<PAGE>
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, 1999
Commission File Numbers: 333-57285-01
333-57285
Mediacom LLC
Mediacom Capital Corporation*
(Exact names of Registrants as specified in their charters)
New York 06-1433421
New York 06-1513997
(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)
914-695-2600
(Registrants' telephone number including area code)
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:
Yes X No
--- ---
Indicate the number of shares outstanding of the Registrants' common
stock: Not Applicable
*Mediacom Capital 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.
<PAGE>
MEDIACOM LLC AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBER 30, 1999
INDEX
PART I
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Page
----
Item 1. Financial Statements.................................. 2
Consolidated Financial Statements of Mediacom LLC
and Subsidiaries................................. 2
Notes to Consolidated Financial Statements.......... 5
Financial Statement of Mediacom Capital Corporation. 12
Note to Balance Sheets.............................. 13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations....... 14
Item 3. Quantitative and Qualitative Disclosures about
Market Risk......................................... 20
PART II
-------
Item 6. Exhibits and Reports on Form 8-K...................... 21
<PAGE>
PART I
-------
ITEM 1. FINANCIAL STATEMENTS
MEDIACOM LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(All dollar amounts in 000's)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
-------------- ------------
ASSETS (Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 3,700 $ 2,212
Subscriber accounts receivable, net of allowance for doubtful accounts
of $408 in 1999 and $298 in 1998 2,269 2,512
Prepaid expenses and other assets 2,947 1,712
Investment in cable television systems:
Inventory 11,606 8,240
Property, plant and equipment, at cost 369,100 314,627
Less - accumulated depreciation (82,200) (45,423)
---------- -----------
Property, plant and equipment, net 286,900 269,204
Intangible assets, net of accumulated amortization of $45,103
in 1999 and $26,307 in 1998 134,768 150,928
---------- -----------
Total investments in cable television systems 433,274 428,372
Other assets, net of accumulated amortization of $4,773 in 1999
and $3,854 in 1998 12,965 16,344
---------- -----------
Total assets $ 455,155 $ 451,152
========== ===========
LIABILITIES AND MEMBERS' EQUITY
LIABILITIES
Debt $ 377,500 $ 337,905
Accounts payable 1,662 2,678
Accrued expenses 31,621 29,446
Subscriber advances 1,857 1,510
Management fees payable 1,881 962
---------- ----------
Total liabilities 414,521 372,501
---------- ----------
Commitments and contingencies
MEMBERS' EQUITY
Capital contributions 124,990 124,990
Accumulated deficit (84,356) (46,339)
---------- ----------
Total members' equity 40,634 78,651
---------- ----------
Total liabilities and members' equity $ 455,155 $ 451,152
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE>
MEDIACOM LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(All dollar amounts in 000's)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
--------------------------------- ---------------------------------
1999 1998 1999 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues $39,052 $ 34,306 $ 113,230 $ 94,374
Costs and expenses:
Service costs 12,396 11,411 36,571 32,873
Selling, general and
administrative expenses 7,314 6,562 21,816 18,101
Management fee expense 1,562 1,557 5,150 4,340
Depreciation and amortization 24,723 16,915 66,154 44,338
---------- -------- --------- --------
Operating loss (6,943) (2,139) (16,461) (5,278)
---------- -------- --------- --------
Interest expense, net 7,185 6,048 20,577 17,786
Other expenses 245 270 979 3,838
---------- -------- ---------- ---------
Net loss $ (14,373) $(8,457) $ (38,017) $(26,902)
========== ======== ========== =========
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
MEDIACOM LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts in 000's)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------------
1999 1998
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (38,017) $ (26,902)
Adjustments to reconcile net loss to net cash flows from operating
activities:
Accretion of interest on seller note 225 205
Depreciation and amortization 66,154 44,338
Decrease (increase) in subscriber accounts receivable 243 (1,389)
Increase in prepaid expenses and other assets (1,235) (1,603)
(Decrease) increase in accounts payable (1,016) 4,003
Increase in accrued expenses 2,175 28,695
Increase in subscriber advances 347 40
Increase in management fees payable 919 409
----------- ---------
Net cash flows from operating activities 29,795 47,796
----------- ---------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital expenditures (60,245) (35,430)
Acquisitions of cable television systems - (336,994)
Other, net (387) (28)
----------- ---------
Net cash flows used in investing activities (60,632) (372,452)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings 224,700 466,225
Repayment of debt (185,330) (221,800)
Capital contributions - 94,000
Financing costs (7,045) (13,828)
----------- ---------
Net cash flows from financing activities 32,325 324,597
----------- ---------
Net increase (decrease) in cash and cash equivalents 1,488 (59)
CASH AND CASH EQUIVALENTS, beginning of period 2,212 1,027
----------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 3,700 $ 968
=========== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 16,438 $ 9,420
=========== =========
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in 000's)
(Unaudited)
(1) Statement of Accounting Presentation and Other Information
Mediacom LLC ("Mediacom" and collectively with its subsidiaries, the
"Company"), a New York limited liability company, was formed in July 1995
principally to acquire and operate cable television systems. As of September
30, 1999, the Company had acquired and was operating cable television systems in
fourteen states, principally Alabama, California, Florida, Kentucky, Missouri
and North Carolina.
Mediacom Capital Corporation ("Mediacom Capital"), a New York corporation
wholly owned by Mediacom, was organized in March 1998 for the sole purpose of
acting as co-issuer with Mediacom of $200,000 aggregate principal amount of 8
1/2% senior notes due 2008 (the "8 1/2% Senior Notes") and of $125,000 aggregate
principal amount of 7 7/8% senior notes due 2011 (the "7 7/8% Senior Notes" and
collectively with the 8 1/2% Senior Notes, the "Senior Notes") (see Note 3).
Mediacom Capital has nominal assets and does not conduct operations of its own.
The Senior Notes are joint and several obligations of Mediacom and Mediacom
Capital, although Mediacom received all the net proceeds of the Senior Notes.
The consolidated financial statements include the accounts of Mediacom and
its subsidiaries and have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted.
