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

MEDIACOM COMMUNICATIONS CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware		0-29227		06-1566067
(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 November 2, 2006, Mediacom Communications Corporation issued a press release announcing its financial results for the quarter ended September 30, 2006. 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 adjusted operating income before depreciation and amortization (“Adjusted OIBDA”) and free cash flow, which are not measures of performance calculated in accordance with generally accepted accounting principles (GAAP) in the United States. Reconciliations of Adjusted OIBDA and free cash flow to the most directly comparable financial measures calculated and presented in accordance with GAAP are presented in Table 6 of the press release. Disclosure regarding management’s reasons for presenting Adjusted OIBDA and free cash flow appears on page 3 of the press release.

Item 9.01. Financial Statements and Exhibits.

(a)		Financial Statements of Businesses Acquired — None
(b)		Pro Forma Financial Information — None
(c)		Shell Company Transactions — None
(d)		Exhibits:

Exhibit No.		Description
99.1		Press release issued by the Registrant on November 2, 2006

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: November 2, 2006

		Mediacom Communications Corporation
		By:		/s/ Mark E. Stephan
				Mark E. Stephan
				Executive Vice President and
				Chief Financial Officer

For Immediate Release

Mediacom Communications Reports Results
for Third Quarter 2006

Middletown, NY – November 2, 2006 – MEDIACOM COMMUNICATIONS CORPORATION (Nasdaq: MCCC) today reported financial results for the three and nine months ended September 30, 2006. The Company will hold a teleconference to discuss its third quarter 2006 results today at 10:30 a.m. Eastern Time. A live broadcast of the Company’s teleconference can be accessed through the Company web site at www.mediacomcc.com.

Third Quarter 2006 Financial Highlights

	•		Revenues of $305.6 million, an increase of 11.1% over Q3 2005
	•		Adjusted operating income before depreciation and amortization (“Adjusted OIBDA”) of $110.8 million, an increase of 10.3% over Q3 2005 1
	•		Operating income of $56.0 million, an increase of 23.9% over Q3 2005
	•		Total revenue generating units (“RGUs”) of 2,535,000, which represents an increase of 7.4% from Q3 2005
	•		Total monthly revenue per basic subscriber of $72.91, an increase of 14.4% over Q3 2005

“In the third quarter, Mediacom delivered its strongest financial performance since 2002,” said Rocco B. Commisso, Mediacom’s Chairman and CEO. “Our double-digit growth rates in both Revenues and Adjusted OIBDA were supported by favorable trends in all segments of our business. Quarterly RGU growth was the second-best in our history, but just as important we achieved the highest basic ARPU growth rates ever. Our results demonstrate that we have found the right balance between pricing and unit growth for our products. As Mediacom Phone rolls out to more of our customer base, it should only strengthen our competitive positioning in the marketplace,” concluded Mr. Commisso.

Three Months Ended September 30, 2006 Compared to Three Months Ended September 30, 2005

For the third quarter of 2006, revenues were $305.6 million, an increase of 11.1% over $275.0 million in the comparable 2005 period.

•

Video revenues increased 4.8%, as a result of basic rate increases applied on video subscribers and higher service fees from advanced video products and services. During the third quarter, the Company lost 6,000 basic subscribers compared to a loss of 17,000 for the same period last

			year, which included the loss of 9,000 basic subscribers as a result of Hurricane Katrina. Average monthly video revenue per basic subscriber grew 7.8% from the third quarter of 2005 to $52.89.
	•		Data revenues rose 22.0%, primarily due to a 20.1% year-over-year increase in data customers. Largely as a result of the expiration of promotional offers taken in 2005, average monthly data revenue per customer increased 1.2% from the prior year period to $38.17 and grew 1.0% sequentially from $37.79 in the second quarter of 2006.
	•		Phone revenues grew 32.8% sequentially from the previous quarter to $7.7 million. As of September 30, 2006, the Company served 83,000 phone customers, and Mediacom Phone was marketed to approximately 1.85 million of the Company’s 2.8 million estimated homes passed.
	•		Advertising revenues increased 14.3%, largely as a result of stronger local advertising sales and, to a lesser extent, political advertising.

