Cablevision Systems Corporation Reports Third Quarter 2004 Results.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. -- 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. ): --Cable Television Revenue up 14%; Adjusted Operating Cash Flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. up 16%; --Rainbow Media Core Networks Revenue up 58%; Adjusted Operating Cash Flow up 39%; --Second Consecutive Quarterly Increase in Basic Video Subscribers; --Revenue Generating Units up 22%; --2004 Outlook Revised Cablevision Systems Corporation (NYSE:CVC) today reported financial results for the third quarter 2004. 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: Results Consolidated third quarter net revenues increased 20% to $1.2 billion compared to the prior year period, based on continued strong growth at both Telecommunications Services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. and Rainbow Media's Core Networks. Consolidated 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. totaled $70.1 million compared to $20.0 million in the prior year period. Consolidated adjusted operating cash flow for the quarter increased 13% to $352.9 million compared to the year-earlier period. The increases in operating income and adjusted operating cash flow are driven by revenue increases at Telecommunications Services and Rainbow Media's Core Networks, partially offset by Rainbow DBS (Direct Broadcast Satellite) A one-way TV broadcast service from a communications satellite to a small round or oval dish antenna no larger than 20" in diameter. operating losses 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. . Adjusted operating cash flow ("AOCF AOCF Association of Outplacement Consulting Firms "), a non-GAAP financial measure, is defined as operating income (loss) before depreciation and amortization, excluding employee stock plan charges or credits 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 4 for a discussion of our use of AOCF as a non-GAAP financial measure and page 6 for a reconciliation of AOCF to operating income and net loss. 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:
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, voice and Lightpath businesses. Cablevision continues to enjoy the industry's leading penetration The successful unauthorized breach of a security perimeter. See penetration test. rate for high-speed data and now holds the industry's highest digital television penetration rate. In addition, the company experienced its second consecutive quarter of basic video subscriber subscriber, 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. growth and a record quarter for our new voice service, which added more than 74,000 customers in the three months. These results underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. Cablevision's success in marketing our suite of industry-leading services delivered over a state-of-the art network." Mr. Dolan continued: "Rainbow Media continued to achieve excellent results in the third quarter. Driven largely by increases in advertising revenue 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. fee revenue, the core networks reported a 58% increase in net revenues and 39% growth in adjusted operating cash flow. In addition, in the quarter, Cablevision advanced the plan to spin off Rainbow Media Enterprises, raising $1.75 billion in financing for the new company and appointing co-CFOs to further solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. its management team." Telecommunications Services - Cable Television and Lightpath For Telecommunications Services, which includes our Cable Television 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, and Lightpath business services, third quarter 2004 net revenues rose 14% to $788.3 million and operating income increased 76% to $114.8 million, both compared to the prior year period. AOCF increased 16% to $317.4 million compared to the year-earlier period. Cable Television - Consumer Services Cable Television, comprised of analog and 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 ), voice and R&D/Technology, recorded third quarter net revenues of $742.8 million, up 14% compared to the prior year period. Operating income increased 68% to $115.7 million and AOCF rose 16% to $298.9 million, each compared to the year-earlier period. Operating income and AOCF include $6.1 million in expense in the 2003 period relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc legal and indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from charges associated with the agreement with the YES Network. The increases in revenue, operating income, and AOCF reflect continued strong growth in digital video, high-speed data, and voice customer relationships. Highlights include: --5,747,393 Revenue Generating Units, up 325,827 or 6% from June June: see month. 