Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2007
Commission File Numbers: 333-72440
333-72440-01
Mediacom Broadband LLC
Mediacom Broadband Corporation*
(Exact names of Registrants as specified in their charters)
|
|
|
Delaware
|
|
06-1615412 |
Delaware
|
|
06-1630167 |
(State or other jurisdiction of
|
|
(I.R.S. Employer |
incorporation or organization)
|
|
Identification Numbers) |
100 Crystal Run Road
Middletown, New York 10941
(Address of principal executive offices)
(845) 695-2600
(Registrants telephone number)
Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the Registrants were required to file such reports), and (2) have been
subject to such filing requirements for the past 90 days.
o Yes þ No
Note: As a voluntary filer, not subject to the filing requirements, the Registrants have filed all
reports under Section 13 or 15(d) of the Exchange Act during the preceding 12 months.
Indicate by check mark whether the Registrants are large accelerated filers, accelerated filers, or
non-accelerated filers. See definition of accelerated filer and large accelerated filer in Rule
12b-2 of the Exchange Act. (Check one):
o Large accelerated filers o Accelerated filers þ Non-accelerated filers
Indicate by check mark whether the Registrants are a shell company (as defined in Rule 12b-2 of the
Exchange Act).
o Yes þ No
Indicate the number of shares outstanding of the Registrants common stock: Not Applicable
*Mediacom Broadband Corporation meets the conditions set forth in General Instruction H (1) (a) and
(b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.
MEDIACOM BROADBAND LLC AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED JUNE 30, 2007
TABLE OF CONTENTS
2
Cautionary Statement Regarding Forward-Looking Statements
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.
These forward-looking statements are subject to risks and uncertainties that could cause actual
results to differ materially from historical results or those we anticipate. Factors that could
cause actual results to differ from those contained in the forward-looking statements include, but
are not limited to: existing and future competition in our video, high-speed Internet access and
phone businesses; our ability to achieve anticipated customer and revenue growth and to
successfully implement our growth strategy, including the introduction of new products and services
and acquisitions; increasing programming costs; changes in laws and regulations; our ability to
generate sufficient cash flow to meet our debt service obligations and access capital to maintain
our financial flexibility; and the other risks and uncertainties discussed in this Quarterly Report
and in our Annual Report on Form 10-K for the year ended December 31, 2006 and other reports or
documents that we file from time to time with the SEC. Statements included in this Quarterly Report
are based upon information known to us as of the date that this Quarterly Report is filed with the
SEC, and we assume no obligation to update or alter our forward-looking statements made in this
Quarterly Report, whether as a result of new information, future events or otherwise, except as
otherwise required by applicable federal securities laws.
3
PART I
ITEM 1. FINANCIAL STATEMENTS
MEDIACOM BROADBAND LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(All dollar amounts in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash |
|
$ |
7,293 |
|
|
$ |
12,019 |
|
Accounts receivable, net of allowance for doubtful accounts of $1,291 and $1,380 |
|
|
42,999 |
|
|
|
43,205 |
|
Prepaid expenses and other current assets |
|
|
89,185 |
|
|
|
68,379 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
139,477 |
|
|
|
123,603 |
|
|
|
|
|
|
|
|
|
|
Investment in cable television systems: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation of $553,116 and $501,713 |
|
|
722,219 |
|
|
|
716,339 |
|
Franchise rights |
|
|
1,251,385 |
|
|
|
1,251,386 |
|
Goodwill |
|
|
204,582 |
|
|
|
204,582 |
|
Subscriber lists, net of accumulated amortization of $22,462 and $21,319 |
|
|
10,661 |
|
|
|
11,803 |
|
|
|
|
|
|
|
|
Total investment in cable television systems |
|
|
2,188,847 |
|
|
|
2,184,110 |
|
|
|
|
|
|
|
|
|
|
Other assets, net of accumulated amortization of $4,603 and $3,636 |
|
|
15,947 |
|
|
|
17,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,344,271 |
|
|
$ |
2,324,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, PREFERRED MEMBERS INTEREST AND MEMBERS EQUITY |
|
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|
|
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|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
133,511 |
|
|
$ |
127,896 |
|
Deferred revenue |
|
|
27,609 |
|
|
|
25,430 |
|
Current portion of long-term debt |
|
|
68,158 |
|
|
|
68,707 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
229,278 |
|
|
|
222,033 |
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion |
|
|
1,556,500 |
|
|
|
1,527,536 |
|
Other non-current liabilities |
|
|
5,287 |
|
|
|
9,875 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
1,791,065 |
|
|
|
1,759,444 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PREFERRED MEMBERS INTEREST |
|
|
150,000 |
|
|
|
150,000 |
|
|
|
|
|
|
|
|
|
|
MEMBERS EQUITY |
|
|
|
|
|
|
|
|
Capital contributions |
|
|
642,910 |
|
|
|
652,310 |
|
Accumulated deficit |
|
|
(239,704 |
) |
|
|
(236,955 |
) |
|
|
|
|
|
|
|
Total members equity |
|
|
403,206 |
|
|
|
415,355 |
|
|
|
|
|
|
|
|
Total liabilities, preferred members interest and members equity |
|
$ |
2,344,271 |
|
|
$ |
2,324,799 |
|
|
|
|
|
|
|
|
The accompanying notes to the unaudited financial
statements are an integral part of these statements
4
MEDIACOM BROADBAND LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands)
(Unaudited)
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
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|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
182,271 |
|
|
$ |
169,769 |
|
|
$ |
355,623 |
|
|
$ |
332,596 |
|
|
|
|
|
|
|
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|
|
|
|
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|
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Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs |
|
|
73,246 |
|
|
|
66,620 |
|
|
|
147,579 |
|
|
|
131,721 |
|
