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 September 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 SEPTEMBER 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)
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash |
|
$ |
6,836 |
|
|
$ |
12,019 |
|
Accounts receivable, net of allowance for doubtful accounts of $1,275 and $1,380 |
|
|
45,969 |
|
|
|
43,205 |
|
Prepaid expenses and other current assets |
|
|
117,161 |
|
|
|
68,379 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
169,966 |
|
|
|
123,603 |
|
|
|
|
|
|
|
|
|
|
Investment in cable television systems: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation of $580,777 and $501,713 |
|
|
726,474 |
|
|
|
716,339 |
|
Franchise rights |
|
|
1,247,426 |
|
|
|
1,251,386 |
|
Goodwill |
|
|
204,005 |
|
|
|
204,582 |
|
Subscriber
lists, net of accumulated amortization of $22,931 and $21,319 |
|
|
10,089 |
|
|
|
11,803 |
|
|
|
|
|
|
|
|
Total investment in cable television systems |
|
|
2,187,994 |
|
|
|
2,184,110 |
|
|
|
|
|
|
|
|
|
|
Other assets, net of accumulated amortization of $5,119 and $3,636 |
|
|
15,561 |
|
|
|
17,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,373,521 |
|
|
$ |
2,324,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, PREFERRED MEMBERS INTEREST AND MEMBERS EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
162,505 |
|
|
$ |
127,896 |
|
Deferred revenue |
|
|
27,507 |
|
|
|
25,430 |
|
Current portion of long-term debt |
|
|
68,091 |
|
|
|
68,707 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
258,103 |
|
|
|
222,033 |
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion |
|
|
1,591,500 |
|
|
|
1,527,536 |
|
Other non-current liabilities |
|
|
12,370 |
|
|
|
9,875 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
1,861,973 |
|
|
|
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 |
|
|
(281,362 |
) |
|
|
(236,955 |
) |
|
|
|
|
|
|
|
Total members equity |
|
|
361,548 |
|
|
|
415,355 |
|
|
|
|
|
|
|
|
Total liabilities, preferred members interest and members equity |
|
$ |
2,373,521 |
|
|
$ |
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
183,975 |
|
|
$ |
171,280 |
|
|
$ |
539,598 |
|
|
$ |
503,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs (exclusive of depreciation and amortization) |
|
|
74,815 |
|
|
|
68,429 |
|
|
|
222,474 |
|
|
|
200,150 |
|
Selling, general and administrative expenses |
|
|
41,022 |
|
|
|
38,944 |
|
|
|
118,115 |
|
|
|
110,669 |
|
Management fee expense |
|
|
3,191 |
|
|
|
3,057 |
|
|
|
9,767 |
|
|
|
8,982 |
|
Depreciation and amortization |
|
|
30,871 |
|
|
|
26,050 |
|
|
|
85,558 |
|
|
|
80,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
34,076 |
|
|
|
34,800 |
|
|
|
103,684 |
|
|
|
103,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(30,982 |
) |
|
|
(27,876 |
) |
|
|
(90,720 |
) |
|
|
(82,739 |
) |
Loss on early extinguishment of debt |
|
|
|
|
|
|
(28,298 |
) |
|
|
|
|
|
|
(31,207 |
) |
Loss on derivatives, net |
|
|
(7,738 |
) |
|
|
(8,392 |
) |
|
|
(4,743 |
) |
|
|
(8,030 |
) |
Gain on sale of cable systems |
|
|
2,248 |
|
|
|
|
|
|
|
2,248 |
|
|
|
|
|
Other expense, net |
|
|
(57 |
) |
|
|
(947 |
) |
|
|
(2,335 |
) |
|
|
(3,834 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(2,453 |
) |
|
$ |
(30,713 |
) |
|
$ |
8,134 |
|
|
$ |
(22,254 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend to preferred member |
|
|
4,500 |
|
|
|
4,500 |
|
|
|
13,500 |
|
|
|
13,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss applicable to member |
|
$ |
(6,953 |
) |
|
$ |
(35,213 |
) |
|
$ |
(5,366 |
) |
|
$ |
(35,754 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
8,134 |
|
|
$ |
(22,254 |
) |
Adjustments to reconcile net income to net cash flows provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
85,558 |
|
|
|
80,520 |
|
Gain on sale of cable systems |
|
|
(2,248 |
) |
|
|
|
|
Loss on derivatives, net |
|
|
4,743 |
|
|
|
8,030 |
|
Loss on early extinguishment of debt |
|
|
|
|
|
|
8,206 |
|
Amortization of deferred financing costs |
|
|
1,483 |
|
|
|
2,115 |
|
Share-based compensation |
|
|
735 |
|
|