The consolidated financial statements as of September 30, 1999 and 1998 are
unaudited; however, in the opinion of management, such statements include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the results for the periods presented. The accounting
policies followed during such interim periods reported are in conformity with
generally accepted accounting principles and are consistent with those applied
during annual periods. For additional disclosures, including a summary of the
Company's accounting policies, the interim financial statements should be read
in conjunction with the Company's Annual Report on Form 10-K, as amended (File
Nos. 333-57285-01 and 333-57285). 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, 1999.
(2) Acquisitions
The Company completed the undernoted acquisitions in 1998 (the "1998
Acquisitions"). These acquisitions were accounted for using the purchase method
of accounting and accordingly, the purchase price of these acquisitions has been
allocated to the assets acquired and liabilities assumed at their estimated fair
values at their respective date of acquisition. The results of operations of the
1998 Acquisitions have been included with those of the Company since the dates
of acquisition.
On January 9, 1998, the Company acquired the assets of a cable television
system serving approximately 17,200 basic subscribers in Clearlake, California
and surrounding communities (the "Clearlake System") for a purchase price of
$21,400. The purchase price has been allocated based on an independent
appraisal as follows: approximately $5,973 to property, plant and equipment, and
approximately $15,427 to intangible assets. Additionally, approximately $226 of
direct acquisition costs has been allocated to other assets. In the first
quarter of 1998, the Company recorded acquisition reserves related to this
acquisition in the amount of approximately $370, which are included in accrued
expenses. The acquisition of the Clearlake System and related closing costs and
adjustments were financed with borrowings under the Company's bank credit
facilities (see Note 3).
5
<PAGE>
MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in 000's)
(Unaudited)
On January 23, 1998, the Company acquired the assets of cable television
systems serving approximately 260,100 basic subscribers in various regions of
the United States (the "Cablevision Systems") for a purchase price of
approximately $308,200. The purchase price has been allocated based on an
independent appraisal as follows: approximately $205,500 to property, plant and
equipment, and approximately $102,700 to intangible assets. Additionally,
approximately $3,500 of direct acquisition costs has been allocated to other
assets. In the first quarter of 1998, the Company recorded acquisition reserves
related to this acquisition in the amount of approximately $3,750, which are
included in accrued expenses. The acquisition of the Cablevision Systems and
related closing costs and adjustments were financed with equity contributions
and borrowings under the Company's bank credit facilities (see Note 3).
On October 1, 1998, the Company acquired the assets of a cable television
system serving approximately 3,800 basic subscribers in Caruthersville, Missouri
(the "Caruthersville System") for a purchase price of $5,000. The purchase price
has been allocated as follows: approximately $2,300 to property, plant and
equipment, and approximately $2,700 to intangible assets. The acquisition of the
Caruthersville System and related closing costs and adjustments were financed
with borrowings under the Company's bank credit facilities (see Note 3).
(3) Debt
As of September 30, 1999 and December 31, 1998, debt consisted of:
September 30, December 31,
1999 1998
--------------- --------------
Mediacom:
8 1/2% Senior Notes (a) $ 200,000 $ 200,000
7 7/8% Senior Notes (b) 125,000 -
Subsidiaries:
Bank Credit Facilities (c) 52,500 134,425
Seller Note (d) - 3,480
---------- ----------
$ 377,500 $ 337,905
========== ==========
(a) On April 1, 1998, Mediacom and Mediacom Capital jointly issued $200,000
aggregate principal amount of 8 1/2% Senior Notes due on April 15,
2008. The 8 1/2% Senior Notes are unsecured obligations of the
Company, and the indenture for the 8 1/2% Senior Notes stipulates,
among other things, restrictions on incurrence of indebtedness,
distributions, mergers and asset sales and has cross-default provisions
related to other debt of the Company. Interest accrues at 8 1/2% per
annum, beginning from the date of issuance and is payable semi-annually
on April 15 and October 15 of each year. The 8 1/2% Senior Notes may
be redeemed at the option of Mediacom, in whole or part, at any time
after April 15, 2003, at redemption prices decreasing from 104.25% of
their principal amount to 100% in 2006, plus accrued and unpaid
interest.
(b) On February 26, 1999, Mediacom and Mediacom Capital jointly issued
$125,000 aggregate principal amount of 7 7/8% Senior Notes due on
February 15, 2011. The 7 7/8% Senior Notes are unsecured obligations
of the Company, and the indenture for the 7 7/8% Senior Notes
stipulates, among other things, restrictions on incurrence of
indebtedness, distributions, mergers and asset sales and has cross-
default provisions related to other debt of the Company. Interest
accrues at 7 7/8% per annum, beginning from the date of issuance and is
payable semi-annually on February 15 and August 15 of each year,
commencing on August 15, 1999. The 7 7/8% Senior Notes may be redeemed
at the option of
6
<PAGE>
MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in 000's)
(Unaudited)
Mediacom, in whole or part, at any time after February
15, 2006, at redemption prices decreasing from 103.938% of their
principal amount to 100% in 2008, plus accrued and unpaid interest.
(c) On June 24, 1997, the Company entered into an eight and one-half year
$100,000 reducing revolver and term loan agreement (the "Western Credit
Agreement"). On January 23, 1998, the Company entered into a separate
eight and one-half year $225,000 reducing revolver and term loan
agreement (the "Southeast Credit Agreement" and together with the
Western Credit Agreement, the "Bank Credit Agreements"). By separate
amendments dated as of January 26, 1999 to each of the Bank Credit
Agreements, the term loans were converted into additional revolving
credit loans.
