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CABLEVISION
SYSTEMS
CORPORATION
2012 Form 10-K
NYSE: CVC

Table of contents

  • Page 1
    CABLEVISION SYSTEMS CORPORATION 2012 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
    ...30, 2012: $2,697,914,833 Number of shares of common stock outstanding as of February 22, 2013: Cablevision NY Group Class A Common Stock Cablevision NY Group Class B Common Stock CSC Holdings, LLC Interests of Member 210,659,548 54,137,673 17,631,479 CSC Holdings, LLC meets the conditions set forth...

  • Page 5
    ... Principal Accountant Fees and Services * * * * * Exhibits and Financial Statement Schedules 96 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, a definitive proxy...

  • Page 6
    This page intentionally left blank.

  • Page 7
    ... ("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 and other local programming, (v) our cable television advertising company, Cablevision Media Sales...

  • Page 8
    ... Online customers, marketed as "Optimum Voice". Through Lightpath, a business broadband service provider, we provide telecommunications services, such as Ethernet-based data, Internet, voice and video transport solutions and managed services, to the business market in the New York metropolitan area...

  • Page 9
    ... accordingly. The following table sets forth certain statistical data regarding our video, high-speed data and VoIP operations, excluding Lightpath, as of the dates indicated: New York Metropolitan Service Area 2012(g) 2011 2010 Optimum West Service Area As of December 31, 2012 2011 2010(a) (in...

  • Page 10
    ..., local sports channels, premium networks such as HBO and various other cable networks, A collection of enhanced television applications including News 12 Interactive, Newsday TV (Long Island only), Newsday Cars and Newsday Homes, MSG Interactive, Tag Games, and MSG Varsity, all in our New York...

  • 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
    ... Our cable plant network in the New York metropolitan service area uses state of the art technology including fiber optic cable. The network is a two-way interactive system with a minimum of 750 MHz offering digital channels, high-speed data and voice services. Our cable plant network in the Optimum...

  • Page 13
    ... to upgrade facilities, to increase channel capacity and to provide additional support for local public, education and government access programming. Negotiations can be protracted, and franchise agreements sometimes expire before a renewal is negotiated and finalized. New York and New Jersey state...

  • Page 14
    ..., Rockland County, Long Island, Pennsylvania and New Jersey. Cablevision Media Sales Corporation Cablevision Media Sales Corporation is a cable television advertising company that sells local and regional commercial advertising time on cable television networks and offers advertisers the opportunity...

  • Page 15
    ... which owns the sports, entertainment and media businesses previously owned and operated by the Company's Madison Square Garden segment (the "MSG Distribution"). The MSG Distribution took the form of a distribution by Cablevision of one share of Madison Square Garden Class A Common Stock for every...

  • Page 16
    ... in the New York metropolitan service area from two incumbent telephone companies. Verizon Communications, Inc. ("Verizon") and AT&T Inc. ("AT&T"), which offer video programming in addition to their voice and high-speed Internet access services to residential customers in this service area, compete...

  • Page 17
    ... 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, branded Optimum Voice...

  • Page 18
    ..., such as network, syndicated, ondemand and pay television; DVD, and other home video systems; DVD by mail services such as Netflix and Red Box and the availability of films over the Internet. Regulation Cable Television Our cable television systems are subject to extensive federal, state and local...

  • Page 19
    ... regulate rates. In both our New York metropolitan service area and Optimum West 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. In areas not subject to effective competition...

  • Page 20
    ...-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 Leased Access. Localities may require free access to, and support of, public, educational, or governmental ("PEG") channels on our cable...

  • Page 21
    ...ensure that persons with disabilities can more fully access the programming we carry. We are required to provide closed captions and pass through video description to subscribers on some networks we carry. Encryption of the Basic Service Tier. If a cable operator decides to encrypt the basic tier on...

  • Page 22
    ... new requirements are necessary to improve the resiliency of communications networks, potentially including cable networks. High-Speed Data Regulatory Classification. High-speed Internet access services (often called "broadband" Internet services) are classified by the FCC as "information services...

  • Page 23
    ...support to broadband networks and services, as well as voice services provided over broadband. Local Number Portability. The FCC requires interconnected VoIP service providers and their "numbering partners" to ensure that their customers have the ability to port their telephone numbers when changing...

  • Page 24
    ... as cable operators 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 Lightpath and...

  • Page 25
    ...issue stocks, bonds and other forms of indebtedness of the telephone company; reporting customer service and quality of service requirements; outage reporting; making contributions to state universal service support programs; paying regulatory and state Telecommunications Relay Service and E911 fees...

  • Page 26
    ... to their voice and high-speed Internet access services, and compete across all of our telecommunications products. Verizon has constructed fiber to the home network plant that passes a significant number of households in our New York metropolitan service area. Verizon does not publicly report the...

  • Page 27
    ... available for the provision of multichannel video service. Our high-speed data offering to consumers faces intense competition from other providers of high-speed Internet access including services offered by local telephone providers such as Verizon, AT&T in our New York metropolitan service area...

  • Page 28
    ...cost of new debt capital and have severely restricted credit availability for most issuers. The market disruptions in recent years were accompanied by a broader economic downturn, which led to lower demand for our products, such as cable television services and entertainment, as well as lower levels...

  • Page 29
    ...other cable television systems, sources of programming and other businesses. We also have incurred substantial indebtedness 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 Clearview...

  • Page 30
    ...make any funds available to the Company to do so. Bresnan Cable is a party to a credit agreement and indenture that contain various financial and operating covenants that restrict the payment of dividends or other distributions. In addition, Newsday LLC is a party to a credit agreement that contains...

  • Page 31
    ... our customers for certain of our video services in accordance with FCC rules. The FCC and state and local governments also regulate us in other ways that affect the daily conduct of our video delivery and video programming businesses, our voice business and our high-speed Internet access business...

  • Page 32
    ... our Newsday business are from advertising. Expenditures by advertisers generally reflect economic conditions and declines in national and local economic conditions affect demand for advertising and the levels of advertising revenue for Newsday. Newsday operates in a highly competitive market which...

