Cablevision 2011 Annual Report Download - page 95

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the fair values of the underlying stock and equity collar, calculated at the termination date. As of
December 31, 2011, 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 Accounting Pronouncements
In September 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards
Update ("ASU") No. 2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Goodwill for
Impairment. ASU No. 2011-08 is intended to reduce the cost and complexity of the annual goodwill
impairment test by providing entities an option to perform a "qualitative" assessment to determine
whether further impairment testing is necessary. ASU No. 2011-08 was effective for the Company on
January 1, 2012.
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to
Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.
ASU No. 2011-04 provides amendments to Topic 820 that change the wording used to describe many of
the requirements in GAAP for measuring fair value and for disclosing information about fair value
measurements. ASU No. 2011-04 is to be applied prospectively and was effective for the Company on
January 1, 2012.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
All dollar amounts, except per subscriber, per unit and per share data, included in the following
discussion under this Item 7A are presented in thousands.
Equity Price Risk
The Company is exposed to market risks from changes in certain equity security prices. Our exposure to
changes in equity security prices stems primarily from the shares of Comcast Corporation common stock
held by us. We have entered into equity derivative contracts consisting of a collateralized loan and an
equity collar to hedge our equity price risk and to monetize the value of these securities. 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. The contracts' actual hedge prices per share vary depending on average stock prices in effect at the
time the contracts were executed. The contracts' actual cap prices vary depending on the maturity and
terms of each contract, among other factors. 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