Cablevision 2011 Annual Report Download - page 28

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Our ability to incur debt and the use of our funds are limited by significant restrictive covenants in
financing agreements.
Our credit facilities and debt instruments contain various financial and operating covenants that, among
other things, require the maintenance of financial ratios and restrict the relevant borrower's ability to incur
debt from other sources and to use funds for various purposes, including investments in some
subsidiaries. Violation of these covenants could result in a default that would permit the parties who have
lent money under such credit facilities and such other debt instruments to:
• restrict the ability to borrow undrawn funds under such credit facilities, and
• require the immediate repayment of the borrowings thereunder.
These events would be likely to have a material adverse effect on the value of our debt and equity
securities.
We will need to raise significant amounts of funding over the next several years to fund capital
expenditures, repay existing obligations and meet other obligations and the failure to do so successfully
could adversely affect our business. We may also engage in extraordinary transactions that involve the
incurrence of large amounts of debt.
Our business is very capital intensive. Operating and maintaining our cable television plant requires
significant amounts of cash payments to third parties. Capital expenditures for our businesses were
$814.8 million, $823.2 million and $737.5 million, in 2011, 2010 and 2009, respectively, and primarily
include 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 have made substantial investments in the development of new and innovative
programming options and other service offerings for our customers as a way of differentiating ourselves
from our competitors. We currently anticipate a significant increase in our level of capital expenditures to
enhance our service offerings. We have substantial future capital commitments in the form of long-term
contracts that require substantial payments over a long period of time. We will not be able to generate
sufficient cash internally to fund anticipated capital expenditures, meet these obligations and repay our
indebtedness at maturity. Accordingly, we will have to do one or more of the following:
• refinance existing obligations to extend maturities,
• raise additional capital, through debt or equity issuances or both,
• cancel or scale back current and future spending programs, or
• sell assets or interests in one or more of our businesses.
However, you should not assume that we will be able to refinance existing obligations or raise any
required additional capital or to do so on favorable terms. Borrowing costs related to future capital
raising activities may be significantly higher than our current borrowing costs and we may not be able to
raise additional capital on favorable terms, or at all, if unsettled conditions in financial markets continue
to exist. If we are unable to pursue our current and future spending programs, we may be forced to cancel
or scale back those programs. Our choice of which spending programs to cancel or reduce may be
limited. Failure to successfully pursue our capital expenditure and other spending plans could materially
and adversely affect our ability to compete effectively. It is possible that in the future we may also
engage in extraordinary transactions and such transactions could result in the incurrence of substantial
additional indebtedness.