7
    %Phone customers
    
    
    204,000
    
    
    
    123,000
    
    
    
    81,000
    
    
    
    65.9
    %RGUs (1)
    
    
    2,802,000
    
    
    
    2,615,000
    
    
    
    187,000
    
    
    
    7.2
    %Average total monthly revenue per RGU(2)
    
    $
    40.98
    
    
    $
    39.43
    
    
    $
    1.55
    
    
    
    3.9
    %
 (1)
    
    RGUs represent the total of basic subscribers and digital, HSD and phone customers.(2)
    
    Represents average monthly revenues for the quarter divided by average RGUs for such period.       15




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Costs and Expenses
       Adjusted OIBDA
  Operating Income
  Interest Expense, Net
   16




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Loss on Derivatives, Net
  Gain on Sale of Cable Systems
  Provision for Income Taxes
  Net Loss
  Liquidity and Capital Resources
 Overview
   Bank Credit Facilities
    17




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Interest Rate Exchange Agreements
  The fair value of the
interest rate swaps is the estimated amount that we would receive or pay to
terminate such agreements, taking into account market interest rates, the remaining time to maturities and the
creditworthiness of our counterparties. As of March 31, 2008 and December 31, 2007, based on the mark-to-market
valuation, we recorded on our consolidated balance sheets a net accumulated liability for derivatives of $49.9 million
and $25.8 million, respectively, of which $29.8 million and $0 was classified as current liabilities, respectively.
The increase in the current portion of the net accumulated liability for derivatives since December 31, 2007 was driven
primarily by a decline in expected interest rates. Senior Notes
  Covenant Compliance and Debt Ratings
  Operating Activities
   Investing Activities
  Financing Activities
   18




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Contractual Obligations and Commercial Commitments
  Critical Accounting Policies
  Inflation and Changing Prices
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
    19




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PART II
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Approximate DollarTotal Number of
    
    
    
    
    
    
    Value of Shares thatTotal Number
    
    
    
    
    
    
    Shares Purchased
    
    
    Total Dollars
    
    
    May Yet Beof Shares
    
    
    Average Price
    
    
    as Part of Publicly
    
    
    Purchased Under
    
    
    Purchased UnderPeriod
    
    Purchased
    
    
    Per Share
    
    
    Announced Program
    
    
    the Program
    
    
    the ProgramJanuary
    
    
    1,496,824
    
    
    $
    4.89
    
    
    
    1,496,824
    
    
    $
    7,314,913
    
    
    $
    12,685,996February
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,685,996March
    
    
    1,306,246
    
    
    
    4.31
    
    
    
    1,306,246
    
    
    
    5,623,586
    
    
    
    7,062,410First Quarter 2008
    
    
    2,803,070
    
    
    $
    4.62
    
    
    
    2,803,070
    
    
    $
    12,938,499
    
    
    $
    7,062,410
    (1)
 (1)
    
    During April 2008, we repurchased an additional 1.5 million shares of Class A common stock with substantially all of
the remaining funds available in our program. On May 5, 2008, our Board of Directors authorized a new $50.0 million Class A common stock
repurchase program. 
 ITEM 3. DEFAULT UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Exhibit Description31.1
    
    
    Rule 13a-14(a) Certifications32.1
    
    
    Section 1350 Certifications
  20




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SIGNATURES
  MEDIACOM COMMUNICATIONS CORPORATIONMay  9, 2008
    By:
    /s/ Mark E. StephanMark E. StephanExecutive Vice President and Chief Financial Officer  21




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EXHIBIT INDEX
 Exhibit No.
    
    DescriptionExhibit 31.1:
    
    Rule 13a-14(a) CertificationsExhibit 32.1:
    
    Section 1350 Certifications
  22