MEDIACOM BROADBAND LLC 8-K (Events or Changes Between Quarterly Reports) 2009-02-20

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 13, 2009

MEDIACOM BROADBAND LLC


(Exact name of Registrant as specified in its charter)

Delaware 333-72440 06-1615412


(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))
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TABLE OF CONTENTS

Item 2.01 Completion of Acquisition or Deposition of Assets


Item 9.01 Financial Statements and Exhibits
SIGNATURES
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Forward Looking Statements


In this report, we state our beliefs of future events and of our future financial performance. In some cases, you can identify those so-called
“forward-looking statements” by words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential,” or “continue” or the negative of those words and other comparable words. These forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ materially from historical results or those we anticipate, many of which are beyond
our control. Factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited
to: competition for video, high-speed data and phone customers; our ability to achieve anticipated customer and revenue growth and to
successfully introduce new products and services; economic downturns and other factors which may negatively affect our customers’
demand for our services; increasing programming costs and delivery expenses related to our products and services; changes in laws and
regulations; changes in technology; changes in assumptions underlying our critical accounting policies; fluctuations in short term interest
rates which may cause our interest expense to vary from quarter to quarter; our ability to generate sufficient cash flow to meet our debt service
obligations; instability in the credit markets which may affect our ability to access capital; and the other risks and uncertainties discussed in
this report and in our Annual Report on Form 10-K for the year ended December 31, 2007 and other reports or documents that we file from time
to time with the SEC. Statements included in this report are based upon information known to us as of the date that this report is filed with the
SEC, and we assume no obligation to update or alter our forward-looking statements made in this report or our other documents filed with the
SEC, whether as a result of new information, future events or otherwise, except as otherwise required by applicable federal securities laws.

Item 2.01 Completion of Acquisition or Disposition of Assets


On February 11, 2009, the operating subsidiaries of Mediacom Broadband LLC (the “Company”) executed an Asset Transfer Agreement
(the “Transfer Agreement”) with Mediacom Communications Corporation (“MCC”) and certain operating subsidiaries of Mediacom LLC,
pursuant to which the Company will exchange certain of its cable television systems located in Illinois, which serve approximately 42,200 basic
subscribers, and a cash payment of $8.2 million for certain of Mediacom LLC’s cable television systems located in Florida, Illinois, Iowa,
Kansas, Missouri and Wisconsin, which serve approximately 45,900 basic subscribers (the “Asset Transfer”). The Company and Mediacom
LLC are wholly owned subsidiaries of MCC. The Company believes the Asset Transfer will better align its customer base geographically,
making the cable systems more clustered and allowing for more effective management, administration, controls and reporting of the
Company’s field operations. The Asset Transfer was completed on February 13, 2009. No gain or loss is being recorded on the Asset Transfer
because the Company and Mediacom LLC are under common control.

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As part of the Transfer Agreement, Mediacom LLC contributed to MCC cable television systems located in Western North Carolina, which
serve approximately 24,800 basic subscribers (the “Exchange Cable Systems”). In connection therewith, Mediacom LLC received on
February 12, 2009, a $74 million cash distribution from MCC, which funds had been contributed to MCC by the Company on February 12, 2009.
On February 12, 2009, the Company’s operating subsidiaries borrowed $82.2 million under the revolving commitments of their bank credit
facility to fund its contribution to MCC and to fund the $8.2 million payment under the Asset Transfer transaction. The terms of the bank
credit facility are set forth under the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Liquidity and Capital Resources” in the Company’s Form 10-K for the year-ended December 31, 2007. The effective rate of this borrowing was
1.86% as of February 12, 2009. The revolving commitments under the Company’s bank credit facility mature in September 2011.
On September 7, 2008, MCC entered into a Share Exchange Agreement (the “Exchange Agreement”) with Shivers Investments, LLC
(“Shivers”) and Shivers Trading & Operating Company (“STOC”). On February 13, 2009, MCC completed the Exchange Agreement, pursuant
to which Shivers exchanged all 28,309,674 shares of the MCC’s Class A common stock owned by Shivers for all the outstanding shares of
stock of a wholly owned subsidiary of MCC (the “Exchange Subsidiary”) which, at the time of closing of the transaction, held (i) the Exchange
Cable Systems, and (ii) approximately $110 million in cash. Both STOC and Shivers are affiliates of Morris Communications Company, LLC
(“Morris Communications”), and STOC, Shivers and Morris Communications are controlled by William S. Morris III, a member of the MCC’s
Board of Directors. Immediately prior to the completion of the Exchange Agreement, MCC had contributed the Exchange Cable Systems and
the $110 million of cash to the Exchange Subsidiary.
Item 9.01 Financial Statements and Exhibits
(b) Pro forma financial information
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2008, and the unaudited pro forma condensed
consolidated statements of operations for the year ended December 31, 2007 and the nine months ended September 30, 2008, which give effect
to the Transfer Agreement and the impact of its cash contribution to MCC, are set forth on pages F-1 to F-5 of this report.