2004 and up 1,033,088 or 22% from September September: see month. 2003 --iO: Interactive Optimum digital video customers up 171,382 from June 2004 to 1,337,091 --Optimum Online HSD customers up 79,982 from June 2004 to 1,259,024 --Optimum Voice customers up 74,143 from June 2004 to 189,191 --Basic video subscribers increased 850 from June 2004 to 2,952,213 --Total cable television revenue per basic video customer up 14% to $83.89 from $73.38 in the prior year period --VOD/SVOD average revenue of $5.00 per digital subscriber per month --A 10% increase in advertising revenue from the prior year period --AOCF margin of 40.2% for the third quarter 2004 Lightpath - Business Services For the third quarter, Lightpath reported $52.5 million in net revenues, a 20% increase compared to the prior year period. Lightpath also reported an operating loss of $0.8 million in the third quarter 2004 compared to an operating loss of $3.8 million in the prior year period. The revenue increase is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to an increase in data revenue 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. for business customer growth and transmission and internet access See how to access the Internet. services revenue growth. AOCF was $18.6 million, up 14% from the third quarter of 2003 driven by the revenue increases. Net revenue for Lighpath includes the impact of Optimum Voice call completion activity, which has no impact on AOCF. Rainbow Media's Core Networks 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 and Consolidated Regional Sports) third quarter net revenues increased 58% to $235.9 million over the prior year period. For the third quarter of 2004, operating income increased 49% to $68.5 million and AOCF increased 39% to $92.6 million, each compared to the year-earlier period. The consolidation of 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. and Fox Sports Net Bay Area in 2003 and strong increases in affiliate and advertising revenues contributed to the solid revenue, operating income and adjusted operating cash flow results. AMC/IFC/WE Third quarter 2004 net revenues increased 22% to $130.2 million, operating income increased 43% to $41.7 million and AOCF increased 26% to $59.4 million, each compared to the year-ago period. Third quarter growth is primarily due to higher affiliate revenue from gains in the number of AMC, IFC and WE viewing subscribers from September 2003 of 3%, 7% and 19%, respectively and a 45% increase in advertising revenue over the prior year period. The third quarter 2003 results include $4.3 million of income from the sale of 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 receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed that were previously written off. Excluding the sale, operating income and AOCF increased 68% and 39%, respectively. 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 , Fox Sports Net Ohio, Fox Sports Net Chicago and Fox Sports Net Bay Area (Chicago and Bay Area were consolidated effective December December: see month. 12, 2003 and are 60% owned by Rainbow). Third quarter 2004 reported net revenues rose to $105.6 million from $42.7 million in the prior year period. Third quarter 2004 reported operating income increased to $26.8 million from $16.9 million and AOCF increased to $33.2 million from $19.6 million, both compared to the prior year period. 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 to reflect the consolidation of Fox Sports Net Chicago and Fox Sports Net Bay Area in 2003, net revenue increased 12% and AOCF increased 7%, due to higher affiliate revenue reflecting a 4% increase in viewing subscribers as well as higher advertising revenue. The third quarter 2003 results include $4.2 million of income from the sale of Adelphia Communications receivables that were previously written off. Excluding the sale and pro forma to reflect the consolidation of Chicago and Bay Area, AOCF increased 24%. Developing Programming/Other Developing Programming/Other consists of 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 , fuse, Rainbow Network Communications, News 12 Networks, MetroChannels, Rainbow Advertising Sales Corp., IFC Entertainment and other Rainbow developmental ventures. Third quarter net revenues increased 8% to $51.9 million and the operating loss for the quarter declined to $16.8 million compared to an operating loss of $22.9 million for the year-earlier period. The AOCF deficit for the quarter totaled $6.5 million compared to an AOCF deficit of $14.1 million for the prior year period. The lower AOCF deficit is primarily attributable to: revenue growth at IFC Films relating to the co-distribution of Fahrenheit Fahr·en·heit adj. Abbr. F Of or relating to a temperature scale that registers the freezing point of water as 32°F and the boiling point as 212°F at one atmosphere of pressure. 