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CABLEVISION
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2011 Form 10-K
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NYSE: CVC
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Table of contents

  • Page 1
    CABLEVISION SYSTEMS CORPORATION 2011 Form 10-K NYSE: CVC

  • Page 2

  • Page 3
    ...ACT OF 1934 [NO FEE REQUIRED] For the transition period from _____ to _____ Commission File Number 1-14764 Registrant; State of Incorporation; Address and Telephone Number Cablevision Systems Corporation Delaware 1111 Stewart Avenue Bethpage, NY 11714 (516) 803-2300 CSC Holdings, LLC Delaware 1111...

  • Page 4
    ... to the price at which the common equity was last sold on the New York Stock Exchange as of June 30, 2011: $8,031,312,425 Number of shares of common stock outstanding as of February 23, 2012: Cablevision NY Group Class A Common Stock Cablevision NY Group Class B Common Stock CSC Holdings, LLC...

  • Page 5
    ... Director Independence Principal Accountant Fees and Services * * * * * Exhibits and Financial Statement Schedules 93 Some or all of these items are omitted because Cablevision intends to file with the Securities and Exchange Commission, not later than 120 days after the close of its fiscal year...

  • Page 6
    This page intentionally left blank.

  • Page 7
    ...") services using our cable television broadband network. Through Cablevision Lightpath, Inc. ("Optimum Lightpath"), our wholly-owned subsidiary, we provide telephone services and high-speed Internet access to the business market. In addition, we own approximately 97.2% of Newsday LLC which operates...

  • Page 8
    ...Optimum brand name to market our video product offerings. Our video services may include, among other programming, local broadcast network affiliates and independent television stations, certain other news, information and entertainment channels such as CNN, AMC, CNBC, ESPN, MTV, and regional sports...

  • Page 9
    ... - Cable Television." We also provide high-speed data services using our cable television broadband network. High-speed data services are provided to residential and small business customers through a cable modem device. The high-speed data service is marketed as "Optimum Online". We offer VoIP...

  • Page 10
    ... operations because Optimum Lightpath's thirdparty revenues are unrelated to our cable television system customers. Represents data for the New York metropolitan service area. (4) (5) (6) Subscriber Rates and Services; Marketing and Sales Video Services Our cable television systems offer...

  • Page 11
    ... mail advertising, promotional campaigns and local media and newspaper advertising. Optimum Online Optimum Online is our high-speed Internet access offering, which connects customers to the Internet using the same network that delivers our cable television service. Our plant is designed for download...

  • Page 12
    ... promotional pricing are available when Optimum Online is combined with our other service offerings. We have deployed a broadband wireless network ("WiFi") in commercial and high traffic locations across our New York metropolitan service area as a free value-added benefit to Optimum Online customers...

  • Page 13
    ...Play, available in our New York metropolitan service area, includes Optimum Online Boost Plus and a free router for new customers. We have from time to time also offered promotional and other pricing discounts as part of our competitive strategy. Subscribers to all three of our service offerings who...

  • Page 14
    ... New York and in the New York metropolitan area amNew York, a free daily newspaper distributed in New York City; and Star Community Publishing, a group of weekly shopper publications. News 12 Networks The regional news services provided by the Company include News 12 Long Island, News 12 New Jersey...

  • Page 15
    ... and New Jersey. Cablevision Media Sales Corporation Cablevision Media Sales Corporation, previously known as Rainbow Advertising Sales Corporation, is a cable television advertising company that sells local and regional commercial advertising time on cable television networks and offers advertisers...

  • Page 16
    ... to offer satellite-based high-speed data services. Cellular phone providers are also increasing the speeds of their Internet access offerings, and the FCC has made other radio spectrum available for wireless highspeed Internet access. VoIP Our VoIP service in our New York metropolitan service area...

  • Page 17
    ... competition for Optimum Lightpath and the Bresnan CLECs. Newsday Newsday operates in a highly competitive market, which may adversely affect advertising and circulation revenues. Newsday faces significant competition for advertising revenue from a variety of media sources. The most direct source of...

  • Page 18
    ...chosen not to regulate rates. For our New York metropolitan service area cable television systems, the FCC has made "effective competition" findings in the majority of our communities covering substantially all of our customer base. For our Optimum West service area cable television systems, we have...

  • Page 19
    ... further steps to promote a retail market for cable service navigation devices, including requirements to facilitate access to Internet-based video offerings via subscribers' television sets, which may entail further mandates in connection with the support and deployment of set top boxes. PEG and...

  • Page 20
    ... Garden, the FCC in November 2011 ordered Madison Square Garden to license Verizon and AT&T the terrestrially-delivered HD programming of the MSG networks. Program Carriage. The FCC's program carriage rules govern disputes between cable operators and unaffiliated programming services over the terms...

  • Page 21
    ... which the operator is the only MVPD with access to the building. The FCC is considering whether to extend these prohibitions to exclusive marketing and bulk sales arrangements. Privacy. In the course of providing service, we collect certain information about our subscribers and their use of our...

  • Page 22
    ... video services. Pursuant to the Accessibility Act, in October 2011, the FCC adopted regulations governing advanced communications services, and in January 2012, the FCC adopted rules requiring that video programming delivered via Internet Protocol include closed captioning and requiring cable...

  • Page 23
    ... and long distance companies, with nondiscriminatory access and interconnection to the BOC and ILEC networks and access to certain portions of their communications networks (known as network elements) at cost-based rates. The 1996 Telecommunications Act entitles our Optimum Lightpath and the Bresnan...

  • Page 24
    ... (rates, terms and conditions); filing operational, financial, and customer service reports; seeking approval to transfer the assets or capital stock of the telephone company; seeking approval to issue stocks, bonds and other forms of indebtedness of the telephone company; reporting customer service...

  • Page 25
    ... in the New York market because of common ownership with our cable systems there, but we have obtained a waiver of this restriction through the end of the license term. Second, a wholly-owned subsidiary of Bresnan Cable holds three licenses that permit us to provide wireless broadband services in...

  • Page 26
    ... in order to offer our new or upgraded services to our current and potential customers and to pursue activities outside our core businesses such as our acquisitions of an electronics retailer, Clearview Cinemas, Newsday and our development of Rainbow DBS. In 2006, CSC Holdings incurred $3.5 billion...

  • Page 27
    ... to Cablevision to fund a $10 per share dividend on its common stock and approximately $414 million of which was used to repay existing indebtedness, including interest, fees and expenses. In December 2010, we incurred approximately $1.4 billion of indebtedness to finance our acquisition of Bresnan...

  • Page 28
    ... payments for customer premises equipment, such as new digital video cable boxes and modems, as well as infrastructure and capital expenditures related to our cable and Optimum Lightpath telecommunications networks, in addition to the capital requirements of our other businesses. Historically, we...

  • Page 29
    ...in our New York metropolitan service area and CenturyLink in our Optimum West service area. In addition, DBS providers have tested the use of certain spectrum to offer satellite-based high-speed data services. Cellular phone providers are also increasing the speeds of their Internet access offerings...