|
789 |
|
Changes in assets and liabilities, net of effects from acquisitions: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(2,764 |
) |
|
|
(4,574 |
) |
Prepaid expenses and other assets |
|
|
(50,260 |
) |
|
|
(24,604 |
) |
Accrued liabilities |
|
|
34,605 |
|
|
|
(9,719 |
) |
Deferred revenue |
|
|
2,077 |
|
|
|
2,496 |
|
Other non-current liabilities |
|
|
(1,494 |
) |
|
|
(2,097 |
) |
|
|
|
|
|
|
|
Net cash flows provided by operating activities |
|
$ |
80,569 |
|
|
$ |
38,908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(94,828 |
) |
|
|
(76,965 |
) |
Proceeds from sale of cable systems |
|
|
7,667 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in investing activities |
|
$ |
(87,161 |
) |
|
$ |
(76,965 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
New borrowings |
|
|
207,492 |
|
|
|
1,295,000 |
|
Repayment of debt |
|
|
(144,145 |
) |
|
|
(727,402 |
) |
Redemption/Repayment of senior notes |
|
|
|
|
|
|
(400,000 |
) |
Financing costs |
|
|
|
|
|
|
(169 |
) |
Capital contribution |
|
|
|
|
|
|
103,040 |
|
Capital distribution |
|
|
(9,400 |
) |
|
|
(175,730 |
) |
Dividend payment on preferred members interest |
|
|
(13,500 |
) |
|
|
(13,500 |
) |
Dividend payment to parent |
|
|
(39,038 |
) |
|
|
(43,332 |
) |
|
|
|
|
|
|
|
Net cash flows provided by financing activities |
|
$ |
1,409 |
|
|
$ |
37,907 |
|
|
|
|
|
|
|
|
Net decrease in cash |
|
|
(5,183 |
) |
|
|
(150 |
) |
|
|
|
|
|
|
|
|
|
CASH, beginning of period |
|
|
12,019 |
|
|
|
7,142 |
|
|
|
|
|
|
|
|
CASH, end of period |
|
$ |
6,836 |
|
|
$ |
6,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid during the period for interest, net of amounts capitalized |
|
$ |
84,477 |
|
|
$ |
100,912 |
|
|
|
|
|
|
|
|
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 or 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):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
Cable systems, equipment and subscriber devices |
|
$ |
1,223,351 |
|
|
$ |
1,138,654 |
|
Vehicles |
|
|
37,941 |
|
|
|
34,190 |
|
Buildings and leasehold improvements |
|
|
24,770 |
|
|
|
24,621 |
|
Furniture, fixtures and office equipment |
|
|
16,582 |
|
|
|
16,011 |
|
Land and land improvements |
|
|
4,607 |
|
|
|
4,576 |
|
|
|
|
|
|
|
|
|
|
|
1,307,251 |
|
|
|
1,218,052 |
|
Accumulated depreciation |
|
|
(580,777 |
) |
|
|
(501,713 |
) |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
$ |
726,474 |
|
|
$ |
716,339 |
|
|
|
|
|
|
|
|
4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
Accrued programming costs |
|
$ |
36,578 |
|
|
$ |
29,071 |
|
Accounts
payable |
|
|
27,405 |
|
|
|
17,085 |
|
Accrued interest |
|
|
21,487 |
|
|
|
11,468 |
|
Accrued taxes and fees |
|
|
16,371 |
|
|
|
19,138 |
|
Accrued payroll and benefits |
|
|
15,782 |
|
|
|
13,509 |
|
Accrued property, plant and equipment |
|
|
11,592 |
|
|
|
9,368 |
|
Accrued
service costs |
|
|
7,217 |
|
|
|
6,970 |
|
Accrued telecommunications costs |
|
|
6,730 |
|
|
|
7,119 |
|
Subscriber
advanced payments |
|
|
6,324 |
|
|
|
4,843 |
|
Intercompany
accounts payable and other accrued expenses |
|
|
13,019 |
|
|
|
9,325 |
|
|
|
|
|
|
|
|
|
|
$ |
162,505 |
|
|
$ |
127,896 |
|
|
|
|
|
|
|
|
5. DEBT
Debt consisted of the following (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
|
|
|
|
|
|
|
|
|
Bank credit facilities |
|
$ |
1,159,500 |
|
|
$ |
1,095,500 |
|
81/2% senior notes due 2015 |
|
|
500,000 |
|
|
|
500,000 |
|
Capital lease obligations |
|
|
91 |
|
|
|
743 |
|
|
|
|
|
|
|
|
|
|
$ |
1,659,591 |
|
|
$ |
1,596,243 |
|
Less: current portion |
|
|
68,091 |
|
|
|
68,707 |
|
|
|
|
|
|
|
|
Total long-term debt |
|
$ |
1,591,500 |
|
|
$ |
1,527,536 |
|
|
|
|
|
|
|
|
Bank Credit Facilities
The average interest rates on outstanding debt under our bank credit facilities as of September 30,
2007 and December 31, 2006, were 6.8% and 7.1% respectively, before giving effect to the interest
rate exchange agreements discussed below. As of September 30, 2007, we had unused credit
commitments of approximately $379.6 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 September 30, 2007.