On September 30, 1999, the Company refinanced the Bank Credit
Agreements with $550,000 of credit facilities, consisting of a $450,000
reducing revolving credit facility and a $100,000 term loan (the
"Mediacom USA Credit Agreement"). The revolving credit facility expires
March 31, 2008, subject to repayment on June 30, 2007 if Mediacom does
not refinance the 8 1/2% Senior Notes. The term loan is due and payable
on September 30, 2008, and is also subject to repayment on September
30, 2007 if Mediacom does not refinance the 8 1/2% Senior Notes. The
reducing revolving credit facility makes available a maximum commitment
amount for a period of up to eight and one-half years, which is subject
to quarterly reductions, beginning September 30, 2002, ranging from
1.25% to 17.50% of the original commitment amount of the reducing
revolver. The Mediacom USA Credit Agreement requires mandatory
reductions of the reducing revolver facility from excess cash flow, as
defined, beginning December 31, 2002. The Mediacom USA Credit Agreement
provides for interest at varying rates based upon various borrowing
options and the attainment of certain financial ratios, and for
commitment fees of 1/4% to 3/8% per annum on the unused portion of
available credit under the reducing revolver credit facility. The
average interest rate on outstanding bank debt was 6.7% and 6.9% for
the three months ended September 30, 1999 and December 31, 1998,
respectively, before giving effect to the interest rate swap agreements
discussed below.
The Mediacom USA Credit Agreement requires the Company to maintain
compliance with certain financial covenants including, but not limited
to, the leverage ratio, the interest coverage ratio, and the pro forma
debt service coverage ratio, as defined therein. The Mediacom USA
Credit Agreement also requires the Company to maintain compliance with
other covenants including, but not limited to, limitations on mergers
and acquisitions, consolidations and sales of certain assets, liens,
the incurrence of additional indebtedness, certain restrictive
payments, and certain transactions with affiliates. The Company was in
compliance with all covenants of the Mediacom USA Credit Agreement as
of September 30, 1999.
The Mediacom USA Credit Agreement is secured by Mediacom's pledge of
all its ownership interests in its operating subsidiaries and is
guaranteed by Mediacom on a limited recourse basis to the extent of
such ownership interests. At September 30, 1999, the Company had
$497,500 of unused bank commitments under the Mediacom USA Credit
Agreement, of which approximately $384,500 could have been borrowed by
the operating subsidiaries for purposes of distributing such borrowed
proceeds to Mediacom under the most restrictive covenants.
As of September 30, 1999, the Company had entered into interest rate
exchange agreements (the "Swaps") with various banks pursuant to which
the interest rate on $50,000 is fixed at a weighted average swap rate
of approximately 6.2%, plus the average applicable margin over the
Eurodollar Rate option under the Mediacom USA Credit Agreement. Under
the terms of the Swaps, which expire from 2000 through 2002, the
Company is exposed to credit loss in the event of nonperformance by the
other parties to the Swaps. However, the Company does not anticipate
nonperformance by the counterparties.
7
<PAGE>
MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in 000's)
(Unaudited)
(d) In connection with an acquisition completed in 1996, certain
subsidiaries of Mediacom issued to the seller an unsecured senior
subordinated note (the "Seller Note") in the amount of $2,800, with a
final maturity of June 28, 2006. Interest is deferred throughout the
term of the Seller Note and is payable at maturity or upon prepayment.
The Seller Note was prepaid in full on September 24, 1999 with no
penalties associated with such prepayment.
The stated maturities of all debt outstanding as of September 30, 1999 are
as follows:
2000 $ -
2001 -
2002 500
2003 1,000
2004 1,000
Thereafter 375,000
---------
$ 377,500
=========
(4) Commitments and Contingencies
Pursuant to the Cable Television Consumer Protection and Competition Act of
1992, the Federal Communications Commission (the "FCC") adopted comprehensive
regulations governing rates charged to subscribers for basic cable and cable
programming services. The FCC's authority to regulate the rates charged for
cable programming services expired on March 31, 1999. Basic cable rates must be
set using a benchmark formula. Alternatively, a cable operator can attempt
to establish higher rates through a cost-of-service showing. The FCC
has also adopted regulations that permit qualifying small cable operators to
justify their regulated rates using a simplified rate-setting methodology. This
methodology almost always results in rates which exceed those produced by the
cost-of-service rules applicable to larger cable television operators.
Approximately 70% of the basic subscribers served by the Company's cable
television systems are covered by such FCC rules. Once rates for basic cable
service have been established pursuant to one of these methodologies, the rate
level can subsequently be adjusted only to reflect changes in the number of
regulated channels, inflation, and increases in certain external costs, such as
franchise and other governmental fees, copyright and retransmission consent
fees, taxes, programming costs and franchise-related obligations. FCC
regulations also govern the rates which can be charged for the lease of customer
premises equipment and for installation services.
As a result of such legislation and FCC regulations, the Company's basic
cable service rates and its equipment and installation charges (the "Regulated
Services") are subject to the jurisdiction of local franchising authorities.
The Company believes that it has complied in all material respects with the rate
regulation provisions of the federal law. However, the Company's rates for
Regulated Services are subject to review by the appropriate franchise authority
if it is certified by the FCC to regulate basic cable service rates. If, as a
result of the review process, the Company cannot substantiate the rates charged
by its cable television systems for Regulated Services, the Company could be
required to reduce its rates for Regulated Services to the appropriate level and
refund the excess portion of rates received for up to one year prior to the
implementation of any increase in rates for Regulated Services.
The Company's agreements with franchise authorities require the payment of
fees of up to 5% of annual revenues. Such franchises are generally nonexclusive
and are granted by local governmental authorities for a specified term of years,
generally for periods of up to fifteen years.
8
<PAGE>
MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in 000's)
(Unaudited)
On April 29, 1999, a bank issued two irrevocable letters of credit in the
aggregate amount of $30,000 in favor of the seller of the Triax systems (defined
below) to secure the Company's performance under the related definitive
agreement. On November 5, 1999, the Company completed the acquisition of the
Triax systems and accordingly such letters of credit were cancelled.
