Cablevision 2012 Annual Report Download - page 97

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Interest rate risk is primarily a result of exposures to changes in the level, slope and curvature of the yield
curve, the volatility of interest rates and credit spreads.
As of December 31, 2011 and through their maturity date in June 2012, 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 our floating rate debt. These contracts were not designated as hedges for
accounting purposes.
All interest rate swap contracts are carried at their fair values on our consolidated balance sheets, with
changes in value reflected in our consolidated statements of operations.
Equity Price Risk
We have entered into derivative contracts to hedge our equity price risk and monetize the value of our
shares of common stock of Comcast Corporation. These contracts, at maturity, are expected to offset
declines in the fair value of these securities below the hedge price per share while allowing us to retain
upside appreciation from the hedge price per share to the relevant cap price. If any one of these contracts
is terminated prior to its scheduled maturity date due to the occurrence of an event specified in the
contract, we would be obligated to repay the fair value of the collateralized indebtedness less the sum of
the fair values of the underlying stock and equity collar, calculated at the termination date. As of
December 31, 2012, we did not have an early termination shortfall relating to any of these contracts. The
underlying stock and the equity collars are carried at fair value on our consolidated balance sheets and the
collateralized indebtedness is carried at its accreted value.
See "Item 7A. Quantitative and Qualitative Disclosures 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 guarantees of the subsidiaries' ongoing contract
payment expense obligations and potential payments that could be due as a result of an early termination
event (as defined in the agreements). The guarantee exposure approximates the net sum of the fair value
of the collateralized indebtedness less the sum of the fair values of the underlying stock and the equity
collar. All of our equity derivative contracts are carried at their current fair value on our consolidated
balance sheets with changes in value reflected in our consolidated statements of income, and all of the
counterparties to such transactions currently carry investment grade credit ratings.
Recently Issued But Not Yet Adopted Accounting Pronouncements
In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards
Update ("ASU") No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified
Out of Accumulated Other Comprehensive Income. ASU No. 2013-02 requires a company to report the
effect of significant reclassifications out of accumulated other comprehensive income on the respective
line items in net income if the amount being reclassified is required under U.S. generally accepted
accounting principles ("GAAP") to be reclassified in its entirety to net income. For other amounts that
are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting
period, a company is required to cross-reference other disclosures required under U.S. GAAP that provide
additional detail about those amounts. ASU No. 2013-02 will be effective for us for all reporting periods
ending after January 1, 2013.
In July 2012, the FASB issued ASU No. 2012-02, Intangibles - Goodwill and Other (Topic 350): Testing
Indefinite-Lived Intangible Assets for Impairment. Similar to ASU No. 2011-08, Intangibles - Goodwill