SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: February 26, 2001 MEDIACOM COMMUNICATIONS CORPORATION MEDIACOM LLC MEDIACOM CAPITAL CORPORATION (Exact names of Registrants as specified in their charters) Delaware 0-29227 06-1566067 New York 333-57285-01 06-1433421 New York 333-57285 06-1513997 (State or other jurisdiction (Commission File (IRS Employer of incorporation or organization) Numbers) Identification Nos.) 100 Crystal Run Road Middletown, New York 10941 (Address of principal executive offices) Registrants' telephone number: (845) 695-2600
Item 5. Other Events. On February 26, 2001, Mediacom Communications Corporation (the "Company") entered into four separate definitive asset purchase agreements with AT&T Broadband, LLC under which various affiliates of AT&T Broadband will sell to the Company certain cable television systems serving approximately 840,000 basic subscribers in Georgia, Illinois, Iowa and Missouri, for an aggregate purchase price of approximately $2.215 billion in cash, subject to closing adjustments. The transaction is expected to close in the second or third quarter of 2001, subject to certain closing conditions and regulatory review. On February 27, 2001, the Company issued a press release announcing that it had entered into these agreements with AT&T Broadband. A copy of such press release is attached hereto as Exhibit 99.1. Item 7. Financial Statements and Exhibits. (a) Financial Statements - None (b) Pro Forma Financial Information - None (c) Exhibits: Exhibit No. Description ---------- ----------- 99.1 Press release dated February 27, 2001
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Mediacom Communications Corporation (Registrant) Date: March 2, 2001 By: /s/ Mark Stephan --------------------------------- Mark Stephan Senior Vice President and Chief Financial Officer
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 LLC (Registrant) Date: March 2, 2001 By: /s/ Mark Stephan -------------------------------- Mark Stephan Senior Vice President and Chief Financial Officer
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 Capital Corporation (Registrant) Date: March 2, 2001 By: /s/ Mark Stephan ------------------------------ Mark Stephan Senior Vice President and Chief Financial Officer
Exhibit 99.1 [LOGO] For Immediate Release Mediacom Communications Reports Record Results for Fourth Quarter and Fiscal Year 2000 Announces Agreement to Acquire 840,000 Basic Subscribers from AT&T Broadband for $2.215 Billion - -------------------------------------------------------------------------------- Middletown, NY --- February 27, 2001 --- MEDIACOM COMMUNICATIONS CORPORATION (Nasdaq: MCCC) today reported record results for the fourth quarter and fiscal year ended December 31, 2000. For the fourth quarter of 2000, the Company reported revenues of $87.5 million, an increase of 39.3% from the $62.8 million recorded in the fourth quarter of 1999. EBITDA (operating loss before depreciation, amortization and non-cash stock charges) increased by 44.2% to $41.0 million from the $28.4 million recorded in the fourth quarter 1999. For the twelve months ended December 31, 2000, the Company reported revenues of $332.1 million, an increase of 88.6% from the $176.1 million recorded in the corresponding period of 1999. EBITDA increased by 99.7% to $156.0 million from the $78.1 million recorded in the corresponding period of 1999. The Company's results for the three and twelve months ended December 31, 2000 include several acquisitions completed subsequent to the third quarter of 1999. The following pro forma results assume that these acquisitions were completed on January 1, 1999. For the fourth quarter of 2000, pro forma revenues and EBITDA increased by 9.9% and 14.2%, respectively, over the fourth quarter of 1999. For the twelve months ended December 31, 2000, pro forma revenues and EBITDA increased by 9.5% and 14.8%, respectively, over the corresponding period of 1999. At December 31, 2000, the Company served 779,000 basic subscribers, representing a year-over- year pro forma growth rate of 1.1%. At the end of the fourth quarter of 2000, the Company served 40,000 digital cable customers and 15,600 data customers, compared to 7,300 and 5,400 customers, respectively, on a pro forma basis, at year-end 1999. Rocco B. Commisso, Mediacom's Chairman and CEO, said, "Our solid fourth quarter results are a fitting conclusion to a year of significant achievements for Mediacom and its employees. In 2000, we completed a successful initial public offering, integrated the Triax cable systems while consummating nine additional accretive acquisitions, reached the ambitious cable system upgrade targets that we revised upward earlier in the year, and accelerated the launches of digital and cable modem services to our customers. Mediacom has established an outstanding foundation for future growth. In 2001 and beyond, we anticipate that the substantial investments we have already made in our cable network will provide enormous opportunities to deploy advanced broadband services to our customer base."
