Cablevision Systems Corporation Reports Third Quarter 2005 Results; Sixth Consecutive Quarter of Basic Subscriber Gains.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. ) today reported financial results for the third quarter ended September September: see month. 30, 2005. 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: net revenue grew 11% to over $1.2 billion compared to the year-earlier period, reflecting strong revenue growth in Telecommunications Services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. ; Madison Square Garden Current arenas in the National Hockey League Western Conference Eastern Conference ; and AMC (Advanced Mezzanine Card) See AdvancedTCA. , 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. and WE networks, offset in part by lower revenue in Rainbow's Other Programming businesses. 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. increased 8% to $107.2 million and 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. ("AOCF AOCF Association of Outplacement Consulting Firms ")* increased 3% to $378.6 million. Highlights for the third quarter include: --Sixth consecutive quarter of basic 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. gains --Revenue Generating Unit (RGU RGU The Robert Gordon University (Aberdeen, Scotland) RGU Responsible Governmental Unit RGU Revenue-Generating Unit ) growth of more than 308,000 new video, 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 and voice units --More than 1.3 million RGUs added across Cable Television's services since Q3'04 --Cable Television net revenue growth of 16% and AOCF growth of 11% as compared to Q3'04 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:
Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the services, which continue to enjoy industry-leading penetration The successful unauthorized breach of a security perimeter. See penetration test. rates. Additional highlights for the third quarter include our sixth consecutive quarter of basic subscriber growth as well as impressive subscriber gains for our digital video service. Our voice service also achieved excellent results and, by the end of the third quarter, more than one out of every three Cablevision high-speed data customers also purchased Optimum Voice." "Rainbow Media's AMC, IFC and WE had an impressive quarter as well with increases in both net revenues and adjusted operating cash flow. This growth was fueled by a double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. increase in advertising revenue, principally at AMC and WE, which both experienced record ratings in the third quarter," concluded Mr. Dolan. 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 The operating results of FSN (Full-Service Network) A communications network that provides shopping, movies on demand and access to databases and a variety of interactive services. Ohio, FSN Florida FSN Florida, formerly Fox Sports Net Florida, is a television channel that shows local sports coverage in the state of Florida. It is owned by News Corp. along with Sun Sports. and Rainbow DBS's distribution operations are included in discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and are not presented in the table below. The VOOM HD Networks Voom HD Networks are a group of 15 original high-definition television channels that are owned by Rainbow Media, a subsidiary of Cablevision. The channels are produced in true High Definition with Dolby Digital 5. are included in the Rainbow segment for all periods presented.
Segment results for the quarters ended September 30, 2005 and
September 30, 2004 are as follows:
---------------------------------------------------
Operating
Revenue Income (loss) AOCF
---------------------------------------------------
$ millions 2005 2004 2005 2004 2005 2004
--------- --------- ------- ------- ------- -------
Telecommunications $ 910.6 $ 788.3 $141.6 $114.8 $353.7 $317.4
Rainbow 211.9 234.0 19.2 11.1 46.1 44.7
MSG 135.2 110.2 (15.8) 2.8 1.8 15.2
Other (including
Eliminations) (14.5) (15.0) (37.8) (29.2) (23.0) (10.5)
---------------------------------------------------
Total Company $1,243.2 $1,117.5 $107.2 $ 99.5 $378.6 $366.8
---------------------------------------------------
* Adjusted operating cash flow ("AOCF"), 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 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 income
(loss).
