Cablevision Systems Corporation Reports First Quarter 2003 Results.Business Editors BETHPAGE Bethpage (bĕthpāj`), uninc. village (1990 pop. 15,761, including Old Bethpage), Nassau co., SE N.Y., on W Long Island. Northrop Grumman Corporation's large defense plant here is being partly redeveloped for diversified industrial use. , N.Y.--(BUSINESS WIRE)--May 13, 2003 Cablevision For the unrelated Canadian company, see . Cablevision Systems Corporation is an American cable television company. It is the 5th largest cable provider in the USA, with most customers residing in New York, New Jersey, Connecticut, and Pennsylvania. Systems Corporation (NYSE NYSE See: New York Stock Exchange :CVC See CSC. ): -- Digital Video Customers up 184,900 to 401,400, 14% Penetration The successful unauthorized breach of a security perimeter. See penetration test. -- High-Speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. Data Customers up 83,700 to 852,800, 22% Penetration Cablevision Systems Corporation (NYSE:CVC) today reported financial results for the first quarter ended March 31, 2003. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. amounted to $60.7 million for the first quarter 2003, up 70% from $35.8 million in the comparable 2002 period. Consolidated first quarter results from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the reflect net revenues of $982.2 million, an 8% increase compared to $911.2 million in the prior year period. Consolidated Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become grew 36% to $299.2 million from $220.1 million in the year-ago period. Adjusted EBITDA is defined as operating income (loss) before depreciation and amortization, excluding charges or credits related to our employee stock plan and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. or credits. Please refer to page 7 for a reconciliation of Adjusted EBITDA to operating income. The quarter's Telecommunications Services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. net revenues rose 7% to $633.8 million, operating income decreased 20% to $77.9 million due to a 23% increase in depreciation and amortization and a $3.7 million stock plan expense in 2003 compared to an $11.3 million credit in 2002. Adjusted EBITDA increased 12% to $246.7 million primarily due to continued strong growth from Optimum Online Optimum Online (OOL) is a broadband Internet service provider subsidiary of Cablevision. Optimum Online serves Long Island, other parts of New York, the Bronx, Brooklyn, Westchester, parts of New Jersey, Connecticut, and Pennsylvania. - the company's high-speed data service and Lightpath - the company's commercial telephone business. For the first quarter, Rainbow Media's Core Networks' (AMC (Advanced Mezzanine Card) See AdvancedTCA. , The Independent Film Channel (IFC (Internet Foundation Classes) A class library from Netscape that provides an application framework and graphical user interface (GUI) routines for Java programmers. IFC was later made part of the Java Foundation Classes (JFC). See JFC, AFC and AWT. See also ICF. ), WE: Women's Entertainment (WE) and Consolidated Regional Sports) net revenues improved 19% to $139.8 million, operating income increased 50% to $49.7 million and Adjusted EBITDA increased 49% to $58.8 million compared to the year-ago quarter due to solid revenue gains coming from advertising and affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. fees. Cablevision President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. L. Dolan Dolan is a surname, and the following people:
n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. gains, almost doubling its subscriber number to more than 400,000 in the first quarter." Mr. Dolan continued: "Rainbow Media's national networks also generated outstanding results in the first quarter, driven largely by significant growth in advertising revenue at AMC and WE: Women's Entertainment." Progress on the Growth Plan and Other Recent Accomplishments In August of 2002, Cablevision announced a comprehensive plan to provide stability, clarity Clarity is the property of being clear or transparent. Clarity can refer to one's ability to clearly visualize an object or concept, as in thought, understanding, and the "mind's eye", as well as the traditional notion of visual perception, that is, with the and growth. By the end of the first quarter, the company had executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. significant portions of this "growth plan" and accomplished other positive steps. Highlights include: -- Accelerated significantly the rollout of our digital products and services -- Since August 2002, digital ready homes have grown from 1.1 million to nearly 3.8 million at March 31, 2003 -- Reduced Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. Services' capital expenditures from $1.1 billion in 2002 to between $750 and $775 million in 2003 (estimated) -- Participated in the sale of Northcoast's PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. licenses to Verizon for $750 million -- Sold Bravo BRAVO Cardiology A clinical trial–Blockade of the GP IIB/IIIA Receptor to Avoid Vascular Occlusion– which evaluated lotrafiban in preventing strokes and acute MI. See GP IIB/IIIA. to NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. for $1.25 billion -- Received a $75 million investment from Quadrangle quadrangle Rectangular open space completely or partially enclosed by buildings of an academic or civic character. The grounds of a quadrangle are often grassy or landscaped. Capital Partners LP -- Finalized See finalization. new agreement with Scientific-Atlanta Scientific Atlanta Inc, a Cisco company, is a Georgia-based manufacturer of cable television, telecommunications, and broadband equipment. Both Scientific Atlanta and Cisco can trace their roots to academia. and have been aggressively rolling out boxes at an average price of $215 per box -- Announced the continuation continuation - continuation passing style of our successful sports partnership with News Corporation -- Reached a one-year adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants accord with YES Network which will allow all Cablevision customers to choose whether or not to receive the service -- Consolidated call centers, helping to streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. our business -- Call centers were reduced from 15 to 6 as of May 8, 2003 -- Exited consumer electronics business with the sale of THE WIZ -- Listed Clearview Clearview may refer to:
for $28 million -- Reduced workforce by 3,000 employees -- Added three new outside board members Mr. Dolan said, "Cablevision's first quarter increases in revenue, operating income and Adjusted EBITDA reflect the company's continued execution of the growth plan outlined last year. We remain focused on accelerating new product rollouts, increasing our return on capital and reaching free cash flow in 2004." The company is comprised of three business segments: (i) Telecommunications Services, (ii) Rainbow and (iii) Madison Square Garden Current arenas in the National Hockey League Western Conference Eastern Conference . Results of each follow. Telecommunications Services Telecommunications Services is comprised of: -- Consumer Services Consumer Services refers to the formulation, deformulation, technical consulting and testing of most consumer products, such as food, herbs, beverages, vitamins, pharmaceuticals, cosmetics, hair products, household cleaners, [paints, plastics, metals, waxes, coatings, minerals, : analog video The original video recording method that stores continuous waves of red, green and blue intensities. In analog video, the number of rows is fixed. There are no real columns, and the maximum detail is determined by the frequency response of the analog system. , digital video, high-speed data (HSD HSD Human Services Department HSD High Speed Data HSD Hillsboro School District (Hillsboro, OR) HSD Hybrid Synergy Drive (Toyota/Lexus) HSD High School Diploma HSD Historical Society of Delaware ), residential telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. and R&D/Technology, and -- Business Services: Lightpath's commercial telephony, high-speed data and broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). businesses throughout the New York York, former name of Toronto, Canada York, Ont.: see Toronto, Ont., Canada. York, city, England York, city (1991 pop. 123,126) and district, North Yorkshire, N England, at the confluence of the Ouse and Foss rivers. metropolitan area. Consumer Services First quarter net revenues increased 6% to $594.6 million, operating income decreased 20% to $78.9 million, and Adjusted EBITDA rose 10% to $231.5 million compared to the year-earlier period. Highlights include: -- 4,217,900 Revenue Generating Units, up 6% from December December: see month. 2002 and up 17% compared to March 31, 2002 -- 401,400 iO: Interactive Optimum digital video customers, nearly 185,000 new customers added during the quarter - 14,200 per week -- 852,800 Optimum Online HSD customers, more than 82,700 new customers added during the quarter - 6,400 per week - and a 22.3% HSD penetration of homes released compared to 17.9% in March 2002 -- Total consumer services revenue per basic video customer for March 2003 increased 8% to $67.02 compared to $62.17 in March 2002 -- A loss of 11,600 cable customers in the quarter - March and April recorded gains of 4,700 and 6,500 cable customers, respectively, with 5,900 new cable customers added thus far in May -- Advertising revenue rose 12% due to strong national and regional sales -- Adjusted EBITDA margin of 38.9%, up from 37.5% in March 2002, due to continued strong HSD revenue growth resulting from significant new customer additions as well as service rate increases. Business Services - Lightpath Achieved an 18% increase in net revenues to $43.3 million, a 54% improvement in operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. to $1.0 million, and a 63% increase in Adjusted EBITDA to $15.2 million, compared to the prior year period. Highlights include: -- A 15% increase in the number of buildings on-net Connected to the Internet, or connected to a LAN or WAN. Contrast with off-net. -- Nearly doubled the number of Business Class Optimum Online customers to 18,600 compared to 9,600 in March 2002 -- 35.0% Adjusted EBITDA margin compared to 25.2% for the year-ago period due to continued strong revenue growth at Business Class Optimum Online, strong transmission revenue growth, and workforce expense reductions implemented last year. Rainbow Rainbow Media Holdings, Inc. (Rainbow), a wholly-owned subsidiary of the company, includes the following businesses: AMC, IFC, WE (each 20% owned by MGM MGM in full Metro-Goldwyn-Mayer, Inc. U.S. corporation and film studio. It was formed when the film distributor Marcus Loew, who bought Metro Pictures in 1920, merged it with the Goldwyn production company in 1924 and with Louis B. Mayer Pictures in 1925. ), muchmusic usa (to be rebranded Fuse on May 19, 2003), Mag Rack A frame or cabinet into which hardware components are mounted. Equipment may be bolted into the rack (see rack mounted), or placed on shelves. Stereo and home theater racks are cabinets with shelves designed to accommodate VCRs, CD, DVD and cassette decks, receivers, amplifiers and and five local News 12 Networks operating on Long Island, in New Jersey, Westchester Westchester is the name of some places in the United States of America:
Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). and the Bronx Bronx, river, c.20 mi (30 km) long, issuing from Kensico Reservoir, SE N.Y., and flowing SW through the Bronx into the East River. The Bronx River Parkway, one of the first limited-access highways in the New York City area, parallels a portion of the river. , as well as three local MetroChannels and Rainbow Advertising Sales Corp. Rainbow, through its 60% ownership interest in Regional Programming Partners (40% owned by Fox Sports), also owns interests in Madison Square Garden, Radio City Entertainment, and five regional Fox Sports Net channels outside the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of market, and Rainbow owns a 50% interest in the Fox Sports Net national service. AMC/IFC/WE First quarter 2003 net revenues increased 23% to $104.2 million, operating income increased 56% to $42.9 million, and Adjusted EBITDA grew 55% to $49.0 million compared to the year-ago period. The strong growth was primarily due to higher affiliate fee revenue as well as strong advertising revenue growth at AMC and WE. Highlights include: -- A 17% increase in the number of IFC viewing subscribers to 26.8 million -- A 12% increase in the number of WE viewing subscribers to 43.7 million -- Advertising revenue comprised 20% and 34%, respectively, of AMC's and WE's revenue -- AMC's prime time rating rose 9% compared to the year-earlier period. Consolidated Regional Sports Consolidated Regional Sports is comprised of Fox Sports Net Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and and Fox Sports Net Ohio, both of which are 60% owned by Rainbow. First quarter 2003 net revenues grew 10% to $35.5 million, operating income rose 18% to $6.9 million, and Adjusted EBITDA increased 24% to $9.7 million compared to the prior year period. The strong growth was primarily the result of solid increases in both affiliate fee and advertising revenue. Non-Consolidated Regional Sports (Fox Sports Net Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , Bay Area and New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. ) First quarter net revenues grew 12% to $58.9 million. Operating income decreased 14% to $6.2 million, primarily due to stock plan expense in 2003 compared to a credit in 2002. Adjusted EBITDA rose 25% to $7.9 million, compared to the year-earlier period, primarily due to strong affiliate fee revenue and a 24% increase in advertising revenue. Non-Consolidated Fox Sports Net Fox Sports Net's viewing subscribers totaled 74.6 million at the end of the quarter, compared to 73.7 million in the prior year period. Developing Programming/Other Developing Programming/Other consists of Mag Rack, muchmusic usa, Rainbow Network Communications, News 12 Networks, MetroChannels, Rainbow Advertising Sales Corp., IFC Entertainment and other Rainbow start-up Start-up The earliest stage of a new business venture. ventures. First quarter net revenues of $42.6 million represent a 6% increase, an operating loss of $33.8 million represents a 6% improvement, and the Adjusted EBITDA deficit of $20.0 million represents a 36% improvement, all compared to the year-earlier period. The revenue increase was primarily due to higher revenue resulting from an increase in home video sales by IFC Films and higher advertising and affiliate revenue from Metro The code name for Microsoft's XPS document format. See XML Paper Specification. Channel. The significant reduction in the operating loss and Adjusted EBITDA deficit was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk primarily to strong Metro TV Metro TV is Indonesia's first 24-hour news channel based in West Jakarta. The station was established on November 25, 2000 and now has over 53 transmission sites all over the country. It is owned by Surya Paloh who also owns the Media Indonesia daily. revenue growth due to higher affiliate fee revenue combined with lower programming and marketing expenses, lower levels of investment at IFC Films and IFC Productions, and reduced expenses at both Mag Rack and News 12 Networks. Madison Square Garden Madison Square Madison Square is a neighborhood on the East Side of the New York City borough of Manhattan, centered on a 6.8 acre (2.75 Hectare) public park in the New York City borough of Manhattan, named for James Madison, fourth President of the United States and co-author of the United Garden's businesses include MSG MSG: see glutamic acid. Network, Fox Sports Net New York, the New York Knicks, the New York Rangers The New York Rangers are a professional ice hockey team based in New York, New York, U.S.A. They are members of the Atlantic Division of the Eastern Conference of the National Hockey League (NHL). , the New York Liberty The New York Liberty is a Women's National Basketball Association (WNBA) team based in New York City. They are one of the eight original WNBA teams that began to see action in 1997, as well one of the most successful teams in WNBA history. , the MSG Arena complex, and Radio City Music Hall Radio City Music Hall New York City’s famous cinema; home of the Rockettes. [Am. Hist.: NCE, 2338] See : Theater . First quarter 2003 net revenue totaled $208.4 million, unchanged from the prior year period. The operating loss improved 51% to $1.8 million compared to a $3.5 million operating loss in the first quarter of 2002. Adjusted EBITDA for the quarter was $14.2 million compared to $9.3 million in the prior year period. The lower operating loss and the 54% increase in Adjusted EBITDA compared to the prior year quarter were primarily due to a decrease in luxury tax expense related to the NY Knicks, partly offset by higher player compensation. Assets Held For Sale The operating results for the theatres, retail electronics and Bravo network have been reported as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , net of tax, in the company's condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated operations data for all periods presented. The company continues to evaluate alternatives for the Clearview Cinemas theatre chain. Thus far, two transactions have taken place, netting proceeds of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $28.0 million, which was used to reduce the company's bank debt. Recent Developments Fox Put In March 2003, Rainbow and Fox Sports Networks agreed on a $110.0 million purchase price for Fox Sports Network's directly-held 50% interest in Fox Sports Net Bay Area and a $40.0 million purchase price for the directly-held 50% interest in Fox Sports Net Chicago, payable in the form of two three-year promissory notes promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. to be issued by Regional Programming Partners. The transaction is expected to close in the second quarter of 2003. Both of these regional sports businesses will be included in the Consolidated Regional Sports financial results upon completion of the transaction. Verizon Wireless Cellco Partnership, doing business as Verizon Wireless, owns and operates the second largest wireless telecommunications network in the United States, based on total wireless customers. to Purchase Northcoast Communications Spectrum Licenses In December 2002, Northcoast Communications announced an agreement to sell its spectrum licenses covering 50 U.S. markets to Verizon Wireless for approximately $750.0 million in cash. Of the gross proceeds, approximately $60.0 million will be used to retire retire v. 1) to stop working at one's occupation. 