8
As of September 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 September 30, 2007, we had interest rate exchange agreements with various banks
pursuant to which the interest rate on $600.0 million was fixed at a weighted average rate of
approximately 5.2%. These agreements have been accounted for on a
mark-to-market basis. Our interest rate exchange agreements are
scheduled to expire in the amounts of $500.0 million and $100.0 million during the years ended
December 31, 2009 and 2010, respectively. As of and for the
three months ended September 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 $8.1 million and $2.7 million, respectively, which are components of accounts payable and other
non-current liabilities and prepaid and other non-current assets, and we recorded in our
consolidated statements of operations a loss on derivatives, net
amounting to $7.7 million and $4.7 million, respectively. For the nine months ended September 30, 2007 and 2006, we recorded a loss on
derivatives, net amounting to $4.7 million and $8.0 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 September 30, 2007. The preferred equity investment has a 12% annual dividend,
payable quarterly in cash. During the three months ended September 30, 2007 and 2006, we paid $4.5
million in cash dividends on the preferred equity, respectively. During the nine months ended
September 30, 2007 and 2006, we paid $13.5 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 |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
Share-based compensation expense by type of
award: |
|
|
|
|
|
|
|
|
Employee stock options |
|
$ |
21 |
|
|
$ |
121 |
|
Employee stock purchase plan |
|
|
47 |
|
|
|
93 |
|
Restricted stock units |
|
|
148 |
|
|
|
87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total share-based compensation expense |
|
$ |
216 |
|
|
$ |
301 |
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2007 |
|
|
2006 |
|
Share-based compensation expense by type of
award: |
|
|
|
|
|
|
|
|
Employee stock options |
|
$ |
177 |
|
|
$ |
343 |
|
Employee stock purchase plan |
|
|
145 |
|
|
|
203 |
|
Restricted stock units |
|
|
413 |
|
|
|
243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total share-based compensation expense |
|
$ |
735 |
|
|
$ |
789 |
|
|
|
|
|
|
|
|
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 approximately 54,000 and 63,000 for the three months ended September 30, 2007 and 2006,
respectively. Shares purchased by employees amounted to approximately 110,000 and 129,000 for the nine months
ended September 30, 2007 and 2006, respectively. The net proceeds to us were approximately $0.2
million for each of the three months ended September 30, 2007 and 2006. The net proceeds to us were
approximately $0.5 million for each of the nine months ended September 30, 2007 and 2006.
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 nine months ended, September 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 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 approximately 96% of our
estimated homes passed. Bundled products and services offer our customers a single provider contact
for provisioning, billing and customer care.
As of September 30, 2007, our cable systems passed an estimated 1.48 million homes and served
723,000 basic video subscribers in four states. We provide digital video services to 309,000
customers, representing a penetration of 42.7% of our basic subscribers, and provide HSD service to
349,000 customers, representing a penetration of 23.6% of our estimated homes passed. We introduced
phone service across several of our markets during the second half of 2005, and provided service to
about 97,000 customers as of September 30, 2007, representing a
penetration of 6.8% of our 1.43 million estimated marketable phone homes.
We evaluate our growth, in part, by measuring the number of revenue generating units (RGUs) we
serve which represent the total of basic subscribers, digital, data, and phone customers. As of
September 30, 2007, we served 1.48 million RGUs, as compared to 1.42 million RGUs for the period
ending September 30, 2006.
We have faced increasing levels of competition for our video programming services over the past few
years, mostly from DBS providers. DirecTV and Echostar now have essentially ubiquitous coverage in
our markets with local television broadcast signals. Their ability to deliver these 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. As a result of
the retransmission consent dispute, both prior to and during the loss
of carriage of the Sinclair stations, we experienced higher levels of
basic subscriber losses in the fourth quarter of 2006 and the first
quarter of 2007.
