Cablevision 2014 Annual Report Download

Download and view the complete annual report

Please find the complete 2014 Cablevision annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 164

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

CABLEVISION
SYSTEMS
CORPORATION
2014 Form 10-K
NYSE: CVC

Table of contents

  • Page 1
    CABLEVISION SYSTEMS CORPORATION 2014 Form 10-K NYSE: CVC

  • Page 2

  • Page 3
    ... ACT OF 1934 [NO FEE REQUIRED] For the transition period from _____ to _____ Commission File Number 1-14764 Registrant; State of Incorporation; Address and Telephone Number Cablevision Systems Corporation Delaware 1111 Stewart Avenue Bethpage, NY 11714 (516) 803-2300 CSC Holdings, LLC Delaware 1111...

  • Page 4
    ... Cablevision Systems Corporation computed by reference to the price at which the common equity was last sold on the New York Stock Exchange as of June 30, 2014: $3,648,276,512 Number of shares of common stock outstanding as of February 19, 2015: Cablevision NY Group Class A Common Stock Cablevision...

  • Page 5
    ...Accountant Fees and Services ...Part IV 15. Exhibits and Financial Statement Schedules ...* * * * * * 72 Some or all of these items are omitted because Cablevision intends to file with the Securities and Exchange Commission, not later than 120 days after the close of its fiscal year, a definitive...

  • Page 6
    This page intentionally left blank.

  • Page 7
    ... access) and Voice over Internet Protocol ("VoIP") services using our broadband network. Through Cablevision Lightpath, Inc. ("Lightpath"), our wholly-owned subsidiary, we provide Ethernet-based data, Internet, voice and video transport and managed services, to the business market in the New York...

  • Page 8
    ... pay-per-view movies and events, video-on-demand and subscription video-ondemand program services, from the sale of advertising time on advertiser supported programming and from installation, equipment charges and other fees. We also provide high-speed data services using our broadband network. High...

  • Page 9
    ..., international channels and digital music at various price points. Since our cable systems have been upgraded to provide advanced digital video services, our sales and marketing efforts are primarily directed toward retaining our existing customers and increasing our penetration to homes passed...

  • Page 10
    ... available hotspots throughout our service area, including our "smart router" product. WiFi is offered as a free value added benefit to Optimum Online customers and for a fee to non-customers in certain locations. Our WiFi service also allows our Optimum Online customers to access the WiFi networks...

  • Page 11
    ... a minimum of 750 MHz offering HD digital channels, high-speed data and voice services. Programming Programming is available to the cable television systems from a variety of sources. Program suppliers' compensation is typically a fixed, per subscriber monthly fee (subject to contractual escalations...

  • Page 12
    .... News 12 Networks is available to all subscribers throughout our footprint in the New York metropolitan area. Cablevision Media Sales Cablevision Media Sales is a cable television advertising company that derives its revenues primarily from the sale of local and regional commercial advertising time...

  • Page 13
    ... this time, such as high-speed data, voice service and interactive services carried over the cable distribution plant. Other Competitors and Video Programming Sources. Another source of competition for our Cable segment is the delivery of video content over the Internet directly to subscribers. This...

  • Page 14
    ... 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...

  • Page 15
    ... retransmission consent negotiations. Ownership Limitations. Congress has required the FCC to set a national limit on the number of subscribers a cable company can serve, and a limit on the number of channels on a cable television system that can be occupied by video programming services in 9

  • Page 16
    ..., public, educational, or governmental ("PEG") channels on our cable systems. In addition to providing PEG channels, we must make a limited number of commercial leased access channels available to third parties (including parties with potentially competitive video services) at regulated rates. Pole...

  • Page 17
    ... the Company, to also offer a solution to provide basic service tier access to certain third-party IP-enabled devices. This latter requirement applies until October 2015, unless the FCC extends it. All of our systems are all-digital; in the New York City franchise areas, Cablevision has encrypted...

  • Page 18
    ... govern the collection, use, and disclosure of subscriber information in connection with the delivery of advertising to consumers that is customized to their interests. Additionally, providers of broadband Internet access services must comply with the Communications Assistance for Law Enforcement...

  • Page 19
    ... universal service support programs to the provision of broadband services through a new Connect America Fund ("CAF"). Other Regulation. Lightpath is subject to other FCC requirements in connection with the services it provides, including protecting customer proprietary network information from...

  • Page 20
    ... broadcast television signals available to homes within our market by over-the-air reception. We face competition from two telephone companies, Verizon and Frontier, who offer video programming in addition to high-speed data and VoIP services to residential and business customers in our service area...

  • Page 21
    ..., Verizon announced a mobile video delivery service and DISH Network introduced a product offering Internet delivery of a number of cable networks. Increasingly, content owners are utilizing Internet-based delivery of content directly to consumers, some without charging a fee for access to the...

  • Page 22
    ... and retain subscribers and the demand for our services and it can also decrease advertising demand on our delivery systems. Our high-speed data business faces technological challenges from rapidly evolving wireless Internet solutions. Our voice service offerings face technological developments...

  • Page 23
    ... other cable 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...

  • Page 24
    ... and $991.6 million, in 2014, 2013 and 2012, respectively, and primarily include payments for customer premise equipment, such as new digital video cable boxes and modems, as well as infrastructure and capital expenditures related to our cable and Lightpath networks, in addition to the capital...

