Cablevision 2013 Annual Report Download - page 28

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Economic downturns may impact our ability to comply with the covenants and restrictions in our
indentures, credit facilities and agreements governing our other indebtedness and may impact our ability
to pay our indebtedness as it comes due. If we do not repay our debt obligations when they become due
and do not otherwise comply with the covenants and restrictions in our indentures, credit facilities and
agreements governing our other indebtedness, we would be in default under those agreements, and the
debt incurred under those agreements could then be declared immediately due and payable. In addition,
any default under our indentures, credit facilities or agreements governing our other indebtedness could
lead to an acceleration of debt under other debt instruments that contain cross acceleration or cross-
default provisions. If the indebtedness under our indentures, credit facilities and our other debt
instruments were accelerated, we would not have sufficient assets to repay amounts due thereunder. To
avoid a default, we could be required to defer capital expenditures, sell assets, seek strategic investments
from third parties or reduce or eliminate dividend payments and stock repurchases or other discretionary
uses of cash. However, if such measures were to become necessary, there can be no assurance that we
would be able to sell sufficient assets or raise strategic investment capital sufficient to meet our scheduled
debt maturities as they come due. In addition, any significant reduction in necessary capital expenditures
could adversely affect our ability to retain our existing customer base and obtain new customers, which
would adversely affect our future operating results, cash flows and financial position.
Disruptions in the capital and credit markets can also result in higher interest rates on publicly issued debt
securities and increased costs under credit facilities. Such disruptions would increase our interest
expense, adversely affecting our results of operations and financial position.
Our access to funds under our revolving credit facilities is dependent on the ability of the financial
institutions that are parties to those facilities to meet their funding commitments. Those financial
institutions may not be able to meet their funding commitments if they experience shortages of capital and
liquidity or if they experience excessive volumes of borrowing requests within a short period of time.
Moreover, the obligations of the financial institutions under our revolving credit facilities are several and
not joint and, as a result, a funding default by one or more institutions does not need to be made up by the
others.
Longer term, volatility and disruptions in the capital and credit markets as a result of uncertainty,
changing or increased regulation of financial institutions, reduced alternatives or failures of significant
financial institutions could adversely affect our access to the liquidity needed for our businesses. Such
disruptions could require us to take measures to conserve cash until the markets stabilize or until
alternative credit arrangements or other funding for our business needs can be arranged.
We have substantial indebtedness and we are highly leveraged, which reduces our capability to
withstand adverse developments or business conditions.
We have incurred substantial amounts of indebtedness to finance operations, upgrade our cable plant and
acquire other cable television systems, sources of programming and other businesses. We have also
incurred substantial indebtedness in order to offer new or upgraded services to our current and potential
customers and to pursue activities outside our core businesses, such as our acquisitions of Clearview
Cinemas (substantially all of whose assets were sold in 2013), Newsday, an electronics retailer, and our
development of Rainbow DBS. In 2006, CSC Holdings incurred $3.5 billion of debt, approximately
$3.0 billion of which was distributed to Cablevision to fund a $10 per share dividend on its common stock
and approximately $414 million of which was used to repay existing indebtedness, including interest, fees
and expenses. In December 2010, we incurred approximately $1.4 billion of indebtedness to finance our
acquisition of Bresnan Cable, which was sold in 2013. We may continue to incur substantial amounts of
debt in the future. At December 31, 2013, our total aggregate indebtedness was approximately
$9.8 billion. Because of our substantial indebtedness, we are highly leveraged and we will continue to be
highly leveraged. This means that our payments on our borrowings are significant in relation to our
revenues and cash flow. This leverage exposes us to significant risk in the event of downturns in our
businesses (whether through competitive pressures or otherwise), in our industries or in the economy