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MEDIACOM BROADBAND LLC AND SUBSIDIARIES


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements illustrate the effects of the Transfer Agreement and the
impact of the Company’s cash contribution to MCC (the “Transactions”). The unaudited pro forma condensed consolidated balance sheet as
of September 30, 2008, gives effect to the Transactions as if they occurred as of that date. The unaudited pro forma condensed consolidated
statements of operations for the year ended December 31, 2007, and the nine months ended September 30, 2008, give effect to the Transactions
as if they occurred on January 1, 2007.
The unaudited pro forma condensed consolidated financial statements have been derived from, and should be read in conjunction with the
Company’s historical consolidated financial statements, including the notes thereto, in its Annual Report filed on Form 10-K for the year
ended December 31, 2007 and other filings on Form 10-Q filed during 2008. The unaudited pro forma condensed consolidated financial
statements are not necessarily indicative of the financial position or results of operations that would have been achieved had the Transactions
occurred on the dates indicated, or that may be expected to occur in the future as a result of the Transactions.

F-1
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MEDIACOM BROADBAND AND SUBSIDIARIES


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
(In thousands)

S e pte m be r 30, 2008


Tran sfe r Tran sfe r
Agre e m e n t - Agre e m e n t -
Historical Asse t C ash Pro Form a
C on solidate d Tran sfe r (a) Paym e n ts C on solidate d
ASSETS
Cash $ 17,389 $ — $ — $ 17,389
Subscriber accounts receivable, net 172,749 (495) — 172,254
Prepaid expenses and other assets 9,691 (23) — 9,668
Total current assets $ 199,829 $ (518) $ — $ 199,311

Preferred equity investment in affiliated company —

Property, plant and equipment, net 744,965 (15,111) — $ 729,854


Intangible assets, net 1,459,245 (31,708) — 1,427,537
Other assets, net 27,261 3 — 27,264

Total assets $ 2,431,300 $ (47,334) $ — $ 2,383,966

LIABILITIES AND MEMBER’S EQUITY


(DEFICIT)
Accounts payable and accrued expenses $ 157,696 $ 302 — $ 157,998
Deferred revenue 29,499 (10) — 29,489
Current portion of long-term debt 88,375 — — 88,375
Total current liabilities $ 275,570 $ 292 — $ 275,862

Long-term debt, less current portion $ 1,684,000 — 74,000(b) 1,766,200


8,200(c)
Other non-current liabilities 3,909 — — 3,909
Preferred member’s interest 150,000 — — 150,000
Total member’s equity (deficit) $ 317,821 $ (47,626) $ (82,200)(d) $ 187,995
Total liabilities and member’s equity (deficit) $ 2,431,300 $ (47,334) $ — $ 2,383,966

F-2
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MEDIACOM BROADBAND AND SUBSIDIARIES


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(In thousands)

Ye ar En de d De ce m be r 31, 2007
Tran sfe r Tran sfe r
Historical Agre e m e n t - Agre e m e n t - Pro Form a
C on solidate d Asse t Tran sfe r(e) C ash Paym e n ts C on solidate d
Revenues $ 727,462 $ (6,430) $ — $ 721,032

Service costs $ 298,103 $ (1,854) $ — $ 296,249


S,G&A expenses 159,314 (1,541) — 157,773
Depreciation and amortization 116,678 (1,395) — 115,283
Management fee expenses 13,371 — — 13,371
Total operating costs $ 587,466 $ (4,790) $ — $ 582,676

Operating income $ 139,996 $ (1,640) $ — $ 138,356

Interest expense, net $ (120,673) $ (2) $ (1,376)(f) $ (122,204)


(153)(g)
Loss on derivatives, net (12,946) — — (12,946)
Gain on sale of cable systems, net 2,249 — — 2,249
Other (expense) income, net (3,352) 15 — (3,337)

Net (loss) income $ 5,274 $ (1,627) $ (1,529) $ 2,118

Dividend to preferred member 18,000 — — 18,000

Net loss applicable to member $ (12,726) $ (1,627) $ (1,529) $ (15,882)

F-3
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MEDIACOM BROADBAND AND SUBSIDIARIES


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(In thousands)

Nine Mon ths En de d S e pte m be r 30, 2008


Tran sfe r Tran sfe r
Historical Agre e m e n t - Agre e m e n t - Pro Form a
C on solidate d Asse t Tran sfe r(h) C ash Paym e n ts C on solidate d
Revenues $ 583,270 $ (3,636) $ — $ 579,634