  • Page 25
    ... affect our business or results of operations. For example, new requirements giving third parties access to our network or other assets, limits on how we offer broadband service or the rates we charge for it, or new regulations that confer asymmetrical benefits on online video distributors could...

  • Page 26
    ... 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...

  • Page 27
    ... MSG Distribution (whereby Cablevision distributed to its stockholders all of the outstanding common stock of The Madison Square Garden Company ("Madison Square Garden"), a company which owns the sports, entertainment and media businesses previously owned and operated by the Company's Madison Square...

  • Page 28
    ... exist by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities set forth in the policy) to Madison Square Garden or AMC Networks or any of their respective subsidiaries instead of the Company, or does not refer or communicate...

  • Page 29
    ... Price Range of Cablevision NY Group Class A Common Stock The following tables set forth for the periods indicated the intra-day high and low sales prices per share of the CNYG Class A common stock as reported on the NYSE: High Year Ended December 31, 2014: First Quarter ...$ Second Quarter ...Third...

  • Page 30
    ...no public trading market for the CNYG Class B common stock, par value $.01 per share. As of February 19, 2015, there were 23 holders of record of CNYG Class B common stock. All membership interests in CSC Holdings are held by Cablevision. Stockholder Dividends and Distributions Cablevision The Board...

  • Page 31
    ... Company's CNYG Class A common stock with the performance of the S&P 500 Index and a Peer Group Index by measuring the changes in CNYG Class A common stock prices from December 31, 2009 through December 31, 2014. As required by the SEC, the values shown assume the reinvestment of all dividends and...

  • Page 32
    ... of Cablevision and CSC Holdings and the notes thereto included in Item 8 of this Report. Operating Data: Cablevision Systems Corporation Years Ended December 31, 2013 2012 (a) 2011 (Dollars in thousands) $ 6,232,152 $ 6,131,675 $ 6,162,608 2014 Revenues, net ...$ 6,460,946 Operating expenses...

  • Page 33
    Cablevision Systems Corporation Years Ended December 31, 2014 2013 2012 2011 2010 (Dollars in thousands, except per share data) INCOME PER SHARE: Basic income per share attributable to Cablevision Systems Corporation stockholders: Income from continuing operations, net of income taxes ...$ Income ...

  • Page 34
    CSC Holdings, LLC 2014 Revenues, net...$6,460,946 Operating expenses: Technical and operating (excluding depreciation, amortization and impairments shown below)...3,136,808 Selling, general and administrative ...1,533,898 Restructuring expense (credits)...2,480 Depreciation and amortization (...

  • Page 35
    Balance Sheet Data: Cablevision Systems Corporation 2014 2013 December 31, 2012 2011 (Dollars in thousands) 2010 Total assets ...$ 6,...690) (5,283,544) (5,638,006) (5,574,064) (6,295,433) CSC Holdings, LLC 2014 December 31, 2013 2012 2011 (Dollars in thousands) 2010 Total assets ...$ 6,648,031 $ 6,...

  • Page 36
    ... video, 9 thousand high-speed data and 7 thousand voice customers. Because of Superstorm Sandy, we suspended our normal collection efforts and non-pay disconnect policy during the fourth quarter of 2012. As a result, the customer information in the table above includes delinquent customer accounts...

  • Page 37
    ... revenues; competition for subscribers from existing competitors (such as telephone companies, direct broadcast satellite ("DBS") distributors, and Internet-based providers) and new competitors entering our franchise areas; demand for our video, high-speed data and voice services, which is impacted...

  • Page 38
    ... available on the programming carried on our cable television systems. Revenue increases are derived from rate increases, increases in the number of subscribers to our services, including additional services sold to our existing subscribers, programming package upgrades by our video customers, speed...

  • Page 39
    ..., amNew York, Star Community Publishing Group, and online websites, (ii) the News 12 Networks, our regional news programming services, (iii) Cablevision Media Sales, a cable television advertising company, and (iv) certain other businesses and unallocated corporate costs. Newsday Newsday's revenue...

  • Page 40
    ... rate, determination of appropriate market comparables and determination of whether a premium or discount should be applied to comparables. For the Cable reportable segment, these valuations also include assumptions for average annual revenue per customer, number of serviceable passings, operating...

  • Page 41
    ...first quarter of 2014, the Company's cable television franchises within the Cable reporting unit have significant safety margins, representing the excess of the identifiable indefinite-lived intangible assets' estimated fair value unit of accounting over their respective carrying values. In order to...

  • Page 42
    ... time studies used to estimate the average time spent on each activity. New connections are amortized over the estimated useful lives of 5 years or 12 years for residence wiring and feeder cable to the home, respectively. The portion of departmental costs related to reconnection, programming service...

  • Page 43
    ...track the performance of the various operating units of our business without regard to expense associated with awards that are not expected to be made in cash, in the case of of restricted shares, restricted stock units and stock options, and the distortive effects of fluctuating stock prices in the...

  • Page 44
    Results of Operations - Cablevision Systems Corporation The following table sets forth on a historical basis certain items related to operations as a percentage of net revenues for the periods indicated: STATEMENT OF INCOME DATA Years Ended December 31, 2014 2013 % of Net % of Net Amount Revenues ...

  • Page 45
    STATEMENT OF INCOME DATA (continued) Years Ended December 31, 2013 2012 Amount Revenues, net...$ 6,232,152 Operating expenses: Technical and operating (excluding depreciation, amortization and impairments shown below)...Selling, general and administrative ...Restructuring expense (credits)......