Operating costs grew 11.6%, primarily due to increases in programming and employee expenses and phone and data customer growth. As a result, Adjusted OIBDA rose 10.3%. Operating income increased 23.9%, principally due to growth in Adjusted OIBDA and slightly lower depreciation and amortization expense compared to the third quarter of 2005.

Net loss for the three months ended September 30, 2006 was $89.8 million compared to a net loss of $2.7 million for the three months ended September 30, 2005. The increase in net loss was driven by several factors: loss on early extinguishment of debt of $28.3 million due to the Company’s redemption of its 11% senior notes due 2013 (the “11% Notes”); loss on derivatives, net of $15.9 million due to the quarterly mark-to-market of the Company’s interest rate hedging agreements; and provision for income taxes of $42.4 million due to a non-cash charge relating to the Company’s deferred tax asset position.

Liquidity and Capital Resources

The Company has included the Condensed Statements of Cash Flows for the nine months ended September 30, 2006 and 2005 in Table 4 to provide more details regarding its liquidity and capital resources.

Significant sources of cash for the nine months ended September 30, 2006 were:

	•		Generation of net cash flows from operating activities of approximately $95.8 million; and
	•		Net borrowings of about $663.4 million under the Company’s bank credit facilities.

Significant uses of cash for the nine months ended September 30, 2006 were:

	•		Capital expenditures of $156.7 million;
	•		Redemption of $400.0 million of the 11% Notes;
	•		Repayment of $172.5 million of 5.25% convertible senior notes due July 1, 2006; and
	•		Repurchases of approximately 5.8 million shares of Class A common stock for $34.4 million.

Free Cash Flow, as defined by the Company below, was positive $6.8 million for the nine months ended September 30, 2006, as compared to negative $27.8 million in the prior year period.

Financing Transactions

On July 17, 2006, the Company redeemed all of the 11% Notes at a redemption price of 105.5%. The Company funded the redemption with drawdowns on the revolving credit portions of its subsidiary credit facilities.

On October 5, 2006, the Company issued $300.0 million of aggregate principal amount of 8.5% senior notes due 2015 (the “8.5% Notes”). The Company used the proceeds of the issuance of the 8.5% Notes to reduce amounts outstanding under the revolving credit portion of its subsidiary credit facilities.

Financial Position

At September 30, 2006, the Company had total debt outstanding of $3,150.6 million. As of the same date, the Company had unused credit commitments of approximately $551.4 million, of which approximately $370.7 million could be borrowed and used for general corporate purposes based on the terms and conditions of the Company’s debt arrangements.

As of September 30, 2006, after giving effect to the issuance of the 8.5% Notes, the Company had unused credit commitments of approximately $848.4 million, of which approximately $667.7 million could be borrowed and used for general corporate purposes based on the terms and conditions of the Company’s debt arrangements.

Use of Non-GAAP Financial Measures

“Adjusted OIBDA” and “Free Cash Flow” are not financial measures calculated in accordance with generally accepted accounting principles (GAAP) in the United States. The Company defines Adjusted OIBDA as operating income before depreciation and amortization and non-cash, share-based compensation charges, and defines Free Cash Flow as Adjusted OIBDA less interest expense, net, cash taxes and capital expenditures.

Adjusted OIBDA is one of the primary measures used by management to evaluate the Company’s performance and to forecast future results. The Company believes Adjusted OIBDA is useful for investors because it enables them to assess the Company’s 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 the Company’s 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 the Company’s non-cash, share-based compensation charges.

Free Cash Flow is used by management to evaluate the Company’s ability to service its debt and to fund continued growth with internally generated funds. The Company believes Free Cash Flow is useful for investors because it enables them to assess the Company’s ability to service its debt and to fund continued growth with internally generated funds in a manner similar to the method used by management, and provide measures that can be used to analyze, value and compare companies in the cable television industry. The Company’s definition of Free Cash Flow eliminates the impact of quarterly working capital fluctuations, most notably from the timing of semi-annual cash interest payments on the Company’s senior notes.