Service costs $ 236,320 $ (426) $ — $ 235,894


S,G&A expenses 124,865 (1,885) — 122,981
Depreciation and amortization 86,058 (1,401) — 84,656
Management fee expenses 11,189 — — 11,189
Total operating costs $ 458,432 $ (3,712) $ — $ 454,720

Operating income $ 124,838 $ 76 $ — $ 124,914

Interest expense, net $ (86,240) $ (3) $ (1,032) (f) $ (87,389)


(114) (g)
Gain on derivatives, net 2,387 — — 2,387
Other expense, net (3,462) (3) — (3,465)

Net income (loss) $ 37,523 $ 70 $ (1,146) $ 36,447

Dividend to preferred member 13,500 — — 13,500

Net income (loss) applicable to member $ 24,023 $ 70 $ (1,146) $ 22,947

F-4
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(a) Represents adjustments to net book values associated with the Asset Transfer transaction as of
September 30, 2008, as follows:

Me diacom Broadban d Me diacom LLC Me diacom Broadban d


(in thousands) Re ce ivin g Re ce ivin g Ne t Re su lts
ASSETS
Cash $ — $ — $ —
Subscriber accounts
receivable, net 1,509 2,004 (495)
Prepaid expenses and
other assets 159 182 (23)
Total current assets 1,668 2,186 (518)
Preferred equity
investment in
affiliated company — — —
Property, plant and
equipment, net 30,661 45,772 (15,111)
Intangible assets, net 43,365 75,073 (31,708)
Other assets, net 24 21 3
Total assets $ 75,718 $ 123,052 $ (47,334)
LIABILITIES AND
MEMBER’S
EQUITY (DEFICIT)
Accounts payable and
accrued expenses $ 4,060 $ 3,758 $ 302
Deferred revenue 1 11 (10)
Current portion of
long-term debt — — —
Total current
liabilities $ 4,061 $ 3,769 $ 292
Long-term debt, less
current portion — — —
Other non-current
liabilities — — —
Total member’s equity
(deficit) 71,657 119,283 (47,626)
Total liabilities and
member’s equity
(deficit) $ 75,718 $ 123,052 $ (47,334)

(b) Represents new indebtedness to fund capital contribution to MCC under the Exchange Cable Systems
transaction. See Note (f).
(c) Represents new indebtedness to fund cash payment under the Asset Transfer transaction. See Note (g).
(d) Represents capital contributions under the Transfer Agreement transaction.
(e) Represents net results of operations associated with the Asset Transfer transaction for the year ended
December 31, 2007, as follows:

Me diacom Broadban d Me diacom LLC Me diacom Broadban d


(in thousands) Re ce ivin g Re ce ivin g Ne t Re su lts
Revenues $ 36,726 $ 43,156 $ (6,430)

Service costs $ 17,439 $ 19,293 $ (1,854)


S,G&A expenses 7,335 8,876 (1,541)
Depreciation and
amortization 6,300 7,695 (1,395)
Total operating costs $ 31,074 $ 35,864 $ (4,790)

Operating income $ 5,652 $ 7,292 $ (1,640)

Interest income, net 9 11 (2)


Other income, net 32 17 15
Net income $ 5,693 $ 7,320 $ (1,627)
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(f) Represents adjustments to Interest expense, net to reflect repayment of a portion of outstanding balance
under revolving credit facilities in the amount of $74.0 million. The effective annual interest rate of 1.86% as
of February 13, 2009, was applied to this repayment for the year ended December 31, 2007 and nine months
ended September 30, 2008 and was based on our Eurodollar rate plus a spread of 1.50%.

(g) Represents adjustments to Interest expense, net to reflect repayment of a portion of outstanding balance
under revolving credit facilities in the amount of $8.2 million. The effective annual interest rate of 1.86% as of
February 13, 2009, was applied to this repayment for the year ended December 31, 2007 and nine months
ended September 30, 2008 and was based on our Eurodollar rate plus a spread of 1.50%.
(h) Represents net results of operations associated with Asset Transfer transaction for the nine months ended
September 30, 2008, as follows:

Me diacom Broadban d Me diacom LLC Me diacom Broadban d


(in thousands) Re ce ivin g Re ce ivin g Ne t Re su lts
Revenues $ 30,312 $ 33,948 $ (3,636)

Service costs $ 14,422 $ 14,848 $ (426)


S,G&A expenses 5,272 7,156 (1,884)
Depreciation and
amortization 4,052 5,454 (1,402)
Total operating costs $ 23,746 $ 27,458 $ 3,712

Operating income $ 6,566 $ 6,490 $ 76

Interest income, net 3 6 (3)


Other income, net 5 8 (3)
Net income $ 6,574 $ 6,504 $ 70

F-5
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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 hereunto duly authorized.

Dated: February 20, 2009

Mediacom Broadband LLC

By: /s/ Mark E. Stephan


Mark E. Stephan
Executive Vice President and
Chief Financial Officer

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