  • Page 46
    ...-speed data, and VoIP services; Lightpath, which provides Ethernet-based data, Internet, voice and video transport and managed services to the business market in the New York metropolitan area; and Other, consisting principally of (i) Newsday, (ii) the News 12 Networks, (iii) Cablevision Media Sales...

  • Page 47
    ... primarily sales, marketing and advertising expenses, administrative costs, and costs of customer call centers. Selling, general and administrative expenses increased $12,893 (1%) for 2014 as compared to 2013. The net increase is attributable to the following: Increase in expenses of the Cable...

  • Page 48
    ... of Bresnan Cable, including gain on sale, net of income taxes...Loss of Clearview Cinemas, including loss on sale in 2013, net of income taxes...Income from discontinued operations, net of income taxes - Cablevision ...Income tax benefit recognized at Cablevision, not applicable to CSC Holdings...

  • Page 49
    ...Percent Increase (Decrease) 1% 5 8 11 13 4% Years Ended December 31, 2014 2013 Video (including equipment rental, DVR, franchise fees, video-ondemand, and pay-per-view) ...$ 3,187,245 High-speed data...1,416,328 Voice...910,653 Advertising ...163,596 Other (including installation, advertising sales...

  • Page 50
    ... programming costs due primarily to contractual rate increases and new channel launches, partially offset by lower customers...$ 91,494 Increase in employee related costs, primarily merit increases and benefits, and an increase in the number of 23,952 employees ...Increase in certain taxes and fees...

  • Page 51
    ... companies for the transport and termination of voice and data services, which typically vary based on rate changes and the level of usage by our customers, and (iii) other direct costs associated with providing and maintaining services to our customers which are impacted by general cost increases...

  • Page 52
    ...of the direct costs associated with providing and maintaining services. Selling, general and administrative expenses increased $4,897 (6%) for 2014 as compared to 2013. The net increase is attributable primarily to an increase in employee costs, including expenses related to long-term incentive plan...

  • Page 53
    ... 28, 2014 of approximately 340,000 on weekdays, approximately 321,000 on Saturdays and approximately 379,000 on Sundays. These circulation figures include digital editions (most of which are free to Optimum Online and Newsday print subscribers) to Newsday's restricted access website and mobile...

  • Page 54
    ... Prior to the Clearview Sale and the Bresnan Sale, we allocated certain corporate overhead, including share-based compensation expense and expenses related to Cablevision's long-term incentive plans aggregating $9,117 for the year ended December 31, 2013, to Clearview Cinemas (previously included in...

  • Page 55
    ... primarily sales, marketing and advertising expenses, administrative costs, and costs of customer call centers. Selling, general and administrative expenses increased $66,960 (5%) for 2013 as compared to 2012. The net increase is attributable to the following: Increase in expenses of the Cable...

  • Page 56
    ...Newsday credit facility. Income tax expense of $65,635 for the year ended December 31, 2013, reflected an effective tax rate of 34%. An increase in the valuation allowance relating to certain state net operating loss carry forwards resulted in tax expense of $5,631. The Company recorded tax benefits...

  • Page 57
    ...Bresnan Cable, including gain on sale in 2013, net of income taxes...Loss of Clearview Cinemas, including loss on sale in 2013, net of income taxes...Income from discontinued operations, net of income taxes - Cablevision ...Income tax benefit recognized at Cablevision, not applicable to CSC Holdings...

  • Page 58
    ...the prior year. The net increase is attributable to the following: Percent Increase (Decrease) (1)% 10 - (3) (2) 2% Years Ended December 31, 2013 2012 Video (including equipment rental, DVR, franchise fees, video-ondemand, and pay-per-view) ...$ 3,149,702 High-speed data...1,342,627 Voice...841,048...

  • Page 59
    ... costs of video-on-demand and pay-per-view), which typically rise due to increases in contractual rates and new channel launches and are also impacted by changes in the number of customers receiving certain programming services, (ii) interconnection, call completion, circuit and transport fees...

  • Page 60
    ...following: Increase in employee related costs, primarily merit increases, benefits, certain compensation increases (see discussion above) ...$ 55,960 Increase in legal and other professional fees ...18,006 Increase in advertising and marketing costs ...6,143 Increase in expenses related to long-term...

  • Page 61
    ..., employee costs incurred as a result of Superstorm Sandy and voice related fees. Technical and operating expenses consist primarily of the direct costs associated with providing and maintaining services. Selling, general and administrative expenses increased $2,476 (3%) for 2013 as compared to 2012...

  • Page 62
    ...lower employee related costs and a decrease in newsprint and ink expenses)...$ (22,670) Increase in expenses at News 12 Networks and other businesses, primarily employee costs and professional fees .. 6,791 $ (15,879) Selling, general, and administrative expenses for the year ended December 31, 2013...

  • Page 63
    ... and the Bresnan Sale, we allocated certain corporate overhead, including share-based compensation expense and expenses related to Cablevision's long-term incentive plans aggregating $9,117 and $16,864 for the years ended December 31, 2013 and December 31, 2012, respectively, to Clearview Cinemas...

  • Page 64
    ... other assets and advances to affiliates. The increase in cash provided by operating activities of $73,769 in 2013 as compared to 2012 resulted from an increase of $79,379 resulting from changes in working capital, including the timing of payments and collections of accounts receivable, among other...

