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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, 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. Employer
Identification 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 X            No Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes X            No As of April 23, 2004 there were 89,969,317 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 MARCH 31, 2004 TABLE OF CONTENTS PART IPageItem 1. Financial StatementsConsolidated Balance Sheets (unaudited)  March 31, 2004 and December 31, 2003
    
    
    1Consolidated Statements of Operations (unaudited)  Three Months Ended March 31, 2004 and 2003
    
    
    2Consolidated Statements of Cash Flows (unaudited)  Three Months Ended March 31, 2004 and 2003
    
    
    3Notes to Consolidated Financial Statements (unaudited)
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    17Item 4. Controls and Procedures
    
    
    18PART IIItem 1. Legal Proceedings
    
    
    19Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
    
    
    19Item 6. Exhibits and Reports on Form 8-K
    
    
    19COMPENSATION AGREEMENTCERTIFICATIONCERTIFICATION
    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) March 31,
    
    December 31,2004
    
    2003ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    11,584
    
    
    $
    25,815Investments
    
    
    1,987
    
    
    
    2,933Subscriber accounts receivable, net of allowance for doubtful accounts
of $3,300 and $3,524, respectively
    
    
    58,617
    
    
    
    56,706Prepaid expenses and other assets
    
    
    16,044
    
    
    
    14,260Total current assets
    
    
    88,232
    
    
    
    99,714Investment in cable television systems:Property, plant and equipment, net of accumulated depreciation of
$894,046 and $844,519, respectively
    
    
    1,462,680
    
    
    
    1,465,362Intangible assets, net of accumulated amortization of $293,082 and
$289,906, respectively
    
    
    2,049,663
    
    
    
    2,050,095Total investment in cable television systems
    
    
    3,512,343
    
    
    
    3,515,457Other assets, net of accumulated amortization of $25,458 and
$23,823, respectively
    
    
    38,157
    
    
    
    39,788Total assets
    
    $
    3,638,732
    
    
    $
    3,654,959LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable and accrued expenses
    
    $
    231,704
    
    
    $
    247,728Deferred revenue
    
    
    39,590
    
    
    
    36,634Current portion of long-term debt
    
    
    21,398
    
    
    
    12,570Total current liabilities
    
    
    292,692
    
    
    
    296,932Long-term debt, less current portion
    
    
    3,015,869
    
    
    
    3,038,922Other non-current liabilities
    
    
    50,307
    
    
    
    33,991Total liabilities
    
    
    3,358,868
    
    
    
    3,369,845STOCKHOLDERS EQUITYClass A common stock, $.01 par value; 300,000,000 shares authorized;
91,429,150 shares issued and 89,892,406 shares outstanding as of March
31, 2004 and 91,345,346 shares issued and 89,808,602 shares outstanding
as of December 31, 2003
    
    
    914
    
    
    
    913Class B common stock, $.01 par value; 100,000,000 shares authorized;
28,913,145 shares issued and outstanding as of March 31, 2004 and
December 31, 2003
    
    
    289
    
    
    
    289Additional paid in capital
    
    
    982,878
    
    
    
    982,390Accumulated deficit
    
    
    (698,254
    )
    
    
    (692,515
    )Treasury stock, at cost, 1,536,744 shares of Class A common stock
    
    
    (5,963
    )
    
    
    (5,963
    )Total stockholders equity
    
    
    279,864
    
    
    
    285,114Total liabilities and stockholders equity
    
    $
    3,638,732
    
    
    $
    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 EndedMarch 31,2004
    
    2003Revenues
    
    $
    263,439
    
    
    $
    242,775Costs and expenses:Service costs (exclusive of depreciation and amortization of
$52,703 and $78,166, respectively, shown separately below)
    
    
    102,451
    
    
    
    94,510Selling, general and administrative expenses
    
    
    51,830
    
    
    
    47,371Corporate expenses
    
    
    4,891
    
    
    
    3,699Depreciation and amortization
    
    
    52,703
    
    
    
    78,166Operating income
    
    
    51,564
    
    
    
    19,029Interest expense, net
    
    
    (47,164
    )
    
    
    (48,706
    )Loss on derivative instruments, net
    
    
    (7,551
    )
    