9/11, higher revenue recorded at fuse due to a 16% increase in viewing subscribers, and higher advertising sales and lower expense levels at several of the programming services. Madison Square Garden Current arenas in the National Hockey League Western Conference Eastern Conference 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 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 , 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 . Madison Square Garden's third quarter revenue increased 2% from the prior year period to $110.2 million. For the third quarter, operating income totaled $2.8 million compared to operating income of $4.2 million in the prior year period. Third quarter AOCF was $15.2 million compared to $16.2 million in the prior year period. Rainbow DBS - VOOM Voom HD was a direct broadcast satellite television provider serving the United States. It was a competitor to the established DirecTV and Dish Network systems. Voom was operated by Rainbow DBS Company, a subsidiary of Cablevision. As of September 30, 2004, Rainbow DBS had approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 26,000 activated activated a state of being more than usually active. In biological systems this is usually brought about by chemical or electrical means. Commonly said of pharmaceutical and chemical products. VOOM customers. For the third quarter of 2004, Rainbow DBS reported net revenues of $5.9 million, primarily resulting from programming service fees, equipment rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. fees and equipment sales. No revenues were recorded for the 2003 period, as the service had not yet launched. The operating loss for the third quarter totaled $75.3 million compared to an operating loss of $29.5 million in the year-earlier period. The AOCF deficit for the third quarter 2004 was $60.4 million compared to $29.4 million in the year-earlier period. The operating loss and AOCF deficit are primarily attributable to content development costs for the VOOM high definition channels, marketing and subscriber acquisition costs and costs associated with operating the uplink (1) Transmitting from an earth station to a satellite. Contrast with downlink. (2) A port on a network device that is used to connect to another network device rather than a client or server. See MDI port. and broadcast facility and customer call center. Theatres For the third quarter, Clearview Clearview may refer to:
2004 Outlook The company affirms and revises the previously issued 2004 guidance as outlined in the table below. In anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of the spin off of Rainbow Media Enterprises, guidance for Rainbow Media's National Networks (AMC/IFC/WE) and Rainbow Developing/Other is not addressed.
Telecommunications Previous Revised
------------------ -------- -------
Basic video subscribers + approximately 0.5% Unchanged
Revenue generating unit (RGU) net
additions 875,000 to 925,000 1,000,000 to
1,100,000
Total revenue + 13% to 15% At high end
of range
Adjusted operating cash flow + 14% to 16% At high end
of range
Capital expenditures,
Telecommunications and corporate Approximately $600 Approximately
million $625 - $650
million
Free cash flow Positive in Q4 Unchanged
Modestly negative
full year 04 Unchanged
Rainbow Media
-------------
Consolidated Regional Sports
Total revenue + 6% to 8% + 8% to 9%
Adjusted operating cash flow + 28% to 30% In excess of 40%
Total revenue, as adjusted * + 4% to 5% + 5% to 6%
Adjusted operating cash flow, as
adjusted * + 20% to 22% + 28% to 30%
Other
-----
Adjusted operating cash flow
deficit Approximately $40 Unchanged
million
(*) Adjusted to give effect to retroactive affiliate settlements.
Note: 2004 guidance for revenue and adjusted operating cash flow
treats the acquisition of Fox Sports Net Chicago and Fox Sports
Net Bay Area as though both were consolidated on January 1,
2003.
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, 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 AOCF as a measure of our ability to service our debt and make continuing investments, including in our capital infrastructure. The company believes adjusted operating cash flow is an appropriate measure for evaluating the operating performance of its business segments and the company on a consolidated basis. Adjusted operating cash flow and similar measures with other titles are common performance measures used by investors, analysts and peers to compare performance in our industry. Internally, we use revenue and adjusted operating cash flow measures as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. Adjusted operating cash flow 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 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 operating cash flow 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 operating cash flow to operating income, please see page 6 of this release. COMPANY