  • Page 30
    ...to attract and retain subscribers and the demand for our services and it can also decrease advertising demand on our delivery systems. Our high-speed data business faces technological challenges from rapidly evolving wireless Internet solutions. Our voice offerings face technological developments in...

  • Page 31
    ... if we were not continuing as an operating business. We urge you to read carefully our consolidated financial statements contained herein, which provide more detailed information about these intangible assets. Programming costs of our cable television systems are increasing and we may not have the...

  • Page 32
    ...,000 video customers, are expired. We are currently operating in these franchise areas under temporary authority. On December 15, 2011, the City of Yonkers and the Company executed a 10year renewal agreement, which will become effective when approved by the New York State Public Service Commission...

  • Page 33
    ... or acquisition of Cablevision's stock or engage in new businesses or other transactions that might increase the value of our business. These restrictions may also limit our ability to raise significant amounts of cash through the issuance of stock, especially if Cablevision's stock price were...

  • Page 34
    ... to which we received a management fee that was based upon revenues of the AMC and WE tv networks. This fee, which amounted to approximately $14.0 million for the six months ended June 30, 2011, was previously included in the operating income of our Telecommunications Services segment and has been...

  • Page 35
    ... a corporate opportunity (other than certain limited types of opportunities set forth in the policy) to Madison Square Garden or AMC Networks or any of their respective subsidiaries instead of the Company, or does not refer or communicate information regarding such corporate opportunities to the...

  • Page 36
    ... stations), cable television system plant (distribution equipment, amplifiers, subscriber drops and hardware), converters, test equipment, tools and maintenance equipment. We also generally own our service and other vehicles. Clearview Cinemas leases 38 theatres (22 in New Jersey, 14 in New York and...

  • Page 37
    ...A common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "CVC." Price Range of Cablevision NY Group Class A Common Stock The following tables set forth for the periods indicated the intra-day high and low sales prices per share of the CNYG Class A common stock as reported on...

  • Page 38
    ... of Madison Square Garden, a company which owns the sports, entertainment and media businesses previously owned and operated by the Company's Madison Square Garden segment. The MSG Distribution took the form of a distribution by Cablevision of one share of Madison Square Garden Class A Common Stock...

  • Page 39
    ... to the Company's employee stock plan. In addition to the information provided in the table above, for the three months ended December 31, 2011, approximately 370,100 restricted shares of CNYG Class A common stock issued to employees of the Company, AMC Networks and Madison Square Garden vested. To...

  • Page 40
    ... in CNYG Class A common stock prices from December 31, 2006 through December 31, 2011. As required by the SEC, the values shown assume the reinvestment of all dividends and also reflect the effect of the AMC Distribution and MSG Distribution. Because no published index of comparable media companies...

  • Page 41
    ... financial statements of Cablevision and CSC Holdings. The selected financial data presented below should be read in conjunction with the audited consolidated financial statements of Cablevision and CSC Holdings and the notes thereto included in Item 8 of this Report. Operating Data: 2011...

  • Page 42
    ... net of income taxes ...Income from discontinued operations, net of income taxes ...Cumulative effect of a change in accounting principle, net of income taxes ...Net income (loss) ..._____ (1) Amounts include the operating results of Bresnan Cable from the date of acquisition on December 14, 2010.

  • Page 43
    ..., net of income taxes ...Income from discontinued operations, net of income taxes ...Cumulative effect of a change in accounting principle, net of income taxes...Net income (loss)..._____ (1) Amounts include the operating results of Bresnan Cable from the date of acquisition on December 14, 2010.

  • Page 44
    ... 29,227 42,763 11,158,782 13,761 (5,575,855) 1,791 (5,574,064) 2011 2010 CSC Holdings, LLC December 31, 2009 (Dollars in thousands) 2008 2007 (38) Total assets ...Credit facility debt ...Collateralized indebtedness ...Senior notes and debentures ...Notes payable ...Capital lease obligations...

  • Page 45
    ... CSC Holdings, LLC As of December 31, Optimum New York West Metropolitan Service Service Area Total Total Area 2011 2010 2010 2010(1) (in thousands, except per subscriber amounts) 3,317 3,123 2,282 1,592 4,679 Total customers(2)...Video customers(3) ...High-speed data customers ...Voice customers...

  • Page 46
    ...the level of our revenues; competition for subscribers from existing competitors (such as telephone companies and direct broadcast satellite ("DBS") distributors) and new competitors (such as high-speed wireless providers) entering our franchise areas; demand for our video, high-speed data and voice...

  • Page 47
    ... monthly charges include fees for cable television programming, high-speed data and voice services, as well as equipment rental, DVR, video-on-demand, pay-per-view, installation and home shopping commissions. Revenue increases are derived from rate increases, increases in the number of subscribers...

  • Page 48
    ... AT&T offer video programming as well as voice and high-speed Internet access services to residential customers in our New York metropolitan service area. Verizon has constructed fiber to the home network plant that passes a significant number of households in our New York metropolitan service area...

  • Page 49
    ... theatre business, Clearview Cinemas, (iii) the News 12 Networks, our regional news programming services, (iv) the MSG Varsity network, our network dedicated entirely to showcasing high school sports and activities, (v) our cable television advertising company, Cablevision Media Sales Corporation...

  • Page 50
    ... seven 24-hour local news channels and five traffic and weather services dedicated to covering areas within the New York metropolitan area, derives its revenues from the sale of advertising on its networks and affiliation fees paid by cable operators, principally Cablevision. MSG Varsity MSG Varsity...

  • Page 51
    ...relationships, customer attrition, eventual development of new technologies and market competition. For Newsday, these valuations also include assumptions for advertising and circulation revenue trends, operating margin, market participant synergies, and market multiples for comparable companies. If...

  • Page 52
    ... or market approach. The Company's cable television franchises are the largest of the Company's identifiable indefinite-lived intangible assets and reflect agreements we have with state and local governments that allow us to construct and operate a cable business within a specified geographic area...

  • Page 53
    ... weighted average discount rate of 12.5% at December 31, 2011 and 12% at December 31, 2010 and 2009. The market approach measures fair value using market multiples of various financial measures compared to a set of comparable publicly traded newspaper publishing companies and comparable transactions...

  • Page 54
    ... the risk of loss as new information becomes available and adjusts liabilities as necessary. The actual cost of resolving a claim may be substantially different from the amount of the liability recorded. Refer to Note 18 to our consolidated financial statements included in this Annual Report on...

  • Page 55
    ... financial results of Madison Square Garden have been reflected in the Company's consolidated financial statements as discontinued operations for all periods presented through the MSG Distribution date. On December 14, 2010, the Company completed its acquisition of Bresnan Cable for a purchase price...

  • Page 56
    Results of Operations - Cablevision Systems Corporation The following table sets forth on a historical basis certain items related to operations as a percentage of net revenues for the periods indicated: STATEMENT OF INCOME DATA Years Ended December 31, 2011 Amount % of Net Revenues Amount 2010 % of...