    
    (1,092
    )Other expense
    
    
    (2,435
    )
    
    
    (2,397
    )Net loss before provision for income taxes
    
    
    (5,586
    )
    
    
    (33,166
    )Provision for income taxes
    
    
    153
    
    
    
    200Net loss
    
    $
    (5,739
    )
    
    $
    (33,366
    )Basic and diluted net loss per share
    
    $
    (0.05
    )
    
    $
    (0.28
    )Weighted average common shares outstanding
    
    
    118,723
    
    
    
    118,525
 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 CASH FLOWS
(Dollar amounts in 000s)
(Unaudited) Three Months EndedMarch 31,2004
    
    2003CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:Net loss
    
    $
    (5,739
    )
    
    $
    (33,366
    )Adjustments to reconcile net loss to net cash flows from operating
activities:Depreciation and amortization
    
    
    52,703
    
    
    
    78,166Loss on derivative instruments, net
    
    
    7,551
    
    
    
    1,092Amortization of deferred financing costs
    
    
    1,635
    
    
    
    1,555Changes in assets and liabilities, net of effects from acquisitions:Subscriber accounts receivable, net
    
    
    (1,911
    )
    
    
    (604
    )Prepaid expenses and other assets
    
    
    (1,784
    )
    
    
    (3,142
    )Accounts payable and accrued expenses
    
    
    (16,024
    )
    
    
    (17,670
    )Deferred revenue
    
    
    2,956
    
    
    
    2,334Other non-current liabilities
    
    
    3,691
    
    
    
    (113
    )Net cash flows provided by operating activities
    
    
    43,078
    
    
    
    28,252CASH FLOWS USED IN INVESTING ACTIVITIES:Capital expenditures
    
    
    (39,841
    )
    
    
    (70,003
    )Acquisition of cable television systems
    
    
    (3,433
    )
    
    
    Proceeds from sales of cable television systems
    
    
    
    
    
    
    8,960Other investment activities
    
    
    (299
    )
    
    
    (405
    )Net cash flows used in investing activities
    
    
    (43,573
    )
    
    
    (61,448
    )CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:New borrowings
    
    
    57,043
    
    
    
    136,250Repayment of debt
    
    
    (71,268
    )
    
    
    (115,250
    )Proceeds from issuance of common stock in employee stock
purchase plan
    
    
    489
    
    
    
    523Financing costs
    
    
    
    
    
    
    (272
    )Net cash flows (used in) provided by financing activities
    
    
    (13,736
    )
    
    
    21,251Net decrease in cash and cash equivalents
    
    
    (14,231
    )
    
    
    (11,945
    )CASH AND CASH EQUIVALENTS, beginning of period
    
    
    25,815
    
    
    
    31,224CASH AND CASH EQUIVALENTS, end of period
    
    $
    11,584
    
    
    $
    19,279SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for interest, net of amounts capitalized
    
    $
    65,210
    
    
    $
    73,766
 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 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 March 31, 2004 and 2003. In the opinion of
management, such statements include all adjustments, including 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 fixed assets 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 decrease in net loss of approximately $32.1 million or $0.27
per share for the three months ended March 31, 2004. 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 equipment 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, sales or
other dispositions of property, the original cost and related accumulated
depreciation are removed from the respective accounts and the gains and 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 Company performs periodic evaluations of certain estimates used to
determine such costs that are capitalized. Any changes to these estimates,
which may be significant, are applied in the period in which the evaluations
were completed. 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. 4




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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. Reclassifications Certain reclassifications have been made to prior years 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, in December 2002, 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 employees 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): 5




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) Three Months EndedMarch 31,2004
    
    2003Net loss, as reported
    
    $
    (5,739
    )
    
    $
    (33,366)Deduct: Total stock based
compensation expense
determined under fair value
based method for all awards,
net of related tax effects
    
    
    (3,802
    )
    
    
    (3,914
    )Pro forma, net loss
    
    $
    (9,541
    )
    
    $
    (37,280
    )Basic and diluted net loss per
share:As reported
    
    $
    (0.05
    )
    
    $
    (0.28
    )Pro forma
    
    $
    (0.08
    )
    