DESCRIPTION Cablevision Systems Corporation is one of the nation's leading entertainment and telecommunications companies See telecom company. . Its cable television operations serve more than 3 million households 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 Communicating information, including data, text, pictures, voice and video over long distance. See communications. offerings include its iO: Interactive Optimum digital television offering, Optimum Online high-speed Internet See broadband. service, Optimum Voice digital voice-over-cable service, and its Lightpath integrated business communications services. Cablevision's Rainbow Media Holdings LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control operates several successful programming businesses, including AMC, IFC, WE and other national and regional networks. Rainbow also is a 50 percent partner in Fox Sports Net. In 2003, Cablevision's Rainbow DBS launched its VOOM satellite service, the first service to offer a comprehensive array of high-definition High-definition refers to an increase in display or visual resolution such as in:
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 3Q 2004 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) 935-8507 Conference call replay number (973) 341-3080/ pin #5270689 until November November: see month. 16, 2004
CABLEVISION SYSTEMS CORPORATION
CONDENSED CONSOLIDATED OPERATIONS DATA AND RECONCILIATION
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- -----------------------
2004 2003 (a) 2004 2003 (a)
---------- ---------- ---------- ----------
Revenues, net $1,169,029 $ 975,766 $3,568,430 $2,949,864
========== ========= ========== ==========
Adjusted operating cash
flow $ 352,854 $ 311,441 $1,055,996 $ 895,818
Stock plan expense (6,755) (1,428) (16,899) (21,620)
Restructuring credits
(charges) 1,203 (8,004) (2,186) (11,423)
---------- --------- ---------- ----------
Operating income before
depreciation and
amortization 347,302 302,009 1,036,911 862,775
Depreciation and
amortization 277,189 282,013 817,292 785,048
---------- --------- ---------- ----------
Operating income 70,113 19,996 219,619 77,727
Other income (expense):
Interest expense, net
(b) (172,062) (167,670) (528,387) (421,310)
Equity in net income
(loss) of affiliates (6,234) (2,918) (7,349) 437,780
Loss on sale of cable
assets - (13,644) - (13,644)
Write-off of deferred
financing costs (12,694) - (18,961) -
Gain (loss) on
investments, net 6,280 52,810 (9,906) 210,858
Gain (loss) on
derivative contracts,
net 21,623 (39,531) (34,049) (165,782)
Loss on extinguishment
of debt - - (72,495) -
Minority interests (13,966) (15,638) (64,834) (128,334)
Other items, net (23) (115) (89) (2,307)
---------- --------- ---------- ----------
Loss from continuing
operations before
income taxes (106,963) (166,710) (516,451) (5,012)
Income tax (expense)
benefit 43,788 51,432 159,436 (81,533)
---------- --------- ---------- ----------
Loss from continuing
operations (63,175) (115,278) (357,015) (86,545)
Income (loss) from
discontinued
operations, net of
taxes - 8,316 (5,815) (13,392)
---------- --------- ---------- ----------
Loss before
extraordinary item (63,175) (106,962) (362,830) (99,937)
Extraordinary loss on
investment, net of
taxes - - (7,436) -
---------- --------- ---------- ----------
Net Loss $ (63,175) $(106,962) $ (370,266) $ (99,937)
========== ========= ========== ==========
Basic and diluted net
loss per share:
Loss from continuing
operations $ (0.22) $ (0.40) $ (1.24) $ (0.30)
========== ========= ========== ==========
Income (loss) from
discontinued
operations $ - $ 0.03 $ (0.02) $ (0.05)
========== ========= ========== ==========
Extraordinary loss $ - $ - $ (0.03) $ -
========== ========= ========== ==========
Net Loss $ (0.22) $ (0.37) $ (1.29) $ (0.35)
========== ========= ========== ==========
Basic weighted average
common shares (in
thousands) 287,173 286,716 287,006 285,054
========== ========= ========== ==========
(a) Results for the 2003 period have been restated to reflect the
impact of amounts that were improperly recorded in 2002 and
earlier periods and certain other adjustments.
(b) Includes a $43.6 million reclassification of dividends on CSC
Holdings' Series H and Series M Redeemable Preferred Stock for the
three and nine months ended September 30, 2003, respectively, as a
result of the implementation of Statement of Financial Accounting
Standards No. 150 as of July 1, 2003.
CABLEVISION SYSTEMS CORPORATION
CONDENSED CONSOLIDATED OPERATIONS DATA AND RECONCILIATION (Cont'd)
(Dollars in thousands, except per share data)
(Unaudited)
ADJUSTMENTS TO RECONCILE OPERATING INCOME TO ADJUSTED OPERATING CASH
FLOW
The following is a description of the adjustments to operating income
included in this earnings release:
-- Depreciation and amortization. This adjustment eliminates
depreciation and amortization in all periods.