Adjusted OIBDA and Free Cash Flow should not be regarded as alternatives to either operating income, net income or net 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. The Company believes that operating income is the most directly comparable GAAP financial measure to Adjusted OIBDA, and that net cash flows provided by operating activities is the most directly comparable GAAP financial measure to Free Cash Flow. Reconciliations of historical presentations of Adjusted OIBDA and Free Cash Flow to their most directly comparable GAAP financial measures are provided in Table 6.

Company Description

Mediacom Communications is the nation’s 8th largest cable television company, and among the leading cable operators focused on serving the smaller cities and towns in the United States. Mediacom Communications offers a wide array of broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high-definition television, high-speed Internet access and phone service. More information about Mediacom Communications can be accessed on the Internet at: www.mediacomcc.com.

Forward Looking Statements

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. In some cases, you can identify those 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 the Company anticipates. Factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to: competition in the Company’s video, high-speed Internet access and phone businesses; the Company’s ability to achieve anticipated customer and revenue growth and to successfully introduce new products and services; increasing programming costs; changes in laws and regulations; the Company’s ability to generate sufficient cash flow to meet its debt service obligations and to access capital to maintain financial flexibility; and the other risks and uncertainties described in the Company’s annual report on Form 10-K for the year ended December 31, 2005 and the other reports and documents the Company files from time to time with the Securities and Exchange Commission. Statements included in this press release are based upon information known to the Company as of the date of this press release, and the Company assumes 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, except as otherwise required by applicable federal securities laws.

(1) Actual Results — Three-Month Periods

Consolidated Statements of Operations
(All amounts in thousands, except per share data)
(Unaudited)

		Three Months Ended
		September 30,								Percent
		2006				2005				Change
Video		$	221,650			$	211,561				4.8	%
Data			60,698				49,753				22.0
Phone			7,696				77			NM
Advertising			15,512				13,568				14.3
Total revenues		$	305,556			$	274,959				11.1	%
Service costs		$	124,320			$	111,364				11.6	%
SG&A expenses			65,019				58,019				12.1
Corporate expenses			5,455				5,168				5.6
Total operating costs		$	194,794			$	174,551				11.6	%
Adjusted OIBDA		$	110,762			$	100,408				10.3	%
Non-cash, share-based compensation charges			1,227				396			NM
Depreciation and amortization			53,572				54,851				(2.3	)
Operating income		$	55,963			$	45,161				23.9	%
Interest expense, net		$	(57,125	)		$	(52,374	)			9.1	%
Loss on early extinguishment of debt			(28,298	)			—			NM
(Loss) gain on derivatives, net			(15,851	)			5,092			NM
Gain on sale of assets and investments, net			—				1,445			NM
Other expense			(2,124	)			(2,047	)			3.8
Loss before provision for income taxes			(47,435	)			(2,723	)		NM
Provision for income taxes			(42,392	)			(8	)		NM
Net loss		$	(89,827	)		$	(2,731	)		NM
Basic weighted average shares outstanding			109,689				116,864
Basic income (loss) per share		$	(0.82	)		$	(0.02	)
Diluted weighted average shares outstanding			109,689				116,864
Diluted income (loss) per share		$	(0.82	)		$	(0.02	)
Adjusted OIBDA margin (a)			36.2	%			36.5	%
Operating income margin (b)			18.3	%			16.4	%

(2) Actual Results — Nine-Month Periods

Consolidated Statements of Operations
(All amounts in thousands, except per share data)
(Unaudited)