Selling, general and administrative expenses |
|
|
39,882 |
|
|
|
36,520 |
|
|
|
77,093 |
|
|
|
71,724 |
|
Management fee expense |
|
|
3,353 |
|
|
|
2,948 |
|
|
|
6,657 |
|
|
|
5,925 |
|
Depreciation and amortization |
|
|
27,838 |
|
|
|
27,286 |
|
|
|
54,687 |
|
|
|
54,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
37,952 |
|
|
|
36,395 |
|
|
|
69,607 |
|
|
|
68,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(30,214 |
) |
|
|
(27,846 |
) |
|
|
(59,738 |
) |
|
|
(54,864 |
) |
Loss on early extinguishment of debt |
|
|
|
|
|
|
(2,908 |
) |
|
|
|
|
|
|
(2,908 |
) |
Gain on derivatives, net |
|
|
5,313 |
|
|
|
420 |
|
|
|
2,995 |
|
|
|
362 |
|
Other expense, net |
|
|
(813 |
) |
|
|
(1,511 |
) |
|
|
(2,277 |
) |
|
|
(2,887 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
12,238 |
|
|
$ |
4,550 |
|
|
$ |
10,587 |
|
|
$ |
8,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend to preferred member |
|
|
4,500 |
|
|
|
4,500 |
|
|
|
9,000 |
|
|
|
9,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) applicable to member |
|
$ |
7,738 |
|
|
$ |
50 |
|
|
$ |
1,587 |
|
|
$ |
(541 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes to the unaudited financial
statements are an integral part of these statements
5
MEDIACOM BROADBAND LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2007 |
|
|
2006 |
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
10,587 |
|
|
$ |
8,459 |
|
Adjustments to reconcile net income to net cash flows provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
54,687 |
|
|
|
54,470 |
|
Gain on derivatives, net |
|
|
(2,995 |
) |
|
|
(362 |
) |
Loss on early extinguishment of debt |
|
|
|
|
|
|
1,908 |
|
Amortization of deferred financing costs |
|
|
967 |
|
|
|
1,512 |
|
Share-based compensation |
|
|
518 |
|
|
|
488 |
|
Changes in assets and liabilities, net of effects from acquisitions: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
206 |
|
|
|
(1,391 |
) |
Prepaid expenses and other assets |
|
|
(21,748 |
) |
|
|
(14,668 |
) |
Accounts payable and accrued expenses |
|
|
5,611 |
|
|
|
536 |
|
Deferred revenue |
|
|
2,179 |
|
|
|
1,859 |
|
Other non-current liabilities |
|
|
(995 |
) |
|
|
(1,346 |
) |
|
|
|
|
|
|
|
Net cash flows provided by operating activities |
|
$ |
49,017 |
|
|
$ |
51,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(59,425 |
) |
|
|
(49,441 |
) |
|
|
|
|
|
|
|
Net cash flows used in investing activities |
|
$ |
(59,425 |
) |
|
$ |
(49,441 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
New borrowings |
|
|
90,164 |
|
|
|
894,000 |
|
Repayment of debt |
|
|
(61,750 |
) |
|
|
(665,678 |
) |
Financing costs |
|
|
|
|
|
|
(198 |
) |
Capital contribution |
|
|
|
|
|
|
3,040 |
|
Dividend payment on preferred members interest |
|
|
(9,000 |
) |
|
|
(9,000 |
) |
Return of capital to parent |
|
|
(9,400 |
) |
|
|
(172,500 |
) |
Dividend payment to parent |
|
|
(4,332 |
) |
|
|
(43,331 |
) |
|
|
|
|
|
|
|
Net cash flows provided by financing activities |
|
$ |
5,682 |
|
|
$ |
6,333 |
|
|
|
|
|
|
|
|
Net (decrease) increase in cash |
|
|
(4,726 |
) |
|
|
8,357 |
|
|
|
|
|
|
|
|
|
CASH, beginning of period |
|
|
12,019 |
|
|
|
7,142 |
|
|
|
|
|
|
|
|
CASH, end of period |
|
$ |
7,293 |
|
|
$ |
15,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid during the period for interest, net of amounts capitalized |
|
$ |
60,563 |
|
|
$ |
56,988 |
|
|
|
|
|
|
|
|
The accompanying notes to the unaudited financial
statements are an integral part of these statements
6
1. ORGANIZATION
Mediacom Broadband LLC (Mediacom Broadband, and collectively with its subsidiaries, the
Company, we, us), a Delaware limited liability company wholly-owned by Mediacom
Communications Corporation (MCC), is involved in the acquisition and operation of cable systems
serving smaller cities and towns in the United States.
We have prepared these unaudited consolidated financial statements in accordance with the rules and
regulations of the Securities and Exchange Commission (the SEC). In the opinion of management,
such statements include all adjustments, consisting of normal recurring accruals and adjustments,
necessary for a fair presentation of our 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 a summary of our
accounting policies and other information, refer to the our Annual Report on Form 10-K for the year
ended December 31, 2006. 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, 2007.
We rely on our parent, MCC, for
various services such as corporate and administrative support. Our financial position, results of
operations and cash flows could differ from those that would have resulted had we operated
autonomously or as an entity independent of MCC.
Mediacom Broadband Corporation
(Broadband Corporation), a Delaware corporation wholly-owned by
us, co-issued, jointly and severally with us, public debt
securities. Broadband Corporation has no operations, revenues or cash flows and has no assets,
liabilities or stockholders equity on its balance sheet, other than a one-hundred dollar
receivable from an affiliate and the same dollar amount of common stock on its consolidated balance
sheets. Therefore, separate financial statements have not been presented for this entity.
Reclassifications
Certain reclassifications have been made to prior year amounts to conform to the current years
presentation.
2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair
Value Measurements (SFAS No. 157). SFAS No. 157 establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value, and expands on required disclosures
about fair value measurement. SFAS No. 157 will be effective as of January 1, 2008 and will be
applied prospectively. We have not completed our evaluation of SFAS No. 157 to determine
the impact that adoption will have on our consolidated financial condition or results of
operations.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities Including an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS
No. 159 permits entities to choose to measure many financial instruments and certain other items at
fair value. This Statement is effective as of the beginning of an entitys first fiscal year that
begins after November 15, 2007. We do not expect that this Statement will have a
material impact on our consolidated financial condition or results of operations.
