Cablevision 2012 Annual Report Download - page 57

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Litigation Settlement
On October 21, 2012, the Company and AMC Networks settled the litigation with DISH Network relating
to VOOM HD Holdings LLC. The terms of the settlement provided for the following, among other
things:
xDISH Network paid a cash settlement of $700,000 to an account for the benefit of the Company
and AMC Networks;
xThe Company agreed to sell to DISH Network its multichannel video and data distribution
service ("MVDDS") spectrum licenses in 45 metropolitan areas in the U.S.;
xDISH Network entered into a long-term affiliation agreement with subsidiaries of AMC
Networks to carry on its satellite service AMC, IFC, the Sundance Channel and WE tv, and
with a subsidiary of The Madison Square Garden Company to carry Fuse; and
xAn affiliate of DISH Network conveyed its 20% membership interest in VOOM HD to
Rainbow Programming Holdings LLC, such that all of the cash settlement remains with the
Company and AMC Networks and its subsidiary, Rainbow Programming Holdings LLC (the
"AMC Parties").
The allocation of the settlement proceeds between the Company and the AMC Parties will be determined
pursuant to the VOOM Litigation Agreement (see Note 20 to our consolidated financial statements). The
Company and AMC Networks agreed that, pending a determination of the allocation of the settlement
proceeds, $350,000 of the cash proceeds would be distributed to each of the Company and AMC
Networks. The Company received its $350,000 distribution in December 2012. The Company recorded a
pre-tax gain of $343,887 included in discontinued operations which represents the actual cash received,
net of the carrying amount of the Company's MVDDS licenses. Any additional proceeds received by the
Company as a result of the determination of the allocation of the VOOM litigation settlement will be
recognized when received.
Non-GAAP Financial Measures
We define adjusted operating cash flow ("AOCF"), which is a non-GAAP financial measure, as operating
income (loss) before depreciation and amortization (including impairments), excluding share-based
compensation expense or benefit and restructuring charges or credits. Because it is based upon operating
income (loss), AOCF also excludes interest expense (including cash interest expense) and other non-
operating income and expense items. We believe that the exclusion of share-based compensation expense
or benefit allows investors to better track the performance of the various operating units of our business
without regard to the distortive effects of fluctuating stock prices in the case of stock appreciation rights
and, in the case of restricted shares, restricted stock units and stock options, the expense associated with
an award that is not expected to be made in cash.
We present AOCF as a measure of our ability to service our debt and make continuing investments,
including in our capital infrastructure. We believe AOCF is an appropriate measure for evaluating the
operating performance of our business segments and the company on a consolidated basis. AOCF and
similar measures with similar titles are common performance measures used by investors, analysts and
peers to compare performance in our industry. Internally, we use net revenues and AOCF measures as
the most important indicators of our business performance, and evaluate management's effectiveness with
specific reference to these indicators. AOCF should be viewed as a supplement to and not a substitute for
operating income (loss), net income (loss), cash flows from operating activities, and other measures of
performance and/or liquidity presented in accordance with U.S. generally accepted accounting principles
("GAAP"). Since AOCF is not a measure of performance calculated in accordance with GAAP, this
measure may not be comparable to similar measures with similar titles used by other companies. Each
presentation of AOCF in this Annual Report on Form 10-K includes a reconciliation of AOCF to
operating income (loss).