  • Page 65
    ... and advances to affiliates, and $28,352 from a increase in accounts payable, other liabilities and amounts due to affiliates. The increase in cash provided by operating activities of $183,688 in 2013 as compared to 2012 resulted from an increase of $163,893 resulting from changes in working capital...

  • Page 66
    ... benefit related to share-based awards of $4,978. Net cash used in financing activities amounted to $894,074 for the year ended December 31, 2013 compared to $890,313 for the year ended December 31, 2012. In 2013, the Company's financing activities consisted primarily of distributions to Cablevision...

  • Page 67
    ...competition and market disruptions or a deterioration in economic conditions could lead to lower demand for our products, such as video services, as well as lower levels of television and newspaper advertising, and increased incidence of customers' inability to pay for the services we provide. These...

  • Page 68
    ... notes issued by Cablevision and held by Newsday Holdings. The following table provides details of our outstanding credit facility debt: Amounts Payable on or prior to December 31, 2015 - 47,926 13,923 61,849 - 61,849 Maturity Date Interest Rate at December 31, 2014 Carrying Value at December 31...

  • Page 69
    ... facility. Restricted Group CSC Holdings and those of its subsidiaries which conduct our video, high-speed data and our VoIP services operations, as well as Lightpath, which provides Ethernet-based data, Internet, voice and video transport and managed services to the business market, comprise the...

  • Page 70
    .... In September 2014, CSC Holdings made a repayment of $200,000 on its outstanding Term B loan facility with cash on hand. In connection with these repayments, the Company recognized a loss on extinguishment of debt of approximately $4,054 and wrote-off unamortized deferred financing costs related to...

  • Page 71
    ... provides details of the Company's capital expenditures for the years ended December 31, 2014 and 2013: Years Ended December 31, 2014 2013 Customer premise equipment ...$ Scalable infrastructure ...Line extensions...Upgrade/rebuild...Support ...Total Cable ...Lightpath...Other ...Total Cablevision...

  • Page 72
    ... various programming vendors to provide video services to our subscribers and minimum purchase obligations to purchase goods or services. Future fees payable under contracts with programming vendors are based on numerous factors, including the number of subscribers receiving the programming. Amounts...

  • Page 73
    ...24, 2015, the Board of Directors of Cablevision declared a cash dividend of $0.15 per share payable on April 3, 2015 to stockholders of record on both its CNYG Class A common stock and CNYG Class B common stock as of March 16, 2015. Managing our Interest Rate and Equity Price Risk Interest Rate Risk...

  • Page 74
    ... Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period...

  • Page 75
    ...the Securities Exchange Act of 1934, as amended. The Company's internal control over financial reporting is a process designed under the supervision of the Company's Chief Executive Officer and Chief Financial Officer to provide reasonable assurance to the Company's management and Board of Directors...

  • Page 76
    ... Changes in Internal Control None. Item 9B. Other Information In the Current Report on Form 8-K, filed February 6, 2015, the Company reported that (1) Mr. Brian G. Sweeney will become Chief Financial Officer of the Company, effective March 1, 2015 (and will continue as the President of the Company...

  • Page 77
    ... by the employment agreement), (B) his title (as in effect from time to time) is diminished, (C) he reports directly to someone other than James L. Dolan (or if James L. Dolan is no longer the Chief Executive Officer of the Company, to someone other than the Chairman of the Board of Directors of the...

  • Page 78
    ... 1934, each person who, at any time during its fiscal year ended December 31, 2014, was a director, officer or beneficial owner of more than 10% of the Company's Class A common stock that failed to file on a timely basis any such reports. Based on such review, the Company is aware of no such failure...

  • Page 79
    ... AND QUALIFYING ACCOUNTS Cablevision Systems Corporation Balance at Beginning of Period Year Ended December 31, 2014 Allowance for doubtful accounts ...$ Year Ended December 31, 2013 Allowance for doubtful accounts ...$ Year Ended December 31, 2012 Allowance for doubtful accounts ...$ 14,614...

  • Page 80
    ... Mink Victoria M. Mink Title Chief Executive Officer and Director (Principal Executive Officer) Vice Chairman and Chief Financial Officer (Principal Financial Officer) Senior Vice President and Controller (Principal Accounting Officer) February 25, 2015 Date February 25, 2015 February 25, 2015 74

  • Page 81
    ... Tow Director Director Director Director Chief Operating Officer and Director Director Director Director Director Director Director Director President and Director Director Director February 25, 2015 February 25, 2015 February 25, 2015 February 25, 2015 February 25, 2015 February 25, 2015 February...

  • Page 82
    ... April 2, 2010, relating to Cablevision Systems Corporation $750,000,000 5.875% Senior Notes due 2022 (incorporated herein by reference to Exhibit 4.1 to Cablevision's Current Report on Form 8-K, filed on October 2, 2012). Indenture, dated as of May 23, 2014, relating to CSC Holdings, LLC $750,000...

  • Page 83
    ... to Exhibit 10.3 to Cablevision's Current Report on Form 8-K, filed on April 11, 2014). Supplemental Benefit Plan of CSC Holdings, Inc. (incorporated herein by reference to Exhibit 10.7 to CSC Holdings' Form S-1). Cablevision Systems Corporation Employee Stock Plan (incorporated herein by reference...