Telecommunications Services - Cable Television and Lightpath Telecommunications Services includes Cable Television - Cablevision's "Optimum" branded video, high-speed data, and voice residential and commercial services offered over its cable infrastructure -- and its "Optimum Lightpath" branded, fiber-delivered commercial data and voice services. Telecommunications Services net revenues for the third quarter rose 16% to $910.6 million, operating income increased 23% to $141.6 million, and AOCF increased 11% to $353.7 million, all as compared to the year-earlier period. Cable Television Cable Television third quarter net revenues increased 16% to $872.3 million, operating income increased 20% to $146.0 million and AOCF rose 11% to $338.5 million, each compared to the year-earlier period. The increases in revenue, operating income, and AOCF reflect the addition of more than 1.3 million Revenue Generating Units since the third quarter of 2004, resulting from growth in video, high-speed data, and voice customers. Highlights include: --Basic video customers up 3,506 or 0.1% from June June: see month. 2005 and 56,851 or 1.9% from September 2004; sixth consecutive quarter of basic subscriber gains --iO: Interactive Optimum digital video customers up 101,611 or 6% from June 2005 and 506,003 or 38% from September 2004 --Optimum Online high-speed data customers up 80,570 or 5% from June 2005 and 341,410 or 27% from September 2004 --Optimum Voice customers up 122,851 or 26% from June 2005 and 412,017 from September 2004, a three-fold increase --Revenue Generating Units up 308,170 or 5% from June 2005 and 1,314,631 or 23% from September 2004 --Advertising revenue up 7% from September 2004 --Cable Television RPS rps abbr. revolutions per second of $96.69, up $1.47 or 2% from June 2005 and $11.74 or 14% from September 2004 --AOCF margin of 38.8% compared to 39.4% in June 2005 and 40.5% in September 2004 Lightpath For the third quarter, Lightpath net revenues increased 15% to $49.4 million, 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. decreased 34% to $4.5 million and AOCF increased 20% to $15.2 million, each as compared to the prior year period. The increase in revenue and AOCF is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to revenue growth in Ethernet Ethernet Telecommunications networking protocol introduced by Xerox Corp. in 1979. It was developed as an inexpensive way of sending information quickly between office machines connected together in a single room or building, but it rapidly became a standard computer data services over Lightpath's fiber infrastructure as well as growth in traditional data services. The improvements in operating loss and AOCF reflect the revenue growth as well as certain expense savings resulting primarily from staff reductions implemented earlier in the year. Lightpath revenue also includes Optimum Voice call completion activity, which has no impact on AOCF. Rainbow Rainbow consists of our AMC, IFC and WE: Women's Entertainment national programming services as well as Other Programming which includes: FSN 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. , FSN Bay Area, fuse, MagRack, Sportskool, News 12 Networks, IFC Entertainment, VOOM HD Networks, Metro The code name for Microsoft's XPS document format. See XML Paper Specification. Channels, Rainbow Network Communications, Rainbow Advertising Sales Corp. and other Rainbow developmental ventures. Rainbow net revenues for the third quarter decreased 9% to $211.9 million, operating income increased 73% to $19.2 million and AOCF increased 3% to $46.1 million, all compared to the year-earlier period. AMC/IFC/WE Third quarter net revenues increased 11% to $144.2 million, operating income increased 25% to $52.3 million and AOCF increased 15% to $68.5 million, each compared to the prior year period. The third quarter results reflect: --Higher advertising revenue driven by continued ratings growth, with AMC recording its strongest quarter ever with a primetime HH rating of .98 --Higher 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. revenue, primarily due to the recognition in the third quarter of affiliate revenue attributable to the second quarter that was not recognized in the second quarter due to a contractual dispute --Viewing subscriber increases of 9% at IFC, 3% at WE and 2% at AMC as compared to September 2004 Other Programming Third quarter net revenues decreased 34% to $72.6 million, operating loss increased $2.5 million to $33.1 million, and the AOCF deficit increased $7.7 million to $22.4 million, all as compared to the prior year period. The decrease in net revenue was primarily driven by lower affiliate revenue at FSN Chicago resulting from the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of contracts after losing professional sports The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. content and from payments not being received 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 an existing affiliate agreement and the closure of two Metro Channels. The increases in operating loss and AOCF deficit primarily reflect the net revenue losses as well as higher expenses at IFC Films and News 12, offset in part by lower amortization of contractual rights A contractual right is a claim, on other persons, that is acknowledged and perhaps reciprocated among the principals associated with that claim. Specialized contractual rights exist as part of a "contract" or agreement between persons to whom these rights belong. at VOOM HD 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, FSN 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 net revenue increased 23% to $135.2 million compared to the third quarter of 2004. Operating income decreased $18.6 million to an operating loss of $15.8 million and AOCF decreased to $1.8 million from $15.2 million in the third quarter, both as compared to the year-earlier period. MSG's third quarter results were primarily impacted by: --Higher network affiliate revenue, including the impact of certain contractual retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a rate adjustments --Higher net charges for personnel transactions at 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. --Impact of certain other events, primarily the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. result of the Republican National Convention in 2004 and the expenses associated with the Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. benefit concerts in September 2005.Total Company (Results From Continuing Operations) Consolidated results exclude FSN Ohio, FSN Florida, and Rainbow DBS's distribution operations, which are reflected in discontinued operations for all periods presented. Consolidated third quarter results compared to the prior year period are as follows: --Net revenues increased 11% to $1.2 billion. This was the result of continued RGU growth in Cable Television as well as net revenue growth at Madison Square Garden and AMC, IFC and WE networks, partially offset by a decrease in net revenues at Rainbow's Other Programming businesses. --Operating income increased 8% to $107.2 million and consolidated AOCF increased 3% to $378.6 million. The increases in operating income and AOCF reflect the factors discussed above, offset by higher expenses at Madison Square Garden and higher advisory fees related to corporate transactions.