7
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
Cable systems, equipment and subscriber devices |
|
$ |
1,192,200 |
|
|
$ |
1,138,654 |
|
Vehicles |
|
|
37,271 |
|
|
|
34,190 |
|
Buildings and leasehold improvements |
|
|
24,641 |
|
|
|
24,621 |
|
Furniture, fixtures and office equipment |
|
|
16,648 |
|
|
|
16,011 |
|
Land and land improvements |
|
|
4,575 |
|
|
|
4,576 |
|
|
|
|
|
|
|
|
|
|
|
1,275,335 |
|
|
|
1,218,052 |
|
Accumulated depreciation |
|
|
(553,116 |
) |
|
|
(501,713 |
) |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
$ |
722,219 |
|
|
$ |
716,339 |
|
|
|
|
|
|
|
|
4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts
payable and accrued expenses consisted of the following (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
Accrued programming costs |
|
$ |
25,455 |
|
|
$ |
29,071 |
|
Accounts payable |
|
|
22,536 |
|
|
|
17,036 |
|
Accrued taxes and fees |
|
|
18,654 |
|
|
|
19,138 |
|
Accrued interest |
|
|
14,476 |
|
|
|
11,468 |
|
Accrued payroll and benefits |
|
|
13,212 |
|
|
|
13,509 |
|
Accrued property, plant and equipment |
|
|
7,041 |
|
|
|
9,368 |
|
Accrued telecommunications costs |
|
|
4,368 |
|
|
|
7,119 |
|
Intercompany
accounts payable and other accrued expenses |
|
|
27,769 |
|
|
|
21,187 |
|
|
|
|
|
|
|
|
|
|
$ |
133,511 |
|
|
$ |
127,896 |
|
|
|
|
|
|
|
|
5. DEBT
Debt consisted of the following (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
Bank credit facilities |
|
$ |
1,124,500 |
|
|
$ |
1,095,500 |
|
81/2% senior notes due 2015 |
|
|
500,000 |
|
|
|
500,000 |
|
Capital lease obligations |
|
|
158 |
|
|
|
743 |
|
|
|
|
|
|
|
|
|
|
$ |
1,624,658 |
|
|
$ |
1,596,243 |
|
Less: current portion |
|
|
68,158 |
|
|
|
68,707 |
|
|
|
|
|
|
|
|
Total long-term debt |
|
$ |
1,556,500 |
|
|
$ |
1,527,536 |
|
|
|
|
|
|
|
|
8
Bank Credit Facilities
The average interest rate on
outstanding debt under our bank credit facilities as of June 30,
2007 and 2006, was 7.0% and 6.2%, respectively, before giving effect to the interest rate exchange
agreements discussed below. As of June 30, 2007, we had unused credit commitments of approximately
$460.7 million under our bank credit facilities, all of which is available to be borrowed and used
for general corporate purposes based on the terms and conditions of our debt arrangements. We were
in compliance with all covenants under our debt arrangements as of June 30, 2007.
As of June 30, 2007, approximately $13.9 million of letters of credit were issued to various
parties as collateral for our performance relating primarily to insurance and franchise
requirements.
Interest Rate Exchange Agreements
We use
interest rate exchange agreements in order to fix the interest rate
on our floating rate
debt. As of June 30, 2007, we had interest rate exchange agreements with various banks pursuant to
which the interest rate on $500.0 million is fixed at a weighted average rate of approximately
5.3%. These agreements have been accounted for on a mark-to-market basis as of, and for the three
months ended June 30, 2007. Our interest rate exchange agreements are scheduled to expire in the
amounts of $400.0 million and $100.0 million during the years ended December 31, 2009 and 2010,
respectively. As of, and for the three months ended, June 30, 2007 and 2006, based on the
mark-to-market valuation, we recorded on our consolidated balance sheet a net accumulated liability
for derivatives of $0.4 million and a net accumulated investment in derivatives of $5.7 million,
respectively, which are components of accounts payable and other non-current liabilities and
prepaid and other non-current assets, and a gain on derivatives, net
amounting to $5.3 million and $0.4 million,
respectively. For the six months ended June 30, 2007 and 2006, we recorded a gain on derivatives,
net amounting to $3.0 million and $0.4 million, respectively.
6. PREFERRED MEMBERS INTERESTS
Mediacom LLC, a wholly owned subsidiary of MCC, has a $150.0 million preferred equity investment in
the Company as of June 30, 2007. The preferred equity investment has a 12% annual dividend, payable
quarterly in cash. During the three months ended June 30, 2007 and 2006, we paid
$4.5 million in cash dividends on the preferred equity,
respectively. During the six months ended June 30, 2007 and
2006, we paid $9.0 million in cash dividends on the preferred
equity, respectively.
7. MEMBERS EQUITY
Share-based Compensation
Effective January 1, 2006, MCC adopted SFAS No. 123(R), Share-Based Payment, requiring the cost
of all share-based payments to employees, including grants of employee stock options, to be
recognized in the financial statements based on their fair values at the grant date, or the date of
later modification, over the requisite service period.
9
Total share-based compensation expense was as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2007 |
|
|
2006 |
|
Share-based compensation expense by type of award: |
|
|
|
|
|
|
|
|
Employee stock options |
|
$ |
32 |
|
|
$ |
105 |
|
Employee stock purchase plan |
|
|
49 |
|
|
|
(13 |
) |
Restricted stock units |
|
|
148 |
|
|
|
95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total share-based compensation expense |
|
$ |
229 |
|
|
$ |
187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2007 |
|
|
2006 |
|
Share-based compensation expense by type of award: |
|
|
|
|
|
|
|
|
Employee stock options |
|
$ |
155 |
|
|
$ |
222 |
|
Employee stock purchase plan |
|
|
98 |
|
|
|
110 |
|
Restricted stock units |
|
|
265 |
|
|
|
156 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total share-based compensation expense |
|
$ |
518 |
|
|
$ |
488 |
|
|
|
|
|
|
|
|
Employee Stock Purchase Plan
We maintain an employee stock purchase plan (ESPP). Under the ESPP, all employees are allowed to
participate in the purchase of MCCs Class A common stock at 85% of the lower of the fair market
value on the first or last day of each six month offering period. Shares purchased by employees
amounted to 55,394 and 65,840 for the six months ended June 30, 2007 and 2006, respectively. The
net proceeds to us were approximately $0.2 million for each of the three months ended June 30, 2007
and 2006, respectively. The net proceeds to us were approximately $0.3 million for each of the six
months ended June 30, 2007 and 2006, respectively.
8. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company, its subsidiaries, MCC and other affiliated companies are involved in various 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 Companys consolidated
financial position, results of operations, cash flows or business.
10
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our unaudited consolidated financial
statements as of, and for the three and six months ended, June 30, 2007 and 2006, and with our
annual report on Form 10-K for the year ended December 31, 2006.
Overview
We are a wholly-owned subsidiary of Mediacom Communications Corporation (MCC). Through our
interactive broadband network, we provide our customers with a wide array of broadband products and
services, including analog and digital video services, such as video-on-demand (VOD),
high-definition television (HDTV), digital video recorders (DVRs), high-speed data access
(HSD) and phone service. We offer triple play bundles of
video, HSD, and phone to 95% of our
estimated homes passed. Bundled products and services offer our customers a single provider contact
for provisioning, billing and customer care.
As of June 30, 2007, our cable systems passed an estimated 1.48 million homes and served 728,000
basic video subscribers in four states. We provide digital video services to 304,000 customers,
representing a penetration of 41.8% of our basic subscribers. We also currently provide HSD to
335,000 customers, representing a penetration of 22.7% of our estimated homes passed. We introduced
phone service during the second half of 2005, and provided service to about 86,000 customers as of
June 30, 2007, representing a penetration of 6.1% of our estimated marketable phone homes.
We evaluate our growth, in part, by measuring the number of revenue generating units (RGUs) we
serve. As of June 30, 2007, we served 1.45 million RGUs, which represent the total of basic
subscribers and digital, data and phone customers.
