e8vk
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 12, 2011
MEDIACOM LLC
(Exact name of Registrant as specified in its charter)
         
New York   333-57285-01   06-1433421
(State of incorporation)   (Commission File No.)   (IRS Employer Identification No.)
100 Crystal Run Road
Middletown, New York 10941

(Address of principal executive offices)
Registrant’s telephone number: (845) 695-2600
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

Item 2.02. Results of Operations and Financial Condition.
     On August 12, 2011, Mediacom LLC issued a press release announcing its financial results for the quarter ended June 30, 2011. A copy of the press release is being furnished as Exhibit 99.1 to this report and incorporated herein by reference.
     The press release contains disclosure of OIBDA, Adjusted OIBDA, free cash flow and cash interest expense, which are not measures of performance calculated in accordance with generally accepted accounting principles (GAAP) in the United States. Reconciliations of OIBDA, Adjusted OIBDA, free cash flow and cash interest expense to the most directly comparable financial measures calculated and presented in accordance with GAAP are presented on Table 3 of the press release. Disclosure regarding management’s reasons for presenting these non-GAAP measures is set forth on Table 4 of the press release.
Item 9.01. Financial Statements and Exhibits.
     (d) Exhibits:
     
Exhibit No.   Description
 
   
99.1
  Press release issued by the Registrant on August 12, 2011

 


 

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 hereunto duly authorized.
Dated: August 12, 2011
         
  Mediacom LLC
 
 
  By:   /s/ Mark E. Stephan    
    Mark E. Stephan   
    Executive Vice President and
Chief Financial Officer 
 
 

 

exv99w1
Exhibit 99.1
     
(MEDIACOM LOGO)   For Immediate Release
Mediacom Broadband LLC and Mediacom LLC Report
Results for Second Quarter 2011
Middletown, NY — August 12, 2011 — MEDIACOM BROADBAND LLC AND MEDIACOM LLC, wholly-owned subsidiaries of Mediacom Communications Corporation, today each reported financial results for the three months ended June 30, 2011.
Mediacom Broadband LLC Second Quarter 2011 Highlights*
    Revenues were $219.8 million, a 3.0% increase from the prior year period
 
    Operating income before depreciation and amortization (“OIBDA”) was $83.9 million, a 6.1% increase from the prior year period
 
    Free cash flow of $15.8 million, compared to $10.6 million in the prior year period
Mediacom LLC Second Quarter 2011 Highlights*
    Revenues were $170.8 million, a 4.3% increase from the prior year period
 
    Adjusted OIBDA was $69.3 million, a 7.2% increase from the prior year period
 
    Free cash flow of $18.6 million, compared to $16.9 million in the prior year period
About Mediacom
Mediacom Communications is the nation’s eighth largest cable television company and one of the leading cable operators focused on serving the smaller cities in the United States, with a significant concentration in the Midwestern and Southeastern regions. Mediacom Communications offers a wide array of broadband products and services, including traditional and advanced video services such as digital television, video-on-demand, digital video recorders, high-definition television, as well as high-speed Internet access and phone service. Mediacom Communications also offers affordable broadband communications solutions that can be tailored to any size business through Mediacom Business. For more information about Mediacom Communications, please visit www.mediacomcc.com.
Cautionary Statement Regarding Forward-Looking Statements
In this press release, we state our beliefs of future events and of our future financial performance. These forward-looking statements are not guarantees of future performance or results, and are subject to risks and uncertainties that could cause actual results to differ materially from historical results or those we anticipate as a result of various factors, many of which are beyond our control. Factors that may cause such differences to occur include, but are not limited to: increased levels of competition; greater than anticipated programming and other service costs; our ability to generate sufficient cash flow to meet our debt service obligations; and other risks and uncertainties discussed in the Annual Reports on Form 10-K for the year ended December 31, 2010 for each Mediacom Broadband LLC and Mediacom LLC. We disclaim any obligation to update any forward-looking statements contained herein.
Contacts:
     
Investor Relations
  Media Relations
     Calvin G. Craib
       Thomas J. Larsen
     Senior Vice President, Corporate Finance
       Group Vice President, Legal and Public Affairs
     (845) 695-2675
       (845) 695-2754
 
*   Adjusted OIBDA is OIBDA plus investment income from affiliate. See Table 4 for information regarding our use of non-GAAP measures.

 


 

TABLE 1*
Mediacom Broadband LLC
Selected Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
                         
    Three Months Ended  
    June 30, 2011     March 31, 2011     June 30, 2010  
Video
  $ 131,297     $ 130,949     $ 131,166  
High-speed data
    59,166       56,282       53,476  
Phone
    17,175       17,270       16,191  
Advertising
    12,120       11,155       12,437  
 
                 
Total revenues
  $ 219,758     $ 215,656     $ 213,270  
Service costs
    (89,125 )     (89,985 )     (88,461 )
SG&A expenses
    (43,052 )     (42,194 )     (41,782 )
Management fees
    (3,663 )     (3,997 )     (3,968 )
 