-- Stock plan income (expense). This adjustment eliminates the
income or expense associated with vesting, and marking to
market, of variable stock options, stock appreciation rights
granted under our employee stock option plan and charges
related to the issuance of restricted shares.
-- Restructuring charges (credits). This adjustment eliminates
the charges or credits recorded that are associated with costs
related to the elimination of positions, facility realignment
and other related costs in all periods.
CABLEVISION SYSTEMS CORPORATION
CAPITALIZATION AND LEVERAGE
(Dollars in thousands)
(Unaudited)
CAPITALIZATION
---------------
Actual
September 30, 2004
------------------
Cash $ 922,924
===========
Bank debt $ 2,480,708
Collateralized indebtedness 1,659,265
Senior notes and debentures 5,991,265
Senior subordinated debentures 746,134
Notes payable 150,000
Capital lease obligations 75,452
-----------
Debt $11,102,824
===========
LEVERAGE
--------
Debt $11,102,824
Less: collateralized indebtedness (1) and cash 2,582,189
-----------
Net debt $ 8,520,635
===========
Ratio
------------
Consolidated net debt/adjusted operating cash flow (2) 5.7x
Restricted Group leverage (Bank Test) 5.1x
CSC Holdings notes and debentures ratio (3) 5.1x
Cablevision notes ratio (4) 6.3x
Rainbow National Services notes ratio (5) 5.2x
(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.
(2) Adjusted operating cash flow is annualized based on the quarterly
results, except with respect to Madison Square Garden, which is
based on a trailing 12 months due to its seasonal nature.
(3) Reflects debt to cash flow ratio applicable under indentures
pursuant to which the CSC Holdings notes and debentures were
issued. The annualized AOCF (as defined) used in the Restricted
Group bank leverage test and for the CSC Holdings indentures test
was $1,264,088.
(4) Reflects debt to cash flow ratio under the Cablevision senior
notes indentures.
(5) Reflects debt to cash flow ratio under the Rainbow National
Services notes issued in August 2004. The annualized AOCF (as
defined) used in the notes ratio was $268,738.
CABLEVISION SYSTEMS CORPORATION
CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS
(Dollars in thousands)
(Unaudited)
NET REVENUES
------------
Three Months Ended
September 30, %
---------------------
2004 2003 (a) Change
---------- -------- --------
Cable Television - Consumer Services $ 742,848 $652,079 13.9%
Lightpath - Business Services 52,510 43,875 19.7%
Eliminations (b) (7,102) (2,439) (191.2)%
---------- --------
Total Telecommunications 788,256 693,515 13.7%
---------- --------
AMC/IFC/WE 130,240 106,980 21.7%
Consolidated Regional Sports 105,617 42,725 147.2%
---------- --------
Subtotal Core Networks 235,857 149,705 57.5%
Developing/Other 51,902 48,009 8.1%
Eliminations (b) (7,506) (7,290) (3.0)%
---------- --------
Total Rainbow 280,253 190,424 47.2%
---------- --------
MSG 110,227 107,780 2.3%
Rainbow DBS 5,920 - -
Theatres 22,463 20,955 7.2%
Other (c) 3,348 - -
Eliminations (d) (41,438) (36,908) (12.3)%
---------- --------
Total Cablevision $1,169,029 $975,766 19.8%
========== ========
NET REVENUES
------------
Nine Months Ended
September 30, %
-----------------------
2004 2003 (a) Change
---------- ---------- -------
Cable Television - Consumer Services $2,170,531 $1,870,401 16.0%
Lightpath - Business Services 149,381 132,683 12.6%
Eliminations (b) (16,411) (10,746) (52.7)%
---------- ----------
Total Telecommunications 2,303,501 1,992,338 15.6%
---------- ----------
AMC/IFC/WE 385,959 321,049 20.2%
Consolidated Regional Sports 309,719 121,124 155.7%
---------- ----------
Subtotal Core Networks 695,678 442,173 57.3%
Developing/Other 161,448 132,608 21.7%
Eliminations (b) (21,789) (19,138) (13.9)%
---------- ----------
Total Rainbow 835,337 555,643 50.3%
---------- ----------
MSG 480,564 449,380 6.9%
Rainbow DBS 9,621 - -
Theatres 59,339 61,700 (3.8)%
Other (c) 3,348 - -
Eliminations (d) (123,280) (109,197) (12.9)%
---------- ----------
Total Cablevision $3,568,430 $2,949,864 21.0%
========== ==========
(a) Net revenues for 2003 have been restated to reflect the impact of
adjustments resulting from the investigation.