11
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 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 September 30, 2007 compared to Three Months Ended September 30, 2006
The
following tables set forth our unaudited consolidated statement of operations for the three
months ended September 30, 2007 and 2006 (dollars in thousands and percentage changes that are not
meaningful are marked NM):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
183,975 |
|
|
$ |
171,280 |
|
|
$ |
12,695 |
|
|
|
7.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs (exclusive of depreciation and amortization) |
|
|
74,815 |
|
|
|
68,429 |
|
|
|
6,386 |
|
|
|
9.3 |
% |
Selling, general and administrative expenses |
|
|
41,022 |
|
|
|
38,944 |
|
|
|
2,078 |
|
|
|
5.3 |
% |
Management fee expense |
|
|
3,191 |
|
|
|
3,057 |
|
|
|
134 |
|
|
|
4.4 |
% |
Depreciation and amortization |
|
|
30,871 |
|
|
|
26,050 |
|
|
|
4,821 |
|
|
|
18.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
34,076 |
|
|
|
34,800 |
|
|
|
(724 |
) |
|
|
(2.1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(30,982 |
) |
|
|
(27,876 |
) |
|
|
(3,106 |
) |
|
|
11.1 |
% |
Loss on early extinguishment of debt |
|
|
|
|
|
|
(28,298 |
) |
|
|
28,298 |
|
|
|
NM |
|
Loss on derivatives, net |
|
|
(7,738 |
) |
|
|
(8,392 |
) |
|
|
654 |
|
|
|
(7.8 |
%) |
Gain on sale of cable systems |
|
|
2,248 |
|
|
|
|
|
|
|
2,248 |
|
|
|
NM |
|
Other expense, net |
|
|
(57 |
) |
|
|
(947 |
) |
|
|
890 |
|
|
|
(94.0 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,453 |
) |
|
$ |
(30,713 |
) |
|
$ |
28,260 |
|
|
|
(92.0 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA |
|
$ |
65,163 |
|
|
$ |
61,151 |
|
|
$ |
4,012 |
|
|
|
6.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
12
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 |
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA |
|
$ |
65,163 |
|
|
$ |
61,151 |
|
|
$ |
4,012 |
|
|
|
6.6 |
% |
Non-cash, share-based compensation |
|
|
(216 |
) |
|
|
(301 |
) |
|
|
85 |
|
|
|
NM |
|
Depreciation and amortization |
|
|
(30,871 |
) |
|
|
(26,050 |
) |
|
|
(4,821 |
) |
|
|
18.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
34,076 |
|
|
$ |
34,800 |
|
|
$ |
(724 |
) |
|
|
(2.1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
The
following tables set forth our unaudited revenue, subscriber and average monthly revenue statistics for the
three months ended September 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 |
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
Video |
|
$ |
124,598 |
|
|
$ |
121,370 |
|
|
$ |
3,228 |
|
|
|
2.7 |
% |
Data |
|
|
38,540 |
|
|
|
33,531 |
|
|
|
5,009 |
|
|
|
14.9 |
% |
Phone |
|
|
8,688 |
|
|
|
5,750 |
|
|
|
2,938 |
|
|
|
51.1 |
% |
Advertising |
|
|
12,149 |
|
|
|
10,629 |
|
|
|
1,520 |
|
|
|
14.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
183,975 |
|
|
$ |
171,280 |
|
|
$ |
12,695 |
|
|
|
7.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
Increase/ |
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
(Decrease) |
|
|
% Change |
|
Basic subscribers |
|
|
723,000 |
|
|
|
758,000 |
|
|
|
(35,000 |
) |
|
|
(4.6 |
%) |
Digital customers |
|
|
309,000 |
|
|
|
297,000 |
|
|
|
12,000 |
|
|
|
4.0 |
% |
Data customers |
|
|
349,000 |
|
|
|
301,000 |
|
|
|
48,000 |
|
|
|
15.9 |
% |
Phone customers |
|
|
97,000 |
|
|
|
60,000 |
|
|
|
37,000 |
|
|
|
61.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
RGUs(1) |
|
|
1,478,000 |
|
|
|
1,416,000 |
|
|
|
62,000 |
|
|
|
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total monthly revenue per basic subscriber (2) |
|
$ |
84.53 |
|
|
$ |
75.42 |
|
|
$ |
9.11 |
|
|
|
12.1 |
% |
Average total monthly revenue per RGU (3) |
|
$ |
41.85 |
|
|
$ |
40.81 |
|
|
$ |
1.04 |
|
|
|
2.5 |
% |
|
|
|
(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.