  • Page 57
    STATEMENT OF INCOME DATA (continued) Years Ended December 31, 2010 Amount % of Net Revenues Amount 2009 % of Net Revenues Favorable (Unfavorable) Revenues, net ...$6,177,575 Operating expenses: Technical and operating (excluding depreciation, amortization and impairments shown below) ...2,663,748 ...

  • Page 58
    ..., amNew York, Star Community Publishing Group, and online websites including newsday.com and exploreLI.com; (ii) our motion picture theatre business, Clearview Cinemas, (iii) the News 12 Networks, (iv) the MSG Varsity network, (v) Cablevision Media Sales, a cable television advertising company, and...

  • Page 59
    ...a percentage of revenues, technical and operating expenses increased 1% in 2011 as compared to 2010. Selling, general and administrative expenses include primarily sales, marketing and advertising expenses, administrative costs, and costs of customer call centers. Selling, general and administrative...

  • Page 60
    ...the year ended December 31, 2010, reflecting an effective tax rate of 35%. In the second quarter of 2010, the Company recorded a nonrecurring tax benefit of $18,951 for an increase in certain state and city net operating loss carry forwards pursuant to the finalization of an examination with a state...

  • Page 61
    ... Distribution. Includes operating results of the Madison Square Garden segment from January 1, 2010 through the date of the MSG Distribution. Business Segments Results Telecommunications Services The table below sets forth, for the periods presented, certain historical financial information and the...

  • Page 62
    ... rental, DVR, video-on-demand, and pay-per-view)...$3,521,882 High-speed data ...1,329,354 Voice...885,343 Advertising ...150,671 Other (including installation, advertising sales commissions, home shopping, and other products) ...100,953 Total Cable Television ...5,988,203 Optimum Lightpath ...310...

  • Page 63
    ...: Increase in programming costs (including costs of on-demand services) primarily due to programming costs for the newly acquired Bresnan Cable system operations of $114,946, rate increases and new program offerings, partially offset by lower subscribers to certain tiers of video service ...$167...

  • Page 64
    ... with the operation of the newly acquired Bresnan Cable system of $29,007, increased high-speed data and voice customers and general cost increases, partially offset by a decrease in customer related costs in the New York metropolitan service area primarily due to a reduction in call center labor...

  • Page 65
    ... challenging economic environment and competition from other media ...Increase in advertising revenues at News 12 Networks and commission revenues at Cablevision Media Sales ...Decrease in other revenues primarily at PVI and Clearview Cinemas ...Intra-segment eliminations ... $(21,000) 3,442 (3,045...

  • Page 66
    ... figures include for the first time digital subscriptions (most of which are free to Optimum Online and certain Newsday print subscribers) to Newsday's restricted access website as these were not previously reported. These circulation figures include Newsday's total average print circulation of...

  • Page 67
    ...on a per-subscriber basis; network management and field service costs which represent costs associated with the maintenance of our broadband network, including costs of certain customer connections; interconnection, call completion and circuit fees relating to our telephone and VoIP businesses which...

  • Page 68
    ... and administrative expenses include primarily sales, marketing and advertising expenses, administrative costs, and costs of customer call centers. Selling, general and administrative expenses increased $51,206 (4%) for 2010 as compared to 2009. The net increase is attributable to the following...

  • Page 69
    ... results of AMC Networks, including transaction costs, net of income taxes ..._____ $ (4,122) 157,970 $153,848 $ 35,856 125,611 $161,467 (a) Includes operating results of the Madison Square Garden segment from January 1, 2010 through February 9, 2010, the date of the MSG Distribution. (63...

  • Page 70
    ..., video-on-demand and digital video recorder) ...$3,237,793 High-speed data ...1,193,624 Voice ...808,374 Advertising ...135,890 Other (including installation, home shopping, advertising sales commissions, and other products) ...94,907 Total Cable Television ...5,470,588 Optimum Lightpath ...284...

  • Page 71
    ... of new subscribers. The acquisition of our Bresnan Cable system on December 14, 2010, resulted in an approximate $22,100 increase in revenues, net. These increases are partially offset by promotional offer pricing discounts and a decline in video customers in our New York metropolitan service area...

  • Page 72
    ...: Increase in programming costs (including costs of on-demand services) due primarily to rate increases (see discussion of MSG networks below), new program offerings and programming costs for the newly acquired Bresnan Cable system operations ($5,662), partially offset by lower subscribers to...

  • Page 73
    ...expenses relating to Cablevision's long-term incentive plans ...Other net increases primarily due to legal costs, other fees and employee costs in the New York metropolitan service area and administrative costs associated with the operation of the newly acquired Bresnan Cable system ($2,244)...Intra...

  • Page 74
    ... other media ...Increase in advertising revenues at News 12 Networks and commission revenues at Cablevision Media Sales ...Decrease in other revenues primarily at PVI and Clearview Cinemas ...Intra-segment eliminations ... $(28,188) 10,128 (8,986) (1,245) $(28,291) Technical and operating expenses...

  • Page 75
    ... of $11,168 ...Charges to Madison Square Garden in 2010 for transition services ...Increase in costs at MSG Varsity, Cablevision Media Sales and News 12 Networks ...Transaction costs related to the Bresnan Cable acquisition ...Other net increases...Intra-segment eliminations ...$(21,832) (6,096...

  • Page 76
    ... $391,223 Refer to Cablevision's Management's Discussion and Analysis of Financial Condition and Results of Operations herein. CASH FLOW DISCUSSION Continuing Operations - Cablevision Systems Corporation Net Cash Provided by Operating Activities Net cash provided by operating activities amounted to...

  • Page 77
    ... $1,356,500 of payments related primarily to the acquisition of Bresnan Cable, $823,245 of capital expenditures ($779,928 of which relate to our Telecommunications Services segment) and net contributions to AMC Networks (reflected in discontinued operations) of $99,614, partially offset by other net...

  • Page 78
    ... and other non-cash items of $108,710 and an increase of $102,222 resulting from changes in working capital, including the timing of payments and collections of accounts receivable, among other items. Net cash provided by operating activities amounted to $1,397,075 for the year ended December...

  • Page 79
    ... Services segment), partially offset by net contributions from AMC Networks (reflected in discontinued operations) of $66,252, and other net cash receipts of $3,999. Net Cash Used in Financing Activities Net cash used in financing activities amounted to $449,672 for the year ended December 31, 2011...

  • Page 80
    ...,695 resulting from the acquisition of and payment of obligations relating to program rights and an increase in current and other assets of $70,758. Net Cash Used in Investing Activities Net cash used in investing activities of discontinued operations for the year ended December 31, 2011 was $4,086...

  • Page 81
    ... newspaper advertising, and increased incidence of customers' inability to pay for the services we provide. These events would adversely impact our results of operations, cash flows and financial position. Although we currently believe that amounts available under our CSC Holdings and Bresnan Cable...

  • Page 82
    ... our outstanding debt (excluding accrued interest), including capital lease obligations, as well as interest expense and capital expenditures as of and for the year ended December 31, 2011: Newsday LLC(a) Bresnan Cable Other Entities Cablevision Total CSC Holdings Eliminations(b) Total Cablevision...

