th
15
Annual
Smith Barney Citigroup
Entertainment, Media &
Telecommunications Conference
January 11, 2005
Safe Harbor Statement
Any statements in this presentation that are not historical facts are forwardlooking statements. The words “plan”, “believe”, “expect”, “anticipate”,
“estimate” and other expressions that indicate future events and trends
identify forward-looking statements. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from historical results or those anticipated. Factors that
could have a material and adverse impact on actual results are described in
the reports and documents Mediacom files from time to time with the
Securities and Exchange Commission. Mediacom undertakes no obligation
to publicly release the results of any revisions to these forward-looking
statements to reflect events or circumstances after today or to reflect the
occurrence of unanticipated events.
2
Use of Non-GAAP Financial Measures
This presentation includes the financial measures “operating income before
depreciation and amortization,” “unlevered free cash flow” and “free cash
flow”, which are not determined in accordance with generally accepted
accounting principles (GAAP) in the United States. The Company defines
unlevered free cash flow as operating income before depreciation and
amortization less capital expenditures, and free cash flow as operating
income before depreciation and amortization less interest expense, net and
capital expenditures.
Any applicable reconciliation of historical non-GAAP financial measures
included in this presentation to the most directly comparable GAAP
financial measures is available at the Press Releases link in the Investor
Relations section of the Company’s website at www.mediacomcc.com. The
Company is unable to reconcile operating income before depreciation and
amortization, unlevered free cash flow and free cash flow to their most
directly comparable GAAP measures on a forward-looking basis primarily
because it is impractical to project the timing of certain items, such as the
initiation of depreciation relative to network construction projects, or
changes in working capital.
3
Mediacom Highlights
 Growing ARPU and expanding RGU penetration
despite intensified video competition
 Attractive growth prospects from Video/Data/
Voice triple play
 Normalized CAPEX leads to increasing levels of
Free Cash Flow
 Flexible capital structure with substantial liquidity
position
4
Our Position Today
 Fiber-rich broadband network
 Regional clusters facilitate new product launches
 Future capex mostly success-based
 Facing intensified video competition
 DBS local-into-local now covers 91% of our markets
 Aggressively introducing advanced video products
 Widespread rollout of VOD, SVOD, HDTV and DVR by YE 2005
 Redefining and expanding our market opportunity
 Continuing growth in RGUs with revenue diversification
 Significant opportunities in residential and commercial data
 Launching VoIP telephone service in 1H 2005
5
The Power of the ONE Network…
Northern Network: 1,500,000 Homes
MN
Minneapolis
WI
IA
Cedar Rapids
South Bend
Moline
Des Moines
Peoria
IL
IN
Springfield
Charleston
SONET-Ready in 2005
Carbondale
6
…is Beginning to Demonstrate its Potential
Southern Network: 400,000 Homes
GA
AL
Albany
MS
Valdosta
Mobile
Tallahassee
Pensacola
FL
Northern/Southern Network Reach: 70% of Our Total Homes
7
Growing ARPU Despite Intensified Video
Competition
DBS Local-into-Local Coverage
1,595
1,592
Basic subs (000's)
1,543
1,461
91%
62%
28%
15%
Video ARPU
Total ARPU
YE 2001
YE 2002
YE 2003
Q3 2004
$40.23
$44.54
$43.17
$50.10
$45.90
$55.75
$47.20
$58.95
8
Video Service Platform is Complete
Availability
(% of digital customers)
VOD
DVR
HDTV
YE03
50%
-
70%
YE04
65%
98%
77%
YE05 (projected)
80%
100%
90%
Product Differentiation
9