  • Page 84
    ... Employee Stock Plan (incorporated herein by reference to Exhibit A to Cablevision's May 22, 2014 Proxy Statement). Cablevision Systems Corporation Executive Performance Incentive Plan (incorporated herein by reference to Exhibit 10.24 to Cablevision's Annual Report on Form 10-K for the fiscal year...

  • Page 85
    ...the fiscal quarter ended June 30, 2014). Time Sharing Agreement, dated November 22, 2006, between CSC Transport V, Inc. and Charles F. Dolan (incorporated herein by reference to Exhibit 10.2 to Cablevision's Current Report on Form 8-K, filed November 29, 2006). Amendment dated August 3, 2012 to Time...

  • Page 86
    ...-Q for the fiscal quarter ended June 30, 2014). Time Sharing Agreement, dated April 7, 2014, between CSC Holdings, LLC and Kristin A. Dolan (incorporated herein by reference to Exhibit 10.6 to Cablevision's Current Report on Form 8-K, filed April 11, 2014). Aircraft Support Services Agreement, dated...

  • Page 87
    ... Exhibit 99.1 to Cablevision's Current Report on Form 8-K, filed July 1, 2011). Cablevision Systems Corporation Policy Concerning Certain Matters Relating to The Madison Square Garden Company and AMC Networks Inc., Including Responsibilities of Overlapping Directors and Officers (incorporated herein...

  • Page 88
    ... Public Accounting Firm. Section 302 Certification of the CEO. Section 302 Certification of the CFO. Section 1350 Certification of the CEO and CFO. The following financial statements from Cablevision Systems Corporation's and CSC Holdings, LLC's Form 10K for the year ended December 31, 2014, filed...

  • Page 89
    ... Independent Registered Public Accounting Firm ...CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES Consolidated Financial Statements Consolidated Balance Sheets - December 31, 2014 and 2013...Consolidated Statements of Income - years ended December 31, 2014, 2013 and 2012 ...Consolidated Statements...

  • Page 90
    ... the Treadway Commission (COSO). We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Cablevision Systems Corporation and subsidiaries as of December 31, 2014 and 2013, and the related consolidated...

  • Page 91
    Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders Cablevision Systems Corporation: We have audited the accompanying consolidated balance sheets of Cablevision Systems Corporation and subsidiaries as of December 31, 2014 and 2013, and the related ...

  • Page 92
    ... of Independent Registered Public Accounting Firm The Board of Directors and Sole Member CSC Holdings, LLC: We have audited CSC Holdings, LLC and subsidiaries' internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework...

  • Page 93
    ... all material respects, the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CSC Holdings, LLC and subsidiaries' internal control over financial reporting as of December 31, 2014, based on criteria...

  • Page 94
    CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2014 and 2013 (In thousands) 2014 ASSETS Current Assets: Cash and cash equivalents ...$ 850,413 Accounts receivable, trade (less allowance for doubtful accounts of $12,112 and $14,614)...277,526 Prepaid ...

  • Page 95
    ... BALANCE SHEETS (continued) December 31, 2014 and 2013 (In thousands, except share and per share amounts) 2014 LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current Liabilities: Accounts payable ...$ 431,761 Accrued liabilities: Interest ...117,354 Employee related costs ...306,270 Other accrued expenses...

  • Page 96
    CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Years ended December 31, 2014, 2013 and 2012 (In thousands, except per share amounts) 2014 Revenues, net (including revenues, net from affiliates of $5,075, $5,586 and $5,784, respectively) (See Note 15) ...$ 6,460,...

  • Page 97
    CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, 2014, 2013 and 2012 (In thousands) 2014 Net income ...$ Other comprehensive income (loss), net of tax: Defined benefit pension and postretirement plans (see Note 13): ...

  • Page 98
    CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY Years ended December 31, 2014, 2013 and 2012 (In thousands) CNYG Class A Common Stock CNYG Class B Common Stock Accumulated Other Comprehensive Loss Paid-in Capital Accumulated Deficit Treasury ...

  • Page 99
    CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (continued) Years ended December 31, 2014, 2013 and 2012 (In thousands) CNYG Class A Common Stock CNYG Class B Common Stock Accumulated Other Comprehensive Loss Paid-in Capital Accumulated Deficit...

  • Page 100
    CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (continued) Years ended December 31, 2014, 2013 and 2012 (In thousands) CNYG Class A Common Stock CNYG Class B Common Stock Accumulated Other Comprehensive Loss Paid-in Capital Accumulated Deficit...

  • Page 101
    CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2014, 2013 and 2012 (In thousands) 2014 Cash flows from operating activities: Net Income...$ Adjustments to reconcile net income to net cash provided by operating activities: Income from ...

  • Page 102
    ... operating activities...Net cash provided by (used in) investing activities ...Net cash used in financing activities...Effect of change in cash related to discontinued operations...Net increase in cash and cash equivalents from discontinued operations...Cash and cash equivalents at beginning of year...

  • Page 103
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED BALANCE SHEETS December 31, 2014 and 2013 (In thousands) 2014 ASSETS Current Assets: Cash and cash equivalents ...$ 813,396 Accounts receivable, trade (less allowance for doubtful accounts ...