  • Page 83
    ... table provides details of the Company's outstanding credit facility debt: Interest Rate at December 31, 2011 $ Carrying Value at December 31, 2011 400,...as of December 31, 2011 are as follows: Cablevision Restricted Group Bresnan Cable Newsday Other Entities Total (a) $ 1,104,896 2012...$ 203,648 $ ...

  • Page 84
    ... 31, 2011, CSC Holdings and those of its subsidiaries which conduct our cable television video operations and high-speed data service, and our VoIP services operations in the New York metropolitan service area, as well as Optimum Lightpath, our commercial data and voice service business, comprise...

  • Page 85
    ..., based upon the Cash Flow Ratio applicable from time to time; provided that until June 2012 the extension fee shall remain at 2.00% per annum. In connection with the Term A-4 extended loan facility, the Company incurred deferred financing costs of $4,490, which are being amortized to interest...

  • Page 86
    ... time. AMC Networks Distribution In connection with the AMC Networks Distribution, AMC Networks issued senior notes and senior secured term loans under its new senior secured credit facility to the Company as partial consideration for the transfer of certain businesses to AMC Networks. The Company...

  • Page 87
    ... debt securities, the Company incurred deferred financing costs of $21,433, which are being amortized to interest expense over the term of the 2021 Notes. Tender Offer for Senior Notes In October 2011, CSC Holdings commenced a cash tender offer for (1) its outstanding $500,000 aggregate principal...

  • Page 88
    ... is expected to be available to provide for ongoing working capital requirements and for other general corporate purposes of the Company and its subsidiaries. Borrowings under the Bresnan Credit Agreement bear interest at a floating rate, which at the option of Bresnan Cable may be either 2.0% over...

  • Page 89
    ... ratio of operating cash flow to interest expense of 2.00:1 increasing periodically to 2.75:1 on March 31, 2014, and (iii) minimum liquidity (as defined) of $25,000. Bresnan Cable was in compliance with all of its financial covenants under its credit agreement as of December 31, 2011. Newsday LLC We...

  • Page 90
    ... and 2010: Years Ended December 31, 2011 2010 Capital Expenditures Customer premise equipment ...Scalable infrastructure ...Line extensions...Upgrade/rebuild...Support ...Total Cable Television ...Optimum Lightpath ...Total Telecommunications ...Other...Total Cablevision ...$203,107 217,066 40,240...

  • Page 91
    Bresnan Cable system operations of $78,287 and other net increases from Optimum Lightpath and businesses in our Other segment. Monetization Contract Maturities The following monetization contracts of our Comcast common stock matured since January 1, 2011: Month of Maturity January 2011...March 2011...

  • Page 92
    ... long-term, noncancelable leases for office, production and storage space, and lease commitments for Clearview Cinemas, and rental space on utility poles used for the Company's Telecommunications Services segment. See Note 9 to our consolidated financial statements for a discussion of our operating...

  • Page 93
    ..., shares of CNYG Class A common stock may be purchased from time to time in the open market. Size and timing of these purchases will be determined based on market conditions and other factors. Funding for the repurchase program will be met with cash on hand and/or borrowings under CSC Holdings...

  • Page 94
    ... all of the outstanding common stock of AMC Networks and on February 9, 2010, Cablevision distributed to its stockholders all of the outstanding common stock of Madison Square Garden. Managing our Interest Rate and Equity Price Risk Interest Rate Risk To manage interest rate risk, we have entered...

  • Page 95
    ...About Market Risk" for information on how we participate in changes in the market price of the stocks underlying these derivative contracts. All of our monetization transactions are obligations of our wholly-owned subsidiaries that are not part of the Restricted Group; however, CSC Holdings provides...

  • Page 96
    ... to interest rate movements results from our use of floating and fixed rate debt to fund the approximately $3 billion special dividend paid in 2006, our working capital, capital expenditures, and other operational and investment requirements. To manage interest rate risk, from time to time we have...

  • Page 97
    ...consolidated statements of income. As of December 31, 2011, CSC Holdings was party to several interest rate swap contracts with an aggregate notional amount of $2,600,000 that effectively fixed borrowing rates on a portion of the Company's floating rate debt. As of December 31, 2011, our outstanding...

  • Page 98
    ...inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those internal controls determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. The Company's management...

  • Page 99
    ... 14, Principal Accountant Fees and Services, is hereby incorporated by reference from Cablevision's definitive proxy statement for its Annual Meeting of Stockholders or, if such definitive proxy statement is not filed with the Securities and Exchange Commission prior to April 29, 2012, an amendment...

  • Page 100
    ...and 54,148,223 shares issued and outstanding...RMG Class A common stock, $.01 par value, 600,000,000 shares authorized, none issued ...RMG Class B common stock, $.01 par value, 160,000,000 shares authorized, none issued ...Paid-in capital ...Accumulated deficit ...Treasury stock, at cost (61,663,286...

  • Page 101
    ... SYSTEMS CORPORATION SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) STATEMENTS OF INCOME Years ended December 31, 2011, 2010 and 2009 (Dollars in thousands) 2011 Revenues, net ...Operating expenses ...Operating income ...Other income (expense): Interest expense...

  • Page 102
    ... SYSTEMS CORPORATION SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, 2011, 2010 and 2009 (Dollars in thousands, except per share amounts) 2011 Net income ...Other comprehensive income (loss), net of...

  • Page 103
    ... ...Deemed repurchases of restricted stock ...Purchase of shares of CNYG Class A common stock, pursuant to a share repurchase program, held as treasury shares ...Additions to deferred financing costs...Net cash provided by (used in) financing activities ...Net increase (decrease) in cash and...

  • Page 104
    ... SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) BALANCE SHEETS December 31, 2011 and 2010 (Dollars in thousands) 2011 ASSETS Current Assets: Cash and cash equivalents...Restricted cash ...Accounts receivable, trade (less allowance for doubtful accounts of $427 and...

  • Page 105
    CSC HOLDINGS, LLC (a wholly-owned subsidiary of Cablevision Systems Corporation) SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) BALANCE SHEETS (continued) December 31, 2011 and 2010 (Dollars in thousands, except share and per share amounts) 2011 LIABILITIES AND ...

  • Page 106
    CSC HOLDINGS, LLC (a wholly-owned subsidiary of Cablevision Systems Corporation) SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) STATEMENTS OF INCOME Years ended December 31, 2011, 2010 and 2009 (Dollars in thousands) 2011 Revenues, net ...Operating expenses: ...

  • Page 107
    CSC HOLDINGS, LLC (a wholly-owned subsidiary of Cablevision Systems Corporation) SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, 2011, 2010 and 2009 (Dollars in thousands, except per share amounts) 2011 Net...

  • Page 108
    CSC HOLDINGS, LLC (a wholly-owned subsidiary of Cablevision Systems Corporation) SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) STATEMENTS OF CASH FLOWS Years ended December 31, 2011, 2010 and 2009 (Dollars in thousands) 2011 Cash flows from operating activities: ...