For the year ended December 31, 2000, capital expenditures were $183.5 million, reflecting both the capital invested in upgrading the cable systems acquired in 2000 and the Company's previously announced acceleration of its network upgrade program. Including the cable systems acquired in 2000, approximately 74% of the Company's cable network was upgraded to 550MHz - 750MHz bandwidth capacity and 47% of its homes passed were activated with two-way communications capability as of December 31, 2000. At year-end 2000, Mediacom's digital cable service was available to 400,000 digital-ready basic subscribers, and the Company offered cable modem service in cable systems with 486,000 data-ready homes marketed. During the fourth quarter of 2000, the Company completed three separate acquisitions of cable systems serving, in total, approximately 34,000 basic subscribers for an aggregate purchase price of $77.1 million. All three acquisitions are within the Company's operating clusters in the Southeast, Midwest and North Central regions. In 2000, the Company completed a total of nine acquisitions of cable systems serving approximately 53,000 basic subscribers for an aggregate purchase price of $109.2 million. At December 31, 2000, Mediacom's total indebtedness was approximately $987 million. For the fourth quarter, the Company's debt leverage ratio (defined as total debt at period end divided by pro forma annualized EBITDA for the period) was 5.9x and its interest coverage ratio (defined as EBITDA divided by interest expense) was 2.3x. At December 31, 2000, the Company had approximately $437 million of unused credit commitments. In December 2000, SoftNet Systems, Inc. announced plans to cease operations of its wholly-owned subsidiary ISP Channel, Inc. during the first quarter of 2001. ISP Channel was the third party provider of high-speed Internet access to the Company's cable modem customers. As of January 31, 2001, the Company formally terminated its relationship with SoftNet and ISP Channel in all material respects and is in the process of transitioning its cable modem customers to the Excite@Home service (as described below). The Company is currently determining the non-cash impact on its consolidated financial statements of the termination of the SoftNet agreement. In addition, as of December 31, 2000, the Company held shares of SoftNet common stock with an original basis of approximately $32.9 million. During the fourth quarter of 2000, the Company determined that the decline in the fair value of these shares was other than temporary and, as a result, a non-cash charge of $28.5 million was recorded as a realized loss in other expenses in its consolidated statements of operations. In December 2000, the Company entered into a binding letter commitment with At Home Network Solutions, Inc., a partially-owned subsidiary of At Home Corporation, for a new cable affiliate relationship. Subject to the completion of a final definitive agreement with At Home Solutions, this new affiliation will enable the Company to offer the Excite@Home high-speed broadband Internet service to its customers, who were previously served by ISP Channel. On January 24, 2001, the Company, through its wholly-owned direct and indirect subsidiaries, Mediacom LLC and Mediacom Capital Corporation, completed an offering of $500 million of 9 1/2% senior notes due 2013. Approximately $467.5 million of the net proceeds were used to repay a substantial portion of the indebtedness outstanding and related accrued interest under the Company's subsidiary credit facilities. The balance of the net proceeds is being used for general corporate purposes. After giving effect to this senior note offering and the application of the proceeds therefrom, the Company now has approximately $900 million of unused credit commitments. Page 2 of 9
On February 7, 2001, the Company filed a Form S-3 registration statement with the Securities and Exchange Commission under which the Company may sell any combination of common and preferred stock, debt securities, warrants and subscription rights for a maximum aggregate amount of $1.0 billion. The Securities and Exchange Commission declared this registration statement effective on February 13, 2001. 