2) to pay off a promissory note, and thus "retire" the loan. 3) for a jury to go into the jury room to decide on a verdict after all evidence, argument and jury instructions have been completed. the Northcoast FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. related debt. The balance of the proceeds will be distributed to Northcoast's partners. Cablevision plans to use its share, approximately $635.0 million, to pay down bank debt. The transaction is expected to close in the second quarter of 2003. 2003 Outlook The company expects to achieve its previous guidance provided on February February: see month. 11, 2003 except for: -- Telecommunications Services Adjusted EBITDA is estimated to grow between 16% and 18%, down from 18% to 20%. This is primarily due to higher programming costs related to the YES transaction. -- Capital expenditures for Telecommunications Services and Corporate between $750 and $775 million, up from $725 million, due to higher second set digital box penetration resulting from strong acceptance by customers for the new digital video offering. Non-GAAP Financial Measures We define Adjusted EBITDA as operating income (loss) before depreciation and amortization, excluding charges or credits related to our employee stock plan, including those related to the vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of restricted shares, variable stock options and stock appreciation rights, and restructuring charges or credits. We believe that the exclusion exclusion /ex·clu·sion/ (eks-kloo´zhun) 1. a shutting out or elimination. 2. surgical isolation of a part, as of a segment of intestine, without removal from the body. of such amounts allows investors to better track the performance of the various operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon of our business without regard to the distortive dis·tor·tive adj. Serving to distort: harsh and distortive peaks in the recorded music; a robust fortissimo without distortive vibration. effects of a fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. stock price (in the case of variable stock options and stock appreciation rights expense) or, in the case of restricted shares, the settlement of an obligation that will not be made in cash. We present "Adjusted EBITDA" as a measure of our ability to service our debt and make continuing investments, including in our capital infrastructure. The company believes Adjusted EBITDA is an appropriate measure for evaluating the operating performance of its business segments and the company on a consolidated basis. Adjusted EBITDA and similar measures with other titles is a common performance measure used by investors, analysts and peers to compare performance in our industry. Internally, we use Revenue and Adjusted EBITDA measures as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. Adjusted EBITDA should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows, and other measures of performance presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). Since Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with other titles used by other companies. For a reconciliation of Adjusted EBITDA to Operating Income, please see page 7 of this release. The Adjusted EBITDA results for the first quarters of 2003 and 2002 include $5.5 million and $6.1 million, respectively, in expenses related to the company's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. incentive plan. This expense had previously been excluded from Adjusted EBITDA. This change has been made in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the requirements set forth in the recently enacted Regulation G, which regulates the use of non-GAAP financial measures. Please refer to the schedules on pages 12 and 13 that adjust the quarterly results for 2002 for such expense. COMPANY DESCRIPTION Cablevision Systems Corporation is one of the nation's leading entertainment and telecommunications companies See telecom company. . Its cable television operations serve 3 million households located in the New York metropolitan area New York–Northern New Jersey–Long Island is the most populous metropolitan area in the United States and the third most populous in the world, after Tokyo and Mexico City. . The company's advanced telecommunications offerings include its Lightpath integrated business communications services; its Optimum-branded high-speed Internet See broadband. service and iO: Interactive Optimum, the company's digital television offering. Cablevision's Rainbow Media Holdings, Inc. operates programming businesses including AMC, The Independent Film Channel (IFC) and other national and regional services. In addition, Rainbow is a 50 percent partner in Fox Sports Net. Cablevision also owns a controlling interest controlling interest The ownership of a quantity of outstanding corporate stock sufficient to control the actions of the firm. Controlling interest often involves ownership of significantly less than 51% of a firm's outstanding stock because many owners fail and operates Madison Square Garden and its sports teams including the Knicks and Rangers Rapidly deployable airborne light infantry organized and trained to conduct highly complex joint direct action operations in coordination with or in support of other special operations units of all Services. . The company operates New York's famed Radio City Music Hall and owns and operates Clearview Cinemas, one of the tri-state Tri-State may refer to:
This earnings release contains statements that constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results or developments may differ materially from those in the forward-looking statements as a result of various factors, including financial community and rating agency perceptions of the company and its business, operations, financial condition and the industry in which it operates and the factors described in the company's filings with the Securities and Exchange Commission, including the sections entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Risk Factors" and "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" contained therein. The company disclaims any obligation to update the forward-looking statements contained herein. Cablevision's Web site: www.cablevision.com The 1Q 2003 earnings announcement will be Webcast live today at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy Conference call dial-in number is (973) 582-2700 Conference call replay number (973) 341-3080 / pin #3830628 until May 20th
CABLEVISION SYSTEMS CORPORATION
CONDENSED CONSOLIDATED OPERATIONS DATA AND RECONCILIATION
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
---------------------
2003 2002
---------- ----------
Revenues, net $ 982,150 $ 911,176
========== ==========
Adjusted EBITDA $ 299,193 $ 220,115
Stock plan income (expense) (6,983) 18,014
Restructuring credits 4,464 -
---------- ----------
Operating income before depreciation and
amortization 296,674 238,129
Depreciation and amortization 235,932 202,293
---------- ----------
Operating income 60,742 35,836
Other income (expense):
Interest expense, net (123,705) (118,124)
Gain (loss) on investments, net 17,429 (418,450)
Gain (loss) on derivative contracts, net (10,708) 295,539
Minority interests (56,649) (43,913)
Other items, net (27,908) (15,008)
---------- ----------
Loss from continuing operations before income
taxes (140,799) (264,120)
Income tax benefit 20,840 27,465
---------- ----------
Loss from continuing operations (119,959) (236,655)
Loss from discontinued operations, net of taxes
(including loss of $12,844 on the sale of the
retail electronics business in 2003) (20,457) (12,975)
---------- ----------
Net loss $(140,416) $(249,630)
========== ==========
LOSS PER SHARE:
Basic and diluted net loss per share:
Loss from continuing operations $ (0.43) $ (0.82)
Loss from discontinued operations $ (0.07) $ (0.05)
Net loss $ (0.50) $ (0.87)
Weighted average common shares (in thousands) 281,742 288,269
ADJUSTMENTS TO EBITDA The following is a description of the adjustments to EBITDA included in this earnings release: -- Stock plan income (expense). This adjustment eliminates the income or expense associated with vesting, and marking to market, of stock appreciation rights granted under our employee stock option plan, a charge related to the redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of RMG RMG Roularta Media Group RMG RiskMetrics Group, Inc. RMG Revenu Minimum Garanti (French: Guaranteed Minimum Income) RMG Risk Management Group RMG Ready Made Garment RMG Raw Materials Group (mining industry) stock option shares and a charge related to the issuance of restricted shares. -- Restructuring charges (credits). This adjustment eliminates the charges (credits) associated with estimated costs related to the elimination of positions, facility realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. , reduction in required digital set top box commitments and other related costs in all periods.
CABLEVISION SYSTEMS CORPORATION
CAPITALIZATION AND LEVERAGE
(Dollars in thousands, except per share data)
(Unaudited)
CAPITALIZATION
--------------
Actual
March 31,
2003
-----------
Cash $ 223,158
===========
Bank debt 2,082,000
Collateralized indebtedness 1,560,960
Senior notes and debentures 3,692,004
Subordinated notes and debentures 599,147
Capital lease obligations 83,402
Redeemable preferred stock 1,544,294
Exchangeable preferred stock 76,146
-----------
Debt and preferred stock $9,637,953
===========
LEVERAGE
--------
Debt and preferred stock $ 9,637,953
Less: collateralized indebtedness (1), exchangeable
preferred stock (1) and cash (1,860,264)
------------
Net debt and redeemable preferred stock $ 7,777,689
============
Actual Pro Forma (4)
------------- -------------
Consolidated net debt and redeemable
preferred/Adjusted EBITDA (2) 6.2x 5.7x
Restricted Group leverage (Bank Test) 5.95x 5.4x
Notes and debentures ratio (3) 5.95x 5.4x
(1) Collateralized indebtedness is excluded for the purpose of the
leverage calculation because it is viewed as a forward sale of the
stock of unaffiliated companies and the company's only obligation
at maturity is to deliver the stock or its cash equivalent.
Exchangeable preferred stock is excluded from the leverage
calculation as it is exchangeable into either common stock or
payable in cash at the company's option.
(2) Under the terms of Madison Square Garden's bank credit agreement,
Adjusted EBITDA for Madison Square Garden is based on a trailing
12 months for purposes of calculating leverage and covenant
compliance.
(3) Reflects debt to cash flow ratio applicable under indentures
pursuant to which the notes and debentures were issued. The
Restricted Group annualized running rate EBITDA (as defined) for
March 31, 2003 was $1,016,400.
(4) Pro forma to reflect proceeds of $635,000 from Northcoast license
sale.
CABLEVISION SYSTEMS CORPORATION
CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS
(Dollars in thousands)
(Unaudited)
NET REVENUES
------------
Three Months Ended
March 31,
-----------------------
2003 2002 % Change
----------- ----------- -----------
Consumer Services $594,619 $560,324 6.1%
Business Services 43,312 36,805 17.7%
Eliminations* (4,127) (4,069) (1.4)%
----------- -----------
Total Telecommunications 633,804 593,060 6.9%
----------- -----------
AMC/IFC/WE 104,245 84,832 22.9%
Consolidated Regional Sports 35,545 32,306 10.0%
----------- -----------
Subtotal Core Networks 139,790 117,138 19.3%
----------- -----------
Developing/Other 42,595 40,213 5.9%
Eliminations* (5,775) (5,433) (6.3)%
----------- -----------
Total Rainbow 176,610 151,918 16.3%
----------- -----------
MSG 208,406 207,097 0.6%
Eliminations** (36,670) (40,899) 10.3%
----------- -----------
Total Cablevision $982,150 $911,176 7.8%
=========== ===========
* Represents intra-segment revenues.