                 
OIBDA (a)
  $ 83,918     $ 79,480     $ 79,059  
Cash interest expense (a)
    (26,887 )     (26,633 )     (27,624 )
Capital expenditures
    (36,742 )     (36,712 )     (36,318 )
Dividend to preferred members
    (4,500 )     (4,500 )     (4,500 )
 
                 
Free cash flow (a)
  $ 15,789     $ 11,635     $ 10,617  
 
                 
 
                       
OIBDA margin (b)
    38.2 %     36.9 %     37.1 %
                         
    June 30, 2011     March 31, 2011     June 30, 2010  
Bank credit facility
  $ 1,534,600     $ 1,560,500     $ 1,372,000  
81/2% senior notes due 2015
    500,000       500,000       500,000  
 
                 
Total debt
  $ 2,034,600     $ 2,060,500     $ 1,872,000  
 
                 
 
                       
Unused revolving credit commitments
  $ 244,100     $ 221,700     $ 421,100  
 
                       
Total leverage ratio (c)
    6.06x       6.48x       5.92x  
Interest coverage ratio (d)
    3.12x       2.98x       2.86x  
 
                       
Basic subscribers
    634,000       654,000       677,000  
High-speed data customers
    470,000       469,000       447,000  
Phone customers
    177,000       175,000       168,000  
 
                 
Primary service units (“PSUs”)
    1,281,000       1,298,000       1,292,000  
Digital customers
    415,000       421,000       394,000  
 
                 
Revenue generating units
    1,696,000       1,719,000       1,686,000  
 
                 
 
                       
Average total monthly revenue per basic subscriber (e)
  $ 113.75     $ 109.17     $ 104.16  
Average total monthly revenue per PSU (f)
  $ 56.81     $ 55.40     $ 55.09  
 
*   See Tables 3 and 4.

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TABLE 2*
Mediacom LLC
Selected Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
                         
    Three Months Ended  
    June 30, 2011     March 31, 2011     June 30, 2010  
Video
  $ 102,382     $ 101,345     $ 100,993  
High-speed data
    48,493       46,592       43,849  
Phone
    15,836       15,125       14,613  
Advertising
    4,044       3,244       4,284  
 
                 
Total revenues
  $ 170,755     $ 166,306     $ 163,739  
Service costs
    (74,455 )     (76,560 )     (73,243 )
SG&A expenses
    (28,652 )     (27,541 )     (27,322 )
Management fees
    (2,847 )     (3,082 )     (3,046 )
 
                 
OIBDA (a)
  $ 64,801     $ 59,123     $ 60,128  
Investment income from affiliate
    4,500       4,500       4,500  
 
                 
Adjusted OIBDA (a)
  $ 69,301     $ 63,623     $ 64,628  
Cash interest expense (a)
    (23,453 )     (23,991 )     (22,798 )
Capital expenditures
    (27,250 )     (19,541 )     (24,978 )
 
                 
Free cash flow (a)
  $ 18,598     $ 20,091     $ 16,852  
 
                 
 
                       
Adjusted OIBDA margin (g)
    40.6 %     38.3 %     39.5 %
                         
    June 30, 2011     March 31, 2011     June 30, 2010  
Bank credit facility
  $ 1,250,400     $ 1,255,500     $ 1,175,000  
91/8% senior notes due 2019
    350,000       350,000       350,000  
 
                 
Total debt
  $ 1,600,400     $ 1,605,500     $ 1,525,000  
 
                 
 
                       
Unused revolving credit commitments
  $ 207,400     $ 205,300     $ 295,000  
 
                       
Total leverage ratio (c)
    5.77x       6.31x       5.90x  
Interest coverage ratio (d)
    2.95x       2.65x       2.83x  
 
                       
Basic subscribers
    505,000       521,000       539,000  
High-speed data customers
    385,000       386,000       367,000  
Phone customers
    158,000       158,000       149,000  
 
                 
Primary service units
    1,048,000       1,065,000       1,055,000  
Digital customers
    309,000       319,000       311,000  
 
                 
Revenue generating units
    1,357,000       1,384,000       1,366,000  
 
                 
 
                       
Average total monthly revenue per basic subscriber (e)
  $ 110.95     $ 105.49     $ 100.61  
Average total monthly revenue per PSU (f)
  $ 53.87     $ 52.03     $ 51.88  
 
*   See Tables 3 and 4.

Page 3 of 5 


 

TABLE 3
Reconciliation of Non-GAAP Measures
(Dollars in thousands)
(Unaudited)
                         
    Three Months Ended  
Mediacom Broadband LLC:   June 30, 2011     March 31, 2011     June 30, 2010  
Free cash flow
  $ 15,789     $ 11,635     $ 10,617  
Capital expenditures
    36,742       36,712       36,318  
Dividend to preferred members
    4,500       4,500       4,500  
Other expense, net
    (374 )     (808 )     (468 )
Share-based compensation
                326  
Changes in assets and liabilities, net
    12,356       7,689       7,832  
 
                 
Net cash flows provided by operating activities
  $ 69,013     $ 59,728     $ 59,125  
 
                 
 
                       
OIBDA
  $ 83,918     $ 79,480     $ 79,059  
Depreciation and amortization
    (35,876 )     (35,212 )     (31,790 )
 