  • Page 109
    ... of CSC Holdings. CSC Holdings' financial statements reflect certain video operations related to selected franchise areas within the Telecommunications Services segment that are owned directly by CSC Holdings. Total amounts payable by Cablevision and CSC Holdings in connection with their outstanding...

  • Page 110
    ...$57,330 $63,574 $64,307 CSC Holdings, LLC Balance at Beginning of Period Year Ended December 31, 2011 Allowance for doubtful accounts ...Year Ended December 31, 2010 Allowance for doubtful accounts ...Year Ended December 31, 2009 Allowance for doubtful accounts ...$17,786 $15,710 $13,508 Deductions...

  • Page 111
    ... duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized on the 28th day of February, 2012. Cablevision Systems Corporation CSC Holdings, LLC By: Name: Title: /s/ Gregg G. Seibert Gregg G. Seibert Executive Vice President and Chief Financial Officer of...

  • Page 112
    ... Title Director Director Director Director Director Director Director Date February 28, 2012 February 28, 2012 February 28, 2012 February 28, 2012 February 28, 2012 February 28, 2012 February 28, 2012 Director Marianne Dolan Weber /s/ Patrick F. Dolan Patrick F. Dolan /s/ Thomas C. Dolan Thomas...

  • Page 113
    ... Statement, dated October 10, 2000, as supplemented). Bylaws of Cablevision Systems Corporation (incorporated herein by reference to Exhibit 99.1 to Cablevision's Current Report on Form 8-K, filed on February 10, 2010). Certificate of Conversion of a Corporation to a Limited Liability Company of CSC...

  • Page 114
    ... herein by reference to Exhibit 10.4 to CSC Holdings' Form S-1). Amendment to Time Sharing Agreements, dated November 5, 2008, between CSC Transport, Inc. and Sterling Aviation LLC (incorporated herein by reference to Exhibit 10.1 to Cablevision's Quarterly Report on Form 10-Q for the fiscal...

  • Page 115
    ... Proxy Statement). Cablevision Systems Corporation Executive Performance Incentive Plan (incorporated herein by reference to Exhibit 10.24 to Cablevision's Annual Report on Form 10-K for the fiscal year ended December 31, 2005). Cablevision Systems Corporation Long-Term Incentive Plan (incorporated...

  • Page 116
    ... Exhibit 10.56 to Cablevision's Registration Statement on Form S-4, dated January 20, 1998, File No. 33344547). Agreement and Plan of Merger, dated June 13, 2010, by and among Bresnan Broadband Holdings, LLC, Providence Equity Bresnan Cable LLC, BBHI Holdings LLC, BBHI Acquisition LLC and Solely for...

  • Page 117
    ...and (ii) providing for an amendment to the Incremental Term Supplement, dated March 29, 2006, among CSC Holdings, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 to Cablevision's Current Report on Form 8-K, filed April 15...

  • Page 118
    ...'s Current Report on Form 8-K, filed April 15, 2010). Incremental Term Supplement, dated March 29, 2006, among CSC Holdings, Inc., the banks party thereto, and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.4 to Cablevision's Quarterly Report on Form...

  • Page 119
    ... Incorporated and Citigroup Global Markets as Joint Book Managers. (incorporated herein by reference to Exhibit 10.1 to Cablevision's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009). Credit Agreement, dated December 14, 2010, among BBHI Acquisition LLC, as the Borrower...

  • Page 120
    ... 10.2 to Cablevision's Current Report on Form 8-K, filed March 31, 2011). Aircraft Management Agreement, dated August 4, 2011, by and between CSC Transport, Inc., Dolan Family Office, LLC and Charles F. Dolan (incorporated herein by reference to Exhibit 10.2 to Cablevision's Quarterly Report on Form...

  • Page 121
    ... DESCRIPTION Aircraft Management Agreement, dated August 4, 2011, by and between CSC Transport, Inc., New York Aircam Corp. and Patrick F. Dolan (incorporated herein by reference to Exhibit 10.1 to Cablevision's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011). Aircraft Dry...

  • Page 122
    ... CEO and CFO. The following financial statements from Cablevision Systems Corporation's and CSC Holdings, LLC's Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission on February 28, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) the...

  • Page 123
    ... TO FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm ...CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES Consolidated Financial Statements Consolidated Balance Sheets - December 31, 2011 and 2010 ...Consolidated Statements of Income - years ended December 31, 2011...

  • Page 124
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  • Page 125
    ...management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal...

  • Page 126
    ... of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the...

  • Page 127
    ...management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal...

  • Page 128
    ... of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the...

  • Page 129
    ... ...Accounts receivable, trade (less allowance for doubtful accounts of $14,907 and $17,786) ...Prepaid expenses and other current assets...Amounts due from affiliates...Deferred tax asset ...Investment securities pledged as collateral ...Assets distributed to stockholders in 2011 ...Total current...

  • Page 130
    ...and 54,148,223 shares issued and outstanding ...RMG Class A common stock, $.01 par value, 600,000,000 shares authorized, none issued ...RMG Class B common stock, $.01 par value, 160,000,000 shares authorized, none issued ...Paid-in capital ...Accumulated deficit...Treasury stock, at cost (61,663,286...

  • Page 131
    ... AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Years ended December 31, 2011, 2010 and 2009 (Dollars in thousands, except per share amounts) 2011 Revenues, net (including revenues, net from affiliates of $5,222, $4,381 and $4,183, respectively) (see Note 17) ...Operating expenses: Technical and...

  • Page 132
    ... share amounts) 2011 Net income ...Other comprehensive income (loss), net of tax: Defined benefit pension plans and postretirement plans: Net unrecognized gain (loss) arising during period ...Amortization of actuarial losses included in net periodic pension cost ...Amortization of prior service cost...

  • Page 133
    ...of restricted shares ...Conversion of CNYG Class B common stock to CNYG Class A common stock ...Dividends on CNYG Class A and CNYG Class B common stock ...Adjustments to noncontrolling interests ... Balance at December 31, 2009 ... $2,741 See accompanying notes to consolidated financial statements.

  • Page 134
    ... shares ...Treasury stock acquired through share repurchase program...Conversion of CNYG Class B common stock to CNYG Class A common stock ...Dividends on CNYG Class A and CNYG Class B common stock ...Distribution of Madison Square Garden ...Impact of exchange of notes due to Newsday Holdings...

  • Page 135
    ...from forfeiture and acquisition of restricted shares ...Treasury stock acquired through share repurchase program...Deferred tax adjustments relating to distribution of Madison Square Garden ...Dividends on CNYG Class A and CNYG Class B common stock ...Distribution of AMC Networks Inc. Adjustments to...

  • Page 136
    ... ...Net cash provided by operating activities ...Cash flows from investing activities: Capital expenditures ...Payments for acquisitions, net of cash acquired...Proceeds from sale of equipment, net of costs of disposal ...Contributions to Madison Square Garden ...Proceeds from sale of affiliate...