  • Page 33
    ...data or intellectual property. Operational or business delays may result from the disruption of network or information systems and the subsequent remediation activities. Moreover, these events may create negative publicity resulting in reputation or brand damage with customers. We have expended, and...

  • Page 34
    ... on our results of operations and financial condition. In connection with the MSG Distribution and AMC Networks Distribution, we will rely on Madison Square Garden's and AMC Networks' performance under various agreements. In connection with the MSG Distribution and the AMC Networks Distribution, we...

  • Page 35
    ... the businesses we transferred to those entities. We are also party to other arrangements with Madison Square Garden and AMC Networks, such as affiliation agreements covering the MSG networks and Fuse, AMC, WE tv, IFC and Sundance Channel. We and these entities will rely on the other to perform its...

  • Page 36
    ... of the Class B common stock. One purpose of the voting agreement referred to above is to consolidate Dolan family control of Cablevision. The Dolan family requested Cablevision's Board of Directors to exercise Cablevision's right, as a "controlled company", to opt-out of the New York Stock Exchange...

  • Page 37
    ... 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 38
    ... 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 the NYSE: High Year Ended December 31, 2012: First Quarter...Second Quarter ...Third Quarter ...Fourth...

  • Page 39
    ... programming networks, including AMC, WE tv, IFC and Sundance Channel, previously owned and operated by the Company's Rainbow segment. The AMC Networks Distribution took the form of a distribution by Cablevision of one share of AMC Networks Class A Common Stock for every four shares of CNYG Class...

  • Page 40
    ... and CSC Holdings credit agreement restrict the amount of dividends and distributions in respect of any equity interest that can be made. Recent Sales and Use of Proceeds In June 2010, Cablevision's Board of Directors authorized the repurchase of up to $500 million of CNYG Class A common stock. In...

  • Page 41
    ...the changes in CNYG Class A common stock prices from December 31, 2007 through December 31, 2012. 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...

  • Page 42
    ... 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: 2012 (Dollars in thousands) Cablevision Systems Corporation Years Ended December 31, 2009 2011 2010(a) 2008 $6,705,461...

  • Page 43
    ... (Dollars in thousands, except per customer, per unit and per share data) Cablevision Systems Corporation Years Ended December 31, 2011 2010(a) 2009 2008 INCOME (LOSS) PER SHARE: Basic net income (loss) per share attributable to Cablevision Systems Corporation stockholders: $0.13 $0.76 $0.89 262...

  • Page 44
    ... in thousands) 2011 CSC Holdings, LLC Years Ended December 31, 2010(a) 2009 2008 $6,705,461 $6,700,848 $6,177,575 $5,900,074 $5,480,799 Revenues, net ...Operating expenses: Technical and operating (excluding depreciation, amortization and impairments shown below) ...Selling, general and...

  • Page 45
    ... 2012 (Dollars in thousands) Cablevision Systems Corporation December 31, 2011 2010 2009 2008 Total assets ...Credit ...991) 333 (5,367,658) 2012 2011 CSC Holdings, LLC December 31, 2010 (Dollars in thousands) 2009 2008 Total assets ...Credit facility debt ...Collateralized indebtedness ......

  • Page 46
    ...): New York Metropolitan Service Area 2012(g) 2011 2010 2011 2010 2012 2011 2010(a) (in thousands, except per customer amounts) 2012(g) Optimum West Service Area As of December 31, Total (f) Customer relationships(b) ...Video customers(c)...High-speed data customers...Voice customers ...3,230...

  • Page 47
    ...; 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 services, which are...

  • Page 48
    ... access), and Voice over Internet Protocol ("VoIP") services and commercial data and voice services operations. These monthly charges include fees for cable television programming, high-speed data and voice services, as well as equipment rental, digital video recorder ("DVR"), video-on-demand, pay...

  • Page 49
    ... 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. Verizon does not publicly report the...

  • Page 50
    ..., 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 and other local programming, (v) our cable television advertising company, Cablevision Media Sales...

  • Page 51
    ...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 is a network dedicated entirely to showcasing high school sports and activities and other local programming...

  • Page 52
    ... affect the fair value of these reporting units, we assess individual factors such as: x x x x x macroeconomic conditions; industry and market conditions; overall financial performance of the reporting unit; changes in management, strategy or customers; and relevant reporting unit specific events...

  • Page 53
    ...be required to record impairment charges related to our long-lived assets. Based on the Company's annual impairment test during the first quarter of 2012, the Company's reporting units had significant safety margins, representing the excess of the estimated fair value of each reporting unit less its...

  • Page 54
    ... indefinite-lived intangibles recorded on the consolidated balance sheet at December 31, 2012 are the Company's cable television franchises and various reporting unit trademarks, which are valued using an income approach or market approach. The Company's cable television franchises are the largest...

  • Page 55
    ...construction of the Company's cable television system, including line extensions to, and upgrade of, the Company's hybrid fiber-coaxial infrastructure and headend facilities are capitalized. These costs consist of materials, subcontractor labor, direct consulting fees, and internal labor and related...

  • Page 56
    ... time studies used to estimate the average time spent on each activity. New connections are amortized over the estimated useful lives of 5 years or 12 years for residence wiring and feeder cable to the home, respectively. The portion of departmental costs related to reconnection, programming service...

  • Page 57
    ... to carry on its satellite service AMC, IFC, the Sundance Channel and WE tv, and with a subsidiary of The Madison Square Garden Company to carry Fuse; and An affiliate of DISH Network conveyed its 20% membership interest in VOOM HD to Rainbow Programming Holdings LLC, such that all of the cash...

  • Page 58
    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, 2012 Amount % of Net Revenues Amount 2011 % of...

  • Page 59
    ...The following is a reconciliation of operating income to AOCF: Years Ended December 31, 2011 2010 Amount Amount Favorable (Unfavorable) Operating income ...Share-based compensation ...Depreciation and amortization (including impairments) ...Restructuring expense (credits) ...AOCF ... $1,228,679 44...