** Represents inter-segment revenues.
OPERATING INCOME (LOSS) AND ADJUSTED EBITDA
-------------------------------------------
Operating Income (Loss)
-----------------------
Three Months Ended
March 31,
----------------------- %
2003 2002 Change
----------- ----------- -----------
Consumer Services $78,897 $99,161 (20.4)%
Business Services (1,016) (2,194) 53.7%
----------- -----------
Total Telecommunications 77,881 96,967 (19.7)%
----------- -----------
AMC/IFC/WE 42,893 27,461 56.2%
Consolidated Regional Sports 6,856 5,806 18.1%
----------- -----------
Subtotal Core Networks 49,749 33,267 49.5%
----------- -----------
Developing/Other (33,783) (35,983) 6.1%
----------- -----------
Total Rainbow 15,966 (2,716) -
----------- -----------
MSG (1,756) (3,544) 50.5%
Other (31,349) (54,871) 42.9%
----------- -----------
Total Cablevision $60,742 $35,836 69.5%
=========== ===========
Adjusted EBITDA*
-----------------------
Three Months Ended
March 31, %
-----------------------
2003 2002 Change
----------- ----------- -----------
Consumer Services $231,519 $210,188 10.1%
Business Services 15,151 9,272 63.4%
----------- -----------
Total Telecommunications 246,670 219,460 12.4%
----------- -----------
AMC/IFC/WE 49,046 31,751 54.5%
Consolidated Regional Sports 9,741 7,839 24.3%
----------- -----------
Subtotal Core Networks 58,787 39,590 48.5%
----------- -----------
Developing/Other (19,992) (31,187) 35.9%
----------- -----------
Total Rainbow 38,795 8,403 -
----------- -----------
MSG 14,245 9,260 53.8%
Other (517) (17,008) 97.0%
----------- -----------
Total Cablevision $299,193 $220,115 35.9%
=========== ===========
* Adjusted EBITDA excludes restructuring credits of $4.5 million in
the three months ended March 31, 2003. Also excludes actual stock
plan (expense) income of $(7.0) million and $18.0 million in the
three months ended March 31, 2003 and 2002, respectively. Adjusted
EBITDA includes the long-term incentive plan expenses of $5.5
million and $6.1 million in the three months ended March 31, 2003
and 2002, respectively. The long-term incentive plan expenses are
cash awards to senior executives of the company that vest over
varying periods, some of which are performance based. A
Supplemental Schedule is attached that reflects Adjusted EBITDA on
a quarterly basis for 2002.
CABLEVISION SYSTEMS CORPORATION
SUMMARY OF OPERATING STATISTICS
(Unaudited)
March 31, December 31, March 31,
2003 2002 2002
------------ ------------ ------------
CONSUMER SERVICES
-----------------
Homes Passed 4,375,355 4,369,385 4,344,095
============ ============ ============
Basic Video Customers 2,951,660 2,963,215 3,000,950
Digital Video Customers 401,420 216,545 24,100
High-Speed Data Customers 852,835 770,125 559,765
Residential Telephone Customers 12,000 12,240 13,120
------------ ------------ ------------
Total Revenue Generating Units 4,217,915 3,962,125 3,597,935
============ ============ ============
Basic Video Penetration 67.5% 67.8% 69.1%
Customer Relationships (a) 3,015,338 3,015,239 3,028,459
----------------------------------------------------------------------
iO - Digital Video
------------------
Homes Released 3,758,615 3,353,675 685,930
Customers 401,420 216,545 24,100
Penetration of Basic Video
Customers 13.6% 7.3% 0.8%
----------------------------------------------------------------------
Optimum Online - High-Speed Data
--------------------------------
Homes Released 3,827,475 3,696,140 3,127,270
Customers (b) 852,835 770,125 559,765
Penetration 22.3% 20.8% 17.9%
----------------------------------------------------------------------
Optimum Telephone - Residential
-------------------------------
Homes Marketed 157,320 157,320 157,320
Customers 12,000 12,240 13,120
Penetration 7.6% 7.8% 8.3%
----------------------------------------------------------------------
Consumer Revenues for the three
months ended ($ millions,
except per customer data)
-------------------------------
Video (c) $465 $456 $459
Advertising 19 27 17
Other (d) 17 16 22
------------ ------------ ------------
Total Video Revenues 501 499 498
High-Speed Data 88 77 57
Residential Telephone and Other 6 7 5
------------ ------------ ------------
Total Consumer Revenue $595 $583 $560
============ ============ ============
Average Consumer Revenue per
Basic Video Customer $67.02 $65.56 $62.17
----------------------------------------------------------------------
BUSINESS SERVICES
-----------------
Buildings on-net 1,525 1,505 1,330
Access Lines 140,035 146,200 132,095
Fiber Miles (e) 112,905 110,370 58,295
Route Miles 2,215 2,180 1,447
----------------------------------------------------------------------
(a) Number of customers who receive at least one level of service
without regard to which service they subscribe.
(b) Includes 18,600 business modem customers as of March 31, 2003,
16,600 as of December 31, 2002 and 9,600 as of March 31, 2002.
(c) Video revenue includes analog, digital, PPV and VOD revenue.