We have faced increasing levels of competition for our video programming services over the past few
years, mostly from DBS providers. Since they have been permitted to deliver local television
broadcast signals beginning in 1999, DirecTV and Echostar now have essentially ubiquitous coverage
in our markets with local television broadcast signals. Their ability to deliver local television
broadcast signals has been the primary cause of our loss of basic subscribers in recent years.
Retransmission Consent
Prior to February 2007, cable systems serving our subscribers carried the broadcast signals of 4
local broadcast stations owned or programmed by Sinclair Broadcast Group, Inc. (Sinclair) under a
month-to-month retransmission arrangement terminable at the end of any month on 45-days notice. All
of these stations are affiliates of one of the big-4 networks (ABC, CBS, FOX and NBC) that we
deliver to approximately half of our total subscribers.
On September 28, 2006, Sinclair exercised its right to deliver notice to us to terminate
retransmission of all of its stations effective December 1, 2006, but subsequently agreed to extend
our right to carriage of its signals until January 5, 2007. We and Sinclair were unable to reach
agreement, and on January 5, 2007, Sinclair directed us to discontinue carriage of its stations. On
February 2, 2007, we and Sinclair reached a multi-year agreement and Sinclair stations were
immediately restored on the affected cable systems.
Adjusted OIBDA
We define Adjusted OIBDA as operating income before depreciation and amortization and non-cash,
share-based compensation charges. Adjusted OIBDA is one of the primary measures used by management
to evaluate our performance and to forecast future results but is not a financial measure
calculated in accordance with generally accepted accounting principles (GAAP) in the United States.
We believe Adjusted OIBDA is useful for investors because it enables them to assess our performance
in a manner similar to the methods 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, as well as different non-cash, share-based
11
compensation programs. A limitation of Adjusted OIBDA, 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. In addition, Adjusted OIBDA has the
limitation of not reflecting the effect of our non-cash, share-based compensation charges.
Adjusted 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 Adjusted OIBDA.
Actual Results of Operations
Three Months Ended June 30, 2007 compared to Three Months Ended June 30, 2006
The following table sets forth our unaudited consolidated statement of operations for the three
months ended June 30, 2007 and 2006 (dollars in thousands and percentage changes that are not
meaningful are marked NM):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
182,271 |
|
|
$ |
169,769 |
|
|
$ |
12,502 |
|
|
|
7.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs |
|
|
73,246 |
|
|
|
66,620 |
|
|
|
6,626 |
|
|
|
9.9 |
% |
Selling, general and administrative expenses |
|
|
39,882 |
|
|
|
36,520 |
|
|
|
3,362 |
|
|
|
9.2 |
% |
Management fee expense |
|
|
3,353 |
|
|
|
2,948 |
|
|
|
405 |
|
|
|
13.7 |
% |
Depreciation and amortization |
|
|
27,838 |
|
|
|
27,286 |
|
|
|
552 |
|
|
|
2.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
37,952 |
|
|
|
36,395 |
|
|
|
1,557 |
|
|
|
4.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(30,214 |
) |
|
|
(27,846 |
) |
|
|
(2,368 |
) |
|
|
8.5 |
% |
Loss on early extinguishment of debt |
|
|
|
|
|
|
(2,908 |
) |
|
|
2,908 |
|
|
|
NM |
|
Gain on derivatives, net |
|
|
5,313 |
|
|
|
420 |
|
|
|
4,893 |
|
|
|
NM |
|
Other expense, net |
|
|
(813 |
) |
|
|
(1,511 |
) |
|
|
698 |
|
|
|
(46.2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
12,238 |
|
|
$ |
4,550 |
|
|
$ |
7,688 |
|
|
|
169.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA |
|
$ |
66,019 |
|
|
$ |
63,868 |
|
|
$ |
2,151 |
|
|
|
3.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following represents a reconciliation of Adjusted OIBDA to operating income, which is the most
directly comparable GAAP measure (dollars in thousands and percentage changes that are not
meaningful are marked NM):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA |
|
$ |
66,019 |
|
|
$ |
63,868 |
|
|
$ |
2,151 |
|
|
|
3.4 |
% |
Non-cash, share-based compensation |
|
|
(229 |
) |
|
|
(187 |
) |
|
|
(42 |
) |
|
|
22.5 |
% |
Depreciation and amortization |
|
|
(27,838 |
) |
|
|
(27,286 |
) |
|
|
(552 |
) |
|
|
2.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
37,952 |
|
|
$ |
36,395 |
|
|
$ |
1,557 |
|
|
|
4.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
12
Revenues
The following table sets forth revenue, subscriber and average monthly revenue statistics for the
three months ended June 30, 2007 and 2006 (dollars in thousands, except per subscriber and customer
data and percentage changes that are not meaningful are marked NM):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
Video |
|
$ |
124,809 |
|
|
$ |
122,399 |
|
|
$ |
2,410 |
|
|
|
2.0 |
% |
Data |
|
|
38,070 |
|
|
|
32,073 |
|
|
|
5,997 |
|
|
|
18.7 |
% |
Phone |
|
|
8,219 |
|
|
|
4,482 |
|
|
|
3,737 |
|
|
|
83.4 |
% |
Advertising |
|
|
11,173 |
|
|
|
10,815 |
|
|
|
358 |
|
|
|
3.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
182,271 |
|
|
$ |
169,769 |
|
|
$ |
12,502 |
|
|
|
7.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
Increase |
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
(Decrease) |
|
|
% Change |
|
Basic subscribers |
|
|
728,000 |
|
|
|
756,000 |
|
|
|
(28,000 |
) |
|
|
(3.7 |
%) |
Digital customers |
|
|
304,000 |
|
|
|
286,200 |
|
|
|
17,800 |
|
|
|
6.2 |
% |
Data customers |
|
|
335,000 |
|
|
|
285,000 |
|
|
|
50,000 |
|
|
|
17.5 |
% |
Phone customers |
|
|
86,000 |
|
|
|
49,000 |
|
|
|
37,000 |
|
|
|
75.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
RGUs(1) |
|
|
1,453,000 |
|
|
|
1,376,200 |
|
|
|
76,800 |
|
|
|
5.6 |
% |
Average total monthly revenue per basic subscriber (2) |
|
$ |
82.78 |
|
|
$ |
74.08 |
|
|
$ |
8.70 |
|
|
|
11.7 |
% |
Average total monthly revenue per RGU (3) |
|
$ |
41.80 |
|
|
$ |
41.02 |
|
|
$ |
0.78 |
|
|
|
1.9 |
% |
|
|
|
(1) |
|
Represents the total of
basic subscribers and digital, data, and phone customers at the
end of each period. |
|
(2) |
|
Represents revenues for the quarter divided by average number of basic subscribers
for such period. |
|
(3) |
|
Represents revenues for the quarter divided by average number of RGUs for such
period. |
Video revenues represent monthly subscription fees charged to customers for our core cable
television products and services (including basic, expanded basic and digital cable programming
services, wire maintenance, equipment rental and services to commercial establishments),
pay-per-view charges, installation, reconnection, and late payment fees, and other ancillary
revenues. Data revenues primarily represent monthly fees charged to customers, including commercial
establishments, 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. Phone revenues represent monthly fees charged to customers.