  • Page 60
    ... commercial high-speed data and voice services operations of Lightpath; and Other, consisting principally of (i) Newsday, (ii) Clearview Cinemas, (iii) the News 12 Networks, (iv) the MSG Varsity network, (v) Cablevision Media Sales, and (vi) certain other businesses and unallocated corporate costs...

  • Page 61
    ... of revenues, technical and operating expenses increased 6% in 2012 as compared to 2011. Selling, general and administrative expenses include primarily sales, marketing and advertising expenses, administrative costs, and costs of customer call centers. Selling, general and administrative expenses...

  • Page 62
    ...expense of $23,821 for the year ended December 31, 2012, reflected an effective tax rate of 42%. An increase in the valuation allowance relating to certain state net operating loss carry forwards resulted in tax expense of $5,480. The Company recorded a tax benefit of $2,659 related to uncertain tax...

  • Page 63
    ...ended December 31, 2011 represents the net operating results of AMC Networks, including transaction costs, through June 30, 2011, the date of the AMC Networks Distribution. Business Segments Results Telecommunications Services The table below sets forth, for the periods presented, certain historical...

  • Page 64
    The following table summarizes service outage credits which reduced revenues, net, incremental costs, depreciation and capital expenditures related to Superstorm Sandy for the year ended December 31, 2012: Revenues, net ...Operating expenses: Technical and operating expenses...Selling, general and ...

  • Page 65
    ..., 2012 2011 Increase (Decrease) Percent Increase (Decrease) Video (including equipment rental, DVR, video-on-demand, and pay-per-view) ...$3,443,267 High-speed data ...1,366,117 Voice ...906,167 Advertising ...167,056 Other (including installation, home shopping, advertising sales commissions, and...

  • Page 66
    ..., 23 thousand high-speed data and 19 thousand voice). (b) The sum of the customer data by service area may not equal the total amount due to rounding. The Company had a loss of 54,500 video customers in the New York metropolitan service area for the year ended December 31, 2012 compared to a loss...

  • Page 67
    ...: Increase in programming costs due primarily to contractual rate increases and new channel launches, partially offset by lower subscribers primarily in the New York metropolitan service area ...Expenses, net of programming and other credits, incurred as a result of Superstorm Sandy in 2012 (see...

  • Page 68
    ... in advertising and marketing costs ...Decrease in customer payment processing fees related to a reduction in rates...Executive separation costs in the fourth quarter of 2011 ...Employee overtime attributed to two severe storms in the New York metropolitan service area in 2011 ...Other net increases...

  • Page 69
    ... at Clearview Cinemas ...Increase in advertising revenues at News 12 Networks and commission revenues at Cablevision Media Sales ...Intra-segment eliminations ...$(9,231) (1,208) 1,671 80 $(8,688) Newsday's total average circulation for the six months ended September 23, 2012 was approximately...

  • Page 70
    ... costs and increases in allocations to business units ...Net increases primarily at News 12 Networks and Cablevision Media Sales ...Increase in legal and other professional fees ...Increase at Newsday (from $105,040 to $106,637) including an increase of $1,331 in expenses relating to long-term...

  • Page 71
    ...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 72
    ... due April 2012 and related fees associated with the tender offer and the write-off of unamortized deferred financing costs related to such repurchases. Income tax expense of $184,436 for the year ended December 31, 2011 reflected an effective tax rate of 44%. The Company recorded a tax benefit of...

  • Page 73
    ...,848 (a) (b) Includes operating results of AMC Networks through the date of the AMC Networks 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...

  • Page 74
    ... Bresnan Cable Impact Years Ended December 31, 2011 2010 Video (including equipment rental, DVR, video-on-demand, and pay-per-view) ...High-speed data...Voice ...Advertising...Other (including installation, advertising sales commissions, home shopping, and other products) ...Total Cable Television...

  • Page 75
    ... 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 ...$167,197 Adjustment recorded in the fourth quarter of 2011 related to estimated programming costs recorded in years prior...

  • Page 76
    ... Bresnan Cable system of $35,670, and in the New York metropolitan service area higher employee and consumer incentive related costs, partially offset by lower costs related to program carriage disputes recorded in the first quarter 2010 ...Decrease in expenses relating to long-term incentive plan...

  • Page 77
    ... 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 78
    ... 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 79
    ... and Analysis of Financial Condition and Results of Operations herein. CASH FLOW DISCUSSION Continuing Operations - Cablevision Systems Corporation Operating Activities Net cash provided by operating activities amounted to $1,151,533 for the year ended December 31, 2012 compared to $1,397,729...

  • Page 80
    ... 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 cash receipts of $7,330. Financing Activities...

  • Page 81
    ...408,245, partially offset by an increase of $97,862 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 $1,615,717 for the year ended December 31, 2011 compared to...

  • Page 82
    ... 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 cash receipts of $7,330. Financing Activities...

  • Page 83
    ... consist of Cablevision NY Group ("CNYG") Class A common stock, CNYG Class B common stock and approximately $3,654,000 of debt securities, including approximately $2,900,000 face value of debt securities held by third party investors and approximately $754,000 held by Newsday Holdings LLC. The...

  • Page 84
    ...12 months totaling approximately $183,660 under our credit facilities, senior notes and notes payable as of December 31, 2012. However, market disruptions or a deterioration in economic conditions could lead to lower demand for our products, such as cable television services, as well as lower levels...

  • Page 85
    ... summarizes 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, 2012: Newsday LLC(a) Bresnan Cable Other Entities Cablevision Total CSC Holdings Eliminations(b) Total...

  • Page 86
    ... loan facility ...March 29, 2016 3.21% Restricted Group credit facility debt ...Bresnan Cable: Term loan facility ...December 14, 2017 4.50% Revolving loan facility(c) ...December 14, 2015 Bresnan Cable credit facility debt ...Newsday: Fixed rate term loan facility ...August 1, 2013 Floating rate...