2005 Outlook
------------
The company affirms and updates the previously issued full year 2005
guidance as outlined in the table below:
Cable Television Previous Updated
---------------- ---------- -----------
Basic video subscribers + 1.5% to 2.0% High end
of range
Revenue generating unit (RGU) + 1.0 to 1.25 million High end
net additions of range
Total revenue growth mid teens* Unchanged
Adjusted operating cash flow growth mid teens* Unchanged
Capital expenditures $600 to $650 million High end
of range
AMC/IFC/WE
----------
Total revenue growth mid to high single digit* Unchanged
Adjusted operating cash flow mid to high single digit* Middle of
growth range
* Percentage growth
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 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. 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. We believe AOCF is an appropriate measure for evaluating the operating performance of its business segments and the company on a consolidated basis. AOCF 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 AOCF measures as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. AOCF should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance presented in accordance 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 AOCF 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 AOCF to operating income (loss), please see page 6 of this release. We define Free Cash Flow, which is a non-GAAP financial measure, as net cash from operating activities less capital expenditures, both of which are reported in our Statement of Cash Flows. We believe the most comparable GAAP financial measure of our liquidity is net cash from operating activities. We believe that Free Cash Flow is useful as an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of our overall liquidity, as the amount of Free Cash Flow generated in any period is representative of cash that is available for debt service and other discretionary and non-discretionary items. It is also one of several indicators of our ability to make investments and return capital to our shareholders. We also believe that Free Cash Flow is one of several benchmarks used by analysts and investors who follow our industry for comparison of our liquidity with other companies in our industry, although our measure of Free Cash Flow may not be directly comparable to similar measures reported by other companies. 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 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, 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. high-speed Internet See broadband. , Optimum Voice digital voice-over-cable, and its Optimum 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. In addition to its telecommunications and programming businesses, Cablevision owns Madison Square Garden and its sports teams, the New York Knicks, Rangers and Liberty. The company also operates New York's famed Radio City Music Hall, and owns and operates Clearview Clearview 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 3Q 2005 earnings announcement will be Webcast live today at
10:00 a.m. EST
Conference call dial-in number is (973) 935-8507
Conference call replay number (973) 341-3080/ pin #6630850 until
November 15, 2005
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,
----------------------- -----------------------
2005 (a) 2004 (a) 2005 (a) 2004 (a)
----------- ----------- ----------- -----------
Revenues, net $1,243,201 $1,117,485 $3,688,366 $3,427,637
----------- ----------- ----------- -----------
Adjusted operating cash
flow $ 378,630 $ 366,778 $1,133,309 $1,103,374
Stock plan expense (3,468) (6,607) (35,888) (16,331)
Restructuring credits
(charges) (1,439) 1,203 (2,197) (2,186)
----------- ----------- ----------- -----------
Operating income before
depreciation and
amortization 373,723 361,374 1,095,224 1,084,857
Depreciation and
amortization
(including