Advertising revenues represent the sale of advertising time on various channels.
Revenues rose 7.4%, largely attributable to growth in our data and phone customers. Average total
monthly revenue per basic subscriber grew 11.7% to $82.78. RGUs grew 5.6% year-over-year and
average total monthly revenue per RGU grew 1.9% compared with the prior year period.
Video
revenues grew 2.0% due to higher service fees from our
advanced video products and services, such as DVRs and HDTV, and
basic video rate increases, offset in part
by a lower number of basic subscribers. During the three months ended
June 30, 2007, we lost 12,000
basic subscribers, compared to a loss of 15,800 for the same period last year.
Data revenues rose 18.7%, primarily due to a 17.5% year-over-year increase in data customers.
Phone
revenues grew 83.4%, largely due to a 75.5% increase in phone
customers. As of June 30, 2007,
Mediacom Phone was marketed to approximately 1.40 million of our
1.48 million estimated homes
passed, and we expect to continue to market the product to these homes
through the end of 2007.
13
Advertising revenues increased 3.3%,
largely as a result of stronger national advertising sales,
offset in part by weaker local advertising sales.
Costs and Expenses
Significant service costs and expenses are for: video programming; wages and salaries of technical
personnel who maintain our cable network, perform customer installation activities, and provide
customer support; our data and phone services, including payments to third-party providers and
costs associated with bandwidth connectivity and customer provisioning; and field operating costs,
including outside contractors, vehicle, utilities and pole rental expenses. Video programming
costs, which are generally paid on a per subscriber basis, represent our largest single expense
category and have historically increased due to both increases in the rates charged for existing
programming services and the introduction of new programming services to our customers. Video
programming costs are expected to continue to grow principally because of contractual unit rate
increases and the increasing demands of television broadcast station owners for retransmission
consent fees. As a consequence, it is expected that our video gross margins will decline as
increases in programming costs outpace growth in video revenues.
Service costs rose 9.9%, primarily due to increases in programming expenses and customer growth in
our phone and HSD services. Programming expense increased 7.8%, principally as a result of higher
unit costs charged by our programming vendors, offset in part by a lower number of basic
subscribers. Recurring expenses related to our phone and HSD services grew 31.4% commensurate with
the significant increase of our phone and data customers. Service costs as a percentage of revenues
were 40.2% and 39.2% for the three months ended June 30, 2007 and 2006, respectively.
Significant selling, general and administrative expenses include: wages and salaries for our call
centers, customer service and support and administrative personnel; franchise fees and taxes;
marketing; bad debt; billing; advertising; and costs related to telecommunications for our call
centers and office administration.
Selling, general and administrative
expenses rose 9.2%, principally due to higher marketing, bad debt and
office expenses. Marketing costs rose 22.5% largely due to
product and service advertising and mailing campaigns, as well as increased headcount. Bad debt expenses were
higher by 27.9% primarily due to unusually low write-offs of uncollectible accounts in the prior
year period. Office costs increased by 22.6% primarily due to call center telecommunications
charges. Selling, general and administrative expenses as a percentage of revenues were 21.9% and
21.5% for the three months ended June 30, 2007 and 2006, respectively.
We expect continued revenue growth in advanced services. As a result, we expect our service costs
and selling, general and administrative expenses to increase.
Management fee expense reflects charges incurred under management arrangements with our parent,
MCC. Management fee expense increased 13.7%, reflecting higher overhead costs charged by MCC. As a
percentage of revenues, management fee expense was 1.8% and 1.7% for the three months ended June
30, 2007 and 2006, respectively.
Depreciation
and amortization expense rose 2.0% compared to the prior year period,
due in part to increased deployment of customer premise equipment.
Adjusted OIBDA
Adjusted
OIBDA increased by 3.4% due to revenue growth, especially in data and phone,
offset in part by increases in related service costs and marketing
expenses.
Operating Income
Operating income increased 4.3%,
largely due to the increase in Adjusted OIBDA, offset in part by higher
depreciation and amortization expense.
14
Interest Expense, Net
Interest expense, net, increased by
8.5%, primarily due to the expiration of certain interest rate hedging agreements with
favorable rates.
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 variable market interest rates. As
of June 30, 2007, we had interest rate swaps with an aggregate
principal amount of $500.0 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. As a result of
the quarterly mark-to-market valuation of these interest rate swaps,
we recorded a gain on
derivatives, net amounting to $5.3 million and $0.4 million for the three months ended June 30,
2007 and 2006, respectively.
Net Income
As a result of the factors described above, we recognized net income for the three months ended
June 30, 2007 of $12.2 million compared to net income of $4.6 million for the three months ended
June 30, 2006.