Next Year: VoIP Telephony
 VoIP: next layer of revenue growth
 Completes the “triple play” bundle
 Wireless opportunity = “quadruple play”
 Strategic alliance with Sprint
 Compelling offering to the consumer
 Primary line service with unlimited local and long
distance
 Targeting $40 per month
 Seamless and convenient switch
 Moderate levels of success-based capex
 Favorable return on invested capital
Mediacom expects to launch VoIP service in 1H 2005
10
Growth Propelled by New RGU’s
Rev/Basic Sub:
$35
98%
Video
Data
Voice
Ad Sales
$59
$81
81%
69%
18%
14%
1999
RGU/HP
Rev/RGU
68%
$34
8%
5%
5%
Q3 2004
2007
79% 100%
$40
$43
11
Key Operational Objectives
 Redesign/enhance core video strategies
 Expand breadth and depth of advanced
video services
 Strengthen broadband data product line
 Prepare for VoIP launch in 1H 2005
12
Current Core Video Strategy
 Customer Acquisition
 Re-price and re-package digital offerings
 Increasing focus on bundling digital service with
VOD/SVOD, HDTV and DVRs
 Retention
 Selected offers and promotions to retain customers
 Greater emphasis on customer care efforts
 Communication
 Brand and product differentiation
 Disrupt/combat negative competitive marketing efforts
13
New Digital Packages Close the Gap
Average Cost - 4 Set Household
Mediacom: 2 Digital TVs, 2 Analog TVs
Satellite: All Digital TVs/No Analog Offered
Service
1-Pay Starz +
SVOD
2-Pay
Show/HBO +
SVOD
Mediacom
$61
$69 - $73
$81
$94
DBS
$67
$78
$85 - $88
$92 - $96
3 Pay +
SVOD
4 Pay +
SVOD
14
Mediacom On-Demand
Case Study: North Central Region
55%
Orders per Month
Usage Rates
27%
519,000
195,000
Jun 2004
Nov 2004
 1,200 hours of content
 On-Demand Premium Services:
Starz, Showtime and HBO
included with premium
subscription
 Value-based packaging
 Objectives:
-
Drive digital sales
Enhance value proposition
Lower digital churn
Generate higher incremental
transactional revenues
15
Regaining the Competitive Advantage
DVR
 No equipment to purchase
 No contract
 HDTV capable
 Low entry price ($2.50/month
incremental)
 Fully integrated with TV Guide
 Dual-tuner rollout: December 2004
– January 2005
Mediacom HD Pack includes:
HDTV
 Mediacom equipment is
$2.50/month vs. Satellite’s
$200 plus in upfront equipment
charges
 HBO HD, Starz HD, Showtime HD
included w/premium subscription
 Local Broadcast Channels
16
Data Strategy
 Launching 5MB residential product for heavy
users
 “Lite” (128k) product introduced in Q2 2004
 Retention tool
 Aimed at dial-up market
 Commercial business opportunities
 Benefits of renegotiated AT&T data contract
 Lower per customer costs to Mediacom (including “Lite”
product)
 Allows for migration to in-house provisioning
17
Data Penetration Will Accelerate

Our lower data penetration is largely due to data market launches between
two and four years after our peers
Data Customer Penetration as of Q3 2004
28.4%
23.1%
Cablevision

Cox
16.1%
15.1%
13.2%
12.6%
Comcast
Charter
Insight
Mediacom
Our markets, although smaller relative to peers, are demographically inline with U.S. averages and offer strong opportunities for increasing data
penetration
2003
2003 Household
Household Income1
Internet Penetration
U.S. average
$42,400
58%2
MCCC market average
$43,800
52%3
1 Source:
Nielsen Media Research (based on information from U.S. census).
Source: IDC (2003).
3 Mediacom estimate based on publicly available information and cable system customer surveys.
2
18
Mediacom’s VoIP Service Features
 Primary line service
 Unlimited local and long distance
 Targeting $40 per month
 Consumers switching to Mediacom’s phone
service can:
 Keep their existing phone numbers and directory
listings
 Utilize their existing telephones and home wiring
 Access all of the traditional telephone products and
services (caller ID, call waiting, call forwarding, etc.)