impairments) 266,543 261,876 805,568 782,151
----------- ----------- ----------- -----------
Operating income 107,180 99,498 289,656 302,706
Other income (expense):
Interest expense, net (186,888) (172,433) (559,066) (529,397)
Equity in net income
(loss) of affiliates 2,267 (6,234) 1,892 (7,349)
Write-off of deferred
financing costs - (12,694) - (18,961)
Gain (loss) on sale of
affiliate interests (16) - 65,467 (b) -
Gain (loss) on
investments, net (20,207) 6,280 (97,354) (9,906)
Gain (loss) on
derivative contracts,
net 10,915 21,623 75,450 (34,049)
Loss on extinguishment
of debt - - - (72,495)
Minority interests (2,822) (6,904) (2,630) (45,864)
Miscellaneous, net 230 (13) 119 (41)
----------- ----------- ----------- -----------
Loss from continuing
operations before
income taxes (89,341) (70,877) (226,466) (415,356)
Income tax benefit 26,034 28,632 56,182 116,976
----------- ----------- ----------- -----------
Loss from continuing
operations (63,307) (42,245) (170,284) (298,380)
Income (loss) from
discontinued
operations, net of
taxes (b) 427 (20,930) 210,490 (64,450)
----------- ----------- ----------- -----------
Income (loss) before
extraordinary item (62,880) (63,175) 40,206 (362,830)
Extraordinary loss on
investment, net of
taxes - - - (7,436)
----------- ----------- ----------- -----------
Net income (loss) $ (62,880) $ (63,175) $ 40,206 $ (370,266)
=========== =========== =========== ===========
Basic and diluted net
income (loss) per share:
Loss from continuing
operations $ (0.22) $ (0.15) $ (0.59) $ (1.04)
=========== =========== =========== ===========
Income (loss) from
discontinued
operations $ - $ (0.07) $ 0.73 $ (0.22)
=========== =========== =========== ===========
Extraordinary loss $ - $ - $ - $ (0.03)
=========== =========== =========== ===========
Net income (loss) $ (0.22) $ (0.22) $ 0.14 $ (1.29)
=========== =========== =========== ===========
Weighted average common
shares (in thousands) 288,507 287,173 288,171 287,006
=========== =========== =========== ===========
(a) Reflects the net operating results of FSN Ohio, FSN Florida
(including the gain related to the Regional Programming Partners
restructuring) and Rainbow DBS (distribution operations) as
discontinued operations.
(b) The Company recorded a pre-tax gain in continuing operations of
$66.6 million and an after-tax gain in discontinued operations of
$265.5 million related to the Regional Programming Partners
restructuring.
CABLEVISION SYSTEMS CORPORATION
CONDENSED CONSOLIDATED OPERATIONS DATA AND RECONCILIATION (Cont'd)
(Dollars in thousands, except per share data)
(Unaudited)
ADJUSTMENTS TO RECONCILE ADJUSTED OPERATING CASH FLOW TO OPERATING
INCOME
The following is a description of the adjustments to operating income
included in this earnings release:
-- Depreciation and amortization (including impairments). This
adjustment eliminates depreciation, amortization and
impairments of long-lived assets in all periods.
-- Stock plan expense. This adjustment eliminates the 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 credits (charges). 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.
Nine Months Ended
September 30,
---------------------
2005 (a) 2004 (a)
---------- ----------
CONSOLIDATED FREE CASH FLOW CALCULATION (b)
-------------------------------------------
Net cash provided by operating activities $ 647,975 $ 484,078
Less: capital expenditures (540,058) (518,732)
---------- ----------
Consolidated free cash flow $ 107,917 $ (34,654)
========== ==========
(a) Excludes the net operating results and capital expenditures of FSN
Ohio, FSN Florida and Rainbow DBS (distribution operations), which
are reported in discontinued operations. Discontinued operations
used $98.8 million in cash in the nine months ended September 30,
2005 and used $71.9 million in cash for the nine months ended
September 30, 2004.
(b) See non-GAAP financial measures on page 4 of this release for a
discussion of Free Cash Flow.
