##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
   FORM 10-Q   Quarterly Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934 For the quarterly period ended September 30, 2004 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. EmployerIdentification Number)
 100 Crystal Run Road
Middletown, NY 10941(Address of principal executive offices) (845) 695-2600(Registrants telephone number) Indicate by check mark whether the Registrant (1) has 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
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes þ No o Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes þ No o As of October 25, 2004 there were 89,461,828 shares of Class A common
stock and 28,836,234 shares of Class B common stock outstanding.




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBER 30, 2004 TABLE OF CONTENTS PagePART IItem 1.
    
    Financial StatementsConsolidated Balance Sheets (unaudited) September 30, 2004 and December 31, 2003
    
    
    1Consolidated Statements of Operations (unaudited) Three Months Ended September 30, 2004 and 2003
    
    
    2Consolidated Statements of Operations (unaudited) Nine Months Ended September 30, 2004 and 2003
    
    
    3Consolidated Statements of Cash Flows (unaudited) Nine Months Ended September 30, 2004 and 2003
    
    
    4Notes to Consolidated Financial Statements (unaudited)
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    24Item 4.
    
    Controls and Procedures
    
    
    25PART IIItem 1.
    
    Legal Proceedings
    
    
    26Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 6.
    
    Exhibits
    
    
    27CREDIT AGREEMENTEX-31.1: CERTIFICATIONSEX-32.1: CERTIFICATIONS
    You should carefully review the information contained in this Quarterly
Report and in other reports or documents that we file from time to time with
the Securities and Exchange Commission (the SEC). In this Quarterly 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 our Annual Report on Form
10-K for the year ended December 31, 2003 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.




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PART I 
 ITEM 1. FINANCIAL STATEMENTS MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES 
 CONSOLIDATED BALANCE SHEETS (Dollar amounts in 000s)
 (Unaudited)
 September 30,
    
    December 31,2004
    
    2003ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    13,471
    
    
    $
    25,815Investments
    
    
    1,987
    
    
    
    2,933Subscriber accounts receivable, net of allowance for doubtful accounts
of $3,648 and $3,524, respectively
    
    
    55,825
    
    
    
    56,706Prepaid expenses and other assets
    
    
    15,420
    
    
    
    14,260Total current assets
    
    
    86,703
    
    
    
    99,714Investment in cable television systems:Property, plant and equipment, net of accumulated depreciation of
$989,511 and $844,519, respectively
    
    
    1,438,553
    
    
    
    1,465,362Intangible assets, net of accumulated amortization of $296,439 and
$289,906, respectively
    
    
    2,044,495
    
    
    
    2,050,095Total investment in cable television systems
    
    
    3,483,048
    
    
    
    3,515,457Other assets, net of accumulated amortization of $28,272 and
$23,823, respectively
    
    
    34,968
    
    
    
    39,788Total assets
    
    $
    3,604,719
    
    
    $
    3,654,959LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable and accrued expenses
    
    $
    233,396
    
    
    $
    247,728Deferred revenue
    
    
    38,596
    
    
    
    36,634Current portion of long-term debt
    
    
    36,807
    
    
    
    12,570Total current liabilities
    
    
    308,799
    
    
    
    296,932Long-term debt, less current portion
    
    
    2,971,503
    
    
    
    3,038,922Other non-current liabilities
    
    
    30,395
    
    
    
    33,991Total liabilities
    
    
    3,310,697
    
    
    
    3,369,845STOCKHOLDERS EQUITYClass A common stock, $.01 par value; 300,000,000 shares authorized;
91,594,664 shares issued and 89,461,828 shares outstanding as of September
30, 2004 and 91,345,346 shares issued and 89,808,602 shares outstanding
as of December 31, 2003
    
    
    916
    
    
    
    913Class B common stock, $.01 par value; 100,000,000 shares authorized;
28,836,234 and 28,913,145 shares issued and outstanding as of September
30, 2004 and December 31, 2003, respectively
    
    
    288
    
    
    
    289Additional paid-in capital
    
    
    983,369
    
    
    
    982,390Accumulated deficit
    
    
    (680,932
    )
    
    
    (692,515
    )Treasury stock, at cost, 2,132,836 and 1,536,744 shares of Class A common
stock, as of September 30, 2004 and December 31, 2003, respectively
    
    
    (9,619
    )
    
    
    (5,963
    )Total stockholders equity
    
    
    294,022
    
    
    
    285,114Total liabilities and stockholders equity
    
    $
    3,604,719
    
    
    $
    3,654,959
 The accompanying notes to unaudited consolidated financial
statements are an integral part of these statements 1




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in 000s, except per share data)
 (Unaudited)
 Three Months EndedSeptember 30,2004
    
    2003Revenues
    
    $
    261,025
    
    
    $
    251,107Costs and expenses:Service costs (exclusive of depreciation and amortization of
$55,631 and $56,958, respectively, shown separately below)
    
    
    103,411
    
    
    
    95,498Selling, general and administrative expenses
    
    
    54,012
    
    
    
    49,820Corporate expenses
    
    
    5,095
    
    
    
    4,697Depreciation and amortization
    
    
    55,631
    
    
    
    56,958Operating income
    
    
    42,876
    
    
    
    44,134Interest expense, net
    
    
    (48,709
    )
    
    
    (46,121
    )(Loss) gain on derivatives, net
    
    
    (4,218
    )
    
    
    8,984Loss on sale of assets and investments, net
    
    

    
    
    
    (2,197
    )Other expense
    
    
    (2,593
    )
    
    
    (2,652
    )Net income (loss) before provision for income taxes
    
    
    (12,644
    )
    
    
    2,148Provision for income taxes
    
    
    163
    
    
    
    211Net income (loss)
    
    $
    (12,807
    )
    
    $
    1,937Basic weighted average shares outstanding
    
    
    118,523
    
    
    
    118,633Basic earnings (loss) per share
    
    $
    (0.11
    )
    
    $
    0.02Diluted weighted average shares outstanding
    
    
    118,523
    
    
    
    118,663Diluted earnings (loss) per share
    
    $
    (0.11
    )
    
    $
    0.02
 The accompanying notes to unaudited consolidated financial
statements are an integral part of these statements 2




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in 000s, except per share data)
 (Unaudited)
 Nine Months EndedSeptember 30,2004
    
    2003Revenues
    
    $
    792,063
    
    
    $
    746,076Costs and expenses:Service costs (exclusive of depreciation and amortization of
$163,826 and $218,436, respectively, shown separately below)
    
    
    307,534
    
    
    
    285,700Selling, general and administrative expenses
    
    
    158,388
    
    
    
    145,073Corporate expenses
    
    
    14,943
    
    
    
    12,304Depreciation and amortization
    
    
    163,826
    
    
    
    218,436Operating income
    
    
    147,372
    
    
    
    84,563Interest expense, net
    
    
    (143,276
    )
    
    
    (143,710
    )Gain (loss) on derivatives, net
    
    
    9,498
    
    
    
    (732
    )Gain (loss) on sale of assets and investments, net
    
    
    5,885
    
    
    
    (1,522
    )Other expense
    
    
    (7,406
    )
    
    
    (7,562
    )Net income (loss) before provision for income taxes
    
    
    12,073
    
    
    
    (68,963
    )Provision for income taxes
    
    
    490
    
    
    
    624Net income (loss)
    
    $
    11,583
    
    
    $
    (69,587
    )Basic weighted average shares outstanding
    
    
    118,683
    
    
    
    118,597Basic earnings (loss) per share
    
    $
    0.10
    
    
    $
    (0.59
    )Diluted weighted average shares outstanding
    
    
    118,709
    
    
    
    118,597Diluted earnings (loss) per share
    
    $
    0.10
    
    
    $
    (0.59
    )
 The accompanying notes to unaudited consolidated financial
statements are an integral part of these statements 3




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in 000s)
 (Unaudited)
 Nine Months EndedSeptember 30,2004
    
    2003CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:Net income (loss)
    
    $
    11,583
    
    
    $
    (69,587
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Depreciation and amortization
    
    
    163,826
    
    
    
    218,436(Gain) loss on derivatives, net
    
    
    (9,498
    )
    
    
    732(Gain) loss on sale of assets and investments, net
    
    
    (5,885
    )
    
    
    1,522Amortization of deferred financing costs
    
    
    4,820
    
    
    
    4,739Changes in assets and liabilities, net of effects from acquisitions:Subscriber accounts receivable, net
    
    
    1,384
    
    
    
    (4,175
    )Prepaid expenses and other assets
    
    
    (1,160
    )
    
    
    (4,147
    )Accounts payable and accrued expenses
    
    
    (14,831
    )
    