  • Page 104
    ...of Cablevision Systems Corporation) CONSOLIDATED BALANCE SHEETS (continued) December 31, 2014 and 2013 (In thousands, except share amounts) 2014 LIABILITIES AND MEMBER DEFICIENCY Current Liabilities: Accounts payable ...$ 431,761 Accrued liabilities: ...Interest...62,555 Employee related costs...302...

  • Page 105
    ... of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF INCOME Years ended December 31, 2014, 2013 and 2012 (In thousands) 2014 Revenues, net (including revenues, net from affiliates of $5,075, $5,586 and $5,784, respectively) (See Note 15) ...$ 6,460,946 Operating expenses: Technical...

  • Page 106
    ... (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, 2014, 2013 and 2012 (In thousands) 2014 Net income...$ Other comprehensive income (loss), net of tax: Defined benefit pension and postretirement plans (see Note 13...

  • Page 107
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL DEFICIENCY Years ended December 31, 2014, 2013 and 2012 (In thousands) Senior Notes due from Cablevision Accumulated Other Comprehensive Loss $ Accumulated ...

  • Page 108
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL DEFICIENCY (continued) Years ended December 31, 2014, 2013 and 2012 (In thousands) Accumulated Other Comprehensive Loss $ Accumulated Deficit Senior Notes ...

  • Page 109
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL DEFICIENCY (continued) Years ended December 31, 2014, 2013 and 2012 (In thousands) Accumulated Other Comprehensive Loss $ Accumulated Deficit Senior Notes ...

  • Page 110
    ... subsidiary of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2014, 2013 and 2012 (In thousands) 2014 Cash flows from operating activities: Net Income...$ Adjustments to reconcile net income to net cash provided by operating activities: Income from...

  • Page 111
    CSC HOLDINGS, LLC AND SUBSIDIARIES (a wholly-owned subsidiary of Cablevision Systems Corporation) CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) Years ended December 31, 2014, 2013 and 2012 (In thousands) 2014 Cash flows from financing activities: Proceeds from credit facility debt, net of ...

  • Page 112
    ... Holdings, LLC ("CSC Holdings," and collectively with Cablevision, the "Company"), owns and operates cable systems and owns companies that provide regional news, local programming and advertising sales services for the cable television industry, provide Ethernet-based data, Internet, voice and video...

  • Page 113
    ... provided to subscribers. Installation revenue for the Company's video, consumer high-speed data and VoIP services is recognized as installations are completed, as direct selling costs have exceeded this revenue in all periods reported. Advertising revenues are recognized when commercials are aired...

  • Page 114
    ...requisite service period for each tranche of awards subject to performance based vesting conditions. For restricted shares and restricted stock units, Cablevision recognizes compensation expense using a straight-line amortization method based on the grant date price of CNYG Class A common stock over...

  • Page 115
    ...are expected to occur, such as the sum of the years' digits method, or when such pattern does not exist, using the straight-line basis over their respective estimated useful lives. The Company reviews its long-lived assets (property, plant and equipment, and intangible assets subject to amortization...

  • Page 116
    ... of Cablevision's Board of Directors. In addition, CNYG Class B stockholders are parties to an agreement which has the effect of causing the voting power of these CNYG Class B stockholders to be cast as a block. The following table provides details of Cablevision's shares of common stock outstanding...

  • Page 117
    ... other employment taxes and forfeited employee restricted shares. CSC Holdings Membership Interests CSC Holdings has 17,631,479 membership units issued and outstanding as of December 31, 2014 and 2013, respectively, which are all owned by Cablevision, its sole owner. In September 2012, CSC Holdings...

  • Page 118
    ... and Madison Square Garden employees), have been excluded from diluted weighted average shares outstanding for the years ended December 31, 2014, 2013 and 2012, respectively. In addition, approximately 45,000 and 1,298,000 restricted shares issued pursuant to the Company's employee stock plan have...

  • Page 119
    ... FLOW INFORMATION During 2014, 2013 and 2012, the Company's non-cash investing and financing activities and other supplemental data were as follows: Years Ended December 31, 2014 2013 2012 Non-Cash Investing and Financing Activities of Cablevision and CSC Holdings: Continuing Operations: Property...

  • Page 120
    ...,997 and $829 in 2014, 2013 and 2012, respectively, included in depreciation and amortization related primarily to certain other long-lived assets of businesses included in the Other segment. NOTE 5. DISCONTINUED OPERATIONS In connection with the Bresnan Sale and Clearview Sale discussed above, the...

  • Page 121
    ...the DISH Network, LLC litigation settlement. See discussion below for additional information. Includes tax benefit of $7,605 resulting from a decrease in the valuation allowance for certain state net operating loss carry forwards. Year Ended December 31, 2012 Bresnan Cable Clearview Cinemas $ 65,076...

  • Page 122
    ... time studies used to estimate the average time spent on each activity. New connections are amortized over the estimated useful lives of 5 years or 12 years for residence wiring and feeder cable to the home, respectively. The portion of departmental costs related to reconnection, programming service...

  • Page 123
    ...its operations. The Company's pole rental agreements are for varying terms, and management anticipates renewals as they expire. Rent expense, including pole rentals, for the years ended December 31, 2014, 2013 and 2012 amounted to $77,769, $75,553 and $78,472, respectively. The minimum future annual...

  • Page 124
    ... 8. INTANGIBLE ASSETS The following table summarizes information relating to the Company's acquired intangible assets at December 31, 2014 and 2013: December 31, 2014 2013 Gross carrying amount of amortizable intangible assets Customer relationships ...$ Other amortizable intangibles...Accumulated...