  • Page 137
    ... of shares of CNYG Class A common stock, pursuant to a share repurchase program, held as treasury shares ...(555,831) Additions to deferred financing costs...(25,626) Distributions to noncontrolling partners, net...(1,311) Net cash provided by (used in) financing activities ...Net increase (decrease...

  • Page 138
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED BALANCE SHEETS December 31, 2011 and 2010 (Dollars in thousands) 2011 ASSETS Current Assets: Cash and cash equivalents ...Restricted cash ...Accounts receivable, trade (less allowance for ...

  • Page 139
    ..., except share and per share amounts) 2011 LIABILITIES AND MEMBER DEFICIENCY Current Liabilities: Accounts payable ...$ 455,654 Accrued liabilities: 102,861 Interest ...Employee related costs ...240,757 Other accrued expenses ...210,432 Amounts due to affiliates ...30,065 Deferred revenue ...61...

  • Page 140
    ... Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF INCOME Years ended December 31, 2011, 2010 and 2009 (Dollars in thousands) 2011 Revenues, net (including revenues, net from affiliates of $5,222, $4,381 and $4,183, respectively) (see Note 17)...Operating expenses: Technical and operating...

  • Page 141
    ... per share amounts) 2011 Net income ...Other comprehensive income (loss), net of tax: Defined benefit pension and postretirement plans: Net unrecognized gain (loss) arising during period...Amortization of actuarial losses included in net periodic pension cost ...Amortization of prior service cost...

  • Page 142
    ... of discount on notes due from Cablevision ...Distribution of Madison Square Garden ...Impact of exchange of notes due from Cablevision, net of income taxes ...Adjustments to noncontrolling interests... Balance at December 31, 2010 ... See accompanying notes to consolidated financial statements.

  • Page 143
    ... plan liability adjustments, net of income taxes ...Recognition of equity-based stock compensation arrangements...Distributions to Cablevision ...Excess tax benefit on share-based awards...Deferred tax adjustments relating to distribution of Madison Square Garden...Distribution of AMC Networks...

  • Page 144
    ...111,895) Net cash provided by operating activities ...Cash flows from investing activities: Capital expenditures ...Payments for acquisitions, net of cash acquired...Proceeds from sale of equipment, net of costs of disposal ...Contributions to Madison Square Garden ...Proceeds from sale of affiliate...

  • Page 145
    ... from Cablevision ...Distributions to Cablevision ...(929,947) Excess tax benefit on share-based awards...11,196 Additions to deferred financing costs...(25,626) (1,311) Distributions to noncontrolling partners, net...Net cash provided by (used in) financing activities ...Net increase (decrease...

  • Page 146
    ... theatre business ("Clearview Cinemas"), (iii) the News 12 Networks, which provides regional news programming services, (iv) the MSG Varsity network, a network dedicated entirely to showcasing high school sports and activities, (v) a cable television advertising company, Cablevision Media Sales...

  • Page 147
    ... and the accompanying consolidated financial statements of CSC Holdings include the accounts of CSC Holdings and its majority-owned subsidiaries. Cablevision has no business operations independent of its CSC Holdings subsidiary, whose operating results and financial position are consolidated into...

  • Page 148
    ... Company's video, consumer high-speed data and VoIP services is recognized as installations are completed, as direct selling costs have exceeded this revenue in all periods reported. Advertising revenues are recognized when commercials are aired. The Company's Newsday business recognizes publication...

  • Page 149
    ... operating" expenses in the accompanying statements of income. Programming Costs Programming expenses for the Company's cable television business included in the Telecommunications Services segment relate to fees paid to programming distributors to license the programming distributed to subscribers...

  • Page 150
    ... and financial institutions that are investment grade as rated by Standard & Poor's and Moody's Investors Service. The Company selects money market funds that predominantly invest in marketable, direct obligations issued or guaranteed by the United States government or its agencies, commercial paper...

  • Page 151
    ... FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) The Company capitalizes certain internal and external costs incurred to acquire or develop internal-use software. Capitalized software costs are amortized over the estimated useful life of the software and reported...

  • Page 152
    ... share amounts) Derivative Financial Instruments The Company accounts for derivative financial instruments as either assets or liabilities measured at fair value. The Company uses derivative instruments to manage its exposure to market risks from changes in certain equity prices and interest rates...

  • Page 153
    ..., CSC Holdings, Inc. converted its form of business organization from a corporation to a limited liability company. All 14,432,750 shares of common stock, $0.01 par value, that were outstanding while it was a corporation were converted into the same number of membership units. Dividends Cablevision...

  • Page 154
    ...'s share repurchase program (see Note 21). Additionally on June 30, 2011, CSC Holdings distributed to Cablevision all of the outstanding common stock of AMC Networks and on February 9, 2010, CSC Holdings distributed to Cablevision all of the outstanding common stock of Madison Square Garden...

  • Page 155
    ...-dilutive shares (options whose exercise price exceeds the average market price of Cablevision's common stock during the period and certain restricted shares) totaling approximately 303,000, 237,000 and 1,736,000 (which include Company options held by AMC Networks and Madison Square Garden employees...

  • Page 156
    ... of AMC Networks (CSC Holdings) ...Distribution of Madison Square Garden ...Gain on redemption of Cablevision notes held by Newsday Holdings LLC recognized in equity (CSC Holdings) ...Non-Cash Investing Activity of Cablevision: Dividends payable on unvested restricted share awards ...Supplemental...

  • Page 157
    ... compiled by management, including a purchase price allocation analysis. The operating results of Bresnan Cable have been consolidated from the date of acquisition and are included in the Company's Telecommunications Services segment and the Company's Consumer Services reporting unit for goodwill...

  • Page 158
    ... FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) timing of estimated future cash flows attributable to the cable television franchises, identification of appropriate continuing growth rate assumptions and attributing the appropriate attrition factor for customer...

  • Page 159
    ...participant's point of view, and the amount and timing of expected future cash flows, including expected cash flows beyond the Company's current long-term business planning period. The market approach measures fair value using market multiples of various financial measures compared to a set of I-35

  • Page 160
    ...results of the Company's Rainbow segment through the date of the AMC Networks Distribution and the operating results of the Company's Madison Square Garden segment through the date of the MSG Distribution, as well as transaction costs, have been classified in the consolidated statements of income as...

  • Page 161
    ... STATEMENTS (continued) (Dollars in thousands, except per share amounts) January 1, 2010 through February 9, 2010 Madison Square Garden Year Ended December 31, 2010 AMC Networks Total Revenues, net ...Income before income taxes...Income tax expense(b)...Income (loss) from discontinued operations...

  • Page 162
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) NOTE 8. PROPERTY, PLANT AND EQUIPMENT Costs incurred in the construction of the Company's cable television system, including line extensions to, and upgrade of, the Company's hybrid fiber...

  • Page 163
    ... for its operations. The Company's pole rental agreements are for varying terms, and management anticipates renewals as they expire. Pole rental expense for the years ended December 31, 2011, 2010 and 2009 amounted to $17,243, $15,551 and $14,939, respectively. The minimum future annual payments for...