  • Page 87
    ... December 31, 2012, CSC Holdings and those of its subsidiaries which conduct our cable television video operations, high-speed data service, and our VoIP services operations in the New York metropolitan service area, as well as Lightpath, our commercial data and voice service business, comprise the...

  • Page 88
    ... equity contribution in Bresnan Cable. On June 30, 2010, the availability period for $20,000 of revolving credit commitments under CSC Holdings' Revolving Loan Facility was extended to March 31, 2015 and the maturity date of $4,786 of loans under CSC Holdings' existing term A facility was extended...

  • Page 89
    ... to time; provided that until June 2012 the extension fee shall remain at 2.00% per annum. The Company incurred deferred financing costs of $4,490, which are being amortized to interest expense over the term of the facility. A portion of the proceeds from the Term A-4 extended loan facility was used...

  • Page 90
    ... restrictions on the permitted use of borrowed funds in the revolving loan facility may limit CSC Holdings' ability to utilize all...credit facility as of December 31, 2012. Senior Notes Tender Offer for Senior Notes In September 2012, CSC Holdings commenced a cash tender offer for: (1) its outstanding...

  • Page 91
    ...designated as hedges for accounting purposes. Bresnan Cable Credit Facility Debt In February 2013, the Company entered into a purchase agreement pursuant to which Charter Communications Operating, LLC will acquire the Company's Bresnan Broadband Holdings, LLC subsidiary (Optimum West) for $1,625,000...

  • Page 92
    ... by operating activities, interest income from the Cablevision senior notes held by Newsday Holdings LLC, capital contributions and intercompany advances. On October 12, 2012, Newsday LLC entered into a new senior secured credit agreement (the "New Credit Agreement"), the proceeds of which were used...

  • Page 93
    ... customer premise equipment of $127,426 due to higher expenditures for set top boxes, an increase in scalable infrastructure of $107,886 primarily due to enhancements to our network and data transmitting facilities for our high-speed data and voice services in the New York metropolitan service area...

  • Page 94
    ... consolidated financial statements for a discussion of our operating leases. Includes franchise and performance surety bonds primarily for the Company's Telecommunications Services segment. Also includes outstanding guarantees primarily by CSC Holdings in favor of certain financial institutions (88...

  • Page 95
    ... Company's entire interest in Newsday Holdings LLC at the fair value of the interest at that time. The table above does not include any future payments that would be required upon the exercise of this put right. Other Events Common Stock Repurchase In June 2010, Cablevision's Board of Directors...

  • Page 96
    ..., the Board of Directors of Cablevision declared a cash dividend of $0.15 per share payable on April 3, 2013 to stockholders of record on both its CNYG Class A common stock and CNYG Class B common stock as of March 15, 2013. During the years ended December 31, 2012 and 2011, CSC Holdings made equity...

  • Page 97
    ...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 98
    ... the use of the optional qualitative assessment. ASU No. 2012-02 will be effective for us on January 1, 2013 and we will adopt this guidance in connection with our annual impairment test to be performed in the first quarter of 2013. Item 7A. Quantitative and Qualitative Disclosures About Market Risk...

  • Page 99
    ... of stock price appreciation. Includes an equity derivative contract at December 31, 2012 related to 2,668,875 shares that matured and was settled on January 23, 2013 from the proceeds of a new monetization contract covering an equivalent number of shares. Fair Value of Debt: Based on the level of...

  • Page 100
    ... Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective as of December 31, 2012. Management's Annual Report on Internal Control Over Financial Reporting The Company's management is responsible for establishing and maintaining effective...

  • Page 101
    ...2017, (2) increase the annual base salary to $2 million and (3) provide for annual long-term cash and/or equity awards with an aggregate annual target value of $12 million. The equity portion of these annual awards will consist of options to acquire shares of the Company's Class A common stock in an...

  • Page 102
    ... 1934, each person who, at any time during its fiscal year ended December 31, 2012, was a director, officer or beneficial owner of more than 10% of the Company's Class A common stock that failed to file on a timely basis any such reports. Based on such review, the Company is aware of no such failure...

  • Page 103
    ... notes due to Newsday...Deficit investment in affiliate, net ...Total liabilities ...Commitments and contingencies Stockholders' Deficiency: Preferred Stock, $.01 par value, 50,000,000 shares authorized, none issued ...CNYG Class A common stock, $.01 par value, 800,000,000 shares authorized, 287,750...

  • Page 104
    CABLEVISION SYSTEMS CORPORATION SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) STATEMENTS OF INCOME Years ended December 31, 2012, 2011 and 2010 (Dollars in thousands) 2012 2011 2010 Revenues, net ...Operating expenses ...Operating income ...Other income (expense):...

  • Page 105
    CABLEVISION SYSTEMS CORPORATION SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, 2012, 2011 and 2010 (Dollars in thousands, except per share amounts) 2012 Net income ...Other comprehensive income, net of tax ...

  • Page 106
    CABLEVISION SYSTEMS CORPORATION SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) STATEMENTS OF CASH FLOWS Years ended December 31, 2012, 2011 and 2010 (Dollars in thousands) 2012 2011 2010 Cash flows from operating activities: Income from continuing operations ......

  • Page 107
    ... of Cablevision Systems Corporation) SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) BALANCE SHEETS December 31, 2012 and 2011 (Dollars in thousands) 2012 2011 ASSETS Current Assets: Cash and cash equivalents...Restricted cash ...Accounts receivable, trade (less...

  • Page 108
    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, 2012 and 2011 (Dollars in thousands, except share and per share amounts) 2012 2011 LIABILITIES ...

  • Page 109
    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, 2012, 2011 and 2010 (Dollars in thousands) 2012 2011 2010 Revenues, net ...Operating ...

  • Page 110
    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, 2012, 2011 and 2010 (Dollars in thousands, except per share amounts) 2012 ...