  • Page 125
    ... and the Term B loans were used to repay all amounts outstanding under CSC Holdings' previous Restricted Group credit facility and to pay fees and expenses in connection therewith. As of December 31, 2014, no amounts were drawn under the revolving credit facility. The Credit Agreement provides for...

  • Page 126
    ... the sale of Cablevision senior notes in December 2013 discussed below) owned by Newsday Holdings. In connection with the Newsday Credit Agreement, the Company incurred deferred financing costs of approximately $4,558, which are being amortized to interest expense over the term of the Newsday Credit...

  • Page 127
    ...whole" premium. CSC Holdings used the net proceeds from the issuance of the 2024 Notes, as well as cash on hand, to make a $750,000 repayment on its outstanding Term B loan facility. In connection with the issuance of the 2024 Notes, the Company incurred deferred financing costs of approximately $14...

  • Page 128
    ... 2014 (the "2014 Notes") in the tender offers commenced in September 2012 discussed below, (ii) make a $150,000 repayment on the then outstanding CSC Holdings Term B-2 extended loan facility, and (iii) for general corporate purposes. In connection with the issuance of the 2022 Notes, the Company...

  • Page 129
    ... has entered into various transactions to limit the exposure against equity price risk on its shares of Comcast Corporation ("Comcast") common stock. The Company has monetized all of its stock holdings in Comcast through the execution of prepaid forward contracts, collateralized by an equivalent...

  • Page 130
    ... number of Comcast shares. The terms of the new contracts allow the Company to retain upside participation in Comcast shares up to each respective contract's upside appreciation limit with downside exposure limited to the respective hedge price. Years Ended December 31, 2014 2013 Number of shares...

  • Page 131
    ...on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: • • Level I - Quoted prices for identical instruments in active markets. Level...

  • Page 132
    ... Cablevision level. The principal amount of the Company's credit facility debt, which bears interest at variable rates, approximates its fair value. Fair value estimates related to the Company's debt instruments and senior notes receivable presented above are made at a specific point in time...

  • Page 133
    ...TAXES Cablevision files a consolidated federal income tax return with its 80% or more owned subsidiaries. Income tax expense (benefit) attributable to Cablevision's continuing operations consists of the following components: Years Ended December 31, 2014 2013 2012 Current expense (benefit): Federal...

  • Page 134
    ..., except share and per share amounts) The income tax expense attributable to Cablevision's continuing operations differs from the amount derived by applying the statutory federal rate to pretax income principally due to the effect of the following items: Years Ended December 31, 2014 2013 2012 148...

  • Page 135
    ... (continued) (Dollars in thousands, except share and per share amounts) December 31, 2014 2013 Deferred Tax Asset (Liability) Current NOLs and tax credit carry forwards ...$ Compensation and benefit plans...Allowance for doubtful accounts...Other liabilities ...Deferred tax asset...Valuation...

  • Page 136
    ... filed separate consolidated income tax returns. Income tax expense (benefit) attributable to continuing operations consists of the following components: Years Ended December 31, 2014 2013 2012 Current expense: Federal ...$ State...Deferred expense (benefit): Federal ...State...Tax benefit relating...

  • Page 137
    ..., except share and per share amounts) Years Ended December 31, 2014 2013 2012 Federal tax expense at statutory rate...$ 243,740 $ 167,098 $ 132,864 State income taxes, net of federal benefit ...42,769 27,177 22,542 Changes in the valuation allowance...Changes in the state apportionment rates used to...

  • Page 138
    .... On a stand-alone basis, CSC Holdings realized federal and state excess tax benefit of $4,978, $46,164 and $61,434 during the years ended December 31, 2014, 2013 and 2012, respectively. Such excess tax benefit resulted in an increase to member's equity. The Company Deferred tax assets have resulted...

  • Page 139
    ... The most significant jurisdictions in which the Company is required to file income tax returns include the states of New York, New Jersey and Connecticut and the City of New York. The State of New York is presently auditing income tax returns for years 2006 through 2011. Management does not believe...

  • Page 140
    ...'s consolidated balance sheets for all of the Company's Defined Benefit Plans at December 31, 2014 and 2013: December 31, 2014 2013 Change in projected benefit obligation: Projected benefit obligation at beginning of year ...$ Service cost ...Interest cost ...Actuarial loss...Transfer of liabilities...

  • Page 141
    ... Benefit Cost for the Benefit Obligations Years Ended December 31, at December 31, 2014 2013 2012 2014 2013 4.24% 3.67% 4.32% 3.70% 4.56% 3.50% 3.50% 3.50% 3.50% 3.50% 4.53% 3.60% 3.76% N/A N/A Discount rate (a) ...Rate of increase in future compensation levels ...Expected rate of return on plan...

  • Page 142
    ...bonds which are marked-to-market on a daily basis. Due to the Pension Plan's significant holdings in long-term government and non-government fixed income securities, the Pension Plan's assets are subjected to interest rate risk; specifically, a rising interest rate environment. However, these assets...

  • Page 143
    ... January 1, 2014, applicable employees of the Company are eligible for an enhanced employer matching contribution, as well as a year-end employer discretionary contribution to the Cablevision 401(k) Savings Plan and the Cablevision Excess Savings Plan. The cost associated with these plans (including...