(5) FASB 131 - Disclosure about Segments of an Enterprise and Related
Information
As of December 31, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 131, "Disclosure about Segments of an Enterprise
and Related Information". This statement requires the Company to report segment
financial information consistent with the presentations made to the Company's
management for decision-making purposes. All revenues of the Company are
derived solely from cable television operations and related activities. The
decision making of the Company's management is based primarily on the impact of
capital and operational resource allocations on the Company's consolidated
system cash flow (defined as operating income (loss) before management fee
expense, and depreciation and amortization). The Company's management evaluates
such factors as the bandwidth capacity and other cable plant characteristics,
the offered programming services, and the customer rates, when allocating
capital and operational resources. The Company's consolidated system cash flow
for the three months ended September 30, 1999 and 1998 was approximately
$19,300, and $16,300, respectively, and for the nine months ended September 30,
1999 and 1998 was approximately $54,800 and $43,400 respectively.
(6) Recent Developments
Acquisitions and Financings
On October 15, 1999, the Company acquired the stock of Zylstra
Communications Corporation ("Zylstra") for a purchase price of approximately
$19,500, subject to certain adjustments. Zylstra owns and operates cable
television systems serving approximately 14,000 subscribers in Iowa, Minnesota
and South Dakota. The Zylstra acquisition was financed with borrowings under the
Mediacom USA Credit Agreement.
On November 5, 1999, the Company entered into credit facilities of
$550,000, consisting of a $450,000 reducing revolver credit facility expiring on
June 2008 and a $100,000 term loan due December 2008 (the "Mediacom Midwest
Credit Agreement"). The terms of the Mediacom Midwest Credit Agreement are
substantially similar to the terms of the Mediacom USA Credit Agreement.
On November 5, 1999, the Company acquired the assets of cable television
systems owned by Triax Midwest Associates, L.P. ("Triax") for a purchase price
of approximately $740,100, subject to certain adjustments. The Triax systems
serve approximately 344,000 subscribers primarily in Illinois, Indiana, and
Minnesota. This acquisition was financed with $10,500 of additional equity
contributions from the Company's members and borrowings under the Mediacom USA
Credit Agreement and Mediacom Midwest Credit Agreement.
9
<PAGE>
MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in 000's)
(Unaudited)
SoftNet Agreement
On November 4, 1999, the Company completed an agreement with SoftNet
Systems, Inc. ("SoftNet") a high-speed broadband Internet access and content
services company, to deploy SoftNet Systems' high-speed Internet access services
throughout the Company's cable television systems. In addition to a revenue
sharing arrangement, the Company will receive 3.5 million shares of SoftNet's
common stock, representing a fair value of approximately $101,500 as of November
10, 1999, in exchange for SoftNet's long-term rights to deliver high-speed
Internet access services to the Company's customers. These shares represent
approximately 16.2% of SoftNet's outstanding stock as of November 10, 1999.
Under the terms of this agreement, over a period of three years the Company is
required to upgrade its cable network to provide two-way communications
capability in cable systems passing 900,000 homes, including the Triax and
Zylstra systems, and make available such homes to Softnet. Of the issued shares,
90% are subject to forfeiture in the event the Company does not perform subject
to the schedule set forth in this agreement calling for the delivery by the
Company of two-way capable homes.
Management Agreements
Each of the Company's operating subsidiaries is a party to a management
agreement with Mediacom Management Corporation ("Mediacom Management"). Under
these agreements, Mediacom Management provides management services to the
Company's operating subsidiaries and is paid annual management fees of 5.0% of
the first $50,000 of annual gross operating revenues, 4.5% of revenues in excess
of $50,000 up to $75,000 and 4.0% of revenues in excess of $75,000. Mediacom
Management utilized such fees to compensate its employees as well as fund its
corporate overhead. The management agreements were revised effective November
19, 1999 in connection with an amendment to Mediacom's operating agreement, to
provide for management fees equal to 2.0% of annual gross revenues. In
addition, Mediacom Management has agreed to waive the management fees accrued
from July 1, 1999 through November 19, 1999.
The operating agreement of Mediacom provides that Mediacom Management is
paid an acquisition fee of 1.0% of the purchase price of acquisitions made by
Mediacom until its pro forma consolidated annual revenues equals $75,000, and
thereafter 0.5% of such purchase price. No such fees were paid during the nine
months ended September 30, 1999 since there were no acquisitions completed
during this period. Pursuant to the amendment to Mediacom's operating agreement,
no further acquisition fees will be payable.
During the fourth quarter of fiscal 1999, the Company will record a one-
time, non-recurring, non-cash charge of $12,500 associated with the amendments
to the management agreements of Mediacom Management for which additional
membership interests will be issued to an existing member of Mediacom upon
occurrence of a future valuation of Mediacom including an initial public
offering.
Initial Public Offering
On November 12, 1999, a registration statement was filed with the
Securities and Exchange Commission for an initial public offering ("IPO") of
shares of Class A common stock. In connection therewith, Mediacom Communications
Corporation ("MCC"), a Delaware Corporation, was formed. Immediately prior to
the IPO, MCC will issue shares of common stock in exchange for all the
outstanding membership interests of Mediacom, which currently serves as the
holding company for the operating subsidiaries. As a result, MCC will become
the parent company of Mediacom, which will continue to serve as the holding
company of the subsidiaries. Immediately prior to the IPO, additional membership
interests will be issued to all members of Mediacom in accordance with a formula
set forth in Mediacom's amended operating agreement which is based upon a
valuation of Mediacom established at the time of the IPO. Effective upon
completion of the IPO, a provision in the amended operating agreement providing
for a special allocation of membership interests to certain members based upon
valuations of Mediacom performed from time to time shall be removed. In
connection with the removal of such provision, the amended operating agreement
also provides for the issuance to a certain member of membership interests
representing 16.5% of the equity in Mediacom in accordance with a formula based
upon the valuation established at the completion of the IPO. These newly issued
membership interests will be included as part of the exchange for shares of
MCC's common stock.
The management agreements between Mediacom Management and each of the
operating subsidiaries will be terminated upon completion of the IPO, and
Mediacom Management's employees will become MCC's employees and its corporate
overhead will become MCC corporate overhead. These expenses will be reflected as
a corporate expense in the consolidated statement of operations.