  • Page 164
    ...FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) NOTE 10. INTANGIBLE ASSETS The following table summarizes information relating to the Company's acquired intangible assets at December 31, 2011 and 2010: December 31, 2011 2010 Estimated Useful... cable television ...

  • Page 165
    ...773 $255,777 255,777 167,030 422,807 422,807 706 423,513 $423,513 (a) (b) Relates primarily to the Newsday impairment charge recognized in 2008. Adjustment to purchase accounting related to the acquisition of Bresnan Cable which is included in the Telecommunications Services reporting unit. I-41

  • Page 166
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) NOTE 11. DEBT Credit Facility Debt The following table provides details of the Company's outstanding credit facility debt: Weighted Average Interest Rate at December 31, 2011 $ Maturity Date...

  • Page 167
    ... in Bresnan Cable. On November 14, 2011, CSC Holdings entered into an extended term A facility Agreement (the "Term A-4 extended loan facility") pursuant to the terms of the Credit Agreement. The Term A-4 extended loan facility agreement increases the commitments of certain existing term A lenders...

  • Page 168
    ... time. AMC Networks Distribution In connection with the AMC Networks Distribution, AMC Networks issued senior notes and senior secured term loans under its new senior secured credit facility to the Company as partial consideration for the transfer of certain businesses to AMC Networks. The Company...

  • Page 169
    ... is expected to be available to provide for ongoing working capital requirements and for other general corporate purposes of the Company and its subsidiaries. Borrowings under the Bresnan Credit Agreement bear interest at a floating rate, which at the option of Bresnan Cable may be either 2.0% over...

  • Page 170
    ...NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) All obligations under the Bresnan Credit Agreement are guaranteed by Holdings Sub (the direct parent of Bresnan Cable) and each of Bresnan Cable's existing and future direct and indirect domestic...

  • Page 171
    ... maintain cash or cash equivalents or publicly traded notes or debt instruments of Cablevision or CSC Holdings with an aggregate principal amount that exceeds the then-outstanding borrowings by Newsday LLC under its senior secured loan facility. In connection with the Newsday LLC loan facility, the...

  • Page 172
    ... CSC Holdings(a) CSC Holdings(b) Rate 7.625% 6.75% 8.50% 8.50% 7.875% 7.625% 8.625% 6.75% 8.00% 8.00% 8.625% 7.75% 8.00% April 2004 (b) CSC Holdings January 2009 CSC Holdings(b)(c) June 2008 CSC Holdings(d) February 1998 CSC Holdings(d) CSC Holdings(b) CSC Holdings(b) Bresnan Cable(e) Cablevision...

  • Page 173
    ... to BBHI Acquisition LLC) existing subsidiaries and will be guaranteed by certain of Bresnan Cable's future subsidiaries. In connection with the issuance of these senior notes, the Company incurred deferred financing costs of $5,781, which are being amortized to interest expense over the term of...

  • Page 174
    ...CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) CSC Holdings 6-3/4% Senior Notes Due 2021 In November 2011, CSC Holdings issued $1,000,000 aggregate principal amount of 6-3/4% senior notes due November 15, 2021 (the "2021 Notes"). CSC Holdings used the...

  • Page 175
    ... the CSC Holdings April 2012 Notes, and approximately 31% of the outstanding principal amount of the April 2014 Notes. Tender premiums aggregating $65,433, along with other transaction costs of approximately $957, have been recorded in loss on extinguishment of debt in the consolidated statement of...

  • Page 176
    ... To manage interest rate risk, the Company has entered into interest rate swap contracts to adjust the proportion of total debt that is subject to variable interest rates. Such contracts effectively fix the borrowing rates on floating rate debt to limit the exposure against the risk of rising rates...

  • Page 177
    ... in loss on interest rate swap contracts, net in the accompanying consolidated statements of income. The Company has also entered into various transactions to limit the exposure against equity price risk on its shares of Comcast Corporation ("Comcast") common stock. The Company had monetized all of...

  • Page 178
    ... rate swap contracts...Prepaid forward contracts ...Prepaid forward contracts ...Balance Sheet Location Current derivative contracts Long-term derivative contracts Current derivative contracts Long-term derivative contracts Asset Derivatives Fair Value at Fair Value at December 31, December 31, 2011...

  • Page 179
    ... number of Comcast shares. The terms of the new contracts allow the Company to retain upside participation in Comcast shares up to each respective contract's upside appreciation limit with downside exposure limited to the respective hedge price. Years Ended December 31, 2011 2010 Number of shares...

  • Page 180
    ... bid/offer spreads and credit risk considerations. Such adjustments are generally based on available market evidence. Since model inputs can generally be verified and do not involve significant management judgment, the Company has concluded that these instruments should be classified within Level II...

  • Page 181
    ...'s debt instruments are based on quoted market prices for the same or similar issues or on the current rates offered to the Company for instruments of the same remaining maturities. The carrying values and estimated fair values of the Company's financial instruments, excluding those that are carried...

  • Page 182
    ... 31, 2010 is primarily attributable to impact of the requested change in tax accounting method with regard to certain installation costs that was approved by the Internal Revenue Service ("IRS") during 2010 whereby the Company recorded a cumulative adjustment to reflect current deductibility of such...

  • Page 183
    COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) The income tax expense (benefit) attributable to Cablevision's continuing operations differs from the amount derived by applying the statutory federal rate to pretax income principally ...

  • Page 184
    ... FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) For Cablevision,...2011 and 2010 are as follows: December 31, 2011 Deferred Tax Asset (Liability) Current NOLs and tax credit carry forwards ...Compensation and benefit plans ...Allowance for doubtful accounts...

  • Page 185
    COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) Subsequent to the utilization of Cablevision's NOLs and tax credit carry forwards, payments for income taxes are expected to increase significantly. CSC Holdings CSC Holdings and its 80%...

  • Page 186
    COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) The income tax expense (benefit) attributable to CSC Holdings' continuing operations differs from the amount derived by applying the statutory federal rate to pretax income principally ...

  • Page 187
    ...-alone basis CSC Holdings realized excess state tax benefit of $11,196 during the year ended December 31, 2011. Such excess tax benefit resulted in an increase to additional paid-in capital. Subsequent to the utilization of CSC Holdings' net operating loss and tax credit carry forwards, including...

  • Page 188
    ... sheet. Management does not believe that it is reasonably possible that the total amount of the gross liability for uncertain tax positions existing as of December 31, 2011 will significantly increase or decrease within twelve months of December 31, 2011. With a few exceptions, the Company is no...

  • Page 189
    ... of the theatre business, Bresnan Cable and Newsday (subsequent to May 1, 2009). Under the Pension Plan, the Company credits a certain percentage of eligible pay into an account established for each participant which is credited with a market based rate of return monthly. The Company also maintains...

  • Page 190
    ... Plans 2011 2010 Change in benefit obligation: Benefit obligation at beginning of year ...Service cost ...Interest cost ...Settlement gain on the Excess Cash Balance Plan in connection with the AMC Networks Distribution (a) ...Curtailment loss on the Pension Plan in connection with the AMC Networks...