 Take comfort in the stability, security and reliability of
facilities-based providers
19
Sprint Partnership
 Strategic alliance utilizes Mediacom’s advanced digital
network and Sprint’s national infrastructure and
telecommunications expertise
 Multi-year agreement with favorable economics
 Unlimited usage, any distance, flat rate
 Sliding scale pricing to Mediacom
 Sprint will assist Mediacom in:
 Switching and termination of traffic to the public switched
telephone network (PSTN)
 Delivery of enhanced E911 emergency service, local number
portability, operator and directory assistance
 Voicemail and other features
 Product development
 Opportunity to resell Sprint’s wireless services
20
Single Platform of Broadband Products
DBS
Digital
-
RBOC
-
ILEC
-
Mediacom
Digital
HDTV
DVR
-
-
HDTV
Local HDTV
DVR
-
DSL
Voice
DSL
Voice
Modem
VoIP
VOD
SVOD
RBOC Overlap in Only 65% of Mediacom’s Footprint
21
Dramatic Improvement in FCF
Substantial NOLs Shelter FCF from Cash Taxes
Levered FCF (LFCF)
Unlevered FCF (UFCF)
Capex
$408
$285
$241
$235
$184
$178
$165
($56)
($37)
($125)
($177)
($37)
($25)
$40
($225)
2000
2001
2002
2003
2004G
$ in millions
G = Guidance
22
YTD 2004 Peer Comparison
YTD – September 30, 2004
(Per basic subscriber)
Mediacom1
Charter
Cablevision
Comcast
Cox
Insight
Monthly Total ARPU
$58.65
$66.48
$86.83
$74.13
$84.06
$63.80
Monthly Operating Expenses
(35.40)
(41.11)
(52.83)
(45.69)
(52.80)
(36.85)
Monthly EBITDA
$23.25
$25.37
$34.00
$28.44
$31.26
$26.95
Margin
39.6%
38.2%
39.2%
38.4%
37.2%
42.2%
Annualized EBITDA
$279
$304
$408
$341
$375
$323
Annualized Capex
(112)
(139)
(219)
(160)
(214)
(135)
Annualized Unlevered FCF
$167
$165
$189
$181
$161
$188
23.7%
20.7%
18.1%
20.3%
16.0%
24.6%
Unlevered FCF margin
Source: Public filings and reports.
1 Excludes Hurricane Ivan related charges.
23
Flexible Capital Structure
Mediacom Communications
Corporation
Total Debt:
$3.0 Billion
Convertible Notes
Total Debt/OCF
Total Debt (excl cnvt)/OCF
$825
7.0x
Mediacom LLC
Subsidiaries
Senior Debt
$656
2
Unused Credit Commitments $486
Senior Debt/SCF
3.1x
Notes:
Cost of Debt:
6.7%
Mediacom Broadband LLC
Mediacom LLC
Senior Notes
Total Debt/OCF1
$173
7.4x
6.9x
Senior Notes
Total Debt/OCF
$400
6.3x
Mediacom Broadband LLC
Subsidiaries
Senior Debt3
$965
Unused Credit Commitments $431
Senior Debt/SCF
4.3x
Based on Q3 ‘04 data; OCF is annualized and excludes hurricane-related charges.
Dollars in millions.
1 OCF for Mediacom LLC includes cash investment income.
2 Proforma for the new credit facility as of 10/21/04.
3 Includes letters of credit and capital lease obligations (net of carve-outs) for bank covenant purposes.
24
New $1.15 Billion Credit Facility
 Extended debt maturities
 Enhanced liquidity
 Greater covenant headroom
 Simplified corporate structure and reporting
25
MCCC Scheduled Debt Maturities
Convert
Senior Notes
Bank Debt
Q3 2004
$1,500
Fixed - Floating:
73% - 27%
$1,406
$1,250
$1,000
$750
$550
$500
$250
$270.5
$220.5
$238.5
$206
$70.5
$40.5
$5.5
$0
2005E
2006E
2007E
2008E
2009E
2010E
2011E
2012E
2013E
$ in millions
Note: Assumes no repayment of revolver outstanding until required by commitment reduction schedule.
26
Credit Availability
 Solid track record of preserving liquidity and
maintaining ample borrowing availability
Unused Credit Commitments
$1,100
$917
$844
$770
$437
FYE 2000
$ in millions
FYE 2001
FYE 2002
FYE 2003
Sep-04
27
Summary
 Strengthening competitive video position
 Broadening data business with commercial
accounts
 Seizing VoIP opportunity
 Accelerating positive free cash flow
28
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