    
    (13,385
    )Deferred revenue
    
    
    1,962
    
    
    
    2,912Other non-current liabilities
    
    
    829
    
    
    
    141Net cash flows provided by operating activities
    
    
    153,030
    
    
    
    137,188CASH FLOWS USED IN INVESTING ACTIVITIES:Capital expenditures
    
    
    (126,047
    )
    
    
    (185,004
    )Acquisition of cable television systems
    
    
    (3,372
    )
    
    
    (5,049
    )Proceeds from sale of assets and investments
    
    
    10,556
    
    
    
    14,489Other investment activities
    
    
    (654
    )
    
    
    (1,053
    )Net cash flows used in investing activities
    
    
    (119,517
    )
    
    
    (176,617
    )CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:New borrowings
    
    
    201,000
    
    
    
    241,750Repayment of debt
    
    
    (244,182
    )
    
    
    (223,018
    )Repurchases of common stock
    
    
    (3,656
    )
    
    
    Proceeds from issuance of common stock in employee stock purchase plan
    
    
    981
    
    
    
    993Financing costs
    
    
    
    
    
    
    (101
    )Net cash flows (used in) provided by financing activities
    
    
    (45,857
    )
    
    
    19,624Net decrease in cash and cash equivalents
    
    
    (12,344
    )
    
    
    (19,805
    )CASH AND CASH EQUIVALENTS, beginning of period
    
    
    25,815
    
    
    
    31,224CASH AND CASH EQUIVALENTS, end of period
    
    $
    13,471
    
    
    $
    11,419SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for interest, net of amounts capitalized
    
    $
    163,459
    
    
    $
    169,183SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES:Capital expenditures financed through capital leases
    
    $
    
    
    
    $
    8,286
 The accompanying notes to unaudited consolidated financial
statements are an integral part of these statements 4




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (1) Statement of Accounting Presentation and Other Information Basis of Preparation of Unaudited Consolidated Financial Statements Mediacom Communications Corporation (MCC, and collectively with its
subsidiaries, the Company) has prepared these unaudited consolidated
financial statements as of September 30, 2004 and 2003. In the opinion of
management, such statements include all adjustments, consisting of normal
recurring accruals and adjustments, necessary for a fair presentation of the
Companys consolidated results of operations and financial position for the
interim periods presented. The accounting policies followed during such
interim periods reported are in conformity with generally accepted accounting
principles in the United States of America and are consistent with those
applied during annual periods. For additional disclosures, including a summary
of the Companys accounting policies, the interim unaudited consolidated
financial statements should be read in conjunction with the Companys Annual
Report on Form 10-K for the year ended December 31, 2003 (File No. 000-29227).
The results of operations for the interim periods are not necessarily
indicative of the results that might be expected for future interim periods or
for the full year ending December 31, 2004. Change in Estimate Effective July 1, 2003, the Company changed the estimated useful lives of
certain plant and equipment of its cable systems in conjunction with the
Companys completed network upgrade and rebuild program. The changes in
estimated useful lives were made to reflect managements evaluation of the
longer economic lives of the Companys upgraded and rebuilt network. The
weighted average useful lives of such plant and equipment changed from approximately 7 years to approximately 12 years. These changes were made on a prospective basis
effective July 1, 2003 and resulted in a reduction of depreciation expense and
a corresponding increase in net income of approximately $64.5 million or $0.54
per share and $31.6 million or $0.27 per share for the nine months ended
September 30, 2004 and 2003, respectively. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Additions to
property, plant and equipment generally include material, labor and indirect
costs. Depreciation is calculated on a straight-line basis over the following
useful lives: Buildings
    
    40 yearsLeasehold improvements
    
    Life of respective leaseCable systems and equipments and subscriber devices
    
    4 to 20 yearsVehicles
    
    5 yearsFurniture, fixtures and office equipment
    
    5 years
 The Company capitalizes improvements that extend asset lives and expenses
repairs and maintenance as incurred. At the time of retirements, or other
dispositions of property, the original cost and related accumulated
depreciation are removed from the respective accounts and the losses are
presented as a component of depreciation expense. The Company capitalizes the costs associated with the construction of
cable transmission and distribution facilities, and new cable installations.
Costs include direct labor and material, as well as certain indirect costs.
The costs of disconnecting service at a customers dwelling or reconnecting to
a previously installed dwelling are charged as expense in the period incurred.
Costs associated with subsequent installations of additional services not
previously installed at a customers dwelling are capitalized to the extent
such costs are incremental and directly attributable to the installation of
such additional services. 5




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) Income Taxes The Company provides for income taxes using the liability method in
accordance with SFAS No. 109, Accounting for Income Taxes, which requires an
asset and liability based approach in accounting for income taxes. The Company
recognizes deferred tax assets and liabilities for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and expected
benefits of utilizing net operating loss carryforwards. The Company
periodically assesses the likelihood of realization of deferred tax assets and
net operating loss carryforwards by considering the scheduled reversal of
deferred tax liabilities, taxable income in future periods and tax planning
strategies. Comprehensive Income SFAS No. 130, Reporting Comprehensive Income (SFAS 130) requires
companies to classify items of other comprehensive income by their nature in
the financial statements and display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of a statement of financial position. The
Company has had no other comprehensive income items to report. Reclassifications Certain reclassifications have been made to prior years amounts to
conform to the current years presentation. (2) Recent Accounting Pronouncements The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure, which amends: (i)
SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative
methods of transition for an entity that voluntarily changes to the fair value
based method of accounting for stock-based employee compensation; (ii) the
disclosure provisions of SFAS No. 123 to require prominent disclosure about the
effects on reported net income of an entitys accounting policy decisions with
respect to stock-based employee compensation; and (iii) Accounting Principles
Board (APB) Opinion No. 28, Interim Financial Reporting, to require
disclosure about those effects in interim financial information. The Company
adopted SFAS No. 148 on January 1, 2003. The Company
did not change to the fair value based method of accounting
for stock-based employee compensation. Accordingly, the adoption of SFAS No.
148 did not affect the Companys financial condition or results of operations.
However, SFAS No. 148 requires that information be provided as if the Company
had accounted for employee stock options under the fair value method of this
statement, including disclosing pro forma information regarding net income
(loss) and net income (loss) per share beginning with the first quarter of
2003. The Company accounts for stock-based compensation in accordance with
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, as permitted by SFAS No. 123. Compensation expense for stock
options is measured as the excess, if any, of the quoted market price of the
Companys stock at the date of the grant over the amount the employee must pay
to acquire the stock. No compensation cost has been recognized for any option
grants in the accompanying consolidated statements of operations since the
price of the options was at their fair market value at the date of grant. The
weighted average fair value of all of the employee options was estimated on the
date of grant using the Black-Scholes model. Had the Company applied the fair
value recognition provisions of SFAS No. 123 to stock-based compensation, MCCs
net income (loss) and basic and diluted net income (loss) per share would have
been changed from the as reported amounts to the pro forma amounts as
follows (dollars in thousands, except per share amounts): 6




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2004
    
    2003
    
    2004
    
    2003Net income (loss), as reported
    
    $
    (12,807
    )
    
    $
    1,937
    
    
    $
    11,583
    
    
    $
    (69,587
    )Deduct: Total stock based
compensation expense determined
under fair value based method of
all awards, net of related tax effects
    
    
    (354
    )
    
    
    (16
    )
    
    
    (4,561
    )
    
    
    (4,268
    )Pro forma, net income (loss)
    
    $
    (13,161
    )
    
    $
    1,921
    
    
    $
    7,022
    
    
    $
    (73,855
    )Basic and diluted earnings (loss) per share:As reported
    
    $
    (0.11
    )
    
    $
    0.02
    
    
    $
    0.10
    
    
    $
    (0.59
    )Pro forma
    
    $
    (0.11
    )
    