13
Revenues rose 7.4%, largely attributable to growth in our data and phone customers. Average total
monthly revenue per basic subscriber grew 12.1%. RGUs grew 4.4% and average total monthly revenue
per RGU grew 2.5%.
Video
revenues grew 2.7% 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. Since June 30, 2007, we lost 5,000 basic subscribers, compared to a gain of 2,000 for
the same period last year. Since September 30, 2006, we lost 35,000 subscribers, including a
significant number of basic subscribers lost in connection with the retransmission consent dispute
with Sinclair and the sale during the period of cable systems serving on a net basis 2,200 basic
subscribers.
Data revenues rose 14.9%, primarily due to a 15.9% increase in data customers.
Phone revenues grew 51.1%, largely due to a 61.7% increase in phone customers.
Advertising
revenues increased 14.3%, largely as a result of a 14-week broadcast sales period
this quarter, as compared to a 13-week period in the three months ended September 30, 2006.
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 9.3%, primarily due to customer growth in our phone and HSD services and
increases in programming expenses. Recurring expenses related to our phone and HSD services grew
39.7% commensurate with the significant increase of our phone and data customers. Programming
expense rose 4.8%, principally as a result of higher unit costs charged by our programming vendors,
offset in part by a lower number of basic subscribers. Service costs as a percentage of revenues
were 40.7% and 40.0% for the three months ended September 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 5.3%, principally due to higher marketing, bad
debt, and office expenses, offset in part by a reduction in taxes and fees. Marketing costs rose
by 15.3%, largely due to increases in product and service advertising and personnel costs, and a
decrease in promotional support. Bad debt expenses were higher by 13.4%, primarily due to higher
average write-offs per delinquent account and increased collections expense. Office costs increased
by 15.3%, primarily due to call center telecommunications charges. Taxes and fees decreased 12.3%
primarily due to a reduction in state property taxes. Selling, general and administrative expenses
as a percentage of revenues were 22.3% and 22.7% for the three months ended September 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 4.4%, reflecting higher
overhead charges by MCC. Management fee expenses as a
percentage of revenues were 1.7% and 1.8% for the three months ended September 30, 2007
and 2006, respectively.
14
Depreciation
and amortization rose 18.5%, primarily due to increased deployment of
shorter-lived customer premise equipment, partly offset by lower spending on plant upgrade and
rebuild.
Adjusted OIBDA
Adjusted
OIBDA increased by 6.6%, due to revenue growth, especially in data and phone, offset in
part by increases in service costs and selling, general, and administrative expenses.
Operating Income
Operating
income decreased 2.1%, due to higher depreciation and amortization expense, largely
offset by an increase in adjusted OIBDA.
Interest Expense, Net
Interest expense, net, increased by 11.1%, due to the expiration of certain interest rate
hedging agreements with favorable rates, and to a lesser extent, higher average indebtedness.
Loss on Derivatives, Net
We enter into interest rate exchange agreements, or interest rate swaps, with counterparties to
fix the interest rate on a portion of our variable rate debt to reduce the potential volatility in
our interest expense that would otherwise result from changes in variable market interest rates. As
of September 30, 2007, we had interest rate swaps with an aggregate principal amount of $600.0
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 loss
on derivatives, net amounting to $7.7 million and $8.4 million for the three months ended September
30, 2007 and 2006, respectively.
Gain
on Sale of Cable Systems
During the three months ended September 30, 2007, we sold cable
systems for $7.7 million and recorded a gain on sale of
$2.2 million.
Net Loss
As a result of the factors described above, we recognized a net loss for the three months ended
September 30, 2007 of $2.5 million, compared to a net loss of $30.7 million for the three months
ended September 30, 2006.