CABLEVISION SYSTEMS CORPORATION
CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS
(Dollars in thousands)
(Unaudited)
REVENUES, NET
Three Months Ended
September 30,
----------------------
%
2005 (a) 2004 (a) Change
----------- ----------- --------
Cable Television (b) $ 872,300 $ 752,255 16.0%
Lightpath (b) 49,387 43,103 14.6%
Eliminations (c) (11,084) (7,102) (56.1)%
----------- -----------
Total Telecommunications 910,603 788,256 15.5%
----------- -----------
AMC/IFC/WE 144,158 130,240 10.7%
Other Programming (d) 72,629 110,721 (34.4)%
Eliminations (c) (4,909) (7,007) 29.9%
----------- -----------
Total Rainbow 211,878 233,954 (9.4)%
----------- -----------
MSG 135,178 110,227 22.6%
Other (e) 19,029 25,811 (26.3)%
Eliminations (f) (33,487) (40,763) 17.8%
----------- -----------
Total Cablevision $1,243,201 $1,117,485 11.2%
=========== ===========
Nine Months Ended
September 30,
-----------------------
%
2005 (a) 2004 (a) Change
----------- ----------- --------
Cable Television (b) $2,541,313 $2,196,496 15.7%
Lightpath (b) 144,704 123,416 17.2%
Eliminations (c) (28,972) (16,411) (76.5)%
----------- -----------
Total Telecommunications 2,657,045 2,303,501 15.3%
----------- -----------
AMC/IFC/WE 414,537 385,959 7.4%
Other Programming (d) 221,582 336,615 (34.2)%
Eliminations (c) (19,559) (20,036) 2.4%
----------- -----------
Total Rainbow 616,560 702,538 (12.2)%
----------- -----------
MSG 466,236 480,564 (3.0)%
Other (e) 62,499 62,687 (0.3)%
Eliminations (f) (113,974) (121,653) 6.3%
----------- -----------
Total Cablevision $3,688,366 $3,427,637 7.6%
=========== ===========
(a) Excludes the net revenues of FSN Ohio, FSN Florida and Rainbow DBS
(distribution operations) which are reported in discontinued
operations.
(b) Optimum Online for business has been reclassified from Lightpath
to Cable Television for all periods presented.
(c) Represent intra-segment revenues.
(d) Includes FSN Chicago, FSN Bay Area, fuse, Mag Rack, Sportskool,
News 12 Networks, IFC Entertainment, VOOM HD Networks, Metro
Channels (through May 2005), Rainbow Network Communications,
Rainbow Advertising Sales Corp. and other Rainbow developmental
ventures.
(e) Represents net revenues of Clearview Cinemas and PVI Virtual
Media, which was consolidated in the second quarter of 2004 in
accordance with FIN 46. In May 2005, Cablevision exchanged its 60%
interest in PVI Latin America for the 40% interest in the rest of
PVI that it did not already own.
(f) Represent 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) (a)
-------------------
Three Months Ended
September 30,
------------------- %
2005 2004 Change
-------- --------- -------
Cable Television (b) $146,047 $121,614 20.1%
Lightpath (b) (4,462) (6,793) 34.3%
--------- ---------
Total Telecommunications 141,585 114,821 23.3%
--------- ---------
AMC/IFC/WE 52,272 41,683 25.4%
Other Programming (c) (33,065) (30,594) (8.1)%
--------- ---------
Total Rainbow 19,207 11,089 73.2%
--------- ---------
MSG (15,772) 2,779 -
Other (d) (37,840) (29,191) (29.6)%
--------- ---------
Total Cablevision $107,180 $ 99,498 7.7%
========= =========
Adjusted Operating
Cash Flow (a)
-------------------
Three Months Ended
September 30,
------------------- %
2005 2004 Change
--------- --------- --------
Cable Television (b) $338,484 $304,805 11.0%
Lightpath (b) 15,210 12,633 20.4%
--------- ---------
Total Telecommunications 353,694 317,438 11.4%
--------- ---------
AMC/IFC/WE 68,483 59,439 15.2%
Other Programming (c) (22,424) (14,701) (52.5)%
--------- ---------
Total Rainbow 46,059 44,738 3.0%
--------- ---------
MSG 1,764 15,173 (88.4)%
Other (d) (22,887) (10,571) (116.5)%
--------- ---------
Total Cablevision $378,630 $366,778 3.2%
========= =========
OPERATING INCOME (LOSS) AND ADJUSTED OPERATING CASH FLOW
--------------------------------------------------------
Operating Income
(Loss) (a)
---------------------
Nine Months Ended
September 30,
--------------------- %
2005 2004 Change
---------- --------- --------
Cable Television (b) $ 407,842 $ 333,191 22.4%
Lightpath (b) (19,255) (23,701) 18.8%
---------- ----------
Total Telecommunications 388,587 309,490 25.6%
---------- ----------
AMC/IFC/WE 132,734 121,004 9.7%
Other Programming (c) (117,105) (86,150) (35.9)%
---------- ----------
Total Rainbow 15,629 34,854 (55.2)%
---------- ----------
MSG (17,231) 75,681 (122.8)%
Other (d) (97,329) (117,319) 17.0%
---------- ----------
Total Cablevision $ 289,656 $ 302,706 (4.3)%
========== ==========
Adjusted Operating
Cash Flow (a)
-----------------------
Nine Months Ended
September 30,
----------------------- %
2005 2004 Change
----------- ----------- ------
Cable Television (b) $ 986,999 $ 865,715 14.0%
Lightpath (b) 46,284 36,069 28.3%
----------- -----------
Total Telecommunications 1,033,283 901,784 14.6%
----------- -----------
AMC/IFC/WE 181,558 178,599 1.7%
Other Programming (c) (66,763) (45,179) (47.8)%
----------- -----------
Total Rainbow 114,795 133,420 (14.0)%
----------- -----------
MSG 34,788 115,217 (69.8)%
Other (d) (49,557) (47,047) (5.3)%
----------- -----------
Total Cablevision $1,133,309 $1,103,374 2.7%
=========== ===========
(a) Excludes the operating income (loss) and AOCF of FSN Ohio, FSN
Florida and Rainbow DBS (distribution operations) which are
reported in discontinued operations.