Six Months Ended June 30, 2007 compared to Six Months Ended June 30, 2006
The following table sets forth our unaudited consolidated statement of operations for the six
months ended June 30, 2007 and 2006 (dollars in thousands and percentage changes that are not
meaningful are marked NM):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
355,623 |
|
|
$ |
332,596 |
|
|
$ |
23,027 |
|
|
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs |
|
|
147,579 |
|
|
|
131,721 |
|
|
|
15,858 |
|
|
|
12.0 |
% |
Selling, general and administrative expenses |
|
|
77,093 |
|
|
|
71,724 |
|
|
|
5,369 |
|
|
|
7.5 |
% |
Management fee expense |
|
|
6,657 |
|
|
|
5,925 |
|
|
|
732 |
|
|
|
12.4 |
% |
Depreciation and amortization |
|
|
54,687 |
|
|
|
54,470 |
|
|
|
217 |
|
|
|
0.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
69,607 |
|
|
|
68,756 |
|
|
|
851 |
|
|
|
1.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(59,738 |
) |
|
|
(54,864 |
) |
|
|
(4,874 |
) |
|
|
8.9 |
% |
Loss on early extinguishment of debt |
|
|
|
|
|
|
(2,908 |
) |
|
|
2,908 |
|
|
NM |
|
Gain on derivatives, net |
|
|
2,995 |
|
|
|
362 |
|
|
|
2,633 |
|
|
NM |
|
Other expense, net |
|
|
(2,277 |
) |
|
|
(2,887 |
) |
|
|
610 |
|
|
|
(21.1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
10,587 |
|
|
$ |
8,459 |
|
|
$ |
2,128 |
|
|
|
25.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA |
|
$ |
124,812 |
|
|
$ |
123,714 |
|
|
$ |
1,098 |
|
|
|
0.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
15
The following represents a reconciliation of Adjusted OIBDA to operating income, which is the most
directly comparable GAAP measure (dollars in thousands and percentage changes that are not
meaningful are marked NM):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA |
|
$ |
124,812 |
|
|
$ |
123,714 |
|
|
$ |
1,098 |
|
|
|
0.9 |
% |
Non-cash, share-based compensation charges |
|
|
(518 |
) |
|
|
(488 |
) |
|
|
(30 |
) |
|
6.1 |
% |
Depreciation and amortization |
|
|
(54,687 |
) |
|
|
(54,470 |
) |
|
|
(217 |
) |
|
|
0.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
69,607 |
|
|
$ |
68,756 |
|
|
$ |
851 |
|
|
|
1.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
The following table sets forth revenue, subscriber and average monthly revenue statistics for the
six months ended June 30, 2007 and 2006 (dollars in thousands, except per subscriber and customer
data and percentage changes that are not meaningful are marked NM):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
Video |
|
$ |
243,948 |
|
|
$ |
242,269 |
|
|
$ |
1,679 |
|
|
|
0.7 |
% |
Data |
|
|
74,150 |
|
|
|
62,953 |
|
|
|
11,197 |
|
|
|
17.8 |
% |
Phone |
|
|
15,830 |
|
|
|
7,318 |
|
|
|
8,512 |
|
|
|
116.3 |
% |
Advertising |
|
|
21,695 |
|
|
|
20,056 |
|
|
|
1,639 |
|
|
|
8.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
355,623 |
|
|
$ |
332,596 |
|
|
$ |
23,027 |
|
|
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
Increase |
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
(Decrease) |
|
|
% Change |
|
Basic subscribers |
|
|
728,000 |
|
|
|
756,000 |
|
|
|
(28,000 |
) |
|
|
(3.7 |
%) |
Digital customers |
|
|
304,000 |
|
|
|
286,200 |
|
|
|
17,800 |
|
|
|
6.2 |
% |
Data customers |
|
|
335,000 |
|
|
|
285,000 |
|
|
|
50,000 |
|
|
|
17.5 |
% |
Phone customers |
|
|
86,000 |
|
|
|
49,000 |
|
|
|
37,000 |
|
|
|
75.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
RGUs(1) |
|
|
1,453,000 |
|
|
|
1,376,200 |
|
|
|
76,800 |
|
|
|
5.6 |
% |
Average total monthly revenue per basic subscriber (2) |
|
$ |
80.15 |
|
|
$ |
72.51 |
|
|
$ |
7.64 |
|
|
|
10.5 |
% |
Average total monthly revenue per RGU (3) |
|
$ |
40.89 |
|
|
$ |
40.65 |
|
|
$ |
0.24 |
|
|
|
0.6 |
% |
|
|
|
(1) |
|
Represents the total of
basic subscribers and digital, data, and phone customers at the
end of each period. |
|
(2) |
|
Represents revenues for the period divided by average number of basic subscribers
for such period. |
|
(3) |
|
Represents revenues for the period divided by average number of RGUs for such
period. |
Revenues rose 6.9%, largely attributable to growth in our data and phone customers. Average total
monthly revenue per basic subscriber grew 10.5% to $80.15. RGUs grew 5.6% year-over-year and
average total monthly revenue per RGU grew 0.6% from the prior year period.
16
Video
revenues grew 0.7% due to higher service fees from our advanced
video products and services, such as DVRs and HDTV, offset by a lower number of basic subscribers.
Our performance was impacted by our postponement until the second quarter of basic video rate adjustments that are
typically applied earlier in the year, as well as $0.9 million in credits issued to customers
because of ice storms. During the six months ended June 30,
2007, we lost 23,000 basic subscribers,
compared to a loss of 17,000 for the same period last year. We
estimate that the loss of so many basic subscribers in the
first quarter of 2007 was primarily due to the Sinclair dispute.
Data revenues rose 17.8%, primarily
due to a 17.5% year-over-year increase in data customers.
Phone revenues grew 116.3%, largely due to a 75.5% increase in phone customers.
Advertising
revenues increased 8.2%, largely as a result of stronger local advertising sales.
Costs and Expenses
Service costs rose 12.0%, primarily
due to customer growth in our phone and HSD services and increases
in programming and field operating expenses. Recurring expenses related to our
phone and HSD services grew 36.0% commensurate with the significant increase of our phone and data
customers. Programming expense increased 6.5%, principally as a result of higher unit costs charged
by our programming vendors, offset in part by a lower number of basic subscribers. Field operating
costs rose 26.2%, primarily as a result of (i) the purchase of antennas
during the Sinclair dispute, which were distributed to our customers so that they could receive the
affected off-air broadcast signals, and (ii) higher outside contractor usage. Service costs as a
percentage of revenues were 41.5% and 39.6% for the six months ended June 30, 2007 and 2006,
respectively.
Selling, general and administrative
expenses rose 7.5%, principally due to higher marketing, bad debt and office expenses. Marketing costs rose 27.5% largely due to product and service
advertising and mailing campaigns. Bad debt expenses were higher by 30.6% primarily due to
unusually low write-offs of uncollectible accounts in the prior year
period. Office expenses increased by 20.3%, primarily due to call center telecommunications charges. Selling, general and
administrative expenses as a percentage of revenues were 21.7% and 21.6% for the six months ended
June 30, 2007 and 2006, respectively.
We expect continued revenue growth in advanced services. As a result, we expect our service costs
and selling, general and administrative expenses to increase.
Management fee expense reflects charges incurred under management arrangements with our parent,
MCC. Management fee expense increased 12.4%, reflecting higher overhead costs charged by MCC. As a
percentage of revenues, management fee expense was 1.9% and 1.8% for the six months ended June 30,
2007 and 2006, respectively.
Depreciation and amortization expense remained relatively unchanged.
Adjusted OIBDA
Adjusted OIBDA increased 0.9%,
due to revenue growth, especially in data and phone, partially offset
by increases in related service costs and marketing expenses.
Operating Income
Operating income increased 1.2%, due to higher Adjusted OIBDA and relatively unchanged
depreciation and amortization expense.
Interest Expense, Net
Interest expense, net, increased by
8.9%, primarily due to the expiration of certain interest rate hedging agreements with
favorable rates and, to a lesser extent, higher market interest rates
on variable rate debt.
17
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 variable market interest rates. As
of June 30, 2007, we had interest rate swaps with an aggregate
principal amount of $500.0 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. As a result of
the quarterly mark-to-market valuation of these interest rate swaps,
we recorded a gain on
derivatives, net amounting to $3.0 million and $0.4 million for the six months ended June 30, 2007
and 2006, respectively.