15
Nine Months Ended September 30, 2007 compared to Nine Months Ended September 30, 2006
The
following tables set forth our unaudited consolidated statement of operations for the nine
months ended September 30, 2007 and 2006 (dollars in thousands and percentage changes that are not
meaningful are marked NM):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
539,598 |
|
|
$ |
503,877 |
|
|
$ |
35,721 |
|
|
|
7.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs (exclusive of depreciation and amortization) |
|
|
222,474 |
|
|
|
200,150 |
|
|
|
22,324 |
|
|
|
11.2 |
% |
Selling, general and administrative expenses |
|
|
118,115 |
|
|
|
110,669 |
|
|
|
7,446 |
|
|
|
6.7 |
% |
Management fee expense |
|
|
9,767 |
|
|
|
8,982 |
|
|
|
785 |
|
|
|
8.7 |
% |
Depreciation and amortization |
|
|
85,558 |
|
|
|
80,520 |
|
|
|
5,038 |
|
|
|
6.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
103,684 |
|
|
|
103,556 |
|
|
|
128 |
|
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(90,720 |
) |
|
|
(82,739 |
) |
|
|
(7,981 |
) |
|
|
9.6 |
% |
Loss on early extinguishment of debt |
|
|
|
|
|
|
(31,207 |
) |
|
|
31,207 |
|
|
|
NM |
|
Loss on derivatives, net |
|
|
(4,743 |
) |
|
|
(8,030 |
) |
|
|
3,287 |
|
|
|
NM |
|
Gain on sale of cable systems |
|
|
2,248 |
|
|
|
|
|
|
|
2,248 |
|
|
|
NM |
|
Other expense, net |
|
|
(2,335 |
) |
|
|
(3,834 |
) |
|
|
1,499 |
|
|
|
(39.1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
8,134 |
|
|
$ |
(22,254 |
) |
|
$ |
30,388 |
|
|
|
(136.6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA |
|
$ |
189,977 |
|
|
$ |
184,865 |
|
|
$ |
5,112 |
|
|
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA |
|
$ |
189,977 |
|
|
$ |
184,865 |
|
|
$ |
5,112 |
|
|
|
2.8 |
% |
Non-cash, share-based compensation |
|
|
(735 |
) |
|
|
(789 |
) |
|
|
54 |
|
|
|
NM |
|
Depreciation and amortization |
|
|
(85,558 |
) |
|
|
(80,520 |
) |
|
|
(5,038 |
) |
|
|
6.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
103,684 |
|
|
$ |
103,556 |
|
|
$ |
128 |
|
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
16
Revenues
The
following tables set forth our unaudited revenue, subscriber and average monthly revenue statistics for the
nine months ended September 30, 2007 and 2006 (dollars in thousands, except per subscriber and
customer data and percentage changes that are not meaningful are marked NM):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
$ Change |
|
|
% Change |
|
Video |
|
$ |
368,546 |
|
|
$ |
363,639 |
|
|
$ |
4,907 |
|
|
|
1.3 |
% |
Data |
|
|
112,690 |
|
|
|
96,484 |
|
|
|
16,206 |
|
|
|
16.8 |
% |
Phone |
|
|
24,518 |
|
|
|
13,068 |
|
|
|
11,450 |
|
|
|
87.6 |
% |
Advertising |
|
|
33,844 |
|
|
|
30,686 |
|
|
|
3,158 |
|
|
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
539,598 |
|
|
$ |
503,877 |
|
|
$ |
35,721 |
|
|
|
7.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
Increase/ |
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
(Decrease) |
|
|
% Change |
|
Basic subscribers |
|
|
723,000 |
|
|
|
758,000 |
|
|
|
(35,000 |
) |
|
|
(4.6 |
%) |
Digital customers |
|
|
309,000 |
|
|
|
297,000 |
|
|
|
12,000 |
|
|
|
4.0 |
% |
Data customers |
|
|
349,000 |
|
|
|
301,000 |
|
|
|
48,000 |
|
|
|
15.9 |
% |
Phone customers |
|
|
97,000 |
|
|
|
60,000 |
|
|
|
37,000 |
|
|
|
61.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
RGUs(1) |
|
|
1,478,000 |
|
|
|
1,416,000 |
|
|
|
62,000 |
|
|
|
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total monthly revenue per basic subscriber (2) |
|
$ |
81.35 |
|
|
$ |
73.14 |
|
|
$ |
8.21 |
|
|
|
11.2 |
% |
Average total monthly revenue per RGU (3) |
|
$ |
41.01 |
|
|
$ |
40.55 |
|
|
$ |
0.46 |
|
|
|
1.1 |
% |
|
|
|
(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 7.1%, largely attributable to growth in our data and phone customers. Average total
monthly revenue per basic subscriber grew 11.2%. RGUs grew 4.4% year-over-year and average total
monthly revenue per RGU grew 1.1%.
Video revenues grew 1.3% for the nine month period, with higher service fees from our advanced
video products and services, such as DVRs and HDTV, offset by a lower number of basic subscribers.
Since December 31, 2006, we lost 28,000 basic subscribers, including a significant number of basic
subscribers lost in connection with the retransmission consent dispute with Sinclair and the sale
during the period of cable systems serving on a net basis 2,200 basic subscribers, compared to a
loss of 15,000 basic subscribers for the same period last year.
Data revenues rose 16.8%, primarily due to a 15.9% increase in data customers.