  • Page 111
    ...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, 2012, 2011 and 2010 (Dollars in thousands) 2012 2011 2010 Cash flows from operating activities: Income from...

  • Page 112
    ... 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 obligations during the five years subsequent to...

  • Page 113
    ... per share data) SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS Cablevision Systems Corporation Balance at Beginning of Period Provision for Bad Debt Deductions/ Write-Offs and Other Charges Balance at End of Period Year Ended December 31, 2012 Allowance for doubtful accounts ...Year Ended December...

  • Page 114
    ... him in his name, place and stead, in any and all capacities, to sign this report, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do...

  • Page 115
    ... /s/ Brian Sweeney Brian Sweeney /s/ Vincent Tese Vincent Tese /s/ Leonard Tow Leonard Tow Title Chairman of the Board of Directors Director Director Director Director Director Director Director Date February 28, 2013 February 28, 2013 February 28, 2013 February 28, 2013 February 28, 2013 February...

  • Page 116
    ...on November 10, 2009). Certificate of Formation of CSC Holdings, LLC (incorporated herein by reference to Exhibit 3.2 to Cablevision's Current Report on Form 8-K, filed on November 10, 2009). Limited Liability Company Agreement of CSC Holdings, LLC (incorporated herein by reference to Exhibit 3.3 to...

  • Page 117
    ... 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 118
    ... 10.11 to Cablevision's Annual Report on Form 10-K for the fiscal year ended December 31, 2011). Supplemental Benefit Plan of CSC Holdings, Inc. (incorporated herein by reference to Exhibit 10.7 to CSC Holdings' Form S-1). Cablevision Systems Corporation Employee Stock Plan (incorporated herein by...

  • Page 119
    ... NO. 10.21 DESCRIPTION Cablevision CHOICE Severance Pay Plan (incorporated herein by reference to Exhibit 10.49 to Cablevision's Annual Report on Form 10-K for fiscal year ended December 31, 2003). Lease Agreement between Nassau Cable Business Trust, as Landlord and CSC Holdings, Inc., as Tenant...

  • Page 120
    ... 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, 2010). Credit Agreement, dated...

  • Page 121
    ... by reference to Exhibit 10.41 to Cablevision's Annual Report on Form 10-K for the fiscal year ended December 31, 2007). Credit Agreement, dated as of October 12, 2012, among Newsday LLC, CSC Holdings, LLC, the lenders party thereto from time to time, Barclays Bank PLC, as administrative agent and...

  • Page 122
    ... by reference to Exhibit 10.3 to Cablevision's Current Report on Form 8-K, filed June 7, 2006). Summary of the Cablevision CHOICE Excess Savings Plan (incorporated herein by reference to Exhibit 10.72 to Cablevision's Annual Report on Form 10-K for the fiscal year ended December 31, 2006). (116) 10...

  • Page 123
    ... 10.2 to Cablevision's Current Report on Form 8-K, filed June 22, 2007). Time Sharing Agreement, dated February 1, 2012, between CSC Transport IV, Inc. and David G. Ellen (incorporated herein by reference to Exhibit 10.59 to Cablevision's Annual Report on Form 10-K for the fiscal year ended December...

  • Page 124
    ...by reference to Exhibit 10.68 to Cablevision's Current Report on Form 8-K, filed February 16, 2011). 10.64 10.65 10.66 Aircraft Dry Lease Agreement, dated November 14, 2012, by and between Brighid Air, LLC and CSC Transport, Inc. Aircraft Support Services Agreement, dated January 1, 2013, by and...

  • Page 125
    ... Madison Square Garden Company and AMC Networks Inc., Including Responsibilities of Overlapping Directors and Officers (incorporated herein by reference to Exhibit 99.1 to Cablevision's Current Report on Form 8-K, filed July 1, 2011). Letter Agreement, dated June 6, 2011, between CSC Holdings, LLC...

  • Page 126
    ... The following financial statements from Cablevision Systems Corporation's and CSC Holdings, LLC's Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission on February 28, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated...

  • Page 127
    ... STATEMENTS Page Reports of Independent Registered Public Accounting Firm ...CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES Consolidated Financial Statements Consolidated Balance Sheets - December 31, 2012 and 2011 ...Consolidated Statements of Income - years ended December 31, 2012, 2011 and...

  • Page 128
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  • Page 129
    ... reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board...

  • Page 130
    ...material respects, the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Cablevision Systems Corporation and subsidiaries' internal control over financial reporting as of December 31, 2012, based on...

  • Page 131
    ... reporting as of December 31, 2012, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board...

  • Page 132
    ... all material respects, the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CSC Holdings, LLC and subsidiaries' internal control over financial reporting as of December 31, 2012, based on criteria...

  • Page 133
    CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2012 and 2011 (Dollars in thousands) 2012 2011 ASSETS Current Assets: Cash and cash equivalents...Restricted cash ...Accounts receivable, trade (less allowance for doubtful accounts of $13,943 and $14,907) ......

  • Page 134
    ... share amounts) 2012 2011 LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current Liabilities: Accounts payable...Accrued liabilities: Interest ...Employee related costs ...Other accrued expenses ...Amounts due to affiliates ...Deferred revenue ...Liabilities under derivative contracts ...Credit facility...

  • Page 135
    ...thousands) ...Amounts attributable to Cablevision Systems Corporation stockholders: Income from continuing operations, net of income taxes ...Income from discontinued operations, net of income taxes ...Net income ...Cash dividends declared and paid per share of common stock... $6,705,461 $6,700,848...

  • Page 136
    CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, 2012, 2011 and 2010 (Dollars in thousands, except per share amounts) 2012 2011 2010 Net income ...Other comprehensive income (loss), net of tax: Defined benefit pension and ...

  • Page 137
    ... shares ...Treasury stock acquired through share repurchase program ...Conversion of CNYG Class B common stock to CNYG Class A common stock ...3 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 138
    ... stock acquired 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...