(b) Represents intra-segment revenues.
(c) Includes net revenues of PVI Virtual Media which was consolidated
in the second quarter of 2004 in accordance with FIN 46.
(d) Represents inter-segment revenues.
CABLEVISION SYSTEMS CORPORATION
CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS (Cont'd)
(Dollars in thousands)
(Unaudited)
OPERATING INCOME (LOSS) AND ADJUSTED OPERATING CASH FLOW
--------------------------------------------------------
Operating Income
(Loss)
-----------------------
Three Months Ended
September 30, %
-----------------------
2004 2003 (a) Change
-------- -------- ---------
Cable Television -
Consumer Services $115,668 $ 68,981 67.7%
Lightpath - Business
Services (847) (3,821) 77.8%
-------- --------
Total Telecommunications 114,821 65,160 76.2%
-------- --------
AMC/IFC/WE (c) 41,683 29,081 43.3%
Consolidated Regional
Sports 26,829 16,916 58.6%
-------- --------
Subtotal Core Networks 68,512 45,997 48.9%
Developing/Other (c) (16,836) (22,851) 26.3%
-------- --------
Total Rainbow 51,676 23,146 123.3%
-------- --------
MSG 2,779 4,240 (34.5)%
Rainbow DBS (75,273) (29,463) (155.5)%
Theatres (887) (847) (4.7)%
Other (d) (23,003) (42,240) 45.5%
-------- --------
Total Cablevision $ 70,113 $ 19,996 -
======== ========
Adjusted Operating
Cash Flow (b)
-----------------------
Three Months Ended
September 30, %
-----------------------
2004 2003 (a) Change
-------- -------- --------
Cable Television -
Consumer Services $298,859 $257,792 15.9%
Lightpath - Business
Services 18,579 16,367 13.5%
-------- --------
Total Telecommunications 317,438 274,159 15.8%
-------- --------
AMC/IFC/WE (c) 59,439 47,111 26.2%
Consolidated Regional
Sports 33,151 19,597 69.2%
-------- --------
Subtotal Core Networks 92,590 66,708 38.8%
Developing/Other (c) (6,494) (14,116) 54.0%
-------- --------
Total Rainbow 86,096 52,592 63.7%
-------- --------
MSG 15,173 16,238 (6.6)%
Rainbow DBS (60,376) (29,448) (105.0)%
Theatres 1,353 908 49.0%
Other (d) (6,830) (3,008) (127.1)%
-------- --------
Total Cablevision $352,854 $311,441 13.3%
======== ========
OPERATING INCOME (LOSS) AND ADJUSTED OPERATING CASH FLOW
--------------------------------------------------------
Operating Income
(Loss)
-----------------------
Nine Months Ended
September 30, %
-----------------------
2004 2003 (a) Change
--------- --------- ---------
Cable Television -
Consumer Services $ 317,055 $ 181,635 74.6%
Lightpath - Business
Services (7,565) (6,991) (8.2)%
--------- ---------
Total Telecommunications 309,490 174,644 77.2%
--------- ---------
AMC/IFC/WE (c) 121,004 98,012 23.5%
Consolidated Regional
Sports 76,233 34,016 124.1%
--------- ---------
Subtotal Core Networks 197,237 132,028 49.4%
Developing/Other (c) (53,322) (81,254) 34.4%
--------- ---------
Total Rainbow 143,915 50,774 183.4%
--------- ---------
MSG 75,681 (6,863) -
Rainbow DBS (211,601) (34,766) -
Theatres (4,682) (1,230) -
Other (d) (93,184) (104,832) 11.1%
--------- ---------
Total Cablevision $ 219,619 $ 77,727 182.6%
========= =========
Adjusted Operating
Cash Flow (b)
----------------------
Nine Months Ended
September 30, %
----------------------
2004 2003 (a) Change
---------- -------- --------
Cable Television -
Consumer Services $ 849,579 $721,297 17.8%
Lightpath - Business
Services 52,205 52,031 0.3%
---------- --------
Total Telecommunications 901,784 773,328 16.6%
---------- --------
AMC/IFC/WE (c) 178,599 136,709 30.6%
Consolidated Regional
Sports 92,221 42,737 115.8%
---------- --------
Subtotal Core Networks 270,820 179,446 50.9%
Developing/Other (c) (25,463) (52,137) 51.2%
---------- --------
Total Rainbow 245,357 127,309 92.7%
---------- --------
MSG 115,217 39,543 191.4%
Rainbow DBS (177,152) (34,590) -
Theatres 1,488 4,385 (66.1)%
Other (d) (30,698) (14,157) (116.8)%
---------- --------
Total Cablevision $1,055,996 $895,818 17.9%
========== ========
(a) Results for 2003 have been restated to reflect the impact of
amounts that were improperly recorded in 2002 and earlier periods