    $
    0.02
    
    
    $
    0.06
    
    
    $
    (0.62
    )
 (3) Earnings Per Share The Company calculates earnings per share in accordance with SFAS No. 128,
Earnings per Share. SFAS No. 128 computes basic earnings per share by
dividing the net income (loss) by the weighted average number of shares of
common stock outstanding during the period. Diluted earnings per share is
computed by dividing the net income (loss) by the weighted average number of
shares of common stock outstanding during the period plus the effects of any
dilutive securities. Diluted earnings per share considers the impact of
potentially dilutive securities except in periods in which there is a loss
because the inclusion of the potential common shares would have an
anti-dilutive effect. Our potentially dilutive securities include common
shares which may be issued upon exercise of our stock options or upon
conversion of convertible senior notes. Diluted earnings per share for the three months ended September 30, 2004
excludes approximately 20.9 million potential common shares primarily related
to our outstanding stock options and convertible senior notes, because the
assumed issuance of such potential common shares is antidilutive in periods in
which there is a loss. For the nine months ended September 30, 2004, diluted
earnings per share excludes approximately 11.3 million potential common shares
related to our outstanding stock options, because the option exercise price was
greater than the average market price of our common stock, and approximately
9.2 million of potential common shares related to convertible senior notes,
which were considered to be antidilutive. Diluted earnings per share for the
three months ended September 30, 2003 excludes approximately 10.4 million
potential common shares related to our outstanding stock options, because the
option exercise price was greater than the average market price of our common
stock, and approximately 9.2 million of potential common shares related to
convertible senior notes, which were considered to be antidilutive. For the
nine months ended September 30, 2003, diluted earnings per share excludes
approximately 19.4 million potential common shares primarily related to our
outstanding stock options and convertible senior notes, because the assumed
issuance of such potential common shares is antidilutive in periods in which
there is a loss. The following table reconciles the numerator and denominator
of the computations of diluted earnings per share for the three and nine months
ended September 30, 2004 and the three and nine months ended September 30, 2003
(dollars in thousands, except per share amounts): 7




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) Three Months Ended
    
    Nine Months EndedSeptember 30, 2004
    
    September 30, 2004Net
    
    



    Loss

Net





EarningsLoss
    
    Shares
    
    Per Share
    
    Income
    
    Shares
    
    Per ShareBasic earnings per share
    
    $
    (12,807
    )
    
    
    118,523
    
    
    $
    (0.11
    )
    
    $
    11,583
    
    
    
    118,683
    
    
    $
    0.10Effect of dilutive securities:Assumed exercise
of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26
    
    
    
    Diluted earnings per share
    
    $
    (12,807
    )
    
    
    118,523
    
    
    $
    (0.11
    )
    
    $
    11,583
    
    
    
    118,709
    
    
    $
    0.10
 Three Months Ended
    
    Nine Months EndedSeptember 30, 2003
    
    September 30, 2003Net
    
    
    
    
    
    Earnings
    
    Net
    
    
    
    
    
    LossIncome
    
    Shares
    
    Per Share
    
    Loss
    
    Shares
    
    Per ShareBasic earnings per share
    
    $
    1,937
    
    
    
    118,633
    
    
    $
    0.02
    
    
    $
    (69,587
    )
    
    
    118,597
    
    
    $
    (0.59
    )Effect of dilutive securities:Assumed exercise
of stock options
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted earnings per share
    
    $
    1,937
    
    
    
    118,663
    
    
    $
    0.02
    
    
    $
    (69,587
    )
    
    
    118,597
    
    
    $
    (0.59
    )
 (4) Property, Plant and Equipment As of September 30, 2004 and December 31, 2003, property, plant and
equipment consisted of (dollars in thousands): September 30,
    
    December 31,2004
    
    2003Land and land improvements
    
    $
    7,100
    
    
    $
    7,059Buildings and leasehold improvements
    
    
    39,536
    
    
    
    41,273Cable systems, equipment and subscriber devices
    
    
    2,290,173
    
    
    
    2,172,953Vehicles
    
    
    61,633
    
    
    
    63,023Furniture, fixtures and office equipment
    
    
    29,622
    
    
    
    25,5732,428,064
    
    
    
    2,309,881Accumulated depreciation
    
    
    (989,511
    )
    
    
    (844,519
    )Property, plant and equipment, net
    
    $
    1,438,553
    
    
    $
    1,465,362
 Depreciation expense for the three and nine months ended September 30,
2004 was approximately $53.0 million and $155.4 million, respectively and $53.5
million and $207.0 million for the respective periods in 2003. 8




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (5) Intangible Assets The Company operates its cable systems under non-exclusive cable
franchises that are granted by state or local government authorities for
varying lengths of time. The Company acquired these cable franchises through
acquisitions of cable systems and accounted for them using the purchase method
of accounting. In accordance with FASB No. 142, Goodwill and Other Intangible Assets,
indefinite-lived intangible assets include goodwill and cable franchise costs.
The provisions of SFAS No. 142 prohibit the amortization of indefinite-lived
intangible assets and goodwill, but require such assets to be tested annually
for impairment, or more frequently if impairment indicators arise. Other
finite-lived intangible assets, which consist primarily of subscriber lists and
covenants not to compete, continue to be amortized over their useful lives of 5
to 10 years and 5 years, respectively. The following table summarizes the net
asset value for each intangible asset category as of September 30, 2004 and
December 31, 2003 (dollars in thousands): Gross Asset
    
    Accumulated
    
    Net AssetSeptember 30, 2004
    
    Value
    
    Amortization
    
    ValueFranchise costs
    
    $
    1,944,646
    
    
    $
    140,947
    
    
    $
    1,803,699Goodwill
    
    
    224,613
    
    
    
    3,232
    
    
    
    221,381Subscriber Lists
    
    
    165,980
    
    
    
    146,660
    
    
    
    19,320Covenants not to compete
    
    
    5,695
    
    
    
    5,600
    
    
    
    95$
    2,340,934
    
    
    $
    296,439
    
    
    $
    2,044,495Gross Asset
    
    Accumulated
    
    Net AssetDecember 31, 2003
    
    Value
    
    Amortization
    
    ValueFranchise costs
    
    $
    1,943,010
    
    
    $
    141,167
    
    
    $
    1,801,843Goodwill
    
    
    224,281
    
    
    
    3,232
    
    
    
    221,049Subscriber Lists
    
    
    167,015
    
    
    
    140,030
    
    
    
    26,985Covenants not to compete
    
    
    5,695
    
    
    
    5,477
    
    
    
    218$
    2,340,001
    
    
    $
    289,906
    
    
    $
    2,050,095
 Amortization expense for the three and nine months ended September 30,
2004 was approximately $2.6 million and $8.4 million, respectively, and $3.5
million and $11.4 million for the respective periods in 2003. The Companys
estimated future aggregate amortization expense for 2004 through 2008 and
beyond are $2.6 million, $2.8 million, $2.1 million, $2.1 million, $2.1 million
and $7.7 million, respectively. 9




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (6) Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following as of
September 30, 2004 and December 31, 2003 (dollars in thousands): September 30,
    
    December 31,2004
    
    2003Accounts payable
    
    $
    25,452
    
    
    $
    6,563Accrued interest
    
    
    35,683
    
    
    
    55,053Accrued payroll and benefits
    
    
    23,887
    
    
    
    23,524Accrued programming costs
    
    
    65,206
    
    
    
    77,296Accrued property, plant and equipment
    
    
    16,501
    
    
    
    25,463Accrued taxes and fees
    
    
    24,947
    
    
    
    26,513Other accrued expenses
    
    
    41,720
    
    
    
    33,316$
    233,396
    
    
    $
    247,728
 (7) Debt As of September 30, 2004 and December 31, 2003, debt consisted of (dollars
in thousands): See Note 12 to our unaudited consolidated financial statements. September 30,
    
    December 31,2004
    
    2003Bank credit facilities
    
    $
    1,604,627
    
    
    $
    1,646,50081/2% senior notes
    
    
    200,000
    
    
    
    200,00077/8% senior notes
    
    
    125,000
    
    
    
    125,00091/2% senior notes
    
    
    500,000
    
    
    
    500,00011% senior notes
    
    
    400,000
    
    
    
    400,00051/4% convertible senior notes
    
    
    172,500
    
    
    
    172,500Capital lease obligations
    
    
    6,183
    
    
    
    7,492$
    3,008,310
    
    
    $
    3,051,492Less: Current portion
    
    
    36,807
    
    
    
    12,570Total long-term debt
    
    $
    2,971,503
    
    
    $
    3,038,922
 The average interest rates on outstanding debt under the bank credit
facilities for the three and nine months ended September 30, 2004 were 3.5% and
3.1%, respectively, before giving effect to the interest rate exchange
agreements discussed below. As of September 30, 2004, the Company had unused
credit commitments of approximately $700.8 million under its bank credit
facilities, of which about $553.0 million could be borrowed and used for
general corporate purposes based on the terms and conditions of the Companys
debt arrangements. The Company was in compliance with all covenants under its
debt arrangements for all periods through September 30, 2004. The Company uses interest rate exchange agreements, or swaps, with
counterparties to fix the interest rate on a portion of its floating rate debt.
As of September 30, 2004, the Company had interest rate exchange agreements
with various banks pursuant to which the interest rate on $800.0 million is
fixed at a weighted average rate of
approximately 3.3%. The fixed rates of the swap agreements are offset against
the applicable three-month London Interbank Offering Rate, or LIBOR, to
determine the interest expense related to these agreements. At the end of each quarterly reporting period, the carrying values of these swap agreements are
marked-to-market. The fair values of these agreements are 10