    $
    (0.31
    )
 (3) Loss Per Share The Company calculates loss per share in accordance with Statement SFAS
No. 128, Earnings per Share. SFAS No. 128 computes basic loss per share by
dividing the net loss by the weighted average number of shares of common stock
outstanding during the period. Diluted loss per share is computed by dividing
the net loss by the weighted average number of shares of common stock
outstanding during the period plus the effects of any potentially dilutive
securities. The effects of stock options and convertible debt were
anti-dilutive, because the Company generated net losses for the periods
presented. Accordingly, diluted loss per share equaled basic loss per share.
If the Company did not have net losses for the quarters ended March 31, 2004
and 2003, the number of potentially dilutive shares that would have been
included in the earnings per share calculation totaled 30,000 and 20,000,
respectively. (4) Property, Plant and Equipment As of March 31, 2004 and December 31, 2003, property, plant and equipment
consisted of (dollars in thousands): March 31,
    
    December 31,2004
    
    2003Land and land improvements
    
    $
    7,092
    
    
    $
    7,059Buildings and leasehold improvements
    
    
    41,866
    
    
    
    41,273Cable systems, equipment and subscriber devices
    
    
    2,216,858
    
    
    
    2,172,953Vehicles
    
    
    64,234
    
    
    
    63,023Furniture, fixtures and office equipment
    
    
    26,676
    
    
    
    25,5732,356,726
    
    
    
    2,309,881Accumulated depreciation
    
    
    (894,046
    )
    
    
    (844,519
    )Property, plant and equipment, net
    
    $
    1,462,680
    
    
    $
    1,465,362
 Depreciation expense for the quarters ended March 31, 2004 and 2003 was
approximately $49.5 million and $73.8 million, respectively. As of March 31,
2004 the Company had property under capitalized leases of $11.3 million before
accumulated depreciation, and $9.1 million, net of accumulated depreciation.
There was no property under capital leases as of March 31, 2003. 6




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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. Indefinite-lived intangible assets include goodwill and cable franchise
costs and are accounted for in accordance with SFAS No. 142 Goodwill and
Other Intangible Assets. The provisions of SFAS No. 142, which were
adopted by the Company on January 1, 2002, 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. The Company has determined that its cable franchise costs
and goodwill are indefinite-lived assets. Accordingly, on January 1, 2002,
the Company ceased the amortization of its indefinite-lived intangible
assets. 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 March 31, 2004 and December 31, 2003 (dollars in thousands): Gross Asset
    
    Accumulated
    
    Net AssetMarch 31, 2004
    
    Value
    
    Amortization
    
    ValueFranchise costs
    
    $
    1,945,369
    
    
    $
    141,167
    
    
    $
    1,804,202Goodwill
    
    
    224,614
    
    
    
    3,232
    
    
    
    221,382Subscriber lists
    
    
    167,067
    
    
    
    143,164
    
    
    
    23,903Covenants not to compete
    
    
    5,695
    
    
    
    5,519
    
    
    
    176$
    2,342,745
    
    
    $
    293,082
    
    
    $
    2,049,663
 Gross 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 quarters ended March 31, 2004 and 2003 was
approximately $3.2 million and $4.4 million, respectively. The Companys
estimated aggregate amortization expense for 2004 through 2008 and beyond is
$7.3 million, $2.8 million, $2.1 million, $2.1 million, $2.1 million and $7.7
million, respectively. 7




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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 March
31, 2004 and December 31, 2003 (dollars in thousands): March
31,
    
    December 31,2004
    
    2003Accounts payable
    
    $
    23,935
    
    
    $
    6,563Accrued capital
    
    
    20,284
    
    
    
    25,463Accrued interest
    
    
    37,020
    
    
    
    55,053Accrued payroll and
benefits
    
    
    20,108
    
    
    
    23,524Accrued programming
    
    
    71,343
    
    
    
    77,296Accrued taxes and fees
    
    
    22,686
    
    
    
    26,513Other accrued expenses
    
    
    36,328
    
    
    
    33,316$
    231,704
    
    
    $
    247,728
 (7) Debt As of March 31, 2004 and December 31, 2003, debt consisted of (dollars in
thousands): March 31,
    
