Cablevision 2012 Annual Report Download - page 48

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CABLEVISION SYSTEMS CORPORATION
All dollar amounts, except per customer, per unit, per share data, and tender prices per note, included in
the following discussion under this Item 7, are presented in thousands.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Summary
Our future performance is dependent, to a large extent, on general economic conditions including capital
and credit market conditions, the impact of direct competition, our ability to manage our businesses
effectively, and our relative strength and leverage in the marketplace, both with suppliers and customers.
Capital and credit market disruptions often cause broader economic downturns, which may lead to lower
demand for our products, such as cable television services, as well as lower levels of television and
newspaper advertising, and increased incidence of customers' inability to pay for the services we provide.
We have experienced some of the effects of the recent economic downturn. Events such as these may
adversely impact our results of operations, cash flows and financial position.
On October 29, 2012, Superstorm Sandy made landfall in our New York metropolitan service area,
resulting in widespread power outages and service disruptions for almost 60% of our customers in this
service area, as well as damage to certain portions of our cable network. See discussion below in
"Business Segments Results - Telecommunications Services" for a summary of service outage credits,
incremental costs and capital expenditures related to Superstorm Sandy.
On June 30, 2011, we distributed to our stockholders all of the outstanding common stock of AMC
Networks Inc., a company which consists principally of national programming networks, including AMC,
WE tv, IFC and Sundance Channel, previously owned and operated by our Rainbow segment.
On February 9, 2010, we distributed to our stockholders all of the outstanding common stock of Madison
Square Garden, a company which owns the sports, entertainment and media businesses previously owned
and operated by our Madison Square Garden segment.
As a result of the AMC Networks Distribution and the MSG Distribution, we no longer consolidate the
financial results of AMC Networks or Madison Square Garden for the purpose of our own financial
reporting and the historical financial results of AMC Networks and Madison Square Garden have been
reflected in our consolidated financial statements as discontinued operations for all periods presented
through the AMC Networks Distribution date and the MSG Distribution date.
Telecommunications Services
Our Telecommunications Services segment, which accounted for 94% of our consolidated revenues, net
of inter-segment eliminations, for the year ended December 31, 2012, derives revenues principally
through monthly charges to subscribers of our video, high-speed data (often called "broadband" Internet
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-per-
view, installation and home shopping commissions. Revenue increases are derived from rate increases,
increases in the number of subscribers to these services, including additional services sold to our existing
subscribers, upgrades by video customers in the level of programming package to which they subscribe,
and acquisition transactions that result in the addition of new subscribers. Our ability to increase the
number of subscribers to our services is significantly related to our penetration rates (the number of
subscribers to our services as a percentage of serviceable passings, which represent the estimated number
of single residence homes, apartment and condominium units and commercial establishments passed by