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) driven by market
interest rates, their remaining time to maturity and the creditworthiness of
the counterparties. The aggregate fair value of the agreements is the estimated
amount that the Company would receive or pay to terminate them. At September
30, 2004, based on the mark-to-market valuation, the Company would have paid
approximately $6.3 million, including accrued interest, if these agreements
were terminated. Changes in the aggregate mark-to-market values of these swap agreements
result in short-term gains or losses and may increase the volatility of the
Companys earnings. The Company had a net loss of $4.2 million and a net gain
of $9.5 million for the three and nine months, respectively, ended September
30, 2004, as compared to a net gain of $9.0 million and a net loss of $0.7
million for the three and nine months, respectively, ended September 30, 2003. Under the terms of the interest rate exchange agreements, which expire
from 2005 through 2007, the Company is exposed to credit loss in the event of
nonperformance by the other parties. However, due to the creditworthiness of
the Companys counterparties, which are major banking firms rated investment
grade, the Company does not anticipate their nonperformance. (8) Share Repurchase Program The Company repurchased 596,092 shares of Class A common stock for
approximately $3.7 million during the three months ended September 30, 2004,
pursuant to its Board authorized repurchase program. (9) Sale of Assets and Investments The Company had a net gain on sale of assets and investments amounting to
$5.9 million for the nine months ended September 30, 2004
compared to a net loss of $1.5 million for the nine months ended
September 30, 2003. The net gain for the nine months ended
September 30, 2004 was
principally due to the sale of a cable system in May 2004, serving
approximately 3,450 subscribers, for gross proceeds of about $10.1 million. (10) Contingency On April 5, 2004, a lawsuit was filed against MCC, MCC Georgia LLC, an
indirect subsidiary of MCC and other, currently unnamed potential defendants in
the United States District Court for the District of Colorado by Echostar
Satellite LLC, which operates a direct broadcast satellite business under the
name Dish Network. Echostar alleges that MCC and MCC Georgia have used,
without authorization, Dish Network satellite dishes activated under
residential accounts to receive the signals of certain broadcast television
stations in one or more locations in Georgia and that the defendants have then
been redistributing those signals, through its cable systems, to its
subscribers. Among other claims, the complaint filed by Echostar alleges that
these actions violate a provision of the Communications Act of 1934 (47 U.S.C.
Sec. 605) that prohibits unauthorized interception of radio communications.
The plaintiff seeks injunctive relief, actual and statutory damages,
disgorgement of profits, punitive damages and litigation costs, including
attorneys fees. On June 29, 2004, Echostar amended its complaint to also allege that this
conduct amounted to a breach of the contract between Echostar and one of the
Companys employees, who allegedly acted as an agent for the defendants, by
which the Company received the Echostar satellite signal. On September 7,
2004, the U.S. District Court granted the Companys motion to transfer the case
to the Middle District of Georgia, where venue is proper and where personal
jurisdiction over the Company exists. There have been no further proceedings
since that date. The Company intends to vigorously defend against these
claims. At the present time, the Company is unable to
reasonably evaluate the likelihood of an unfavorable outcome or quantify the
possible damages, if any, associated with these matters, or judge whether or
not those damages would be material to its consolidated financial position,
results of operations, cash flows or business. 11




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) The Company also is involved in various other legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Companys consolidated financial position, results of operations, cash flows or
business. (11) Hurricane Losses On September 16, 2004,
Hurricane Ivan impacted the Companys systems in
Alabama, Florida and Mississippi. As a result, for the three month period ended September 30, 2004,
the Company: (i) incurred additional service costs of approximately $0.8
million; (ii) incurred additional selling, general and administrative costs of
approximately $0.2 million, and (iii) recorded an increase in depreciation
expense of $2.1 million due to the impairment of cable plant and equipment.
The Company is insured against certain losses related to the hurricane, subject
to varying deductible amounts. The Company cannot estimate at this time the
amounts that will be ultimately recoverable under its insurance policies. (12) Subsequent Event On October 21, 2004, the operating subsidiaries of Mediacom LLC, one of
the Companys wholly-owned subsidiaries, refinanced their two credit facilities
(the two prior credit facilities) with a new $1.15 billion senior secured
credit facility. This new credit facility, which consists of a $400 million
revolving credit loan, a $200 million delayed-draw term loan, and a $550
million term loan, has a final maturity of March 31, 2013. The terms and
conditions, as well as interest rates, of the new credit facilities are
substantially similar to those of the two prior credit facilities. The Company
incurred $5.7 million of financing costs associated with this refinancing which
will be amortized over the term of the credit facility. The two prior credit facilities were scheduled to expire in 2008, or in
2007 under certain circumstances. These facilities had current commitments of
$924.0 million, of which approximately $651 million was outstanding as of
October 21, 2004. Proceeds from the new credit facility were drawn down at
closing to pay in full the outstanding indebtedness, including accrued
interest, of the two prior credit facilities. 12




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the Companys
unaudited consolidated financial statements as of and for the three and nine
months ended September 30, 2004 and 2003 and with the Companys annual report
on Form 10-K for the year ended December 31, 2003. Overview Mediacom Communications Corporation 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. We provide our customers with a wide array of broadband products and
services, including traditional analog video services, digital television,
video-on-demand, high-definition television and broadband data access. As of
September 30, 2004, our cable systems passed 2.78 million homes and served 1.46
million basic subscribers in 23 states. In mid-2003, we completed our network upgrade program that significantly
increased bandwidth and enabled interactivity. Our upgraded network allows us
to introduce additional programming and other products and services such as
digital video, video-on-demand, high-definition television, digital video
recorders and broadband data service. We currently provide digital video
services to 382,000 subscribers, representing a penetration of 26.1% of our
basic subscribers. We also currently provide broadband data services to
350,000 subscribers, representing a penetration of 12.6% of our homes passed.
Beginning in the first half of 2005, we plan to launch in certain of our
markets Internet protocol telephony service, which is sometimes referred to as
Voice-over-Internet-Protocol, or VoIP telephony. VoIP telephony will allow us
to offer an attractive triple-play bundle of video, data and voice products and
services. Bundled products and services offer our subscribers key benefits such
as a single provider contact for provisioning, billing and customer care. We face increasing competition for our video programming services, most
notably from direct broadcast satellite service, or DBS service providers.
During the first nine months of 2004, competitive pressure from DBS service
providers further intensified when they launched local television channels in
additional markets representing an estimated 29% of our basic subscriber base.
Since they have been permitted to deliver local television broadcast signals
beginning in 1999, DIRECTV, Inc. and Echostar Communications Corporation, the
two largest DBS service providers, have been increasing the number of markets
in which they deliver these local television signals. These local-into-local
launches are usually accompanied by heavy marketing and advertising and are the
primary cause of our loss of basic subscribers in recent periods. As of
September 30, 2004, competitive local-into-local services in our markets
covered an estimated 91% of our basic subscribers. Use of Operating Income Before Depreciation and Amortization Operating income before depreciation and amortization, or OIBDA, is not a
financial measure calculated in accordance with generally accepted accounting
principles (GAAP) in the United States. However, OIBDA is one of the primary
measures used by management to evaluate our performance and to forecast future
results. We believe OIBDA is useful for investors because it enables them to
assess our performance in a manner similar to the method used by management,
and provides a measure that can be used to analyze, value and compare the
companies in the cable television industry, which may have different
depreciation and amortization policies. A limitation of this measure, however,
is that it excludes depreciation and amortization, which represents the
periodic costs of certain capitalized tangible and intangible assets used in
generating revenues in our business. Management utilizes a separate process to
budget, measure and evaluate capital expenditures. OIBDA should not be regarded as an alternative to either operating income
or net income (loss) as an indicator of operating performance nor should it be
considered in isolation or as a substitute for financial measures prepared in
accordance with GAAP. We believe that operating income is the most directly
comparable GAAP financial measure to OIBDA. 13




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The following table sets forth the reconciliation of OIBDA to operating
income for the three and nine months ended September 30, 2004 and 2003 (dollars
in thousands and unaudited): Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2004
    
    2003
    
    2004
    
    2003OIBDA
    
    $
    98,507
    
    
    $
    101,092
    
    
    $
    311,198
    
    
    $
    302,999Depreciation and amortization
    
    
    (55,631
    )
    
    
    (56,958
    )
    
    
    (163,826
    )
    