                 
Operating income
  $ 48,042     $ 44,268     $ 47,269  
 
                 
 
                       
Cash interest expense
  $ 26,887     $ 26,633     $ 27,624  
Amortization of deferred financing costs
    1,341       792       741  
 
                 
Interest expense, net
  $ 28,228     $ 27,425     $ 28,365  
 
                 
                         
    Three Months Ended  
Mediacom LLC:   June 30, 2011     March 31, 2011     June 30, 2010  
Free cash flow
  $ 18,598     $ 20,091     $ 16,852  
Capital expenditures
    27,250       19,541       24,978  
Other expense, net
    (535 )     (556 )     (666 )
Share-based compensation
                142  
Changes in assets and liabilities, net
    (13,687 )     8,605       (19,127 )
 
                 
Net cash flows provided by operating activities
  $ 31,627     $ 47,681     $ 22,179  
 
                 
 
                       
Adjusted OIBDA
  $ 69,301     $ 63,623     $ 64,628  
Investment income from affiliate
    (4,500 )     (4,500 )     (4,500 )
 
                 
OIBDA
  $ 64,801     $ 59,123     $ 60,128  
Depreciation and amortization
    (29,341 )     (29,231 )     (27,309 )
 
                 
Operating income
  $ 35,460     $ 29,892     $ 32,819  
 
                 
 
                       
Cash interest expense
  $ 23,453     $ 23,991     $ 22,798  
Amortization of deferred financing costs
    971       1,020       787  
 
                 
Interest expense, net
  $ 24,424     $ 25,011     $ 23,585  
 
                 

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TABLE 4
Use of Non-GAAP Financial Measures and Notes
“OIBDA,” “Adjusted OIBDA,” “cash interest expense” and “free cash flow” are not financial measures calculated in accordance with generally accepted accounting principles (“GAAP”) in the United States. We define OIBDA as operating income before depreciation and amortization and Adjusted OIBDA as OIBDA plus investment income from affiliate. We define cash interest expense as interest expense, net, less non-cash amortization of deferred financing costs. For Mediacom Broadband LLC, we define free cash flow as OIBDA less capital expenditures, cash interest expense and dividends to preferred members. For Mediacom LLC, we define free cash flow as Adjusted OIBDA less capital expenditures and cash interest expense. OIBDA, Adjusted OIBDA, cash interest expense and free cash flow have inherent limitations as discussed below.
OIBDA and Adjusted OIBDA are some of the primary measures used by management to evaluate our performance and to forecast future results. We believe OIBDA and Adjusted OIBDA are 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 industry. A limitation of OIBDA and Adjusted OIBDA, however, is that they exclude depreciation and amortization, which represents the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business. Management utilizes a separate process to budget, measure and evaluate capital expenditures. OIBDA and Adjusted OIBDA may not be comparable to similarly titled measures used by other companies, which may have different depreciation and amortization policies, and are key components in our covenant calculations, as defined under our debt arrangements.
Free cash flow is used by management to evaluate our ability to repay debt, and to facilitate the growth of our business with internally generated funds. A limitation of free cash flow, however, is that it may be affected by the timing of our capital spending. We believe free cash flow is useful for investors for the same reasons and provides measures that can be used to analyze value and compare companies in the cable television industry, although our measure of free cash flow may not be directly comparable to similar measures reported by other companies.
OIBDA, Adjusted OIBDA and free cash flow should not be regarded as alternatives to operating income or net income (loss) as indicators of operating performance, or to the statement of cash flows as measures of liquidity, nor should they be considered in isolation or as substitutes for financial measures prepared in accordance with GAAP. We believe that operating income is the most directly comparable GAAP financial measure to OIBDA and Adjusted OIBDA, and that net cash flows provided by operating activities is the most directly comparable GAAP financial measure to free cash flow.
Cash interest expense excludes the non-cash amortization of financing costs which were paid upon the financing of the relevant debt. We believe cash interest expense is useful for investors because it enables them to assess our cost of debt for the current period without including the non-cash amortization of financing costs that were previously paid. We believe interest expense, net, is the most directly comparable GAAP financial measure to cash interest expense.
For a reconciliation of OIBDA, Adjusted OIBDA, cash interest expense and free cash flow to their most directly comparable GAAP financial measures, see Table 3.
NOTES:
(a)   See above for information about our use of Non-GAAP financial measures.
 
(b)   Represents OIBDA as a percentage of total revenues.
 
(c)   For Mediacom Broadband LLC, represents total debt at quarter end divided by annualized OIBDA for the quarter. For Mediacom LLC, represents total debt at quarter end divided by annualized Adjusted OIBDA for the quarter.
 
(d)   For Mediacom Broadband LLC, represents OIBDA divided by cash interest expense. For Mediacom LLC, represents Adjusted OIBDA divided by cash interest expense.
 
(e)   Represents average total monthly revenues for the quarter divided by average basic subscribers for such quarter.
 
(f)   Represents average total monthly revenues for the quarter divided by average PSUs for such quarter.
 
(g)   Represents Adjusted OIBDA as a percentage of total revenues.

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