    December 31,2004
    
    2003Bank credit facilities
    
    $
    1,632,500
    
    
    $
    1,646,5008 1/2% senior notes
    
    
    200,000
    
    
    
    200,0007 7/8% senior notes
    
    
    125,000
    
    
    
    125,0009 1/2% senior notes
    
    
    500,000
    
    
    
    500,00011% senior notes
    
    
    400,000
    
    
    
    400,0005 1/4% convertible senior
notes
    
    
    172,500
    
    
    
    172,500Capital lease obligations
    
    
    7,267
    
    
    
    7,492$
    3,037,267
    
    
    $
    3,051,492Less: current portion
    
    
    21,398
    
    
    
    12,570Total long-term debt
    
    $
    3,015,869
    
    
    $
    3,038,922
 The average interest rate on outstanding debt under the bank credit
facilities was 2.9% for the three months ended March 31, 2004, before giving
effect to the interest rate exchange agreements discussed below. As of March
31, 2004, the Company had unused credit commitments of approximately $748.7
million under its bank credit facilities, of which about $612.4 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 as of March 31, 2004. The
Company uses interest rate exchange agreements with counterparties to fix the interest
rate on a portion of its floating rate debt. As of March 31, 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%. This fixed interest rate is then adjusted,
if necessary, by the applicable three-month London Interbank Offering Rate
to determine the interest expense related to the Companys
interest rate swap agreements. These interest rate swaps are accounted for as fair value
hedges of debt instruments as prescribed by SFAS No. 133. The changes in their
mark-to-market values are derived from changes in market interest
rates, the decrease in their time to maturity and 8




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MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) the creditworthiness of the counterparties. The Companys use of interest rate
exchange agreements may result in short-term gains or losses and may increase
the volatility of earnings. 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 high creditworthiness of the Companys counterparties,
which are major banking firms rated investment grade or better, the Company does
not anticipate their nonperformance. The fair value of the interest rate exchange agreements is the estimated
amount that the Company would receive or pay to terminate such agreements,
taking into account current interest rates, their remaining lives and the
current creditworthiness of the Companys counterparties. At March 31, 2004,
based on the mark-to-market valuation, the Company would have paid
approximately $23.4 million if these agreements were terminated, inclusive of
accrued interest. (8) Subsequent Event On April 5, 2004, a lawsuit was filed against Mediacom Communications
Corporation, MCC Georgia LLC, an indirect subsidiary of Mediacom Communications
Corporation 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 the Company has 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 Company has 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. The
Company intends to vigorously defend against such 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. 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. 9




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##### Table of Contents



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 months
ended March 31, 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 high-speed Internet access. As
of March 31, 2004, our cable systems passed approximately 2.77 million homes
and served approximately 1.53 million basic subscribers in 23 states. In 2003, we completed our planned network upgrade program that
significantly increased bandwidth and enabled interactivity. As of March 31,
2004, approximately 98% of our cable network was upgraded with 550MHz to 870MHz
bandwidth capacity and about 97% of our homes passed were activated with
two-way communications capability. As of the same date, approximately 95% of
our basic subscribers were served by our 50 largest headend facilities.
Expressed in megahertz, or MHz, bandwidth represents a systems capacity to
deliver telecommunication services. A headend facility is the location where
signals are received and processed for distribution over a cable system. Our upgraded network allows us to introduce additional programming and
other products and services such as digital video, video-on-demand,
high-definition television and high-speed Internet service. We currently
provide digital video services to approximately 372,000 subscribers,
representing a penetration of approximately 24.3% of our basic subscribers. We
also currently provide high speed Internet services to approximately 302,000
subscribers, representing a penetration of approximately 10.9% of our homes
passed. Beginning in the
fourth quarter of 2004, 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. In
the first quarter of 2004, competitive pressure from DBS service providers
intensified when they launched local television channels in additional markets
representing an estimated 19% 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 were
usually accompanied by heavy marketing and advertising and were the primary
cause of our loss of basic subscribers in recent periods including the
first quarter of 2004. As of March 31, 2004,
competitive local-into-local services in our markets covered an estimated 81%
of our basic subscribers. 10