    
    (218,436
    )Operating income
    
    $
    42,876
    
    
    $
    44,134
    
    
    $
    147,372
    
    
    $
    84,563
 Hurricane Losses On September 16, 2004, as a result of Hurricane Ivan, our cable systems in
areas of Alabama, Florida and Mississippi experienced, to varying degrees,
damage to cable plant and other property and equipment, business interruption
and loss of customers. The hurricane initially disrupted cable service to over
100,000 of our basic subscribers in these three states. Our results of
operations for the three and nine months ended September 30, 2004 take into
account lost revenues and incremental costs caused by the hurricane. In
addition, we estimate that, as of September 30, 2004, the hurricane caused
losses of 8,000 basic subscribers, 2,000 digital customers and 1,000 data
customers. These losses are reflected in our subscriber and customer counts as
of September 30, 2004. The revenue impact and the costs incurred during the third quarter are
reflected in our consolidated financial statements, and are detailed as
follows: (a) revenues were recorded net of $2.9 million of service interruption
credits issued to customers; (b) service costs included $0.8 million of
incremental costs to cover the repair of our facilities, the use of outside
contractors to help repair cable plant and increased employee costs; (c)
selling, general and administrative expenses included incremental costs of $0.2
million related to additional customer service employee costs required to
support customers needs; and (d) depreciation expense included $2.1 million
due to an impairment of cable plant and other property and equipment. In
addition, we estimate that we will spend about $6.0 million of capital
expenditures to replace or rebuild property, plant and equipment damaged by
Hurricane Ivan. We are insured against certain losses related to the hurricane, subject to
varying deductible amounts. We cannot estimate at this time the amounts that
will be ultimately recoverable under our insurance policies. 14




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Actual Results of Operations Three Months Ended September 30, 2004 Compared to Three Months Ended September 30, 2003 The following table sets forth the unaudited consolidated statements of
operations for the three months ended September 30, 2004 and 2003 (dollars in
thousands and percentage changes that are not meaningful are marked NM): Three Months EndedSeptember 30,2004
    
    2003
    
    $ Change
    
    % ChangeRevenues
    
    $
    261,025
    
    
    $
    251,107
    
    
    $
    9,918
    
    
    
    3.9
    %Costs and expenses:Service costs
    
    
    103,411
    
    
    
    95,498
    
    
    
    7,913
    
    
    
    8.3
    %Selling, general and administrative
expenses
    
    
    54,012
    
    
    
    49,820
    
    
    
    4,192
    
    
    
    8.4
    %Corporate expenses
    
    
    5,095
    
    
    
    4,697
    
    
    
    398
    
    
    
    8.5
    %Depreciation and amortization
    
    
    55,631
    
    
    
    56,958
    
    
    
    (1,327
    )
    
    
    (2.3
    %)Operating income
    
    
    42,876
    
    
    
    44,134
    
    
    
    (1,258
    )
    
    
    (2.9
    %)Interest expense, net
    
    
    (48,709
    )
    
    
    (46,121
    )
    
    
    (2,588
    )
    
    
    5.6
    %(Loss) gain on derivatives, net
    
    
    (4,218
    )
    
    
    8,984
    
    
    
    (13,202
    )
    
    NMLoss on sale
of assets and investments, net
    
    
    
    
    
    
    (2,197
    )
    
    
    (2,197
    )
    
    NMOther expense
    
    
    (2,593
    )
    
    
    (2,652
    )
    
    
    2,256
    
    
    
    (2.2
    %)Net income (loss) before provision for
income taxes
    
    
    (12,644
    )
    
    
    2,148
    
    
    
    (14,792
    )
    
    NMProvision for income taxes
    
    
    163
    
    
    
    211
    
    
    
    (48
    )
    
    
    (22.7
    %)Net income (loss)
    
    $
    (12,807
    )
    
    $
    1,937
    
    
    $
    (14,744
    )
    
    NMOIBDA
    
    $
    98,507
    
    
    $
    101,092
    
    
    $
    (2,585
    )
    
    
    (2.6
    %)
 Revenues The following table sets forth revenue information for the three months
ended September 30, 2004 and 2003 (dollars in millions): Three Months EndedSeptember 30,2004
    
    2003% of
    
    
    
    
    
    % ofAmount
    
    Revenues
    
    Amount
    
    Revenues
    
    $ Change
    
    % ChangeVideo
    
    $
    209.0
    
    
    
    80.1
    %
    
    $
    210.2
    
    
    
    83.7
    %
    
    $
    (1.2
    )
    
    
    (0.6
    %)Data
    
    
    38.9
    
    
    
    14.9
    %
    
    
    30.1
    
    
    
    12.0
    %
    
    
    8.8
    
    
    
    29.2
    %Advertising
    
    
    13.1
    
    
    
    5.0
    %
    
    
    10.8
    
    
    
    4.3
    %
    
    
    2.3
    
    
    
    21.3
    %$
    261.0
    
    
    
    100.0
    %
    
    $
    251.1
    
    
    
    100.0
    %
    
    $
    9.9
    
    
    
    3.9
    %
 Video revenues represent monthly subscription fees charged to customers
for our core cable television products and services (including basic, expanded
basic and analog 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 primarily represent
monthly subscription fees charged to customers for our data products and
services and equipment rental fees. Franchise fees charged to customers for
payment to local franchising authorities are included in their corresponding
revenue category. 15




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Revenues rose 3.9%, net of service interruption credits related to the
hurricane. Excluding such credits, revenues rose 5.1%, largely attributable to
an increase in broadband data customers and basic rate increases applied to our
video customers, driven in large part by our own video programming cost
increases, offset by a reduction in video subscribers during the period. Video revenues decreased 0.6%, net of service interruption credits related
to the hurricane. Excluding such credits, video revenues increased 0.5% as a
result of the aforementioned basic rate increases, partially offset by a
decline in basic subscribers from 1,552,000 to 1,461,000, which is net of an
estimated 8,000 basic subscribers lost due to the hurricane. Digital
customers, at 382,000, which is net of an estimated 2,000 digital subscribers
lost due to the hurricane, were down compared to 393,000 a year ago. Our loss
in video subscribers resulted primarily from increased competitive pressures by
DBS service providers, particularly in those markets where we experienced their
local-into-local launches, and, to a lesser extent, due to our tighter
customer credit policies. To reverse this video subscriber trend, we have been
increasing our customer retention efforts and our emphasis on product bundling,
enhancing and differentiating our video products and services with new digital
packages, video-on-demand, high-definition television, digital video recorders
and more local programming. Data revenues rose 29.2%, net of service interruption credits related to
the hurricane. Excluding such credits, data revenues rose 30.5% due primarily
to an increase in data customers from 261,000 to 350,000, which is net of an
estimated 1,000 data customers lost due to the hurricane. Average monthly data
revenue per data customer decreased 5.7% from $40.57 to $38.26 due to the
growth of lower-priced, slower speed data customers, as well as to discounting
associated with our bundling of digital and data services. Advertising
revenues increased 21.3%, as a result of a stronger local
advertising market, an increase in political advertising sales and, to a lesser
extent, the completion of an interconnect in one of the Companys larger
markets. and bringing in-house certain markets previously managed by third
parties. With respect to our in-house advertising activities, instead of
receiving advertising revenues net of commissions paid to third parties, we now
record the full revenues from these markets as earned, with the related
expenses, including in-house salaries and commissions, recorded as selling,
general and administrative expenses. We do not expect growth in advertising
revenues to continue at the current rate, due to a lack of political
advertising in 2005 and the fact that we have completed bringing in-house most of our
larger markets. Costs and Expenses Service costs include: fees paid to programming suppliers; expenses
related to wages and salaries of technical personnel who maintain our cable
network and perform customer installation activities; broadband data access
costs, including costs of bandwidth connectivity, customer provisioning and
technical support; and plant operating costs, such as utilities and pole rental
expense. Programming costs, which are payments to programmers for content and
are generally paid on a per subscriber basis, have historically increased due
to both increases in the rates charged for existing programming services and
the introduction of new programming services to our basic subscribers. Service costs increased 8.3% and included incremental costs related to the
hurricane. Excluding such incremental costs, service costs increased 7.5% over
the prior year. Of this increase, 42.0% was due to increased programming costs
caused by rate increases on basic and, to a lesser extent, premium services,
offset in part by a reduction in video subscribers, 17.9% was due to greater
expensing of labor and overhead resulting from the transition from upgrade
construction to maintenance activities, 13.5% was due to servicing the growth
in our data customers, and 11.7% was due to increased use of outside
contractors to service our customers. The balance was from higher employee
costs, utility costs and plant maintenance costs. Excluding the impact of the
hurricane, service costs as a percentage of revenues were 38.9% for the three
months ended September 30, 2004 and 38.0% for the three months ended September
30, 2003. Selling, general and administrative expenses include: wages and salaries
for our call centers, customer service and support and administrative
personnel; franchise fees and taxes; and expenses related to billing,
telecommunications, marketing, bad debt, advertising and office administration. Selling, general and administrative expenses increased 8.4% and included
incremental costs related to the hurricane. Excluding such incremental costs,
selling, general and administrative expenses increased 8.0%. Of this increase, 40.8% was due to greater expensing of labor 16