		Nine Months Ended
		September 30,								Percent
		2006				2005				Change
Video		$	661,741			$	637,256				3.8	%
Data			173,604				142,733				21.6
Phone			17,138				77			NM
Advertising			44,843				38,469				16.6
Total revenues		$	897,326			$	818,535				9.6	%
Service costs		$	364,596			$	325,674				12.0	%
SG&A expenses			183,561				171,763				6.9
Corporate expenses			15,904				15,655				1.6
Total operating costs		$	564,061			$	513,092				9.9	%
Adjusted OIBDA		$	333,265			$	305,443				9.1	%
Non-cash, share-based compensation charges			3,280				937			NM
Depreciation and amortization			161,473				162,530				(0.7	)
Operating income		$	168,512			$	141,976				18.7	%
Interest expense, net		$	(169,667	)		$	(153,784	)			10.3	%
Loss on early extinguishment of debt			(35,831	)			(4,742	)		NM
(Loss) gain on derivatives, net			(14,528	)			11,513			NM
Gain on sale of assets and investments, net			—				2,628			NM
Other expense, net			(7,750	)			(7,276	)			6.5
Loss before (provision for) benefit from income taxes			(59,264	)			(9,685	)		NM
(Provision for) benefit from income taxes			(62,045	)			124			NM
Net loss		$	(121,309	)		$	(9,561	)		NM
Basic and diluted weighted average shares outstanding			111,366				117,401
Basic and diluted loss per share		$	(1.09	)		$	(0.08	)
Adjusted OIBDA margin (a)			37.1	%			37.3	%
Operating income margin (b)			18.8	%			17.3	%

(3) Condensed Consolidated Balance Sheets

Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)

		September 30,				December 31,
		2006				2005
ASSETS
Cash and cash equivalents		$	26,158			$	17,281
Accounts receivable, net			71,641				63,845
Prepaid expenses and other assets			22,066				23,046
Deferred tax assets			2,547				2,782
Total current assets		$	122,412			$	106,954
Investment in cable television systems
Property, plant and equipment, net		$	1,451,702			$	1,453,588
Franchise rights, net			1,803,898				1,803,971
Goodwill, net			221,382				221,382
Subscriber lists and other intangible assets, net			12,348				13,823
Total investment in cable television systems		$	3,489,330			$	3,492,764
Other assets, net			31,139				49,780
Total assets		$	3,642,881			$	3,649,498
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Accounts payable and accrued expenses		$	252,800			$	270,137
Deferred revenue			45,807				41,073
Current portion of long-term debt			66,628				222,770
Total current liabilities		$	365,235			$	533,980
Long-term debt, less current portion		$	3,083,934			$	2,836,881
Deferred tax liabilities			261,740				200,090
Other non-current liabilities			24,707				19,440
Total stockholders’ (deficit) equity			(92,735	)			59,107
Total liabilities and stockholders’ (deficit) equity		$	3,642,881			$	3,649,498

(4) Condensed Statements of Cash Flows

Condensed Statements of Cash Flows
(Dollars in thousands)
(Unaudited)

		Nine Months Ended
		September 30,
		2006				2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash flows provided by operating activities		$	95,807			$	121,151
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(156,652	)			(179,230	)
Proceeds from sale of assets and investments			—				4,616
Net cash flows used in investing activities		$	(156,652	)		$	(174,614	)
CASH FLOWS FROM FINANCING ACTIVITIES:
New borrowings		$	2,106,000			$	778,750
Repayment of debt			(1,442,590	)			(720,037	)
Repayment/redemption of senior notes			(572,500	)			(202,834	)
Issuance of senior notes			—				200,000
Repurchases of common stock			(34,386	)			(6,335	)
Proceeds from issuance of common stock in employee stock purchase plan			910				954
Other financing activities – book overdrafts			12,481				(8,989	)
Financing costs			(193	)			(6,330	)
Net cash flows provided by financing activities		$	69,722			$	35,179
Net increase (decrease) in cash and cash equivalents		$	8,877			$	(18,284	)
CASH AND CASH EQUIVALENTS, beginning of period			17,281				23,875
CASH AND CASH EQUIVALENTS, end of period		$	26,158			$	5,591
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest, net of amounts capitalized		$	200,689			$	184,425

(5) Capital Expenditure Data

(Dollars in thousands)
(Unaudited)