(d) Other consumer revenue includes installation revenue, guide
revenue, and other product offerings.
(e) Fiber miles include Westchester region, previously excluded.
CABLEVISION SYSTEMS CORPORATION
SUMMARY OF OPERATING STATISTICS (Cont'd)
(Dollars in thousands)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2003 2002
----------- -----------
CAPITAL EXPENDITURES
--------------------
Consumer premise equipment $101,518 $63,095
Scalable infrastructure 10,890 31,793
Line extensions 4,241 7,780
Upgrade/rebuild 23,961 57,873
Support 5,534 35,268
----------- -----------
Total Consumer 146,144 195,809
Commercial 8,885 28,212
----------- -----------
Total Telecommunications 155,029 224,021
Rainbow 5,851 15,967
MSG 903 7,534
Other 3,933 10,468
----------- -----------
Total Cablevision $165,716 $257,990
=========== ===========
----------------------------------------------------------------------
NON-CONSOLIDATED REGIONAL SPORTS - Managed Businesses
-----------------------------------------------------
100% of these affiliated entities' net revenues, operating income and
Adjusted EBITDA are reflected below:
Three Months Ended
March 31,
-----------------------
Non-Consolidated Regional Sports 2003 2002 % Change
-------------------------------- ------------ ---------- -----------
Revenues, net $58,869 $52,557 12.0%
Operating income 6,161 7,191 (14.3)%
Adjusted EBITDA 7,877 6,279 25.4%
Note: Regional Sports includes Fox Sports Net Chicago, Fox Sports Net
Bay Area and Fox Sports Net New England in which Rainbow holds a
30% effective ownership interest.
Viewing Subscribers Basic Subscribers
March 31, March 31,
----------------------- -----------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
SUBSCRIBERS (in thousands)
-----------
AMC 72,800 72,100 80,500 79,100
IFC 26,800 23,000 66,900 60,500
WE 43,700 39,000 66,400 61,100
muchmusic usa 26,600 22,800 59,100 55,500
Consolidated Regional
Sports (Florida &
Ohio) 8,000 7,800 8,600 8,400
Non-Consolidated Fox
Sports Networks
(Bay Area, New
England, Chicago) 10,500 10,600 11,600 11,600
Fox Sports Net 74,600 73,700 83,000 82,000
2002 PRO FORMA SUPPLEMENTAL INFORMATION
(Dollars in millions)
(Unaudited)
Cablevision Systems Corporation
REVENUE
-------
4Q02 3Q02 2Q02 1Q02 2002
--------- --------- --------- --------- ---------
Consumer Services $583.4 $569.5 $567.5 $560.3 $2,280.7
Business Services 41.9 39.7 39.9 36.8 158.3
Eliminations (7.5) (4.0) (4.0) (4.0) (19.5)
--------- --------- --------- --------- ---------
Total
Telecommunications 617.8 605.2 603.4 593.1 2,419.5
--------- --------- --------- --------- ---------
AMC/IFC/WE 98.6 86.7 87.0 84.8 357.1
Consolidated Regional
Sports 33.5 41.3 43.0 32.3 150.1
--------- --------- --------- --------- ---------
Subtotal Core
Networks 132.1 128.0 130.0 117.1 507.2
Developing/Other 59.0 41.5 44.0 40.2 184.7
Eliminations (6.2) (5.8) (5.8) (5.4) (23.2)
--------- --------- --------- --------- ---------
Total Rainbow 184.9 163.7 168.2 151.9 668.7
--------- --------- --------- --------- ---------
MSG 312.0 116.8 154.8 207.1 790.7
Eliminations (39.4) (36.4) (32.1) (40.9) (148.8)
--------- --------- --------- --------- ---------
Total $1,075.3 $849.3 $894.3 $911.2 $3,730.1
========= ========= ========= ========= =========
PRO FORMA ADJUSTED EBITDA
-------------------------
4Q02 3Q02 2Q02 1Q02 2002
--------- --------- --------- --------- ---------
Consumer Services $231.9 $236.8 $226.4 $210.2 $905.3
Business Services 16.3 16.3 11.1 9.3 53.0
--------- --------- --------- --------- ---------
Total
Telecommunications 248.2 253.1 237.5 219.5 958.3
--------- --------- --------- --------- ---------
AMC/IFC/WE 31.3 33.1 40.2 31.8 136.4
Consolidated Regional
Sports 11.2 14.7 15.0 7.8 48.7
--------- --------- --------- --------- ---------
Subtotal Core
Networks 42.5 47.8 55.2 39.6 185.1
--------- --------- --------- --------- ---------
Developing/Other (18.9) (21.0) (23.2) (31.2) (94.3)
--------- --------- --------- --------- ---------
Total Rainbow 23.6 26.8 32.0 8.4 90.8
--------- --------- --------- --------- ---------
MSG 36.7 15.8 51.3 9.2 113.0
Other (16.2) 3.7 (19.5) (17.0) (49.0)
--------- --------- --------- --------- ---------
Total $292.3 $299.4 $301.3 $220.1 $1,113.1
========= ========= ========= ========= =========
OPERATING INCOME (LOSS)
-----------------------
4Q02 3Q02 2Q02 1Q02 2002
--------- --------- --------- --------- ---------