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##### Table of Contents



Actual Results of Operations Three Months Ended March 31, 2004 Compared to Three Months Ended March 31,
2003 The following table sets forth the unaudited consolidated statements of
operations for the three months ended March 31, 2004 and 2003 (dollars in
thousands and percentage changes that are not meaningful are marked NM): Three Months EndedMarch 31,2004
    
    2003
    
    $ Change
    
    % ChangeRevenues
    
    $
    263,439
    
    
    $
    242,775
    
    
    $
    20,664
    
    
    
    8.5
    %Costs and expenses:Service costs
    
    
    102,451
    
    
    
    94,510
    
    
    
    7,941
    
    
    
    8.4Selling, general and administrative
expenses
    
    
    51,830
    
    
    
    47,371
    
    
    
    4,459
    
    
    
    9.4Corporate expenses
    
    
    4,891
    
    
    
    3,699
    
    
    
    1,192
    
    
    
    32.2Depreciation and amortization
    
    
    52,703
    
    
    
    78,166
    
    
    
    (25,463
    )
    
    
    (32.6
    )Operating income
    
    
    51,564
    
    
    
    19,029
    
    
    
    32,535
    
    
    
    171.0Interest expense, net
    
    
    (47,164
    )
    
    
    (48,706
    )
    
    
    1,542
    
    
    
    3.2Loss on derivative instruments, net
    
    
    (7,551
    )
    
    
    (1,092
    )
    
    
    (6,459
    )
    
    NMOther expense
    
    
    (2,435
    )
    
    
    (2,397
    )
    
    
    (38
    )
    
    
    (1.6
    )Net loss before provision for income taxes
    
    
    (5,586
    )
    
    
    (33,166
    )
    
    
    27,580
    
    
    
    83.2Provision for income taxes
    
    
    153
    
    
    
    200
    
    
    
    (47
    )
    
    
    (23.5
    )Net loss
    
    $
    (5,739
    )
    
    $
    (33,366
    )
    
    $
    27,627
    
    
    
    82.8
    %Operating income before depreciation and
amortization
    
    $
    104,267
    
    
    $
    97,195
    
    
    $
    7,072
    
    
    
    7.3
    %
 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 operating income or net
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. The following table sets forth the reconciliation
of OIBDA to operating income for the three months ended March 31, 2004 and 2003
(dollars in thousands and unaudited): Three Months EndedMarch 31,2004
    
    2003OIBDA
    
    $
    104,267
    
    
    $
    97,195Depreciation and amortization
    
    
    (52,703
    )
    
    
    (78,166
    )Operating income
    
    $
    51,564
    
    
    $
    19,029
 11




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##### Table of Contents



Revenues The following table sets forth revenue information for the three months
ended March 31, 2004 and 2003 (dollars in thousands): Three Months Ended March 31,2004
    
    2003% of
    
    
    
    
    
    % ofAmount
    
    Revenues
    
    Amount
    
    Revenues
    
    $ Change
    
    % ChangeVideo
    
    $
    216,249
    
    
    
    82.1
    %
    
    $
    209,311
    
    
    
    86.2
    %
    
    $
    6,938
    
    
    
    3.3
    %Data
    
    
    36,520
    
    
    
    13.9
    
    
    
    24,284
    
    
    
    10.0
    
    
    
    12,236
    
    
    
    50.4Advertising
    
    
    10,670
    
    
    
    4.0
    
    
    
    9,180
    
    
    
    3.8
    
    
    
    1,490
    
    
    
    16.2$
    263,439
    
    
    
    100.0
    %
    
    $
    242,775
    
    
    
    100.0
    %
    
    $
    20,664
    
    
    