10
<PAGE>
MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts in 000's)
(Unaudited)
The Company is currently a limited liability company and its members are
required to report their share of income or loss in their respective income tax
returns. After completion the IPO and the exchange of membership interests in
Mediacom for shares of MCC's common stock, the results of MCC will be included
in MCC's corporate tax returns. MCC will also record a one-time non recurring
charge to earnings to record a net deferred tax liability. If the Company had
been a C corporation as of September 30, 1999, this charge would have been
$1,937. If the Company had been C corporation as of September 10, 1999, this
charge would have been $1,937.
11
<PAGE>
MEDIACOM CAPITAL CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
ASSETS (Unaudited)
<S> <C> <C>
Note receivable - from affiliate for issuance of common stock $ 100 $ 100
------ -----
Total assets $ 100 $ 100
====== =====
LIABILITIES AND STOCKHOLDER'S EQUITY
Stockholder's equity
Common stock, par value $0.10; 200 shares authorized;
100 shares issued and outstanding $ 10 $ 10
Additional paid-in capital 90 90
------ -----
Total stockholder's equity $ 100 $ 100
------ -----
Total liabilities and stockholder's equity $ 100 $ 100
====== =====
</TABLE>
12
<PAGE>
MEDIACOM CAPITAL CORPORATION
NOTE TO THE BALANCE SHEETS
(All dollar amounts in 000's)
(Unaudited)
(1) Organization
Mediacom Capital Corporation ("Mediacom Capital"), a New York corporation,
wholly-owned by Mediacom LLC ("Mediacom"), was organized on March 9, 1998 for
the sole purpose of acting as co-issuer with Mediacom of $200,000 aggregate
principal amount of the 8 1/2% senior notes due April 15, 2008. Interest on the
8 1/2% senior notes is payable semi-annually on April 15 and October 15 of each
year. Mediacom Capital does not conduct operations of its own.
On February 26, 1999, Mediacom and Mediacom Capital jointly issued $125,000
aggregate principal amount of 7 7/8% senior notes due on February 15, 2011. The
net proceeds from this offering of approximately $121,900 were used to repay a
substantial portion of outstanding bank debt under the bank credit facilities of
Mediacom's operating subsidiaries. Interest on the 7 7/8% senior notes is
payable semi-annually on February 15 and August 15 of each year, commencing on
August 15, 1999.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Introduction
The following discussion of the financial condition and results of
operations of the Company, the description of the Company's business as well as
other sections of this Form 10-Q contain certain forward-looking statements.
The Company's actual results could differ materially from those discussed herein
and its current business plans could be altered in response to market conditions
and other factors beyond the Company's control.
EBITDA represents operating income (loss) before depreciation and
amortization. EBITDA is not intended to be a performance measure that should be
regarded as an alternative either to operating income or net income as an
indicator of operating performance, or to the statement of cash flows as a
measure of liquidity, as determined in accordance with generally accepted
accounting principles. EBITDA is included herein because the Company's
management believes that EBITDA is a meaningful measure of performance as it is
commonly used by the cable television industry and by the investment community
to analyze and compare cable television companies on the basis of operating
performance, leverage and liquidity. In addition, the primary debt instruments
of the Company contain certain covenants, compliance with which is measured by
computations similar to determining EBITDA. The Company's definition of EBITDA
may not be identical to similarly titled measures reported by other companies.
Mediacom was founded in July 1995 principally to acquire, operate and
develop cable television systems in selected non-metropolitan markets of the
United States. The Company's business strategy is to: (i) improve the operating
and financial performance of our acquired cable systems; (ii) develop efficient
operating clusters; (iii) rapidly upgrade our cable network; (iv) introduce new
and enhanced products and services; (v) maximize customer satisfaction; (vi)
acquire underperforming cable television systems; and (vii) implement a flexible
financing structure.
The Company commenced operations in March 1996 with the acquisition of its
first cable television system. As of September 30, 1999, the Company had
completed nine acquisitions of cable television systems that on such date passed
approximately 525,000 homes and served approximately 358,000 basic subscribers.
In October 1999, the Company purchased the outstanding stock of Zylstra
Communications Corporation ("Zylstra") which owns and operates cable television
systems serving 14,000 basic subscribers as of September 30, 1999. In November
1999, the Company acquired cable television systems from Triax Midwest
Associates, L.P. ("Triax" ) serving 344,000 basic subscribers as of September
30, 1999. All acquisitions have been accounted for under the purchase method of
accounting and, therefore, the Company's historical results of operations
include the results of operations for each acquired system subsequent to its
respective acquisition date.
Results of Operations
The following historical information includes the results of operations of
the Clearlake system (acquired on January 9, 1998), the Cablevision systems
(acquired on January 23, 1998), and the Caruthersville system (acquired on
October 1, 1998) (collectively, the "1998 Acquisitions") only for that portion
of the respective period that such cable television systems were owned by the
Company. See Note 2 to the Company's consolidated financial statements for a
detailed description of the Company's acquisitions in 1998.
Three Months Ended September 30, 1999 Compared to Three Months Ended September
30, 1998
Revenues. Revenues increased 13.8% to approximately $39.1 million for the
three months ended September 30, 1999 as compared to $34.3 million for the three
months ended September 30, 1998, primarily as a result of:
. an increase in the average monthly basic service rate of $3.11 per basic
subscriber;
. including the results of operations of the Caruthersville system in the
1999 period; and
. internal basic subscriber growth of 1.8%, excluding the acquisition of the
Caruthersville system.
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Average monthly revenue per basic subscriber increased to $36.57 for the
three months ended September 30, 1999, from $33.01 for the corresponding period
of 1998. At September 30, 1999, the Company served approximately 358,000 basic
subscribers compared to approximately 348,000 basic subscribers at September 30,
1998.