and certain other adjustments.
(b) Adjusted operating cash flow excludes restructuring charges
(credits) of $(1.2) million and $2.2 million in the three and nine
months ended September 30, 2004, and $8.0 million and $11.4
million in the three and nine months ended September 30, 2003.
It also excludes stock plan expense of $6.8 million and $16.9
million in the three and nine months ended September 30, 2004, and
$1.4 million and $21.6 million in the three and nine months ended
September 30, 2003. Adjusted operating cash flow includes
long-term incentive plan expenses of $3.6 million and $26.3
million in the three and nine months ended September 30, 2004, and
$13.4 million and $29.2 million in the three and nine months ended
September 30, 2003. The long-term incentive plan expenses are cash
awards to senior executives of the company, some of which are
performance based, that vest over varying periods.
(c) Operating income (loss) for AMC/IFC/WE and Developing/Other has
been reclassified to reflect the push down from Rainbow Media
Holdings of certain amortization expense of acquired intangibles
and depreciation expense relating to the fair value step up of
fixed assets.
(d) Other includes certain long-term incentive plan expenses, certain
senior management retirement costs, and management bonuses.
SUMMARY OF OPERATING STATISTICS
(Unaudited)
September 30, June 30, September 30,
2004 2004 2003
---------- ---------- ----------
CABLE TELEVISION - Consumer Services
--------------------------------------
Homes Passed 4,427,561 4,416,505 4,392,617
========== ========== ==========
Basic Video Customers (a) 2,952,213 2,951,363 2,957,650
Digital Video Customers 1,337,091 1,165,709 755,325
High-Speed Data Customers (b) 1,259,024 1,179,042 984,835
Voice Customers 189,191 115,048 5,006
Residential Telephone Customers 9,874 10,404 11,489
---------- ---------- ----------
Total Revenue Generating Units 5,747,393 5,421,566 4,714,305
========== ========== ==========
Basic Video Penetration 66.7% 66.8% 67.3%
Customer Relationships (c) 3,063,036 3,057,815 3,044,421
Monthly Churn 2.1% 1.8% 2.2%
----------------------------------------------------------------------
iO - Digital Video
--------------------------------------
Customers 1,337,091 1,165,709 755,325
Penetration of Basic Video Customers 45.3% 39.5% 25.5%
Monthly Churn 3.1% 2.9% 3.3%
----------------------------------------------------------------------
Optimum Online - High-Speed Data
--------------------------------------
Customers (b) 1,259,024 1,179,042 984,835
Penetration of Homes Passed 28.4% 26.7% 23.1%
Monthly Churn 2.6% 2.2% 2.6%
----------------------------------------------------------------------
Optimum Voice - Voice
--------------------------------------
Customers 189,191 115,048 5,006
Penetration of Homes Passed 4.3% 2.7% -
----------------------------------------------------------------------
Optimum Telephone - Residential
--------------------------------------
Customers 9,874 10,404 11,489
----------------------------------------------------------------------
Cable Television Revenues for the
three months ended (dollars in
millions, except per customer data)
--------------------------------------
Video (d) $542 $537 $501
Advertising 24 26 22
Other (e) 4 5 3
---------- ---------- ----------
Total Video Revenues 570 568 526
High-Speed Data 150 144 118
Residential Telephone and Other 23 18 8
---------- ---------- ----------
Total Cable Television Revenue $743 $730 $652
========== ========== ==========
Average Monthly Cable Television
Revenue per Basic Video Customer $83.89 $82.60 $73.38
----------------------------------------------------------------------
LIGHTPATH - Business Services
-------------------------------
Buildings on-net (f) 1,634 1,697 1,625
Access Lines 151,210 145,530 140,282
Fiber Miles 121,995 120,817 118,173
Route Miles 2,390 2,360 2,292
----------------------------------------------------------------------
Note: Subscriber figures are not rounded.