Net Income
As a result of the factors described above, we recognized a net income for the six months ended
June 30, 2007 of $10.6 million compared to net income of $8.5 million for the six months ended June
30, 2006.
Liquidity and Capital Resources
Overview
We have invested, and will continue to invest, in our network to enhance its reliability and
capacity, and in the further deployment of advanced broadband services. Our capital spending has
recently shifted from network upgrade investments to the deployment of advanced services. We also
may continue to make strategic acquisitions of cable systems. We have a high level of indebtedness
and incur significant amounts of interest expense each year. We believe that we will meet our debt
service, capital spending and other requirements through a combination of our net cash flows from
operating activities, borrowing availability under our bank credit facilities, and our ability to
secure future external financing.
As of June 30, 2007, our total
debt was $1,624.7 million. Of this amount, $68.2 million matures
within the twelve months ending June 30, 2008. During the six months ended June 30, 2007, we paid
cash interest of $60.6 million, net of capitalized interest. As of June 30, 2007, we had unused
revolving credit commitments of approximately $460.7 million, all of which can borrowed and used
for general corporate purposes based on the terms and conditions of our debt arrangements.
For all periods through June 30, 2007, we were in compliance with all of the covenants under our
debt arrangements. Continued access to our credit facilities is subject to our remaining in
compliance with the covenants of these credit facilities, including covenants tied to our operating
performance. There are no covenants, events of default, borrowing conditions or other terms in our
credit facilities or our other debt arrangements that are based on changes in our credit ratings
assigned by any rating agency. We believe that we will not have any difficulty in the foreseeable
future complying with the applicable covenants and that we will meet our current and long-term debt
service, capital spending, and other cash requirements through a combination of our net cash flows
from operating activities, borrowing availability under our bank credit facilities, and our ability
to secure future external financing. However, there is no assurance that we will be able to obtain
sufficient future financing, or, if we were able to do so, that the terms would be favorable to us.
Our future access to debt financings and the cost of such financings are affected by our credit
ratings. Any future downgrade to our credit ratings could increase the cost of debt and adversely
impact our ability to raise additional funds.
Operating Activities
Net cash flows provided by
operating activities were $49.0 million for the six months ended June
30, 2007 compared to $51.5 million for the comparable period
last year. The change of $2.5 million
is primarily due to the net change in operating assets and liabilities.
During the six months ended June 30, 2007, the net change in our operating assets and liabilities
was $14.7 million, primarily due to an increase in our prepaid
expenses and other assets of $21.7 million, offset
by an increase in our accounts payable and accrued expenses of $5.6 million and an increase in deferred
revenue of $2.2 million.
18
Investing Activities
Net cash flows used in investing activities, which consisted of capital expenditures, were $59.4
million for the six months ended June 30, 2007, as compared to $49.4 million for the prior year
period. Capital expenditures increased $10.0 million, primarily due to higher spending on customer
premise equipment.
Financing Activities
Net
cash flows provided by financing activities were $5.7 million for the six months ended
June 30, 2007, largely due to a net reduction of debt and a dividend payment on preferred
members interest. Net cash flows provided by financing activities were $6.3 million for the comparable period in 2006,
largely due to net bank borrowings, a dividend payment to parent and a dividend payment on
preferred members interest.
Other
We have entered into interest rate exchange agreements with counterparties, which expire from 2009
through 2010, to hedge $500.0 million of floating rate debt. These agreements have been accounted
for on a mark-to-market basis as of, and for the six months ended June 30, 2007. Our interest rate
exchange agreements are scheduled to expire in the amounts of $400.0 million and $100.0 million
during the years ended December 31, 2009 and 2010, respectively.
As of June 30, 2007, approximately $13.9 million of letters of credit were issued to various
parties as collateral for our performance relating to insurance and franchise requirements.
Contractual Obligations and Commercial Commitments
There have been no material changes to our contractual obligations and commercial commitments as
previously disclosed in our annual report on Form 10-K for the year ended December 31, 2006.
Critical Accounting Judgments and Estimates
Use of Estimates
The preparation of our 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. For a
discussion of our critical accounting judgments and estimates that we believe require significant
judgment in the preparation of our consolidated financial statements, please refer to our annual
report on Form 10-K for the year ended December 31, 2006.
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 Commissions 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no significant changes to the information required under this Item from what was
disclosed in Item 7A of our annual report Form 10-K for the year ended December 31, 2006.
19
ITEM 4. CONTROLS AND PROCEDURES
Mediacom Broadband LLC
Under the supervision and with the participation of the management of Mediacom Broadband LLC
(Mediacom), including Mediacoms Chief Executive Officer and Chief Financial Officer, Mediacom
evaluated the effectiveness of Mediacoms disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period
covered by this report. Based upon that evaluation, Mediacoms Chief Executive Officer and Chief
Financial Officer concluded that Mediacoms disclosure controls and procedures were effective as of
June 30, 2007.
There has not been any change in Mediacoms internal control over financial reporting (as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2007
that has materially affected, or is reasonably likely to materially affect, Mediacoms internal
control over financial reporting.
Mediacom Broadband Corporation
Under the supervision and with the participation of the management of Mediacom Broadband
Corporation (Mediacom Broadband), including Mediacom Broadbands Chief Executive Officer and
Chief Financial Officer, Mediacom Broadband evaluated the effectiveness of Mediacom Broadbands
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon
that evaluation, Mediacom Broadbands Chief Executive Officer and Chief Financial Officer concluded
that Mediacom Broadbands disclosure controls and procedures were effective as of June 30, 2007.
There has not been any change in Mediacom Broadbands internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30,
2007 that has materially affected, or is reasonably likely to materially affect, Mediacom
Broadbands internal control over financial reporting.
20
PART II
ITEM 1. LEGAL PROCEEDINGS
See Note 8 to our consolidated financial statements.
ITEM 1A. RISK FACTORS
There have been no material changes in our risk factors from those disclosed in the risk factors
section in Item 1A of our 2006
Form 10-K.