  • Page 139
    ... stock compensation arrangements ...Treasury stock acquired from forfeiture and acquisition of restricted shares ...Treasury stock acquired through share repurchase program ...Deferred tax adjustments relating to distribution of AMC Networks ...Dividends on CNYG Class A and CNYG Class B common stock...

  • Page 140
    CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2012, 2011 and 2010 (Dollars in thousands) 2012 2011 2010 Cash flows from operating activities: Income from continuing operations ...Adjustments to reconcile income from continuing ...

  • Page 141
    ... ...Purchase of shares of CNYG Class A common stock, pursuant to a share repurchase program, held as treasury shares ...Additions to deferred financing costs...Distributions to noncontrolling interests, net ...Net cash provided by (used in) financing activities ...Net increase (decrease) in cash...

  • Page 142
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED BALANCE SHEETS December 31, 2012 and 2011 (Dollars in thousands) 2012 2011 ASSETS Current Assets: Cash and cash equivalents ...Restricted cash ...Accounts receivable, trade (less allowance...

  • Page 143
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED BALANCE SHEETS (continued) December 31, 2012 and 2011 (Dollars in thousands, except share and per share amounts) 2012 2011 LIABILITIES AND MEMBER DEFICIENCY Current Liabilities: Accounts ...

  • Page 144
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF INCOME Years ended December 31, 2012, 2011 and 2010 (Dollars in thousands) 2012 2011 2010 Revenues, net (including revenues, net from affiliates of $5,805, $5,222 and $4,381...

  • Page 145
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, 2012, 2011 and 2010 (Dollars in thousands, except per share amounts) 2012 2011 2010 Net income ...Other comprehensive income (...

  • Page 146
    ......Pension and postretirement plan liability adjustments, net of income taxes ...Recognition of equity-based stock compensation arrangements ...Distributions to Cablevision ...(450,115) Accretion of discount on notes due from Cablevision ...Distribution of Madison Square Garden ...(134,869) Impact...

  • Page 147
    ......Recognition of equity-based stock compensation arrangements ...Distributions to Cablevision ...(543,180) Excess tax benefit on share-based awards ...Deferred tax adjustments relating to distribution of Madison Square Garden ...Distribution of AMC Networks...Adjustments to noncontrolling interests...

  • Page 148
    ... stock compensation arrangements ...Distributions to Cablevision ...Contributions from Cablevision ...Excess tax benefit on share-based awards ...Deferred tax adjustments relating to distribution of AMC Networks ...Adjustments to noncontrolling interests - Balance at December 31, 2012 ...$(3,106...

  • Page 149
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2012, 2011 and 2010 (Dollars in thousands) 2012 2011 2010 Cash flows from operating activities: Income from continuing operations ...$ ...

  • Page 150
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) Years ended December 31, 2012, 2011 and 2010 (Dollars in thousands) 2012 2011 2010 Cash flows from financing activities: Proceeds from credit facility...

  • Page 151
    ... Cinemas"), (iii) the News 12 Networks, which provide regional news programming services, (iv) the MSG Varsity network, a network dedicated entirely to showcasing high school sports and activities and other local programming, (v) a cable television advertising company, Cablevision Media Sales...

  • Page 152
    ... 2012 presentation. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Summary of Significant Accounting Policies Revenue Recognition The Company recognizes video, high-speed data, and voice services revenues as the services are provided to subscribers. Installation revenue for the Company's video...

  • Page 153
    ...except per share amounts) 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 advertising revenue when...

  • Page 154
    ...requisite service period for each tranche of awards subject to performance based vesting conditions. For restricted shares and restricted stock units, Cablevision recognizes compensation expense using a straightline amortization method, based on the grant date price of CNYG Class A common stock over...

  • Page 155
    ... or develop internal-use software. Capitalized software costs are amortized over the estimated useful life of the software and reported in depreciation and amortization. Customer relationships, advertiser relationships, and other intangibles established in connection with acquisitions that are...

  • Page 156
    ... 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 and does not hold or issue...

  • Page 157
    ...stock have ten votes per share. CNYG Class B shares can be converted to CNYG Class A common stock at anytime with a conversion ratio of one CNYG Class A common share for one CNYG Class B common share. CNYG Class A stockholders are entitled to elect 25% of Cablevision's Board of Directors. CNYG Class...

  • Page 158
    ...and CSC Holdings credit agreement restrict the amount of dividends and distributions in respect of any equity interest that can be made. The Board of Directors of Cablevision declared the following cash dividends to stockholders of record on both its CNYG Class A common stock and CNYG Class B common...

  • Page 159
    ... (options whose exercise price exceeds the average market price of Cablevision's common stock during the period and certain restricted shares) totaling approximately 1,257,000, 303,000 and 237,000 shares (which include Company options held by AMC Networks and Madison Square Garden employees), have...

  • Page 160
    ... of Madison Square Garden ...Distribution of AMC Networks (Cablevision) ...Distribution of AMC Networks (CSC Holdings) ...Gain on redemption of Cablevision notes held by Newsday Holdings LLC recognized in equity (CSC Holdings) ...Non-Cash Investing Activity of Cablevision: Dividends payable...

  • Page 161
    ... 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 162
    ... 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 comparable public companies taking into consideration synergies a market participant may generate. The...

  • Page 163
    ... 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 discontinued operations for all periods presented. No gain or loss was recognized in connection with the AMC Networks...

  • Page 164
    ... time studies used to estimate the average time spent on each activity. New connections are amortized over the estimated useful lives of 5 years or 12 years for residence wiring and feeder cable to the home, respectively. The portion of departmental costs related to reconnection, programming service...

  • Page 165
    ... estate taxes and other costs or credits. Costs associated with such operating leases are recognized on a straight-line basis over the initial lease term. The difference between rent expense and rent paid is recorded as deferred rent. Rent expense for the years ended December 31, 2012, 2011 and 2010...

  • Page 166
    ... 74,001 65,268 58,254 46,473 58,363 NOTE 9. INTANGIBLE ASSETS The following table summarizes information relating to the Company's acquired intangible assets at December 31, 2012 and 2011: December 31, 2012 2011 Estimated Useful Lives Gross carrying amount of other amortizable intangible assets...