2001 Outlook The following guidance is for cable systems owned and operated by the Company as of December 31, 2000. In 2001, the Company estimates basic subscriber growth of 1.0% to 1.3%. The Company also estimates that in 2001 it will achieve pro forma revenue growth of between 12.0% and 14.0% and pro forma EBITDA growth of between 11.5% and 13.5%. Capital expenditures are projected at between $180 million and $200 million. The Company expects to continue its aggressive cable network upgrade program. The Company forecasts that by the end of 2001, approximately 90% of its cable network will be upgraded to 550MHz-860MHz bandwidth capacity and approximately 80% of its homes passed will have two-way communications capability. By year-end 2001, the Company expects to have launched digital and cable modem services in cable systems with 550,000 digital-ready basic subscribers and 940,000 data-ready homes passed, respectively. At the same period end, the Company anticipates having between 90,000 and 100,000 digital cable customers and between 45,000 and 50,000 data customers. Acquisition of AT&T Broadband Cable Systems The Company and AT&T Broadband today announced that they have entered into four separate definitive asset purchase agreements under which various affiliates of AT&T Broadband will sell to the Company certain cable television systems serving approximately 840,000 basic subscribers in Georgia, Illinois, Iowa and Missouri, for an aggregate purchase price of approximately $2.215 billion in cash, subject to closing adjustments. The transaction, which was approved by the boards of directors of both companies, is expected to close in the second or third quarter of 2001, subject to certain closing conditions and regulatory review. Credit Suisse First Boston, JPMorgan, and Salomon Smith Barney served as financial advisors to the Company. Upon completion of this transaction with AT&T Broadband, the Company will be the 8th largest cable operator in the United States, serving approximately 1.6 million basic subscribers in 23 states, and the largest cable operator in the state of Iowa, serving approximately 525,000 basic subscribers. Among the largest clusters are the communities of Albany, Columbus, Tifton and Valdosta in southern Georgia; Charleston, Carbondale, Effingham and Marion, in southern and southeastern Illinois; Ames, Cedar Rapids, Clinton, Des Moines, Dubuque, Fort Dodge, Iowa City, Mason City, the Quad Cities area (which includes certain systems in Illinois) and Waterloo, Iowa; and Columbia, Jefferson City and Springfield, Missouri. Page 3 of 9
In commenting on this potential acquisition, Mr. Commisso stated, "We are embarking on another new and exciting chapter in the growth story of Mediacom. This transaction with AT&T Broadband represents a unique opportunity to purchase highly attractive systems, including several serving the top 100 markets. And, for the second time in two years, we'll be doubling the size of the Company. Our excellent management team has proven itself time and time again as a successful acquirer and integrator of cable systems, having successfully completed 20 acquisitions in the last five years to build the quality company that Mediacom is today. Overall, we are excited by the opportunities this transaction presents, not only for our new customers, but also for our investors, our employees, and the dedicated AT&T field staff that we will warmly welcome into the Mediacom family." Mr. Commisso added, "AT&T Broadband has done a tremendous job launching in these systems digital cable and high-speed Internet services. This, in part, reflects the fact that about half of the subscribers are served by systems that have been upgraded to 550MHz to 860MHz bandwidth capacity. In keeping with Mediacom's operating strategy and our commitment to first-class customer service, we intend to aggressively upgrade the remaining AT&T Broadband cable systems and deliver to all of our new customers in these communities a state-of-the-art offering of advanced broadband services." Included with this press release as Attachment 4 are summary pro forma operating data as of December 31, 2000 and selected pro forma operating results for the twelve months ended December 31, 2000 for Mediacom Communications and the AT&T Broadband cable systems, individually and combined. All information relating to the AT&T Broadband cable systems has been furnished by AT&T Broadband, is unaudited, subject to normal year end adjustments, and has not been independently verified by the Company. Teleconference The Company will hold a teleconference to discuss its fourth quarter and full year 2000 results, the outlook for 2001, and the acquisition of the above mentioned AT&T Broadband cable systems, today at 11:00 a.m. EST. A live broadcast of the Company's teleconference can be accessed through the Company web site at www.mediacomcc.com. Participants should go to the Investor Relations link at least 10 minutes prior to the start time to register. The teleconference will be archived on the website until March 27, 2001. Company Description Mediacom is the 8th largest cable television company in the United States, after giving effect to the acquisition of the AT&T Broadband cable systems. On a pro forma basis, the Company's cable systems pass approximately 2.6 million homes and serve approximately 1.6 million basic subscribers in 23 states. The Company offers an array of broadband services, including cable television, advanced digital video programming and high-speed Internet access. The Company was founded in July 1995 by Rocco B. Commisso to acquire and operate cable television systems serving principally non-metropolitan markets in the United States. More information about Mediacom can be accessed on the Internet at: www.mediacomcc.com. Page 4 of 9