  • Page 191
    ...: Cablevision Defined Benefit Plans 2011 2010 Actuarial gain ...Recognized actuarial loss ...Transfer of unrecognized actuarial loss to Madison Square Garden as a result of the MSG Plans Transfer...Transfer of unrecognized prior service cost to Madison Square Garden as a result of the MSG Plans...

  • Page 192
    ... of returns for each asset class are the most important of the assumptions used in the review and modeling and are based on comprehensive reviews of historical data, forward looking economic outlook, and economic/financial market theory. The expected long-term rate of returns were selected from...

  • Page 193
    ...takes into account investment advice provided by its external investment consultant. The investment consultant takes into account expected long-term risk, return, correlation, and other prudent investment assumptions when recommending asset classes and investment managers to the Company's Investment...

  • Page 194
    ... investments in mutual funds that invest primarily in money market securities. Total amount includes plan assets of $9,451 relating to Madison Square Garden which were transferred in 2011 and excludes net receivables relating to securities sales that were not settled as of December 31, 2010...

  • Page 195
    ...on the date of each annual meeting of Cablevision's stockholders, each non-employee director will receive a number of restricted stock units for the number of shares of common stock equal to $110,000 divided by the fair value of a share of CNYG Class A stock based on the closing price on the date of...

  • Page 196
    ...57,152 held by AMC Networks and Madison Square Garden employees) at December 31, 2011. Total non-employee director restricted stock units outstanding as of December 31, 2011 were 235,826. There were no stock options or stock appreciation rights granted in 2011. Since share-based compensation expense...

  • Page 197
    ... the average of the volume weighted average prices of AMC Network's, Madison Square Garden's and Cablevision's common shares for the ten trading days immediately following the AMC Networks Distribution and MSG Distribution. The underlying share amount took into account the 1:4 distribution ratio for...

  • Page 198
    ... FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) Share-Based Payment Award Activity The following table summarizes activity relating to Company employees who held Cablevision stock options for the year ended December 31, 2011: Shares Under Option Time Performance...

  • Page 199
    ... activity relating to AMC Networks and Madison Square Garden employees who held Cablevision stock options for the year ended December 31, 2011: Weighted Average Exercise Price Per Share(a) Weighted Average Remaining Contractual Term (in years) Shares Under Option Time Performance Vesting Vesting...

  • Page 200
    ...replaced with AMC Networks shares in connection with the AMC Networks Distribution. Cablevision recognizes compensation expense for restricted shares issued to its employees using a straight-line amortization method, based on the grant date price of CNYG Class A common stock over the service period...

  • Page 201
    ...'s stock plans. The unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1 year. During the year ended December 31, 2011, 2,616,030 Cablevision restricted shares issued to employees of the Company, AMC Networks and Madison Square Garden vested...

  • Page 202
    ... and the MSG Distribution. These agreements also include arrangements with respect to transition services and a number of on-going relationships. The distribution agreements include agreements that the Company and AMC Networks and the Company and Madison Square Garden agree to provide each other...

  • Page 203
    ... Madison Square Garden or AMC Networks for the incremental amount. Technical Expenses, net of Credits Technical expenses include costs incurred by the Company for the carriage of the MSG networks and Fuse program services, as well as for AMC, WE tv, IFC and Sundance Channel on Cablevision's cable...

  • Page 204
    ... a term of 10 years, obligates the Company to carry the MSG networks program services on its cable television systems and provides for the payment by the Company to the MSG networks of a per subscriber license fee, which fee is increased each year during the term of the agreement. Selling, General...

  • Page 205
    ...per subscriber rates or the stated annual fee, as applicable, contained in the executed agreements in effect as of December 31, 2011. Includes franchise and performance surety bonds primarily for the Company's Telecommunications Services segment. Also includes outstanding guarantees primarily by CSC...

  • Page 206
    ... Court, Plaintiffs filed their third amended complaint on August 22, 2011, alleging that the Company violated Section 1 of the Sherman Antitrust Act by allegedly tying the sale of interactive services offered as part of iO television packages to the rental and use of set-top boxes distributed by...

  • Page 207
    ... Act by allegedly issuing materially false and misleading statements regarding (i) the Company's customer retention and advertising costs, and (ii) the Company's loss of video customers, especially in the New York area. The complaint also alleges that the individual defendants violated Section...

  • Page 208
    ...interstate and international telephone service from tax and the Company's reasonable calculation of subscriber interstate and international usage. NYS has asserted that all Optimum Voice revenue, less embedded sales tax included in the subscriber fee, bad debts and other customer adjustments, should...

  • Page 209
    ... the Newsday daily newspaper and related assets, (ii) a motion picture theatre business, Clearview Cinemas, (iii) the News 12 Networks, (iv) the MSG Varsity network, (v) Cablevision Media Sales, a cable television advertising company, and (vi) certain other businesses and unallocated corporate costs...

  • Page 210
    ... FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) The Company's reportable segments are strategic business units that are managed separately. The Company evaluates segment performance based on several factors, of which the primary financial measure is business...

  • Page 211
    ... FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) A reconciliation of reportable segment amounts to Cablevision's and CSC Holdings' consolidated balances is as follows: 2011(a) Operating income (loss) from continuing operations before income taxes Total operating...

  • Page 212
    ... FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) NOTE 20. INTERIM FINANCIAL INFORMATION (Unaudited) The following is a summary of the Company's selected quarterly financial data for the years ended December 31, 2011 and 2010: 2011: Revenues, net ...Operating...

  • Page 213
    COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) 2010: Revenues, net ...Operating expenses ...Operating income ...Income from continuing operations...Income from discontinued operations, net of income taxes ...Net income ...Net income ...

  • Page 214
    COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share amounts) 2011: Revenues, net ...Operating expenses ...Operating income ...Income from continuing operations ...Income from discontinued operations, net of income taxes ...Net income ...Net income...

  • Page 215
    ..., shares of CNYG Class A common stock may be purchased from time to time in the open market. Size and timing of these purchases will be determined based on market conditions and other factors. Funding for the repurchase program will be met with cash on hand and/or borrowings under CSC Holdings...

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    ... L. Dolan, President and Chief Executive Officer of Cablevision Systems Corporation and CSC Holdings, LLC (the "Registrants") certify that: 1. I have reviewed this annual report on Form 10-K of the Registrants; 2. Based on my knowledge, this annual report does not contain any untrue statement of...

  • Page 217
    ... Vice President and Chief Financial Officer of Cablevision Systems Corporation and CSC Holdings, LLC (the "Registrants") certify that: 1. I have reviewed this annual report on Form 10-K of the Registrants; 2. Based on my knowledge, this annual report does not contain any untrue statement of...

  • Page 218
    ... Act of 1934, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Cablevision and CSC Holdings. Date: February 28, 2012 By: /s/ James L. Dolan James L. Dolan President and Chief Executive Officer Date...

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