(a) As a result of a bulk account analysis, the number of basic video
subscribers reported as of September 30, 2003, was increased by
approximately 2,690.
(b) Includes 33,535 business modem customers as of September 30, 2004;
31,011 as of June 30, 2004; and 23,175 as of September 30, 2003.
(c) Number of customers who receive at least one of the Company's
services. Does not include 12,536 customers who subscribe only to
business modem service.
(d) Video revenue includes analog, digital, PPV, VOD and SVOD revenue.
(e) Includes installation revenue, guide revenue, and other product
offerings.
(f) As a result of an analysis, the number of buildings-on-net, in
September 2004 was reduced by approximately 90.
CABLEVISION SYSTEMS CORPORATION
SUMMARY OF OPERATING STATISTICS (Cont'd)
(Dollars in thousands)
(Unaudited)
Three Months Ended
September 30,
-------------------
2004 2003
-------- --------
CAPITAL EXPENDITURES
---------------------
Consumer premise equipment $124,693 $120,620
Scalable infrastructure 22,659 13,990
Line extensions 8,355 4,175
Upgrade/rebuild 2,034 31,709
Support 14,423 15,323
-------- --------
Total Cable Television - Consumer Services 172,164 185,817
Commercial (Lightpath) 11,981 19,446
-------- --------
Total Telecommunications 184,145 205,263
Rainbow 6,605 4,555
MSG 3,487 1,025
Rainbow DBS 21,936 23,722
Other (Corporate and Theatres) 1,183 2,931
-------- --------
Total Cablevision $217,356 $237,496
======== ========
Nine Months Ended
September 30,
-------------------
2004 2003
-------- --------
CAPITAL EXPENDITURES
----------------------
Consumer premise equipment $347,345 $361,616
Scalable infrastructure 43,800 41,186
Line extensions 18,981 15,853
Upgrade/rebuild 7,515 109,262
Support 32,484 32,007
-------- --------
Total Cable Television - Consumer Services 450,125 559,924
Commercial (Lightpath) 33,349 38,441
-------- --------
Total Telecommunications 483,474 598,365
Rainbow 12,587 10,772
MSG 6,527 3,539
Rainbow DBS 44,020 41,630
Other (Corporate and Theatres) 8,033 7,631
-------- --------
Total Cablevision $554,641 $661,937
======== ========
----------------------------------------------------------------------
Viewing Basic
Subscribers Subscribers
--------------- ---------------
September 30, September 30,
--------------- ---------------
2004 2003 2004 2003
------- ------- ------- -------
SUBSCRIBERS (in thousands)
-------------
AMC 75,600 73,500 83,500 80,800
WE 49,300 46,000 71,000 68,100
IFC 33,600 28,300 73,800 68,500
fuse 32,500 28,100 65,900 60,900
Consolidated Regional Sports (Florida,
Ohio, Bay Area & Chicago) 15,800 15,200 17,200 16,400
Non-Consolidated Fox Sports Networks
(New England) 3,700 3,600 4,200 4,200
Fox Sports Net 76,200 74,500 87,700 87,500
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