Any statements in this press release that are not historical facts are forward- looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical results or those the Company anticipates. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see the reports and documents the Company files from time to time with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) publicly update or alter its forward-looking statements made in this press release, whether as a result of new information, future events or otherwise. Attachments (1) Selected Pro Forma Operating Results (2) Historical Results of Operations (3) Summary Actual and Pro Forma Operating Data (4) Summary Pro Forma Operating Data and Selected Pro Forma Operating Results for Mediacom Communications and the AT&T Broadband Acquisition Contact Mark E. Stephan Senior Vice President and Chief Financial Officer 845-695-2640 mstephan@mediacomcc.com Page 5 of 9
(1) Selected Pro Forma Operating Results The following table presents selected pro forma results for the three and twelve months ended December 31, 2000 and 1999, including the results of the Company's acquisitions as if such acquisitions had occurred on January 1, 1999: MEDIACOM COMMUNICATIONS CORPORATION Pro Forma Operating Results (Dollars in thousands) (Unaudited) Pro Forma(a) Pro Forma(a) Three Months Ended Twelve Months Ended December 31, Percent December 31, Percent ------------------- ------------------- 2000 1999 Change 2000 1999 Change ---------- ------- ------- ------ -------- -------- ------ Revenues $89,747 $81,696 9.9% $348,391 $318,086 9.5% Service costs 31,229 28,278 10.4 120,578 108,049 11.6 SG&A expenses 15,018 14,407 4.2 58,552 56,718 3.2 ------- ------- ----- -------- --------- ------ System cash flow 43,500 39,011 11.5 169,261 153,319 10.4 Corporate expenses 1,500 2,242 (33.1) 6,029 11,175 (46.0) ------- ------- ------ -------- -------- ------ EBITDA $42,000 $36,769 14.2% $163,232 $142,144 14.8% ======= ======= ====== ======== ======== ====== EBITDA Margin 46.8% 45.0% 46.9% 44.7% (a) The above pro forma operating results give effect to the following transactions as though they occurred on January 1, 1999: . the October 1999 acquisition of Zylstra Communications Corporation; . the November 1999 acquisition of cable systems owned by Triax Midwest Associates, L.P.; . the April 2000 acquisitions of cable systems owned by MidAmerican Cable Systems, L.P. and Rapid Communications Partners, L.P.; . the May 2000 acquisition of a cable system owned by Tri Cable, Inc.; . the June 2000 acquisition of a cable system owned by Spirit Lake Cable TV, Inc.; . the July 2000 acquisition of a cable system owned by South Kentucky Services Corporation; . the August 2000 acquisition of cable systems owned by Dowden Midwest Cable Partners, L.P.; . the October 2000 acquisition of cable systems owned by Illinet Communications of Central Illinois, L.L.C.; . the October 2000 acquisition of cable systems owned by Satellite Cable Services, Inc.; and . the December 2000 acquisition of cable systems in Fairhope, Alabama owned by AT&T Broadband, LLC The information presented above is not necessarily indicative of what results would have been had the Company operated these cable systems since the beginning of 1999. Page 6 of 9
(2) Historical Results of Operations The following table presents the actual results for the three and twelve months ended December 31, 2000 and 1999: MEDIACOM COMMUNICATIONS CORPORATION Consolidated Statements of Operations (All amounts in thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ---------------------- Percent --------------------- Percent 2000 1999 Change 2000 1999 Change --------- ------ -------- ------ Revenues $ 87,537 $ 62,822 39.3% $ 332,050 $176,052 88.6% Service costs 30,421 21,486 41.6 114,234 58,058 96.8 SG&A expenses 14,649 11,133 31.6 55,820 32,949 69.4 Corporate expenses 1,500 1,800 (16.7) 6,029 6,951 (13.3) Depreciation and amortization 49,080 34,911 40.6 178,331 101,065 76.5 Non-cash stock charges 658 15,445 (95.7) 28,254 15,445 82.9 --------- -------- ----- --------- -------- ------ Operating loss (8,771) (21,953) (60.0) (50,618) (38,416) 31.8 --------- -------- ----- --------- -------- ------ Interest expense, net 17,511 17,240 1.6 68,955 37,817 82.3 Other expenses(a) 28,800 4,108 601.1 30,024 5,087 490.2 --------- -------- ----- --------- -------- ------ Net loss before income taxes (55,082) (43,301) 27.2 (149,597) (81,320) 84.0 (Benefit) provision for income taxes (1,134) - - 250 - - --------- -------- ----- --------- -------- ------ Net loss $ (53,948) $(43,301) 24.6% $(149,847) $(81,320) 84.3% ========= ======== ===== ========= ======== ====== Basic and diluted loss per share ($0.60) ($2.43) ($1.79) ($7.82) Weighted average common shares outstanding(b) 89,944 17,849 83,803 10,404 EBITDA $ 40,967 $ 28,403 44.2% $ 155,967 $ 78,094 99.7% ========= ======== ===== ========= ======== ====== _________________ (a) Includes a $28.5 million non-cash realized loss, recorded in the three month period ended December 31, 2000, resulting from a decline in the fair value of the Company's SoftNet shares. (b) The number of weighted average common shares outstanding for the year ended December 31, 2000 and for the 1999 periods is a pro forma calculation based upon ownership of the Company prior to its initial public offering in February 2000. Page 7 of 9