Phone revenues grew 87.6%, largely due to a 61.7% increase in phone customers.
Advertising
revenues rose 10.3%, as a result of stronger local and, to a lesser extent, national advertising sales.
Costs and Expenses
Service costs rose 11.2%, 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 38.1% commensurate with the significant increase of our phone and data customers.
Programming expense rose 6.0%, 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 21.3%, primarily as a result
of higher outside contractor usage and increased utility expenses and, to a lesser extent, the purchase of antennas in the first quarter
of 2007 for distribution to our customers so that they could receive
affected off-air broadcast signals during the Sinclair dispute and
costs associated with our workforce management system. Service costs as a percentage of revenues were 41.2% and 39.7% for the nine months ended September
30, 2007 and 2006, respectively.
17
Selling, general and administrative expenses rose 6.7%, principally due to higher marketing, bad
debt and office expenses, offset in part by a reduction in taxes and fees. Marketing costs rose by
22.9% largely due to increases in product and service advertising,
and direct mailing campaigns and
personnel costs, and a decrease in promotional support. Bad debt expenses were higher by 22.6%,
primarily due to higher average write-offs per delinquent account, unusually low write-offs of
uncollectible accounts in the prior year period and increased collection expense. Office costs
increased by 18.4%, primarily due to call center telecommunications charges and equipment rental and
maintenance costs. Taxes and fees decreased 5.3% primarily due to a reduction
of state taxes. Selling, general and administrative expenses as a percentage of revenues were 21.9% and 22.0% for
the nine months ended September 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 8.7%, reflecting higher
overhead charges by MCC. Management fee expenses as a
percentage of revenues were 1.8% for each of the nine month periods ended September 30, 2007
and 2006, respectively.
Depreciation
and amortization rose 6.3%, due primarily to increased deployment of customer premise
equipment, offset by lower spending on plant upgrade and rebuild.
Adjusted OIBDA
Adjusted OIBDA increased 2.8%, due to revenue growth, especially in data and phone, offset in part
by increases in service costs and selling, general and administration expenses.
Operating Income
Operating income remained relatively unchanged year to year.
Interest Expense, Net
Interest
expense, net, increased by 9.6%, primarily due to higher average indebtedness, and to a lesser extent, the expiration
of certain interest rate hedging agreements with favorable rates.
Loss on Derivatives, Net
We enter into interest rate exchange agreements, or interest rate swaps, with counterparties to
fix the interest rate on a portion of our variable rate debt to reduce the potential volatility in
our interest expense that would otherwise result from changes in variable market interest rates. As
of September 30, 2007, we had interest rate swaps with an aggregate principal amount of $600.0
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 loss
on derivatives, net amounting to $4.7 million and $8.0 million for the nine months ended September
30, 2007 and 2006, respectively.
Gain
on Sale of Cable Systems
During the nine months ended September 30, 2007, we sold cable
systems for $7.7 million and recorded a gain on sale of
$2.2 million.
Net
Income (Loss)
As a result of the factors described above, we recognized a net income for the nine months ended
September 30, 2007 of $8.1 million, compared to a net loss of $22.3 million for the nine months
ended September 30, 2006.
18
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 September 30, 2007, our total debt was $1,659.6 million of which $68.1 million
matures within the twelve months ending September 30, 2008. During the nine months ended September
30, 2007, we paid cash interest of approximately $84.5 million, net of capitalized interest. As of September 30,
2007, we had unused revolving credit commitments of approximately
$379.6 million, all of which could be borrowed and used for general corporate purposes based on the terms and conditions of our debt
arrangements.
For all periods through September 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 these 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 $80.6 million for the nine months ended
September 30, 2007, as compared to $38.9 million for the comparable period last year. The change of
$41.7 million is primarily due to the loss on early extinguishment of debt in the nine months ended
September 30, 2006 and to a lesser extent, the net change in
operating assets and liabilities.
During the nine months ended September 30, 2007, the net change in our operating assets and
liabilities was $17.8 million, primarily due to an increase in our prepaid expenses and other
assets of $50.3 million, offset in part by an increase in our accrued liabilities of $34.6 million
and an increase in deferred revenue of $2.1 million.
Investing Activities
Net
cash flows used in investing activities, which consisted primarily of capital expenditures, were $87.2
million for the nine months ended September 30, 2007, as compared to $77.0 million for the prior
year period. Capital expenditures increased $17.9 million to $94.8 million, primarily due to higher
spending on customer premise equipment and installation activities and network
performance. In addition, we received proceeds of $7.7 million from the sale of a cable system.