    8.5
    %
 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. Revenues rose 8.5%, largely attributable to an increase in high-speed data
customers and basic rate increases applied on our video customers, driven in
large part by our own video programming cost increases. Video revenues increased 3.3% as a result of the aforementioned basic rate
increases, partially offset by a 3.2% decline in basic subscribers from
1,584,000 to 1,533,000. Digital customers, at 372,000, were relatively flat
compared to 374,000 a year ago. Our loss in basic subscribers and the flat
performance of digital customers 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 customer trend, we are
increasing our customer retention efforts and our emphasis on bundling,
enhancing and differentiating our video products and services with new digital
service packages, video-on-demand, high-definition television, digital video
recorders and more local programming. Data revenues rose 50.4% due primarily to an increase in data customers
from 214,000 to 302,000, as well as a gain in average monthly data revenue per
data subscriber from $39.97 to $41.83. We expect this customer trend in our
data business to continue given anticipated demand for our high-speed
data service. Advertising revenues increased 16.2%, primarily as a result of bringing
in-house certain markets previously managed by third parties and to a lesser
extent from increased local advertising sales. Instead of receiving
advertising revenues net of commissions paid to third parties, we now record
the full revenues from these markets with the related expenses, including
in-house commissions, recorded as selling, general and administrative expenses. 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; high-speed Internet
access costs, including costs of bandwidth connectivity, customer provisioning
and technical support for our customers; 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. 12




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##### Table of Contents



Service costs increased 8.4% over the prior year. Of this increase, 35.8%
was due to servicing the growth in our data customers, 18.7% was due to
increased employee headcount and compensation, 15.8% was due to greater
expensing of labor and overhead costs resulting from the transition from
upgrade construction to maintenance activities, and 9.6% was due to an increase
in vehicle and other operating costs related to servicing our customers. The
balance was from higher programming costs. This increase in
programming costs, however, was partially offset by the decline in basic
subscribers and a modest increase in launch support received from programmers.
We expect programming costs on a per unit basis to continue to rise in 2004, primarily due to
price increases reflecting both inflation-indexed and negotiated license fee
increases. As a percentage of revenues, service costs were 38.9% for the three
months ended March 31, 2004 and March 31, 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 9.4%. Of this
increase, 27.5% was due to higher advertising expense as we now record in-house
advertising costs that were previously managed by third parties as discussed
above, 14.5% was principally due to an increase in support personnel, 14.1% was
due to an increase in telephone costs, and 11.6% was due to higher bad debt
expense because of higher customer churn and the implementation throughout the
year of our tighter customer credit controls. As a percentage of revenues,
selling, general and administrative expenses were 19.7% for the three months
ended March 31, 2004, as compared with 19.5% for the three months ended March
31, 2003. We expect the rate of increase in expenses relating to our advertising sales to moderate as the
migration of the work in-house is completed. We expect continued growth in
advanced services, which include digital cable, high-definition television and
high-speed Internet access and, in late 2004, 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 32.2% to $4.9 million for the
three months ended March 31, 2004, as compared to $3.7 million for the three
months ended March 31, 2003. This was principally due to increases in employee
compensation, and to a lesser extent, professional fees and insurance premiums.
We believe the annual increase in corporate expenses will moderate as
the rate of change in employee compensation is not expected to repeat
itself. As a percentage of revenues, corporate expenses were 1.9% for the three months
ended March 31, 2004, as compared with 1.5% for the three months ended March
31, 2003. Depreciation and amortization decreased 32.6% to $52.7 million for the
three months ended March 31, 2004, as compared to $78.2 million for the three
months ended March 31, 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 $32.1 million for the three
months ended March 31, 2004. This decrease 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 and high-speed Internet access. See Note 1 to our
consolidated financial statements. Interest Expense, Net Interest expense, net, decreased by 3.2% to $47.2 million for the three
months ended March 31, 2004, as compared to $48.7 million for the three months
ended March 31, 2003. This was primarily due to lower market interest rates on
our variable rate debt for the three months ended March 31, 2004. Loss on Derivative Instruments, 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 in order to
reduce the potential volatility in our interest expense that would otherwise
result from changes in market interest rates. As of March 31, 2004 we had
interest rate swaps with an aggregate principal amount of $800.0 million. These
interest rate swaps are accounted for as fair value hedges of debt instruments
as prescribed by SFAS No. 133. 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 a downward change during the quarter in market
interest rates that are used to fair value our interest rate swaps, loss on derivative instruments, net, was $7.6 million
for the three months ended March 31, 2004, as compared to a loss on derivative
instruments, net of $1.1 million for the three months ended March 31, 2003. 13