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and overhead costs
resulting from the transition from upgrade construction to maintenance
activities, 28.2% was due to higher advertising costs as a result of bringing
in-house certain markets previously managed by third parties, and 25.1% was due
to higher marketing costs for new programs instituted during the quarter,
offset in part by a decrease in bad debt expense. Excluding the impact of the
hurricane, selling, general and administrative expenses as a percentage of
revenues were 20.4% for the three months ended September 30, 2004, as compared
with 19.8% for the three months ended September 30, 2003. We expect continued revenue growth in advanced services, which include
digital cable, high-definition television and broadband data access and, in the
first half of 2005, the launch of VoIP telephony service. As a result, we
expect our service costs and selling, general and administrative expenses to
increase. Corporate expenses reflect compensation of corporate employees and other
corporate overhead. Corporate expenses increased 8.5% to $5.1 million for the
three months ended September 30, 2004, as compared to $4.7 million for the
three months ended September 30, 2003. This was principally due to increases
in employee compensation and, to a lesser extent, increases in professional
service fees and insurance premiums, partially offset by greater capitalization
of labor and overhead costs related to increased capital project activities in
2004. Corporate expenses as a
percentage of revenues, which exclude the impact of the hurricane were 1.9% for the
three months ended September 30, 2004
and 2003. Depreciation and amortization decreased 2.3% and included incremental
impairment charges related to the hurricane. Excluding such incremental costs,
depreciation and amortization decreased 6.1% to $53.5 million for the three
months ended September 30, 2004, as compared to $57.0 million for the three
months ended September 30, 2003. This decrease was principally due to a higher
level of plant disposals in 2003, as a result of the completion of our network
upgrade program, offset in part by increased depreciation for investments in
our cable network and ongoing investments to continue the rollout of products
and services such as video-on-demand, high-definition television, digital video
recorders and broadband data access. See Note 1 to our unaudited consolidated
financial statements. Interest Expense, Net Interest expense, net, increased by 5.6% to $48.7 million for the three
months ended September 30, 2004, as compared to $46.1 million for the three
months ended September 30, 2003. This increase was primarily due to lower
interest expense capitalization for the three months ended September 30, 2004
associated with the substantial reduction of upgrade/rebuild capital
expenditures, as well as higher market interest rates on variable rate
debt. This increase was offset in part by lower average indebtedness for the
three months ended September 30, 2004. (Loss) Gain on Derivatives, Net We enter into interest rate exchange agreements, or interest rate swaps,
with counterparties to fix the interest rate on a portion of our variable rate
debt to reduce the potential volatility in our interest expense that would
otherwise result from changes in market interest rates. As of September 30,
2004 we had interest rate swaps with an aggregate principal amount of $800.0
million. The changes in their mark-to-market values are derived from changes
in market interest rates, the decrease in their time to maturity and the
creditworthiness of the counterparties. Principally as a result of lower
market interest rates at the end of the quarter compared with the beginning, we
recorded a loss on derivatives amounting to $4.2 million for the three months
ended September 30, 2004, as compared to a net gain on derivatives of $9.0
million for the three months ended September 30, 2003. Loss on
Sale of Assets and Investments, Net The Company had a
loss on the sale of assets and investments
amounting to $2.2 million for the three months ended
September 30, 2003. The net loss was primarily due to a
sale of a small cable system in September 2003 with
approximately 1,500 subscribers for gross proceeds of $3.1 million. Other Expense Other
expense was $2.6 million and $2.7 million for the three months ended
September 30, 2004 and 2003, respectively. Other expense primarily represents
amortization of deferred financing costs and fees on unused credit commitments. 17




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Net Income (loss) As a result of the factors described above, we generated a net loss for
the three months ended September 30, 2004 of $12.8 million, as compared to net
income of $1.9 million for the three months ended September 30, 2003. Operating Income Before Depreciation and Amortization OIBDA decreased 2.6% to $98.5 million, reflecting $3.9 million of service
interruption credits and incremental operating costs related to the hurricane.
Excluding such service credits and incremental costs, OIBDA increased 1.3% to
$102.4 million due to a 5.1% increase in revenues, partially offset by a 7.5%
increase in service costs and an 8.0% increase in selling, general and
administrative expenses. Excluding the impact of the hurricane, OIBDA,
expressed as a percentage of revenues, was 38.8% for the three months ended
September 30, 2004, as compared to 40.3% in the year-ago period. Nine Months Ended September 30, 2004 Compared to Nine Months Ended September 30, 2003 The following table sets forth the unaudited consolidated statements of
operations for the nine months ended September 30, 2004 and 2003 (dollars in
thousands and percentage changes that are not meaningful are marked NM): Nine Months EndedSeptember 30,2004
    
    2003
    
    $ Change
    
    % ChangeRevenues
    
    $
    792,063
    
    
    $
    746,076
    
    
    $
    45,987
    
    
    
    6.2
    %Costs and expenses:Service costs
    
    
    307,534
    
    
    
    285,700
    
    
    
    21,834
    
    
    
    7.6
    %Selling, general and administrative
expenses
    
    
    158,388
    
    
    
    145,073
    
    
    
    13,315
    
    
    
    9.2
    %Corporate expenses
    
    
    14,943
    
    
    
    12,304
    
    
    
    2,639
    
    
    
    21.4
    %Depreciation and amortization
    
    
    163,826
    
    
    
    218,436
    
    
    
    (54,610
    )
    
    
    (25.0
    %)Operating income
    
    
    147,372
    
    
    
    84,563
    
    
    
    62,809
    
    
    
    74.3
    %Interest expense, net
    
    
    (143,276
    )
    
    
    (143,710
    )
    
    
    434
    
    
    
    (0.3
    %)Gain (loss) on derivatives, net
    
    
    9,498
    
    
    
    (732
    )
    
    
    10,230
    
    
    NMGain on sale of assets and investments, net
    
    
    5,885
    
    
    
    (1,522
    )
    
    
    7,407
    
    
    NMOther expense
    
    
    (7,406
    )
    
    
    (7,562
    )
    
    
    156
    
    
    
    (2.1
    %)Net income (loss) before provision for
income taxes
    
    
    12,073
    
    
    
    (68,963
    )
    
    
    81,036
    
    
    NMProvision for income taxes
    
    
    490
    
    
    
    624
    
    
    
    (134
    )
    
    
    (21.5
    %)Net income (loss)
    
    $
    11,583
    
    
    $
    (69,587
    )
    
    $
    81,170
    
    
    NMOIBDA
    
    $
    311,198
    
    
    $
    302,999
    
    
    $
    8,199
    
    
    
    2.7
    %
 18




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##### Table of Contents



Revenues The following table sets forth revenue information for the nine months
ended September 30, 2004 and 2003 (dollars in millions): Nine Months EndedSeptember 30,2004
    
    2003% of
    
    
    
    
    
    % ofAmount
    
    Revenues
    
    Amount
    
    Revenues
    
    $ Change
    
    % ChangeVideo
    
    $
    642.2
    
    
    
    81.1
    %
    
    $
    633.7
    
    
    
    84.9
    %
    
    $
    8.5
    
    
    
    1.3
    %Data
    
    
    113.5
    
    
    
    14.3
    %
    
    
    81.7
    
    
    
    11.0
    %
    
    
    31.8
    
    
    
    38.9
    %Advertising
    
    
    36.4
    
    
    
    4.6
    %
    
    
    30.7
    
    
    
    4.1
    %
    
    
    5.7
    
    
    
    18.6
    %$
    792.1
    
    
    
    100.0
    %
    
    $
    746.1
    
    
    
    100.0
    %
    
    $
    46.0
    
    
    