  • Page 167
    ...share amounts) The changes in the carrying amount of goodwill for the years ended December 31, 2012 and 2011 are as follows: Telecommunications Services... to purchase accounting related to the acquisition of Bresnan Cable which is included in the Telecommunications Services reporting unit. I-39

  • Page 168
    ... funding and investment requirements of Bresnan Cable. Includes extension fees, where applicable. See Note 11 for details relating to interest rate swap contracts outstanding at December 31, 2011. Restricted Group Credit Facility Credit Agreement On April 13, 2010, CSC Holdings and certain of its...

  • Page 169
    ... equity contribution in Bresnan Cable. On June 30, 2010, the availability period for $20,000 of revolving credit commitments under CSC Holdings' Revolving Loan Facility was extended to March 31, 2015 and the maturity date of $4,786 of loans under CSC Holdings' existing term A facility was extended...

  • Page 170
    ... 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 171
    ...is comprised of two components: a $765,000 term loan facility (of which $749,700 was outstanding at December 31, 2012) and a $75,000 revolving loan facility (collectively, the "Bresnan Credit Agreement"). In connection with the financing of the Bresnan acquisition in December 2010, the full $765,000...

  • Page 172
    ...LLC and Cablevision senior notes with an aggregate principal amount of $753,717 owned by Newsday Holdings. In connection with the New Credit Agreement, the Company incurred deferred financing costs of approximately $4,558, which are being amortized to interest expense over the term of the New Credit...

  • Page 173
    ...$60,997, plus accrued interest with cash on hand. Cablevision repaid the principal amount of $26,825, plus accrued interest with dividends received from CSC Holdings. The Company may redeem some or all of the notes at any time at a specified "make-whole" price plus accrued and unpaid interest to the...

  • Page 174
    ... Cablevision commenced in April 2010 discussed below and for general corporate purposes. In connection with the issuance of these senior notes, the Company incurred deferred financing costs of $26,481, which are being amortized to interest expense over the term of these senior notes. CSC Holdings...

  • Page 175
    ... 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 176
    ..., except per share amounts) CSC Holdings In September 2012, CSC Holdings commenced a cash tender offer for: (1) its outstanding $120,543 ...in the year ended December 31, 2012. In October 2011, CSC Holdings commenced a cash tender offer (the "October 2011 Tender Offer") for (1) its outstanding $500,...

  • Page 177
    ...various transactions to limit the exposure against equity price risk on its shares of Comcast Corporation ("Comcast") common stock. The Company has monetized all of its stock holdings in Comcast Corporation through the execution of prepaid forward contracts, collateralized by an equivalent amount of...

  • Page 178
    ...044) $(157,057) Total derivative contracts ... For the years ended December 31, 2012, 2011 and 2010, the Company recorded a gain on investments of $293,599, $37,370 and $109,751 respectively, representing the net increase in the fair values of all investment securities pledged as collateral for the...

  • 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, 2012 2011 Number of shares...

  • Page 180
    ...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 of the fair value hierarchy. The Company considers the impact of credit risk when...

  • Page 181
    ... used to estimate fair value of each class of financial instruments for which it is practicable to estimate: Credit Facility Debt, Collateralized Indebtedness, Senior Notes and Debentures and Notes Payable The fair values of each of the Company's debt instruments are based on quoted market prices...

  • Page 182
    ...current federal income tax benefit for the year ended December 31, 2010 is primarily attributable to impact of the change in tax accounting method with regard to certain installation costs. Income tax expense attributable to discontinued operations for the year ended December 31, 2012 of $138,754 is...

  • Page 183
    ... of deferred tax benefits...Impact of non-deductible officers' compensation ...Other non-deductible expenses ...Increase in certain state and local net operating loss carry forwards pursuant to the finalization of an examination with a taxing authority ...Increase in the state rate used to determine...

  • Page 184
    ... uses the 'with-and-without' approach to determine whether an excess tax benefit has been realized. Upon realization, such excess tax benefits will be recorded as an increase to paid-in capital. As of December 31, 2012, Cablevision has $21,273 of federal alternative minimum tax credit carry forwards...

  • Page 185
    ...Cablevision. The income tax provision for CSC Holdings is determined on a stand-alone basis for all periods presented as if CSC Holdings filed separate consolidated income tax returns. Income tax expense (benefit) attributable to continuing operations consists of the following components: 2012 Years...

  • Page 186
    ... income principally due to the effect of the following items: 2012 Years Ended December 31, 2011 2010 Federal tax expense at statutory rate ...State income taxes, net of federal benefit ...Changes in the valuation allowance...Change in the state rate used to determine deferred taxes, net of federal...

  • Page 187
    ... federal and state excess tax benefit of $61,434 during the year ended December 31, 2012. Such excess tax benefit resulted in an increase to member's equity. Subsequent to the utilization of CSC Holdings' NOLs and tax credit carry forwards, obligations to Cablevision pursuant to the tax allocation...

  • Page 188
    ..., cannot be made. The most significant jurisdictions in which the Company is required to file income tax returns include the states of New York, New Jersey and Connecticut and the city of New York. The State of New York is presently auditing income tax returns for years 2006 through 2008. I-60

  • Page 189
    ...benefit of non-union employees other than those of Bresnan Cable, Newsday and Clearview Cinemas. 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...

  • Page 190
    ... Company's Defined Benefit Plans at December 31, 2012 and 2011: Cablevision Defined Benefit Plans 2012 2011 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...

  • Page 191
    ...31, 2010. The use of the revised assumptions resulted in an increase in the Pension Plan's expected duration of benefit payments as compared to the previous years. The Company's expected long-term return on Pension Plan assets is based on a periodic review and modeling of the plan's asset allocation...

  • Page 192
    ... 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 and Benefit Committee. The investment consultant also takes into account the Pension Plan's liabilities when...