Service costs. Service costs increased 8.6% to approximately $12.4 million
for the three months ended September 30, 1999, as compared to approximately
$11.4 million for the three months ended September 30, 1998. The Caruthersville
system accounted for approximately 12.0% of the total increase. Excluding the
Caruthersville system, these costs increased by approximately $867,000 primarily
as a result of higher programming costs, and additional programming carried by
the systems. As a percentage of revenues, service costs were 31.7% for the
three months ended September 30, 1999, as compared with 33.3% for the three
months ended September 30, 1998.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased 11.5% to approximately $7.3 million for the
three months ended September 30, 1999, as compared to approximately $6.6 million
for the three months ended September 30, 1998. The Caruthersville system
accounted for approximately 10.9% of the total increase. Excluding the
Caruthersville system, these costs increased by approximately $670,000 primarily
as a result of higher personnel expenses. As a percentage of revenues, selling,
general and administrative expenses were 18.7% for the three months ended
September 30, 1999, as compared with 19.1% for the three months ended September
30, 1998.
Management fee expense. Management fee expense remained flat for the three
months ended September 30, 1999 as compared to the comparable 1998 period.
Depreciation and amortization expense. Depreciation and amortization
expense increased 46.2% to approximately $24.7 million for the three months
ended September 30, 1999, from approximately $16.9 million in the comparable
1998 period. This increase was substantially due to the Company's purchase of
the 1998 Acquisitions and additional capital expenditures associated with the
upgrade of the Company's systems.
Interest expense. Interest expense, net, increased 18.8% to approximately
$7.2 million for the three months ended September 30, 1999, from approximately
$6.0 million for the three months ended September 30, 1998. This increase was
substantially due to higher average debt outstanding during the 1999 period.
Other expenses. Other expenses decreased 9.3% to approximately $245,000
for the three months ended September 30, 1999, from approximately $270,000 for
the three months ended September 30, 1998. This change was principally due to a
decrease in bank commitment fees.
Net loss. Due to the factors described above, the Company generated a net
loss of approximately $14.4 million for the three months ended September 30,
1999, compared to a net loss of approximately $8.5 million for the three months
ended September 30, 1998.
EBITDA. EBITDA increased 20.3% to approximately $17.8 million for the three
months ended September 30, 1999, from approximately $14.8 million for the three
months ended September 30, 1998. This increase was substantially due to the
reasons noted above. As a percentage of revenues, EBITDA increased to 45.5% for
the three months ended September 30, 1999, from 43.1% for the three months ended
September 30, 1998.
Nine Months ended September 30, 1999 Compared to Nine Months Ended September
30, 1998
Revenues increased 20.0% to approximately $113.2 million for the nine
months ended September 30, 1999, as compared to approximately $94.4 million for
the nine months ended September 30, 1998, primarily as a result of:
. an increase in the average monthly basic service rate of $3.01 per basic
subscriber;
. including the results of operations of the 1998 Acquisitions for the
full nine month period in 1999; and
. internal basic subscriber growth of 1.8%, excluding the acquisition of
the Caruthersville system.
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Service costs. Service costs increased 11.2% to approximately $36.6 million
for the nine months ended September 30, 1999, as compared to approximately $32.9
million for the nine months ended September 30, 1998. The ownership of the 1998
Acquisitions for the full nine month period in 1999 accounted for 74.1% of this
increase. The remaining 25.9% of this increase is due principally to higher
programming costs. As a percentage of revenues, service costs were 32.3% for the
nine months ended September 30, 1999, as compared with 34.8% for the nine months
ended September 30, 1998.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased 20.5% to approximately $21.8 million for the
nine months ended September 30, 1999, from approximately $18.1 million for the
nine months ended September 30, 1998. The ownership of the 1998 Acquisitions
for the full nine month period in 1999 accounted for 38.2% of this increase in
selling, general and administrative expenses. The remaining 61.8% of this
increase is primarily due to increased marketing costs associated with the
promotion of new programming services and increased personnel expenses. As a
percentage of revenues, selling, general and administrative expenses were 19.3%
for the nine months ended September 30, 1999 as compared with 19.2% for the nine
months ended September 30, 1998.
Management fee expense. Management fee expense increased 18.7% to
approximately $5.2 million for the nine months ended September 30, 1999, from
approximately $4.3 million in the comparable 1998 period, due to the higher
revenues generated in the 1999 period.
Depreciation and amortization expense. Depreciation and amortization
expense increased 49.2% to approximately $66.2 million for the nine months ended
September 30, 1999, from approximately $44.3 million in the comparable 1998
period. This increase was substantially due to the Company's purchase of the
1998 Acquisitions in 1998 and additional capital expenditures associated with
the upgrade of the Company's systems.
Interest expense. Interest expense, net, increased 15.7% to approximately
$20.6 million for the nine months ended September 30, 1999, from approximately
$17.8 million for the nine months ended September 30, 1998. This increase was
substantially due to higher average debt outstanding during the 1999 period as a
result of the debt incurred in connection with the purchase of the 1998
Acquisitions.
Other expenses. Other expenses decreased 74.5% to approximately $979,000
for the nine months ended September 30, 1999, from approximately $3.8 million
for the nine months ended September 30, 1998. This decrease was principally due
to acquisition fees incurred in the 1998 period in connection with the
acquisition of the Clearlake system and the Cablevision systems.
Net loss. Due to the factors described above, the Company generated a net
loss of approximately $38.0 million for the nine months ended September 30,
1999, compared to a net loss of approximately $26.9 million for the nine months
ended September 30, 1998.
EBITDA. EBITDA increased 27.2% to approximately $49.7 million for the nine
months ended September 30, 1999, from approximately $39.1 million for the nine
months ended September 30, 1998. This increase was substantially due to the
reasons noted above. As a percentage of revenues, EBITDA increased to 43.9% for
the nine months ended September 30, 1999, from 41.4% for the nine months ended
September 30, 1998.
Liquidity and Capital Resources
The Company's operations require substantial capital for the upgrade,
expansion and maintenance of the cable network. In addition, the Company has
pursued, and will continue to pursue, a business strategy that includes
selective acquisitions. The Company has funded its working capital
requirements, capital expenditures and acquisitions through a combination of
internally generated funds, long-term borrowings and equity contributions. The
Company intends to continue to finance such expenditures through the same
sources.
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During the third quarter of 1998, the Company modified its previously
disclosed five-year system upgrade by accelerating its planned completion date
to June 30, 2000. Upon completion, the Company anticipates that 85% of its
customers will be served by systems with 550MHz to 750MHz bandwidth capacity.