  • Page 144
    ...annual meeting of Cablevision's stockholders, each non-employee director will receive a number of restricted stock units for the number of shares of common stock equal to $150 divided by the fair value of a share of CNYG Class A stock based on the closing price on the date of grant. In 2014 and 2013...

  • Page 145
    ... in connection with the AMC Networks Distribution and the MSG Distribution (whereby Cablevision distributed to its stockholders all of the outstanding common stock of The Madison Square Garden Company ("Madison Square Garden"), a company which owns the sports, entertainment and media businesses...

  • Page 146
    ... employment taxes, 365,130 of these shares, with an aggregate value of $6,608, were surrendered to the Company. During the year ended December 31, 2013, 2,073,066 Cablevision restricted shares issued to employees of the Company, AMC Networks and Madison Square Garden vested. To fulfill the employees...

  • Page 147
    ... Networks and Madison Square Garden. The following table summarizes the revenue and charges (credits) related to services provided to or received from AMC Networks not discussed elsewhere in the accompanying combined notes to the consolidated financial statements: Years Ending December 31, 2014 2013...

  • Page 148
    ...expenses include costs incurred by the Company for the carriage of the MSG networks and Fuse program services (through June 30, 2014), as well as for AMC, WE tv, IFC, Sundance Channel and BBC America (beginning in the fourth quarter of 2014) on Cablevision's cable systems. The Company also purchases...

  • Page 149
    ...the per subscriber rates or the stated annual fee, as applicable, contained in the executed agreements in effect as of December 31, 2014. Includes franchise and performance surety bonds primarily for the Company's Cable segment. Also includes outstanding guarantees primarily by CSC Holdings in favor...

  • Page 150
    ...plaintiffs filed their third amended complaint on August 22, 2011, alleging that the Company violated Section 1 of the Sherman Antitrust Act by allegedly tying the sale of interactive services offered as part of iO television packages to the rental and use of set-top boxes distributed by Cablevision...

  • Page 151
    ... of operations or the financial position of the Company. On April 15, 2011, Thomas C. Dolan, a director and Executive Vice President, Strategy and Development, in the Office of the Chairman at Cablevision, filed a lawsuit against Cablevision and Rainbow Media Holdings in New York Supreme Court...

  • Page 152
    ... from the sale of local programming services and voice services to the Company's Cable segment. The Cable and Lightpath segments share portions of each other's network infrastructure. Depreciation charges are recorded by the segment that acquired the respective asset. The 2013 amount includes...

  • Page 153
    ... share and per share amounts) For the years ended December 31, 2014, 2013 and 2012, Cable segment revenue was derived from the following sources: Years Ended December 31, 2014 2013 2012 Video (including equipment rental, DVR, franchise fees, video-on-demand, and payper-view) ...$3,187,245 High-speed...

  • Page 154
    ... to or located in the United States primarily concentrated in the New York metropolitan area. NOTE 18. INTERIM FINANCIAL INFORMATION (Unaudited) The following is a summary of the Company's selected quarterly financial data for the years ended December 31, 2014 and 2013: Cablevision September 30...

  • Page 155
    ...,661 (9,265) 107,495 (16,141) $ 135,359 $ $ Since Cablevision generated a loss from continuing operations for the three months ended March 31, 2013, the outstanding common stock equivalents were excluded from the computation of net loss per share for the respective period as the impact would be...

  • Page 156
    ... per share amounts) CSC Holdings 2014: March 31, June 30, September 30, December 31, Total 2014 2014 2014 2014 2014 Revenues, net ...$ 1,575,586 $ 1,628,137 $ 1,626,187 $ 1,631,036 $ 6,460,946 (1,373,741) (1,425,200) (5,539,688) Operating expenses ...(1,368,503) (1,372,244) Operating income...$ 207...

  • Page 157
    ... the Company's business resulting from Superstorm Sandy, including lower revenue related to customers for whom we decided to temporarily suspend billing during the restoration of their homes, displaced homes and advertising cancellations. Common Stock Repurchases Cablevision's Board of Directors has...

  • Page 158
    ... of December 31, 2014, Cablevision had $455,322 of availability remaining under its stock repurchase authorizations. NOTE 20. SUBSEQUENT EVENTS On February 24, 2015, the Board of Directors of Cablevision declared a cash dividend of $0.15 per share payable on April 3, 2015 to stockholders of record...

  • Page 159
    Exhibit 31.1 I, James L. Dolan, Chief Executive Officer of Cablevision Systems Corporation and CSC Holdings, LLC (the "Registrants") certify that: 1. I have reviewed this annual report on Form 10-K of the Registrants; 2. Based on my knowledge, this annual report does not contain any untrue ...

  • Page 160
    ... 31.2 I, Gregg G. Seibert, Vice Chairman and Chief Financial Officer of Cablevision Systems Corporation and CSC Holdings, LLC (the "Registrants") certify that: 1. I have reviewed this annual report on Form 10-K of the Registrants; 2. Based on my knowledge, this annual report does not contain any...

  • Page 161
    ... all material respects, the financial condition and results of operations of Cablevision and CSC Holdings. Date: February 25, 2015 By: /s/ James L. Dolan James L. Dolan Chief Executive Officer Date: February 25, 2015 By: /s/ Gregg G. Seibert Gregg G. Seibert Vice Chairman and Chief Financial Officer

  • Page 162
    This page intentionally left blank.

  • Page 163

  • Page 164