Cablevision 2012 Annual Report Download - page 33

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geographic area. Newsday also faces competition from magazines, shopping guides, yellow pages,
websites, mobile-device platforms, broadcast and cable television, radio and direct marketing; particularly
if those media sources provide advertising services that could substitute for those provided by Newsday
within the same geographic area. Specialized websites for real estate, automobile and help wanted
advertising have become increasingly competitive with our newspapers and websites for classified
advertising and further development of additional targeted websites is likely.
Newsday and the newspaper industry generally have also experienced significant declines in advertising
and circulation revenue as circulation and readership levels continue to be adversely affected by
competition from new media news formats and less reliance on newspapers by some consumers as a
source of news, particularly younger consumers. A prolonged decline in circulation would have a
material adverse effect on the rate and volume of advertising revenues.
A significant amount of our book value consists of intangible assets that may not generate cash in the
event of a voluntary or involuntary sale.
At December 31, 2012, we reported approximately $7.2 billion of consolidated total assets, of which
$1.9 billion were intangible. Intangible assets include franchises from city and county governments to
operate cable television systems and goodwill. While we believe that the carrying values of our
intangible assets are recoverable, you should not assume that we would receive any cash from the
voluntary or involuntary sale of these intangible assets, particularly 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.
We rely on network and information systems for our operations, and a disruption or failure of those
systems may disrupt our operations.
We have in place layered and multi-threaded security systems designed to protect against intentional or
unintentional disruption, failure, misappropriation or corruption of our network and information systems.
A problem of this type might be caused by events such as computer hacking, computer viruses, worms
and other destructive or disruptive software, "cyber attacks" and other malicious activity, as well as
natural disasters, power outages, terrorist attacks and similar events. Such events could have an adverse
impact on us and our customers, including degradation of service, service disruption, excessive call
volume to call centers and damage to our plant, equipment and data. In addition, our future results could
be adversely affected due to the theft, destruction, loss, misappropriation or release of confidential
customer 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 expect to continue to spend in the future, significant amounts to protect our
network and information systems; however, there can be no assurance that these efforts will prevent any
of the problems identified above.
The MSG Distribution and the AMC Networks Distribution could result in significant tax liability.
We have received private letter rulings from the IRS to the effect that, among other things, the MSG
Distribution and the AMC Networks Distribution and certain related transactions, will qualify for tax-free
treatment under the Internal Revenue Code of 1986, as amended (the "Code").
Although a private letter ruling from the IRS generally is binding on the IRS, if the factual representations
or assumptions made in the letter ruling request are untrue or incomplete in any material respect, we will
not be able to rely on the ruling. Furthermore, the IRS will not rule on whether a distribution satisfies
certain requirements necessary to obtain tax-free treatment under the Code. Rather, the ruling is based