As a result of the Company's accelerated system upgrade program, total
capital expenditures were $53.7 million for the year ended December 31, 1998 and
$60.2 million for the nine months ended September 30, 1999. For the year ended
December 31, 1998, and for the nine months ended September 30, 1999, net cash
flows from operations were $53.6 million and $29.8 million respectively, which
together with borrowings under the Company's subsidiary bank credit agreements
funded such capital expenditures. The Company anticipates that total capital
expenditures will be approximately $80.0 million as compared to our original
plans to spend approximately $66.0 million during this fiscal year. This
increase is principally due to expenditures relating to the Company's launch of
digital cable and two-way, high-speed Internet services in several of the
Company's systems and to the Triax and Zylstra systems subsequent to their
acquisition. The Company intends to use net cash flows from operations and
borrowings under its subsidiary bank credit agreements to fund these capital
expenditures.
As a result of the Company's recent acquisitions of the Triax and Zylstra
systems, the Company has updated its capital improvement program and now expects
to spend approximately $400.0 million over the three-year period ending December
2002, of which approximately $240.0 million will be invested to upgrade the
cable network and approximately $160.0 million will be used for plant expansion,
digital headends and set-up boxes, cable modems and maintenance. The Company
plans to fund these expenditures through net cash flows from operations and
additional borrowings under its subsidiary bank credit agreements. By December
2002, including the Triax and Zylstra systems, the Company anticipates:
. 91% of its basic subscribers will be served by systems with 550MHz to
750MHz bandwidth capacity and two-way communications capability; and
. eliminating 369 headend facilities of its systems, resulting in 90
headend facilities serving all of its basic subscribers and 30 headend
facilities serving 84% of its basic subscribers.
From the Company's commencement of operations in March 1996 through
December 31, 1997, the Company invested approximately $97.8 million (before
closing costs) to acquire cable television systems serving approximately 67,450
basic subscribers as of September 30, 1999. In 1998, the Company invested
approximately $334.6 million (before closing costs) to acquire cable television
systems serving approximately 290,550 basic subscribers as of September 30,
1999. In the aggregate, the Company has invested approximately $432.4 million
(before closing costs) to acquire its cable television systems serving
approximately 358,000 basic subscribers as of September 30, 1999.
On October 15, 1999, the Company purchased the outstanding stock of Zylstra
for a purchase price of $19.5 million, before closing costs and adjustments. As
of September 30, 1999, Zylstra owned and operated cable television systems
serving approximately 14,000 basic subscribers in Iowa, Minnesota and South
Dakota.
On November 5, 1999, the Company acquired the cable television systems
owned by Triax for $740.1 million, before closing costs and adjustments. As of
September 30, 1999, the Triax systems served approximately 344,000 basic
subscribers in eight states, principally Illinois, Indiana, and Minnesota.
Mediacom is a limited liability company that serves as the holding company
for its various subsidiaries, each of which is also a limited liability company.
To date, the Company's financing strategy has been to raise equity from its
members and issue public long-term debt at the holding company level, while
utilizing its subsidiaries to access debt capital, principally in the commercial
bank market, through two stand-alone borrowing groups. The Company believes that
this financing strategy is beneficial because it broadens the Company's access
to various debt markets, enhances its flexibility in managing the Company's
capital structure, reduces the overall cost of debt capital, and permits the
Company to maintain a substantial liquidity position in the form of unused and
available bank credit commitments.
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To finance the Company's acquisitions, working capital requirements and
capital expenditures and to provide liquidity for future capital needs, the
Company had completed the following financing arrangements as of November 10,
1999:
. $200.0 million offering of 8 1/2% senior notes due April 2008;
. $125.0 million offering of 7 7/8% senior notes due February 2011;
. $550.0 million subsidiary bank credit facilities expiring in September
2008;
. $550.0 million subsidiary bank credit facilities expiring in December
2008; and
. $135.4 million of equity capital contributed by the members of Mediacom
LLC.
As of November 10, 1999, the Company has entered into interest rate swap
agreements, which expire from 2000 through 2002, to hedge a notional amount of
$50.0 million of floating rate debt under the subsidiary bank agreements. As of
such date, the weighted average interest rate on all indebtedness outstanding
under the Company's subsidiary bank credit facilities was approximately 7.9%,
before giving effect to the aforementioned interest rate swap agreements. As of
November 10, 1999, the Company had $278.0 million of unused credit commitments,
$29.0 million of which could have been borrowed under the most restrictive
covenants under the Company's debt agreements.
A bank had issued two irrevocable letters of credit under the Company's
subsidiary bank credit facilities in the aggregate amount of $30.0 million in
favor of the seller of the Triax systems to secure the Company's performance
under the related agreement to acquire these systems. On November 5, 1999, the
Company completed the acquisition of the Triax systems and accordingly such
letters of credit were cancelled.
In the second half of 1999, the Company signed five letters of intent to
acquire cable systems serving approximately 28,000 basic subscribers for an
aggregate purchase price of $47.7 million. These cable systems are in close
proximity to the existing systems, thereby complementing the Company's operating
clusters. The Company expects to complete the acquisition of these systems in
the first half of 2000, subject to the completion of definitive documentation.
The Company is regularly presented with opportunities to acquire cable
television systems that are evaluated on the basis of the Company's acquisition
strategy. Although the Company presently does not have any definitive agreements
to acquire or sell any of its cable television systems, other than the five
letters of intent noted above to acquire the systems serving approximately
28,000 basic subscribers, from time to time it negotiates with prospective
sellers to acquire additional cable television systems. These potential
acquisitions are subject to the negotiation and completion of definitive
documentation, which will include customary representations and warranties and
will be subject to a number of closing conditions. No assurance can be given
that such definitive documents will be entered into or that, if entered into,
the acquisitions will be consummated.