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##### Table of Contents



Other Expense Other expense was $2.4 million for the three months ended March 31, 2004
and 2003. Other expense primarily represents amortization of deferred
financing costs and fees on unused credit commitments. Net Loss Due to the factors described above, we generated a net loss of $5.7
million for the three months ended March 31, 2004, as compared to a net loss of
$33.4 million for the three months ended March 31, 2003. Operating Income Before Depreciation and Amortization OIBDA increased 7.3% to $104.3 million due to an 8.5% increase in
revenues, partially offset by an 8.4% increase in service costs and 9.4%
increase in selling, general and administrative expenses. OIBDA, expressed as
a percentage of revenues, was 39.6% for the three months ended March 31, 2004,
as compared to 40.0% in the year-ago period. Liquidity and Capital Resources 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. We also will continue to pursue a business
strategy that includes selective acquisitions. We expect to fund our capital
requirements through a combination of internally generated funds, and amounts
available under our bank credit facilities. Operating Activities Net cash flows provided by operating activities were $43.1 million and
$28.3 million for the three months ended March 31, 2004 and 2003, respectively.
The change in net operating cash flows was primarily due to a reduction in
net loss, and to a lesser extent, a reduction in the use of cash for certain
working capital accounts, principally prepaid
expenses, other assets and other non-current liabilities for the three
months ended March 31, 2004. Investing Activities Net cash flows used in investing activities were $43.6 million and $61.4
million for the three months ended March 31, 2004 and 2003, respectively. The
change in net investing cash flows resulted primarily from a reduction in
capital expenditures for the three months ended March 31, 2004, due to the
completion of our planned network upgrade and rebuild program. Our capital expenditures were $39.8 million for the three months ended
March 31, 2004, as compared to $70.0 million for the three months ended March
31, 2003. We expect prospective capital expenditures to consist primarily of
the costs of new advanced service installations and equipment, new plant
construction and network replacement. We plan to invest approximately $165.0
million to $175.0 million in capital expenditures in 2004. Financing Activities For the three months ended March 31, 2004, net cash flows used in
financing activities were $13.7 million, as compared to net cash flows provided
by financing of $21.3 million for the same period of the prior
year. The use of net
cash flows in the first quarter of 2004 was due principally to the above-mentioned increase in
net cash flows provided by operating activities and the significant reduction
of capital expenditures, which allowed us to make net repayments of debt, as
compared to our net borrowings in the comparable 2003 quarter, which funded capital
expenditures in that period. 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 $947.0 million was outstanding as of March 31, 2004. The
operating subsidiaries of Mediacom LLC 14




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have two bank credit facilities aggregating $995.5 million, of which $685.5
million was outstanding as of March 31, 2004. Mediacom LLCs bank credit
facilities expire in September 2008 and December 2008, however, their final
maturities are subject to earlier repayment on dates ranging from June 2007 to
December 2007 if Mediacom LLC does not refinance its $200.0 million 81/2%
senior notes due April 2008 prior to March 31, 2007. We have entered into interest rate exchange
agreements with counterparties, which expire from
June 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
or better,
we do not anticipate their nonperformance. As of March 31, 2004, about 72% of
the Companys outstanding indebtedness was at fixed interest rates or subject
to interest rate protection. As of March 31, 2004, our total debt was $3.037 billion, we had unused
credit commitments of about $748.7 million under our bank credit facilities,
and our annualized cost of debt capital was approximately 6.3%.On such date,
approximately $612.4 million could be borrowed and used for general corporate
purposes based on the terms and conditions of our debt arrangements. As of
March 31, 2004, we were in compliance with all covenants under our debt
arrangements. As of March 31, 2004, approximately $14.4 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,
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 high-speed Internet subscriber installations.
Capitalized costs are recorded as additions to property, plant and equipment
and depreciated over the life of the related assets. We perform periodic
evaluations of the estimates used to determine the amount of costs that are
capitalized. Any changes to these estimates, which may be
significant, are applied in the period in which the evaluations were
completed. 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 as of September 30, 2003, determined that there was no
impairment of 15




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##### Table of Contents



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, in December 2002, 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. 16