ITEM 6. EXHIBITS
|
|
|
Exhibit |
|
|
Number |
|
Exhibit Description |
|
|
|
10.1
|
|
Amendment No. 3, dated as of
June 11, 2007, to the Amendment
and Restatement, dated as of
December 16, 2004, of Credit
Agreement, dated as of July 18,
2001, among the operating
subsidiaries of Mediacom
Broadband LLC, the lenders
party thereto and JPMorgan
Chase Bank, as administrative
agent for the lenders
(1) |
|
|
|
10.2
|
|
Amendment No. 4, dated as of
June 11, 2007, to the Amendment
and Restatement, dated as of
December 16, 2004, of Credit
Agreement, dated as of July 18,
2001, among the operating
subsidiaries of Mediacom
Broadband LLC, the lenders
party thereto and JPMorgan
Chase Bank, as administrative
agent for the lenders
(1) |
|
|
|
31.1
|
|
Rule 15d-14(a) Certifications of Mediacom Broadband LLC |
|
|
|
31.2
|
|
Rule 15d-14(a) Certifications of Mediacom Broadband Corporation |
|
|
|
32.1
|
|
Section 1350 Certifications Mediacom Broadband LLC |
|
|
|
32.2
|
|
Section 1350 Certifications Mediacom Broadband Corporation |
|
|
|
(1) |
|
Filed as an exhibit to the Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2007 of
Mediacom Communications Corporation and incorporated herein by
reference. |
21
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 BROADBAND LLC |
|
|
|
|
|
August 10, 2007
|
|
By:
|
|
/s/ Mark E. Stephan |
|
|
|
|
|
|
|
|
|
Mark E. Stephan
Executive Vice President and
Chief Financial Officer |
22
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 BROADBAND CORPORATION |
|
|
|
|
|
August 10, 2007
|
|
By:
|
|
/s/ Mark E. Stephan |
|
|
|
|
|
|
|
|
|
Mark E. Stephan
Executive Vice President and
Chief Financial Officer |
23
EXHIBIT INDEX
|
|
|
Exhibit |
|
|
Number |
|
Exhibit Description |
|
|
|
10.1
|
|
Amendment No. 3, dated as of June 11, 2007, to the Amendment and
Restatement, dated as of December 16, 2004, of Credit Agreement,
dated as of July 18, 2001, among the operating subsidiaries of
Mediacom Broadband LLC, the lenders party thereto and JPMorgan
Chase Bank, as administrative agent for the lenders
(1) |
|
|
|
10.2
|
|
Amendment No. 4, dated as of June 11, 2007, to the Amendment and
Restatement, dated as of December 16, 2004, of Credit Agreement,
dated as of July 18, 2001, among the operating subsidiaries of
Mediacom Broadband LLC, the lenders party thereto and JPMorgan
Chase Bank, as administrative agent for the lenders (1) |
|
|
|
31.1
|
|
Rule 15d-14(a) Certifications of Mediacom Broadband LLC |
|
|
|
31.2
|
|
Rule 15d-14(a) Certifications of Mediacom Broadband Corporation |
|
|
|
32.1
|
|
Section 1350 Certifications Mediacom Broadband LLC |
|
|
|
32.2
|
|
Section 1350 Certifications Mediacom Broadband Corporation |
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(1) |
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Filed as an exhibit to the Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2007 of
Mediacom Communications Corporation and incorporated herein by
reference. |
Filed by Bowne Pure Compliance
Exhibit 31.1
CERTIFICATIONS
I, Rocco B. Commisso, certify that:
(1) |
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I have reviewed this report on Form 10-Q of Mediacom Broadband LLC; |
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(2) |
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Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
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(3) |
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Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
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(4) |
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The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have: |
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a) |
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Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared; |
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b) |
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Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986; |
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c) |
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Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of end of the period covered by this report based on such evaluation;
and |
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d) |
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Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrants internal control
over financial reporting; and |
(5) |
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The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent
function): |
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a) |
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All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
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b) |
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Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
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August 10, 2007
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By:
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/s/ Rocco B. Commisso |
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Rocco B. Commisso
Chairman and Chief Executive Officer |
CERTIFICATIONS
I, Mark E. Stephan, certify that:
(1) |
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I have reviewed this report on Form 10-Q of Mediacom Broadband LLC; |
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(2) |
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Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
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(3) |
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Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
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(4) |
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The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have: |
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a) |
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Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared; |
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b) |
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Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986; |
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c) |
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Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of end of the period covered by this report based on such evaluation;
and |
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d) |
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Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrants internal control
over financial reporting; and |
(5) |
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The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent
function): |
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a) |
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All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
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b) |
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Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
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August 10, 2007
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By:
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/s/ Mark E. Stephan |
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Mark E. Stephan
Executive Vice President and Chief Financial
Officer |
Filed by Bowne Pure Compliance
Exhibit 31.2
CERTIFICATIONS
I, Rocco B. Commisso, certify that:
(1) |
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I have reviewed this report on Form 10-Q of Mediacom Broadband Corporation; |
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(2) |
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Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
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(3) |
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Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
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(4) |
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The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have: |
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a) |
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Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared; |
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b) |
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Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986; |
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c) |
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Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of end of the period covered by this report based on such evaluation;
and |
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d) |
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Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrants internal control
over financial reporting; and |
(5) |
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The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent
function): |
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a) |
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All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
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b) |
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Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
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August 10, 2007
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By:
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/s/ Rocco B. Commisso |
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Rocco B. Commisso
Chairman and Chief Executive Officer |
CERTIFICATIONS
I, Mark E. Stephan, certify that:
(1) |
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I have reviewed this report on Form 10-Q of Mediacom Broadband Corporation; |
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(2) |
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Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
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(3) |
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Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
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(4) |
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The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have: |
|
a) |
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Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared; b) Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986; |
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c) |
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Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of end of the period covered by this report based on such evaluation;
and |
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d) |
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Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrants internal control
over financial reporting; and |
(5) |
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The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent
function): |
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a) |
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All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
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b) |
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Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
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August 10, 2007
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By:
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/s/ Mark E. Stephan |
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Mark E. Stephan
Executive Vice President and Chief Financial
Officer |
Filed by Bowne Pure Compliance
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Mediacom Broadband LLC (the Company) on Form 10-Q for
the period ended June 30, 2007 as filed with the Securities and Exchange Commission on the date
hereof (the Report), Rocco B. Commisso, Chairman and Chief Executive Officer and Mark E. Stephan,
Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
§ 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
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(1) |
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the Report fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and |
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(2) |
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the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company. |
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August 10, 2007
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By:
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/s/ Rocco B. Commisso |
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Rocco B. Commisso |
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Chairman and Chief Executive Officer |
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By:
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/s/ Mark E. Stephan |
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Mark E. Stephan |
|
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Executive Vice President and Chief Financial
Officer |
Filed by Bowne Pure Compliance
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Mediacom Broadband Corporation (the Company) on Form
10-Q for the period ended June 30, 2007 as filed with the Securities and Exchange Commission on the
date hereof (the Report), Rocco B. Commisso, Chairman and Chief Executive Officer and Mark E.
Stephan, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
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(1) |
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the Report fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and |
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(2) |
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the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company. |
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August 10, 2007
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By:
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/s/ Rocco B. Commisso |
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Rocco B. Commisso |
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|
Chairman and Chief Executive Officer |
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By:
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/s/ Mark E. Stephan |
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Mark E. Stephan |
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Executive Vice President and Chief Financial Officer |