Cablevision 2013 Annual Report Download - page 29

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generally, because although our cash flows would decrease in this scenario, our required payments in
respect of indebtedness would not.
We have in past periods incurred substantial losses from continuing operations, we have a significant
stockholders' deficiency, and we may in the future incur losses from continuing operations which
could be substantial, which may reduce our ability to raise needed capital.
We have in the past reported losses from continuing operations and we may do so in the future.
Significant losses from continuing operations could adversely affect our ability to comply with the
covenants and restrictions in our debt agreements and could limit our ability to raise needed financing, or
to do so on favorable terms, as such losses could be taken into account by potential investors, lenders and
the organizations that issue investment ratings on our indebtedness.
A lowering or withdrawal of the ratings assigned to our debt securities by ratings agencies may further
increase our future borrowing costs and reduce our access to capital.
The debt ratings for our debt securities are below the "investment grade" category, which results in higher
borrowing costs as well as a reduced pool of potential purchasers of our debt as some investors will not
purchase debt securities that are not rated in an investment grade rating category. In addition, there can
be no assurance that any rating assigned will remain for any given period of time or that a rating will not
be lowered or withdrawn entirely by a rating agency, if in that rating agency's judgment, future
circumstances relating to the basis of the rating, such as adverse changes, so warrant. A lowering or
withdrawal of a rating may further increase our future borrowing costs and reduce our access to capital.
Our ability to meet our obligations under our indebtedness may be restricted by limitations on our
subsidiaries' ability to send us funds.
Cablevision's sole subsidiary is CSC Holdings. CSC Holdings' principal subsidiaries include various
entities that own cable television systems and other businesses. Cablevision's ability to pay interest and
principal on its outstanding indebtedness is dependent upon the operations of CSC Holdings and its
subsidiaries and the distributions or other payments of the cash they generate to Cablevision in the form
of distributions, loans or advances. Similarly, CSC Holdings' ability to pay interest and principal on its
indebtedness is dependent in part on distributions from its subsidiaries. The Company's subsidiaries are
separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts
due on the Company's indebtedness or to make any funds available to the Company to do so. In addition,
Newsday LLC is a party to a credit agreement that contains various financial and operating covenants that
restrict the payment of dividends or other distributions. Also, our subsidiaries' creditors, including trade
creditors, in the event of a liquidation or reorganization of any subsidiary, would be entitled to a claim on
the assets of such subsidiaries, including any assets transferred to those subsidiaries, prior to any of our
claims as a stockholder and those creditors are likely to be paid in full before any distribution is made to
us. To the extent that we are a creditor of a subsidiary, our claims could be subordinated to any security
interest in the assets of that subsidiary and/or any indebtedness of that subsidiary senior to that held by us.
Our ability to incur debt and the use of our funds are limited by significant restrictive covenants in
financing agreements.
Our credit facilities and debt instruments contain various financial and operating covenants that, among
other things, require the maintenance of financial ratios and restrict the relevant borrower's ability to incur
debt from other sources and to use funds for various purposes, including investments in some
subsidiaries. Violation of these covenants could result in a default that would permit the parties who have
lent money under such credit facilities and such other debt instruments to:
x restrict the ability to borrow undrawn funds under such credit facilities, and
x require the immediate repayment of the borrowings thereunder.