Consumer Services $84.0 $65.9 $113.5 $99.2 $362.6
Business Services (0.1) 1.3 (3.0) (2.2) (4.0)
--------- --------- --------- --------- ---------
Total
Telecommunications 83.9 67.2 110.5 97.0 358.6
--------- --------- --------- --------- ---------
AMC/IFC/WE 25.4 27.5 30.6 27.5 111.0
Consolidated Regional
Sports 8.4 12.1 5.0 5.8 31.3
--------- --------- --------- --------- ---------
Subtotal Core
Networks 33.8 39.6 35.6 33.3 142.3
--------- --------- --------- --------- ---------
Developing/Other (21.6) (36.5) (25.0) (36.0) (119.1)
--------- --------- --------- --------- ---------
Total Rainbow 12.2 3.1 10.6 (2.7) 23.2
--------- --------- --------- --------- ---------
MSG 19.6 (0.5) 40.9 (3.6) 56.4
Other (62.5) (59.3) (55.6) (54.9) (232.3)
--------- --------- --------- --------- ---------
Total $53.2 $10.5 $106.4 $35.8 $205.9
========= ========= ========= ========= =========
RECONCILIATION OF PRO FORMA ADJUSTED EBITDA TO OPERATING INCOME
---------------------------------------------------------------
4Q02 3Q02 2Q02 1Q02 2002
--------- --------- --------- --------- ---------
Pro forma Adjusted
EBITDA $292.3 $299.4 $301.3 $220.1 $1,113.1
Bad debt expense
(Adelphia) - - (16.3) - (16.3)
Stock plan income
(expense) (10.0) (5.3) 38.8 18.0 41.5
Restructuring
credits (charges) 2.4 (74.2) (4.5) - (76.3)
--------- --------- --------- --------- ---------
Operating income
before depreciation
and amortization 284.7 219.9 319.3 238.1 1,062.0
Depreciation and
amortization 231.5 209.4 212.9 202.3 856.1
--------- --------- --------- --------- ---------
Operating income $53.2 $10.5 $106.4 $35.8 $205.9
========= ========= ========= ========= =========
2002 PRO FORMA SUPPLEMENTAL INFORMATION (Cont'd)
(Dollars in millions)
(Unaudited)
Fox Sports Chicago & Bay Area
REVENUE
-------
4Q02 3Q02 2Q02 1Q02 2002
--------- --------- --------- --------- ---------
Fox Sports Chicago $26.2 $29.0 $29.2 $26.3 $110.7
Fox Sports Bay Area 14.0 18.2 18.2 14.2 64.6
--------- --------- --------- --------- ---------
Total $40.2 $47.2 $47.4 $40.5 $175.3
========= ========= ========= ========= =========
ADJUSTED EBITDA
---------------
4Q02 3Q02 2Q02 1Q02 2002
--------- --------- --------- --------- ---------
Fox Sports Chicago $1.6 $5.1 $4.5 $1.5 $12.7
Fox Sports Bay Area 2.9 4.9 5.1 3.2 16.1
--------- --------- --------- --------- ---------
Total $4.5 $10.0 $9.6 $4.7 $28.8
========= ========= ========= ========= =========
OPERATING INCOME
----------------
4Q02 3Q02 2Q02 1Q02 2002
--------- --------- --------- --------- ---------
Fox Sports Chicago $0.9 $4.6 $5.4 $1.8 $12.7
Fox Sports Bay Area 2.3 4.7 5.9 3.6 16.5
--------- --------- --------- --------- ---------
Total $3.2 $9.3 $11.3 $5.4 $29.2
========= ========= ========= ========= =========
RECONCILIATION OF ADJUSTED EBITDA TO OPERATING INCOME
-----------------------------------------------------
4Q02 3Q02 2Q02 1Q02 2002
--------- --------- --------- --------- ---------
Adjusted EBITDA $4.5 $10.0 $9.6 $4.7 $28.8
Stock plan income
(expense) (0.6) (0.2) 2.3 1.3 2.8
--------- --------- --------- --------- ---------
Operating income
before depreciation
and amortization 3.9 9.8 11.9 6.0 31.6
Depreciation and
amortization 0.7 0.5 0.6 0.6 2.4
--------- --------- --------- --------- ---------
Operating income $3.2 $9.3 $11.3 $5.4 $29.2
========= ========= ========= ========= =========
The employee long-term incentive plan expense of $23.5 million in 2002 is included in adjusted EBITDA; breakdown breakdown /break·down/ (brak´doun) 1. the act or process of ceasing to function. 2. an often sudden collapse in health. 3. loss of self-control. by quarter is as follows: 1Q $6.1, 2Q $6.0, 3Q $4.3, 4Q $7.1. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Adjustments to 2002 Adjusted EBITDA --------------------------------------------- 1. The WIZ, theatres and Bravo operating results classified to discontinued operations in accordance with GAAP. 2. The bad debt provision of $16.3 million due to Adelphia A`del´phi`a n. 1. (Bot.) A "brotherhood," or collection of stamens in a bundle; - used in composition, as in the class names, Monadelphia, Diadelphia, etc. s> communications bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most is excluded. 3. Reclass of $3.3 million of expenses in Other from discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: operations. |
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