    6.2
    %
 Revenues rose 6.2%, net of service interruption credits related to the
hurricane. Excluding such credits, revenues rose 6.5%, largely attributable to
an increase in broadband data customers and basic rate increases applied on our
video customers, driven in large part by our own video programming cost
increases, offset by a reduction in video subscribers during the period. Video revenues rose 1.3%, net of service interruption credits related to
the hurricane. Excluding such credits, video revenues increased 1.7% as a
result of the aforementioned basic rate increases, partially offset by a
decline in basic subscribers from 1,552,000 to 1,461,000, which is net of an
estimated 8,000 basic subscribers lost due to the hurricane. Digital
customers, at 382,000, which is net of an estimated 2,000 digital customers
lost due to the hurricane, were down compared to 393,000 a year ago. Our loss
in video subscribers resulted primarily from increased competitive pressures by
DBS service providers, particularly in those markets where we experienced their
local-into-local launches and, to a lesser extent, from our tighter customer
credit policies. To reverse this video subscriber trend, we have been
increasing our customer retention efforts and our emphasis on product bundling,
enhancing and differentiating our video products and services with new digital
packages, video-on-demand, high-definition television, digital video recorders
and more local programming. Data revenues rose 38.9%, net of service interruption credits related to
the hurricane. Excluding such credits, data revenues rose 39.5% due primarily
to an increase in data customers from 261,000 to 350,000, which is net of an
estimated 1,000 data customers lost due to the hurricane. Average monthly data
revenue per data customer decreased 0.3% from $40.16 to $40.04 due to the
growth of lower-priced, slower speed data customers, as well as the discounting
associated with our bundling of digital and data services. Advertising
revenues increased 18.6%, primarily as a result of higher
local advertising sales and, to a lesser extent, due to the completion of an
interconnect in one of our larger markets and bringing in-house certain markets
previously managed by third parties. With respect to our in-house advertising
activities, instead of receiving advertising revenues net of commissions paid
to third parties, we now record the full revenues from these markets as earned,
with the related expenses, including in-house salaries and commissions,
recorded as selling, general and administrative expenses. We do not expect
growth in advertising revenues to continue at the current rate in 2005, due to
a lack of political advertising and the fact that we have completed bringing
in-house most of our larger markets. Costs and Expenses Service costs increased 7.6% and included incremental costs related to the
hurricane. Excluding such incremental costs, service costs increased 7.4% over
the prior year. Of this increase, 27.9% was due to increased programming costs
caused by rate increases on basic and, to a lesser extent, premium services,
offset in part by a reduction in video subscribers and an increase in launch
support received from programmers, 27.2% was due to servicing the growth in our
data customers, 15.8% was due to an increase in operations cost, which include
vehicle, utility and plant maintenance costs, 13.6% was due to greater expensing of
labor and overhead costs resulting from the transition from 19




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upgrade
construction to maintenance activities, and 9.5% was due to an increase in
employee costs. Excluding the impact of the hurricane, service costs as a
percentage of revenues were 38.6% for the nine months ended September 30, 2004,
as compared with 38.3% for the nine months ended September 30, 2003. Selling, general and administrative expenses increased 9.2% and included
incremental costs related to the hurricane. Excluding such incremental costs,
selling, general and administrative expenses increased 9.0%. Of this increase,
21.7% was due to higher marketing costs for new programs instituted during the
period, 21.6% was due to higher advertising costs primarily as a result of
bringing in-house certain markets previously managed by third parties, 20.2%
was principally due to an increase in employee costs, 11.6% was due to
increased property taxes and franchise fees, and 10.6% was due to an increase
in telephone costs. Excluding the impact of the hurricane, selling, general
and administrative expenses as a percentage of revenues were 19.9% for the nine
months ended September 30, 2004, as compared with 19.4% for the nine months
ended September 30, 2003. We expect continued revenue growth in advanced services, which include
digital cable, high-definition television and broadband data access and, in the
first half of 2005, the launch of VoIP telephony service. As a result, we
expect our service costs and selling, general and administrative expenses to
increase. Corporate expenses reflect compensation of corporate employees and other
corporate overhead. Corporate expenses increased 21.4% to $14.9 million for
the nine months ended September 30, 2004, as compared to $12.3 million for the
nine months ended September 30, 2003. This was principally due to increases in
employee compensation and, to a lesser extent, transportation, travel and
entertainment, professional fees and insurance premiums, partially offset by
greater capitalization of labor and overhead costs related to increased capital
project activities in 2004. We believe the annual increase in corporate
expenses will moderate as the rate of change in employee compensation is
expected to be lower. Corporate
expenses as a percentage of revenues, which exclude the impact of the
hurricane were 1.9% for the nine months ended
September 30, 2004, as compared with 1.6% for the nine months ended September
30, 2003. Depreciation and amortization decreased 25.0% and included incremental
impairment charges related to the hurricane. Excluding such incremental costs,
depreciation and amortization decreased 26.0% to $161.7 million for the nine
months ended September 30, 2004, as compared to $218.4 million for the nine
months ended September 30, 2003. The decrease was primarily due to changes,
effective July 1, 2003, in the estimated useful lives of our cable systems and
equipment in conjunction with the completion of our network upgrade and rebuild
program. These changes reduced depreciation by $64.5 million and $31.6 million
for the nine months ended September 30, 2004 and 2003, respectively. This
decrease in the 2004 period was offset in part by increased depreciation for
investments in our cable network and ongoing investments to continue the
rollout of products and services such as video-on-demand, high-definition
television, digital video recorders and broadband data access. See Note 1 to
our consolidated financial statements. Interest Expense, Net Interest expense, net, decreased by 0.3% to $143.3 million for the nine
months ended September 30, 2004, as compared to $143.7 million for the nine
months ended September 30, 2003. This was primarily due to lower indebtedness
and partially offset by higher market interest rates on variable rate debt
and lower interest expense capitalization for the nine months ended September
30, 2004 associated with the substantial reduction of upgrade/rebuild capital
expenditures. Gain (Loss) on Derivatives, Net We enter into interest rate exchange agreements, or interest rate swaps,
with counterparties to fix the interest rate on a portion of our variable rate
debt to reduce the potential volatility in our interest expense that would
otherwise result from changes in market interest rates. As of September 30,
2004 we had interest rate swaps with an aggregate principal amount of $800.0
million. The changes in their mark-to-market values are derived from changes
in market interest rates, the decrease in their time to maturity and the
creditworthiness of the counterparties. Principally as a result of higher
market interest rates at the end of the period compared with the beginning, we
recorded a net gain on 20




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derivatives amounting to $9.5 million for the nine
months ended September 30, 2004, as compared to a net loss on derivatives of
$0.7 million for the nine months ended September 30, 2003. Gain on Sale of Assets and Investments, Net The Company had a net gain on sale of assets and investments amounting to
$5.9 million for the nine months ended September 30, 2004. The net gain was
principally due to the sale of a cable system in May 2004, serving
approximately 3,450 subscribers, for gross proceeds of about $10.1 million. Other Expense Other
expense was $7.4 million and $7.6 million for the nine months ended
September 30, 2004 and 2003, respectively. Other expense primarily represents
amortization of deferred financing costs and fees on unused credit commitments. Net Income (loss) As a result of the factors described above, we generated net income for
the nine months ended September 30, 2004 of $11.6 million, as compared to a net
loss of $69.6 million for the nine months ended September 30, 2003. Operating Income Before Depreciation and Amortization OIBDA increased 2.7% to $311.2 million, reflecting $3.9 million of service
interruption credits and incremental operating costs related to Hurricane Ivan.
Excluding these service credits and incremental costs, OIBDA increased 4.0% to
$315.1 million due to a 6.5% increase in revenues, partially offset by a 7.4%
increase in service costs and 9.0% increase in selling, general and
administrative expenses. Excluding the impact of Hurricane Ivan, OIBDA,
expressed as a percentage of revenues, was 39.6% for the nine months ended
September 30, 2004, as compared to 40.6% in the year-ago period. Liquidity and Capital Resources Uses of Cash As an integral part of our business plan, we have significantly invested,
and will continue to invest, additional capital in our cable network to enhance
its reliability and capacity, which will allow for the introduction of new
advanced broadband services. In addition, we will continue to pursue a
business strategy that includes selective acquisitions. For the nine months
ended September 30, 2004, we made capital expenditures of $126.0 million and
purchased a small cable system for $3.4 million. We also repaid $43.2 million
of debt and repurchased $3.7 million of common stock. Sources of Cash We expect to fund our capital requirements and operations through a
combination of internally generated funds and amounts available under our bank
credit facilities. Net cash flows provided by operating activities amounted to
$153.0 million for the nine months ended September 30, 2004. We also received
$10.6 million in proceeds from the sale of assets and investments, primarily
from the sale of a cable system. Other We own our cable systems through two principal subsidiaries, Mediacom
Broadband LLC and Mediacom LLC. The operating subsidiaries of Mediacom
Broadband LLC have a $1.4 billion bank credit facility expiring in September
2010, of which $956.8 million was outstanding as of September 30, 2004. On
October 21, 2004, the operating subsidiaries of Mediacom LLC refinanced their
two bank credit facilities (the two prior credit facilities)
with a new $1.15 billion bank credit facility (the new credit facility) that
expires in March 2013. These two prior credit facilities were scheduled to
expire in 2008, or in 2007 under certain circumstances. 21