(3) Summary Actual and Pro Forma Operating Data MEDIACOM COMMUNICATIONS CORPORATION Actual Pro Forma Pro Forma December 31, September 30, December 31, 2000 2000(a) 1999(a) ------------ ------------ ------------ Homes passed 1,173,000 168,000 1,156,600 Basic subscribers 779,000 777,000 770,600 Basic penetration 66.4% 66.5% 66.6% Premium service units(b) 597,000 573,000 615,000 Premium penetration 76.6% 73.7% 79.8% Average monthly revenues per basic subscriber(c) $ 38.45 $ 38.03 $ 35.39 Digital Cable Digital-ready basic subscribers 400,000 336,000 182,000 Digital customers 40,000 28,000 7,300 Digital penetration 10.0% 8.3% 4.0% Data Data-ready homes passed 550,000 375,000 146,000 Data-ready homes marketed 486,000 354,000 131,000 Dial-up customers 3,600 3,800 4,600 Cable modem customers 12,000 7,600 800 ----------- ---------- ------------ Total data customers 15,600 11,400 5,400 Data penetration 3.2% 3.2% 4.1% Percentage of basic subscribers at 550MHz - 750MHz 74% 69% 55% - ----------------------- (a) The pro forma summary operating data give effect to the following transactions as if they occurred on January 1, 1999: . the October 1999 acquisition of Zylstra Communications Corporation; . the November 1999 acquisition of cable systems from Triax Midwest Associates, L.P.; . the April 2000 acquisitions of cable systems from MidAmerican Cable Systems, L.P. and Rapid Communications Partners, L.P.; . the May 2000 acquisition of a cable system owned by Tri Cable, Inc.; . the June 2000 acquisition of a cable system owned by Spirit Lake Cable TV, Inc.; . the July 2000 acquisition of a cable system owned by South Kentucky Services Corporation; . the August 2000 acquisition of cable systems owned by Dowden Midwest Cable Partners, L.P.; . the October 2000 acquisition of cable systems owned by Illinet Communications of Central Illinois, L.L.C.; . the October 2000 acquisition of cable systems owned by Satellite Cable Services, Inc.; and . the December 2000 acquisition of cable systems in Fairhope, Alabama owned by AT&T Broadband, LLC (b) Reflects the migration of the Disney Channel as a premium service to a basic programming service. (c) Represents average monthly revenues for the last three months of the period divided by average basic subscribers for such period, assuming all acquisitions were completed at beginning of period. Page 8 of 9
(4) Summary Pro Forma Operating Data and Selected Pro Forma Operating Results for Mediacom Communications and the AT&T Broadband Acquisition(a) The following tables present summary pro forma operating data at December 31, 2000 and selected pro forma operating results for the twelve months ended December 31, 2000 for Mediacom Communications Corporation and the AT&T Broadband cable systems being acquired: Summary Pro Forma Operating Data Mediacom AT&T Communications Broadband Combined ---------------- ----------- ---------- Homes passed 1,173,000 1,397,000 2,570,000 Miles of plant 24,500 18,860 43,360 Density 48 74 59 Basic subscribers 779,000 840,000 1,619,000 Basic penetration 66.4% 60.1% 63.0% Average monthly revenues per basic subscriber(b) $37.47 $43.39 $40.55 Digital Cable Digital-ready basic subscribers 400,000 783,000 1,183,000 Digital customers 40,000 214,000 254,000 Digital penetration 10.0% 27.3% 21.5% Data Data-ready homes passed 550,000 646,000 1,196,000 Data-ready homes marketed 486,000 571,000 1,057,000 Total data customers 15,600 49,400 65,000 Data penetration 3.2% 8.7% 6.1% Percentage of basic subscribers at 550MHz - 860MHz 74% 50% 62% Selected Pro Forma Operating Results (Dollars in thousands) (Unaudited) Mediacom AT&T Communications Broadband Combined ---------------- ----------- ---------- Revenues $348,391 $438,009 $786,400 Service costs 120,578 176,273 296,851 SG&A expenses 58,552 85,597 144,149 System cash flow 169,261 176,139 345,400 System Cash Flow Margin 48.6% 40.2% 43.9% _________________________ (a) All information relating to the AT&T Broadband cable systems has been furnished by AT&T Broadband, is unaudited, subject to normal year end adjustments, and has not been independently verified by the Company. (b) Average for the twelve month period. Page 9 of 9