Financing Activities
Net
cash flows provided by financing activities were $1.4 million for the nine months ended
September 30, 2007, as compared to $37.9 million for the
comparable period in 2006, primarily due to a net increase in debt partially offset by dividend payments on preferred members interest.
19
Other
We have entered into interest rate exchange agreements with counterparties which expire from 2009
through 2010, to hedge $600.0 million of floating rate debt. These agreements have been accounted
for on a mark-to-market basis as of, and for, the nine months ended September 30, 2007. Our
interest rate exchange agreements are scheduled to expire in the amounts of $500.0 million and
$100.0 million during the years ended December 31, 2009 and 2010, respectively.
As of September 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.
20
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
September 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 September 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 September 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 September
30, 2007 that has materially affected, or is reasonably likely to materially affect, Mediacom
Broadbands internal control over financial reporting.
21
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 |
|
|
|
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 |
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 LLC |
|
|
|
|
|
|
|
|
|
November 14, 2007
|
|
By:
|
|
/s/ Mark E. Stephan
Mark E. Stephan
|
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer |
|
|
23
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 |
|
|
|
|
|
|
|
|
|
November 14, 2007
|
|
By:
|
|
/s/ Mark E. Stephan
Mark E. Stephan
|
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer |
|
|
24
EXHIBIT INDEX
|
|
|
Exhibit |
|
|
Number |
|
Exhibit Description |
|
|
|
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 |
Filed by Bowne Pure Compliance
Exhibit 31.1
CERTIFICATIONS
I, Rocco B. Commisso, certify that:
(1) |
|
I have reviewed this report on Form 10-Q of Mediacom Broadband LLC; |
|
(2) |
|
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; |
|
(3) |
|
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; |
|
(4) |
|
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) |
|
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; |
|
|
c) |
|
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 |
|
|
d) |
|
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) |
|
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): |
|
a) |
|
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 |
|
|
b) |
|
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. |
|
|
|
|
|
|
|
November 14, 2007
|
|
By:
|
|
/s/ Rocco B. Commisso
Rocco B. Commisso
|
|
|
|
|
|
|
Chairman and Chief Executive Officer |
|
|
CERTIFICATIONS
I, Mark E. Stephan, certify that:
(1) |
|
I have reviewed this report on Form 10-Q of Mediacom Broadband LLC; |
|
(2) |
|
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; |
|
(3) |
|
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; |
|
(4) |
|
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) |
|
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; |
|
|
c) |
|
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 |
|
|
d) |
|
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) |
|
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): |
|
a) |
|
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 |
|
|
b) |
|
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. |
|
|
|
|
|
|
|
November 14, 2007
|
|
By:
|
|
/s/ Mark E. Stephan
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) |
|
I have reviewed this report on Form 10-Q of Mediacom Broadband Corporation; |
|
(2) |
|
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; |
|
(3) |
|
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; |
|
(4) |
|
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) |
|
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; |
|
|
c) |
|
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 |
|
|
d) |
|
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) |
|
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): |
|
a) |
|
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 |
|
|
b) |
|
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. |
|
|
|
|
|
|
|
November 14, 2007
|
|
By:
|
|
/s/ Rocco B. Commisso
Rocco B. Commisso
|
|
|
|
|
|
|
Chairman and Chief Executive Officer |
|
|
CERTIFICATIONS
I, Mark E. Stephan, certify that:
(1) |
|
I have reviewed this report on Form 10-Q of Mediacom Broadband Corporation; |
|
(2) |
|
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; |
|
(3) |
|
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; |
|
(4) |
|
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) |
|
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; |
|
|
c) |
|
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 |
|
|
d) |
|
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) |
|
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): |
|
a) |
|
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 |
|
|
b) |
|
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. |
|
|
|
|
|
|
|
November 14, 2007
|
|
By:
|
|
/s/ Mark E. Stephan
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 September 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:
|
(1) |
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and |
|
|
(2) |
|
the information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company. |
|
|
|
|
|
|
|
November 14, 2007
|
|
By:
|
|
/s/ Rocco B. Commisso
Rocco B. Commisso
|
|
|
|
|
|
|
Chairman and Chief Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Mark E. Stephan |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark E. Stephan |
|
|
|
|
|
|
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 September 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:
|
(1) |
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and |
|
|
(2) |
|
the information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company. |
|
|
|
|
|
|
|
November 14, 2007
|
|
By:
|
|
/s/ Rocco B. Commisso
Rocco B. Commisso
|
|
|
|
|
|
|
Chairman and Chief Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Mark E. Stephan
Mark E. Stephan
|
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer |
|
|