Although the Company has not generated earnings sufficient to cover fixed
charges, the Company has generated cash and obtained financing sufficient to
meet its debt service, working capital, capital expenditures and acquisition
requirements. The Company expects that it will continue to be able to generate
funds and obtain financing sufficient to service its obligations and complete
its pending acquisitions. There can be no assurance that the Company will be
able to complete the financing arrangements described above, or, if the Company
was able to do so, that the terms would be favorable to the Company.
Recent Accounting Pronouncements
In 1998, Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities", ("SFAS 133") was issued.
SFAS 133 establishes accounting and reporting standards requiring that every
derivative instrument be recorded in the balance sheet as either an asset or
liability measured at its fair value. The Company will adopt SFAS 133 in fiscal
2001, but has not quantified the impact or not yet determined the timing or
method of the adoption.
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Inflation and Changing Prices
The Company's costs and expenses are subject to inflation and price
fluctuations. However, because changes in costs are generally passed through to
subscribers, such changes are not expected to have a material effect on the
Company's results of operations.
Year 2000
The Company has formed a Year 2000 project management team responsible for
overseeing, coordinating and reporting on the Year 2000 remediation efforts.
The Company has implemented a company-wide effort to assess and remediate its
computer systems, related software and equipment. This effort will also help to
ensure such systems, software and equipment can recognize, process and store
information in the year 2000 and thereafter. Such Year 2000 remediation efforts
include an assessment of the most critical systems, such as customer service and
billing systems, headend facilities, business support operations, and other
equipment and facilities. The Company is also verifying the Year 2000 readiness
of its significant suppliers and vendors.
As of September 30, 1999, the Company's assessment and remediation were
substantially complete, and testing and implementation are 80% complete, with
final completion expected in the fourth quarter of 1999.
The project management team has also identified the Company's most critical
supplier/vendor relationships and has instituted a verification process to
determine the vendors' Year 2000 readiness. Such verification includes
reviewing vendors' test and other data and engaging in regular communications
with vendors' Year 2000 teams. The Company is currently conducting tests to
validate the Year 2000 compliance of certain critical products and services.
The completion dates set forth above are based on current expectations.
However, due to the uncertainties inherent in Year 2000 remediation, no
assurances can be given as to whether such projects will be completed on such
dates.
The Company is in the process of acquiring certain cable television
systems, and it is monitoring their Year 2000 remediation efforts. However, the
Company cannot determine at this time the materiality of information technology
and non-information technology issues, if any, relating to the Year 2000 problem
affecting those cable television systems. The Company is in the process of
including these pending acquisitions in its Year 2000 program and is not
currently aware of any likely material Year 2000 problems.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of business, the Company uses interest rate swap
agreements in order to fix the interest rate for the duration of the contract as
a hedge against interest rate volatility. As of September 30, 1999, the Company
had interest rate exchange agreements (the "Swaps") with various banks pursuant
to which the interest rate on $50.0 million is fixed at a weighted average swap
rate of approximately 6.2%, plus the average applicable margin over the
Eurodollar Rate option under the Company's bank credit agreement. Under the
terms of the Swaps, which expire from 2000 through 2002, the Company is exposed
to credit loss in the event of nonperformance by the other parties to the Swaps.
However, the Company does not anticipate nonperformance by the counterparties.
The Company would have paid approximately $18,200 at September 30, 1999 to
terminate the Swaps, inclusive of accrued interest. The table below provides
information for the Company's long term debt. See Note 3 to the Company's
unaudited consolidated financial statements.
Expected Maturity
------------------------------------------
(All dollar amounts in 000's)
2000 2001 2002 2003 2004 Thereafter Total Fair Value
----- ----- ----- ----- ----- ----------- ------- ----------
Fixed rate $ - $ - $ - $ - $ - $200,000 $200,000 $184,000
Weighted average
interest rate - - - - - 8.5% 8.5%
Fixed rate $ - $ - $ - $ - $ - $125,000 $125,000 $125,000
Weighted average
interest rate - - - - - 7.9% 7.9%
Variable rate $ - $ - $500 $1,000 $1,000 $ 50,000 $ 52,500 $ 52,500
Weighted average
interest rate 6.7% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7%
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PART II
ITEM 6.
(a) Exhibits
Exhibit
Number Exhibit Descriptions
- - ------ --------------------
10.5 Mediacom USA Credit Agreement dated as of September 30, 1999(1)
10.6 Mediacom Midwest Credit Agreement dated as of November 5, 1999(1)
10.9* ISP Channel Affiliate Agreement, dated as of November 4, 1999,
between ISP Channel Inc., a subsidiary of SoftNet Systems, Inc.
and Mediacom LLC
10.10* Stock Purchase Agreement, dated as of November 4, 1999, between
SoftNet Systems, Inc. and Mediacom LLC
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None.
- - ------------
(1) Such Exhibits were filed with the Registration Statement on Form S-1 (File
No. 333-90879) of Mediacom Communications Corporation and is incorporated
herein by reference
* To be filed by amendment with the Registration statement on Form S-1 of
Mediacom Communications Corporation
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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
November 15, 1999 By: /s/ Mark E. Stephan
-------------------
Mark E. Stephan
Senior Vice President,
Chief Financial Officer, Treasurer
And Principal Financial Officer
22
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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
November 15, 1999 By: /s/ Mark E. Stephan
-------------------
Mark E. Stephan
Treasurer, Secretary and
Principal Financial Officer
23
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the consolidated
statements of operations and consolidated balance sheets of Mediacom LLC and it
subsidiaries and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 3,700
<SECURITIES> 0
<RECEIVABLES> 2,677
<ALLOWANCES> 408
<INVENTORY> 11,606
<CURRENT-ASSETS> 0
<PP&E> 369,100
<DEPRECIATION> (82,200)
<TOTAL-ASSETS> 455,155
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 40,634
<TOTAL-LIABILITY-AND-EQUITY> 455,155
<SALES> 113,230
<TOTAL-REVENUES> 113,230
<CGS> 36,571
<TOTAL-COSTS> 129,691
<OTHER-EXPENSES> 979
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,577
<INCOME-PRETAX> (38,017)
<INCOME-TAX> 0
<INCOME-CONTINUING> (38,017)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (38,017)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