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the normal course of business, the Company uses interest rate exchange
agreements with counterparties in order to fix the interest rate on its floating rate debt. As of
March 31, 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%. This fixed interest rate
is then adjusted, if necessary, by the applicable three-month London Interbank Offering Rate to determine the interest
expense related to the Company's interest rate swap agreements. 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 high
creditworthiness of its counterparties, which are major banking firms rated investment grade or better, the Company does not anticipate
nonperformance by the other parties. At March 31, 2004, based on the
mark-to-market valuation, the Company would have paid approximately $23.4
million if it terminated these agreements, inclusive of accrued interest. The table below provides the expected maturity and estimated fair value
of the Companys debt as of March 31, 2004 (dollars in thousands). See Note 7
to the Companys unaudited consolidated financial statements. Bank Credit
    
    Capital LeaseSenior Notes
    
    Facilities
    
    Obligations
    
    TotalExpected Maturity:April 1, 2004 to March 31, 2005
    
    $
    
    
    
    $
    19,250
    
    
    $
    2,148
    
    
    $
    21,398April 1, 2005 to March 31, 2006
    
    
    
    
    
    
    63,875
    
    
    
    2,216
    
    
    
    66,091April 1, 2006 to March 31, 2007
    
    
    172,500
    (1)
    
    
    221,375
    
    
    
    2,286
    
    
    
    396,161April 1, 2007 to March 31, 2008
    
    
    
    
    
    
    320,125
    
    
    
    617
    
    
    
    320,742April 1, 2008 to March 31, 2009
    
    
    200,000
    
    
    
    298,750
    
    
    
    
    
    
    
    498,750Thereafter
    
    
    1,025,000
    
    
    
    709,125
    
    
    
    
    
    
    
    1,734,125Total
    
    $
    1,397,500
    
    
    $
    1,632,500
    
    
    $
    7,267
    
    
    $
    3,037,267Fair Value
    
    $
    1,418,806
    
    
    $
    1,632,500
    
    
    $
    7,267
    
    
    $
    3,058,573Weighted Average Interest Rate
    
    
    9.1
    %
    
    
    2.9
    %
    
    
    3.1
    %
    
    
    5.8
    %
   (1)
    
    Represents convertible senior notes due July 2006. 17




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ITEM 4. CONTROLS AND PROCEDURES The Companys management carried out an evaluation, with the participation
of its Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the Companys disclosure controls and procedures as of March
31, 2004. Based upon that evaluation, the Companys Chief Executive Officer and
Chief Financial Officer concluded that the Companys disclosure controls and
procedures were effective to ensure that information required to be disclosed
by the Company in reports that it files or submits 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 the Companys 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 March
31, 2004 that has materially affected, or is reasonably likely to materially
affect, the Companys internal control over financial reporting. 18




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PART II 
 ITEM 1. LEGAL PROCEEDINGS See Note 8 to our consolidated financial statements. 
 ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES During the quarter ended March 31, 2004, we granted stock options to
certain of our employees to purchase an aggregate of 152,000 shares of Class A
Common Stock at exercise prices ranging from $8.02 to $8.82 per share. The grant
of stock options to the employees was not registered
under the Securities Act of 1933 because the stock options either did not
involve an offer or sale for purposes of Section 2(a)(3) of the Securities Act
of 1933, in reliance on the fact that the stock options were granted for no
consideration, or were offered and sold in transactions not involving a public
offering, exempt from registration under the Securities Act of 1933 pursuant to
Section 4(2). 
 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits ExhibitNumber
    
    Exhibit Description10.1
    
    Compensation Agreement, as of
December 28, 2003  Rocco B. Commisso, Chief Executive Officer31.1
    
    Rule 13a-14(a) Certifications32.1
    
    Section 1350 Certifications
 (b) Reports on Form 8-K: During the quarter ended March 31, 2004, the Company filed or furnished
the following current reports on Form 8-K with the Securities and Exchange
Commission: Current report on Form 8-K, dated February 24, 2004, was furnished on
February 24, 2004. The item reported was:  
    
    Item 12  Regulation FD Disclosure, which reported the issuance of
a press release announcing the Companys financial results for the
quarter and year ended December 31, 2003. 19




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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 CORPORATIONMay 10, 2004
    
    BY:
    
    /s/ MARK E. STEPHANMark E. Stephan
Executive Vice President and
Chief Financial Officer
 20