  • Page 193
    ...invest primarily in money market securities. Excludes net receivables relating to securities sales that were not settled as of December 31, 2012. The fair values of the assets of the Pension Plan at December 31, 2011 by asset class are as follows: Asset Class Level I Level II Level III Total Fixed...

  • Page 194
    ...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 divided by the fair value of a share of CNYG Class A stock based on the closing price on the date of grant. In 2012 and...

  • Page 195
    ... to AMC Networks and Madison Square Garden share-based awards held by Company employees, for continuing operations recognized by the Company as selling, general and administrative expense for the years ended December 31, 2012, 2011 and 2010: 2012 Years Ended December 31, 2011 2010 Stock options...

  • Page 196
    ... subsequent to a change in Cablevision's structure in connection with the AMC Networks Distribution and the MSG Distribution. The following assumptions were used to calculate the fair value of stock option awards granted in 2012: Risk-free interest rate ...Expected life (in years) ...Dividend yield...

  • Page 197
    ... to AMC Networks and Madison Square Garden employees who held Cablevision stock options for the year ended December 31, 2012: Shares Under Option Time Performance Vesting Based Vesting Options Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (in years...

  • Page 198
    ... as of December 31, 2012. The following table summarizes activity relating to AMC Networks and Madison Square Garden employees who held Cablevision restricted shares for the year ended December 31, 2012: Number of Performance Restricted Shares Weighted Average Fair Value Per Share at Date of Grant...

  • Page 199
    ... Plan, which was approved by Cablevision's stockholders at its annual stockholders meeting in May 2006. In connection with the long-term incentive awards outstanding, the Company has recorded expenses in continuing operations of $10,308, $2,920 and $48,410 for the years ended December 31, 2012...

  • Page 200
    ... summarizes the revenue and charges (credits) related to services provided to or received from Madison Square Garden reflected in continuing operations not discussed elsewhere in the accompanying combined notes to the consolidated financial statements: 2012 Years Ending December 31, 2010(a) 2011...

  • Page 201
    ...will charge Madison Square Garden or AMC Networks for the incremental amount. Technical Expenses 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 systems...

  • Page 202
    ...of the Dolan family. All costs incurred on behalf of these related parties are reimbursed to the Company. Aggregate amounts due from and due to AMC Networks, Madison Square Garden and other affiliates at December 31, 2012 and 2011 are summarized below: Cablevision 2012 December 31, 2011 Amounts due...

  • Page 203
    ...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 Cablevision...

  • Page 204
    ... owe to Cablevision by allegedly causing or allowing the Company to issue 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 seeks unspecified...

  • Page 205
    ...Contract Dispute In 2005, subsidiaries of the Company (now subsidiaries of AMC Networks) entered into agreements with EchoStar Communications Corporation and its affiliates by which EchoStar Media Holdings Corporation acquired a 20% interest in VOOM HD Holdings LLC ("VOOM HD") and EchoStar Satellite...

  • Page 206
    ... excludes interstate and international telephone service from tax and its reasonable calculation of subscriber interstate and international usage. NYS had asserted that all Optimum Voice revenue, less embedded sales tax included in the subscriber fee, bad debts and other customer adjustments, should...

  • Page 207
    ... of (i) Newsday, (ii) Clearview Cinemas, (iii) the News 12 Networks, (iv) the MSG Varsity network, (v) Cablevision Media Sales, and (vi) certain other businesses and unallocated corporate costs. The Company's reportable segments are strategic business units that are managed separately. The Company...

  • Page 208
    ...) (Dollars in thousands, except per share amounts) Information as to the operations of the Company's reportable business segments is set forth below. 2012 Years Ended December 31, 2011 2010 Revenues, net from continuing operations Telecommunications Services ...Other ...Inter-segment eliminations...

  • Page 209
    ... share amounts) A reconciliation of reportable segment amounts to Cablevision's and CSC Holdings' consolidated balances is as follows: Years Ended December 31, 2012 2011(a) Operating income for reportable segments ...Items excluded from operating income (loss): CSC Holdings interest expense ...CSC...

  • Page 210
    ... INFORMATION (Unaudited) The following is a summary of the Company's selected quarterly financial data for the years ended December 31, 2012 and 2011: 2012: March 31, 2012 June 30, 2012 Cablevision September 30, 2012 December 31, 2012 Total 2012 Revenues, net ...Operating expenses ...Operating...

  • Page 211
    ... Corporation stockholders ...Basic income per share attributable to Cablevision Systems Corporation stockholders: Income from continuing operations ...Income from discontinued operations ...Net income ...Diluted income per share attributable to Cablevision Systems Corporation stockholders: Income...

  • Page 212
    ... in thousands, except per share amounts) CSC Holdings September 30, 2012 2012: March 31, 2012 June 30, 2012 December 31, 2012 Total 2012 Revenues, net ...Operating expenses ...Operating income ...Income (loss) from continuing operations ...Income from discontinued operations, net of income...

  • Page 213
    ...for almost 60% of the Company's Telecommunications Services customers in this service area, as well as damage to certain portions of the Company's cable network. The following table summarizes service outage credits which reduced revenues, net, incremental costs depreciation and capital expenditures...

  • Page 214
    ... to carry on its satellite service AMC, IFC, the Sundance Channel and WE tv, and with a subsidiary of The Madison Square Garden Company to carry Fuse; and An affiliate of DISH Network conveyed its 20% membership interest in VOOM HD to Rainbow Programming Holdings LLC, such that all of the cash...

  • Page 215
    ...In May 2012, Cablevision's Board of Directors authorized the repurchase of up to another $500,000 of CNYG Class A common stock giving the Company the ability to repurchase up to a total of $1,500,000 of CNYG Class A common stock since inception of the program. Under the repurchase program, shares of...

  • Page 216
    Exhibit 31.1 I, James 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 ...

  • Page 217
    ... Chairman 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 a material...

  • 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, 2013 By: /s/ James L. Dolan James L. Dolan President and Chief Executive Officer Date...

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