		Nine Months Ended
		September 30,
		2006				2005
Customer premise equipment		$	79,765			$	96,616
Scalable infrastructure			21,097				21,749
Line extensions			10,614				14,704
Upgrade/Rebuild			29,519				31,836
Support capital			15,657				14,325
Total		$	156,652			$	179,230

(6) Reconciliation Data — Historical

Reconciliation of Adjusted OIBDA to Operating Income
(Dollars in thousands)
(Unaudited)

		Three Months Ended
		September 30,
		2006				2005
Adjusted OIBDA		$	110,762			$	100,408
Non-cash, share-based compensation charges			(1,227	)			(396	)
Depreciation and amortization			(53,572	)			(54,851	)
Operating income		$	55,963			$	45,161

		Nine Months Ended
		September 30,
		2006				2005
Adjusted OIBDA		$	333,265			$	305,443
Non-cash, share-based compensation charges			(3,280	)			(937	)
Depreciation and amortization			(161,473	)			(162,530	)
Operating income		$	168,512			$	141,976

(6) Reconciliation Data — Historical (cont)

Reconciliation of Free Cash Flow to Net Cash Flows
Provided by Operating Activities
(Dollars in thousands)
(Unaudited)

		Nine Months Ended
		September 30,
		2006				2005
Free Cash Flow		$	6,779			$	(27,805	)
Capital expenditures			156,652				179,230
Other expenses			(24,368	)			(1,176	)
Non-cash, share-based compensation charges			(3,280	)			(937	)
Change in assets and liabilities, net			(39,976	)			(28,161	)
Net cash flows provided by operating activities		$	95,807			$	121,151

(7) Calculation — Free Cash Flow

(Dollars in thousands)
(Unaudited)

		Three Months Ended
		September 30,
		2006				2005
Adjusted OIBDA		$	$110,762			$	$100,408
Cash taxes			(55	)			(45	)
Capital expenditures			(51,871	)			(67,352	)
Interest expense, net			(57,125	)			(52,374	)
Free Cash Flow		$	1,711			$	(19,363	)

		Nine Months Ended
		September 30,
		2006				2005
Adjusted OIBDA		$	333,265			$	305,443
Cash taxes			(167	)			(234	)
Capital expenditures			(156,652	)			(179,230	)
Interest expense, net			(169,667	)			(153,784	)
Free Cash Flow		$	6,779			$	(27,805	)

(8) Summary Operating Statistics (Unaudited)

		Actual				Actual				Actual
		September 30,				June 30,				September 30,
		2006				2006				2005
Estimated homes passed			2,817,000				2,813,000				2,802,000
Total revenue generating units (RGUs) (a)			2,535,000				2,478,000				2,361,000
Quarterly net RGU additions			57,000				9,000				34,000
RGU penetration(b)			90.0	%			88.1	%			84.3	%
Total monthly revenue per RGU(c)		$	40.64			$	40.75			$	39.10
Customer relationships(d)			1,454,000				1,459,000				1,477,000
Video
Basic subscribers			1,394,000				1,400,000				1,429,000
Quarterly net basic subscriber losses			(6,000	)			(22,000	)			(17,000	)
Basic penetration(e)			49.5	%			49.8	%			51.0	%
Digital customers			514,000				496,000				477,000
Quarterly net digital customer additions (losses)			18,000				(1,000	)			22,000
Digital penetration(f)			36.9	%			35.4	%			33.4	%
Monthly video revenue per basic subscriber(g)		$	52.89			$	52.65			$	49.06
Data
Data customers			544,000				516,000				453,000
Quarterly net data customer additions			28,000				12,000				27,000
Data penetration(h)			19.3	%			18.3	%			16.2	%
Monthly data revenue per data customer(i)		$	38.17			$	37.79			$	37.73
Phone
Estimated marketable phone homes(j)			1,850,000				1,700,000				455,000
Phone customers			83,000				66,000				2,000
Quarterly net phone customer additions			17,000				20,000				—
Total monthly revenue per basic subscriber(k)		$	72.91			$	71.44			$	63.76