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Approximately $658 million was drawn from the new credit facility at
closing, of which approximately $652 million was used to pay in full
outstanding indebtedness, including accrued interest, under the two prior
credit facilities and the balance was used to pay fees and expenses.
The financial obligations of the operating subsidiaries under the two prior
credit facilities have been satisfied, and the prior credit facilities have
been terminated. We have entered into interest rate exchange agreements with
counterparties, which expire from September 2005 through March 2007, to hedge
$800.0 million of floating rate debt. 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 of the agreements. However, due to the
high creditworthiness of our counterparties, which are major banking firms
rated investment grade, we do not anticipate their nonperformance. As of
September 30, 2004, about 73% of the Companys outstanding indebtedness was at
fixed interest rates or subject to interest rate protection. As of September 30, 2004, our total debt was $3.0 billion, and we were in
compliance with all covenants under our debt arrangements. On that same date,
our annualized cost of debt was approximately 6.5%, and we had unused credit
commitments of about $700.8 million, of which $553.0 million could be borrowed
and used for general corporate purposes based on the terms and conditions of
our debt arrangements. As of that same date, giving effect to the new facility,
we had unused credit commitments of $916.7 million, of which $768.9 million
could be borrowed and used for general corporate purposes based on the terms
and conditions of our debt arrangements. As of September 30, 2004, approximately $14.3 million of letters of credit
were issued to various parties to secure our performance relating to insurance
and franchise requirements. Although we have not generated earnings sufficient to cover fixed charges
in the past, we have generated cash and obtained financing sufficient to meet
our short-term requirements, including our debt service, working capital and
capital expenditures. We expect that we will continue to be able to generate
funds and obtain financing sufficient to service 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. 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: Property, Plant and Equipment In accordance with Statement of Financial Accounting Standards (SFAS)
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 broadband data 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. Any changes to these estimates, which may be significant, are
applied in the period in which the evaluations were completed. 22




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Goodwill and Other Intangible Assets In accordance with SFAS No. 142, Goodwill and Other Intangible Assets,
the amortization of goodwill and indefinite-lived intangible assets is
prohibited and requires 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. Our annual impairment
tests, performed in the fourth quarter of 2003, based on financial information
as of September 30, 2003, determined that there was no impairment of goodwill
or indefinite-lived intangible assets. There have been no events since then
that would require an analysis to be completed before the annual test date. Recent Accounting Pronouncements The FASB issued SFAS No. 148, Accounting for Stock-Based Compensation -
Transition and Disclosure, which amends: (i) SFAS No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for an entity that voluntarily changes to the fair value based
method of accounting for stock-based employee compensation; (ii) the disclosure
provisions of SFAS No. 123 to require prominent disclosure about the effects on
reported net income of an entitys accounting policy decisions with respect to
stock-based employee compensation; and (iii) Accounting Principles Board
(APB) Opinion No. 28, Interim Financial Reporting, to require disclosure
about those effects in interim financial information. We adopted SFAS No. 148
on January 1, 2003. We did not change to the fair value based method of
accounting for stock-based employee compensation. Accordingly, the adoption of
SFAS No. 148 did not affect our financial condition or results of operations. 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. However, competitive conditions and other factors in
the marketplace may limit our ability to increase our rates. 23




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the normal course of business, we use interest rate exchange
agreements, or swaps, with counterparties to fix the interest rate on our
floating rate debt. As of September 30, 2004, we had interest rate exchange
agreements with various banks pursuant to which the interest rate on $800.0
million is fixed at a weighted average rate of approximately 3.3%. The fixed
rates of the swap agreements are offset against the applicable three-month
London Interbank Offering Rate to determine the interest expense related to
these agreements. Under the terms of the interest rate exchange agreements,
which expire from 2005 through 2007, we are exposed to credit loss in the event
of nonperformance by the other parties. However, due to the high
creditworthiness of our counterparties, which are major banking firms rated
investment grade, we do not anticipate their nonperformance. At September 30,
2004, based on the mark-to-market valuation, we would have paid approximately
$6.3 million, including accrued interest, if we terminated these agreements. On October 21, 2004, the operating subsidiaries of Mediacom LLC, one of
the Companys wholly-owned subsidiaries, refinanced their two credit facilities
(the two prior credit facilities) with a new $1.15 billion senior secured
credit facility. This new credit facility, which consists of a $400 million
revolving credit loan, a $200 million delayed-draw term loan, and a $550
million term loan, has a final maturity of March 31, 2013. We
have incurred $5.7 million of financing costs associated with
this refinancing that will be recorded in the fourth quarter of 2004
and amortized over the term of the credit facility. The table below provides the new expected maturity and estimated fair
value of our debt as of September 30, 2004, giving effect for the new credit
facility at Mediacom LLC (dollars in thousands). See Note 7 to our unaudited
consolidated financial statements. Bank Credit
    
    Capital LeaseSenior Notes
    
    Facilities
    
    Obligations
    
    TotalExpected Maturity:October 1, 2004 to September 30, 2005
    
    $
    
    
    
    $
    34,625
    
    
    $
    2,182
    
    
    $
    36,807October 1, 2005 to September 30, 2006
    
    
    172,500
    (1)
    
    
    46,125
    
    
    
    2,251
    
    
    
    220,876October 1, 2006 to September 30, 2007
    
    
    
    
    
    
    64,875
    
    
    
    1,640
    
    
    
    66,515October 1, 2007 to September 30, 2008
    
    
    200,000
    
    
    
    70,500
    
    
    
    110
    
    
    
    270,610October 1, 2008 to September 30, 2009
    
    
    
    
    
    
    159,125
    
    
    
    
    
    
    
    159,125Thereafter
    
    
    1,025,000
    
    
    
    1,229,377
    
    
    
    
    
    
    
    2,254,377Total
    
    $
    1,397,500
    
    
    $
    1,604,627
    
    
    $
    6,183
    
    
    $
    3,008,310Fair Value
    
    $
    1,397,156
    
    
    $
    1,604,627
    
    
    $
    6,183
    
    
    $
    3,007,966Weighted Average Interest Rate
    
    
    9.1
    %
    
    
    3.5
    %
    
    
    3.1
    %
    
    
    6.1
    %
   (1)
    
    Represents convertible senior notes due July 2006. 24




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES Our management carried out an evaluation, with the participation of our
Chief Executive Officer and Chief Financial Officer, of the effectiveness of
our disclosure controls and procedures as of September 30, 2004. Based upon
that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures were effective to ensure
that information required to be disclosed by us in reports that we file or
submit under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and
forms of the Securities and Exchange Commission. There has not been any change in our internal control over financial
reporting in connection with the evaluation required by Rule 13a-15(d) under
the Exchange Act that occurred during the quarter ended September 30, 2004 that
has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting. 25




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##### Table of Contents



PART II 
 ITEM 1. LEGAL PROCEEDINGS See Note 10 to our consolidated financial statements. 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS A summary of our repurchases of Class A common shares during the quarter
under the $50.0 million repurchase program, authorized by our Board of
Directors in May 2000 and reaffirmed on August 3, 2004, are as follows: Approximate DollarTotal Number of
    
    Value of Shares thatTotal Number
    
    
    
    
    
    Shares Purchased
    
    May Yet Beof Shares
    
    Average Price
    
    as Part of Publicly
    
    Purchased UnderPeriod
    
    Purchased
    
    Per share
    
    Announced Program
    
    the ProgramJuly 1 - 31, 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    August 1 -31, 2004
    
    
    500,667
    
    
    $
    6.12
    
    
    
    500,667
    
    
    $
    40,973,135September 1 - 30, 2004
    
    
    95,425
    
    
    $
    6.21
    
    
    
    95,425
    
    
    $
    40,380,751596,092
    
    
    $
    6.13
    
    
    
    596,092
    
    
    $
    40,380,751
 26




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##### Table of Contents



ITEM 6. EXHIBITS ExhibitNumber
    
    Exhibit Description10.1
    
    Credit Agreement, dated as of October 21, 2004, among the operating subsidiaries of
Mediacom LLC, the lenders thereto and JPMorgan Chase Bank, as administrative agent for
the lenders31.1
    
    Rule 13a-14(a) Certifications32.1
    
    Section 1350 Certifications
 27




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##### Table of Contents



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 COMMUNICATIONS CORPORATIONNovember 9,2004
    By:
    
    /s/ Mark E. StephanMark E. StephanExecutive Vice President and
  Chief Financial Officer 28