(b) Optimum Online for business has been reclassified from Lightpath
to Cable Television for all periods presented.
(c) Includes FSN Chicago, FSN Bay Area, fuse, Mag Rack, Sportskool,
News 12 Networks, IFC Entertainment, VOOM HD Networks, Metro
Channels (through May 2005), Rainbow Network Communications,
Rainbow Advertising Sales Corp. and other Rainbow developmental
ventures.
(d) Includes operating results of Clearview Cinemas, PVI Virtual Media
and certain corporate general and administrative costs. For 2005,
it also includes certain corporate general and administrative
costs allocated to FSN Ohio, FSN Florida and Rainbow DBS
(distribution operations) that were not eliminated as a result of
the disposition or shut down of these businesses.
CABLEVISION SYSTEMS CORPORATION
SUMMARY OF OPERATING STATISTICS
(Unaudited)
September 30, June 30, September 30,
CABLE TELEVISION 2005 2005 2004
----------------- ------------- ------------ -------------
Revenue Generating Units
Basic Video Customers 3,009,064 3,005,558 2,952,213
iO Digital Video Customers 1,843,094 1,741,483 1,337,091
Optimum Online High-Speed
Data Customers 1,600,434 1,519,864 1,259,024
Optimum Voice Customers 601,208 478,357 189,191
Residential Telephone
Customers 8,224 8,592 9,874
----------------- ------------- ------------ -------------
Total Revenue Generating Units 7,062,024 6,753,854 5,747,393
============= ============ =============
Customer Relationships (a) 3,153,652 3,146,426 3,075,572
----------------------------------------------------------------------
Homes Passed 4,473,977 4,464,425 4,427,561
Penetration
Basic Video to Homes Passed 67.3% 67.3% 66.7%
iO Digital to Basic
Penetration 61.3% 57.9% 45.3%
Optimum Online to Homes
Passed 35.8% 34.0% 28.4%
Optimum Voice to Homes Passed 13.4% 10.7% 4.3%
----------------------------------------------------------------------
Monthly Churn
Basic Video 2.1% 1.7% 2.1%
iO Digital Video 2.6% 2.3% 3.1%
Optimum Online High-Speed
Data 2.4% 2.0% 2.6%
----------------------------------------------------------------------
Revenue for the three months ended
(dollars in millions)
Video(b) $ 587 $ 584 $ 542
High-Speed Data(c) 196 190 160
Voice 50 38 16
Advertising 26 27 24
Other(d) 13 17 10
------------- ----------- -----------
Total Cable Television
Revenue(e) $ 872 $ 856 $ 752
============= =========== ===========
Average Monthly Revenue per
Basic Video Customer ("RPS")
(c)(e) $ 96.69 $ 95.22 $ 84.95
(a) Number of customers who receive at least one of the company's
services, including business modem only customers. Prior year has
been adjusted for comparative analysis.
(b) Includes analog, digital, PPV, VOD and SVOD revenue.
(c) Optimum Online for business has been reclassified from Lightpath
to Cable Television for all periods presented.
(d) Includes installation revenue, NY Interconnect, home shopping and
other product offerings.
(e) RPS is calculated by dividing average monthly revenue for the
quarter by the average number of basic video subscribers for the
quarter.
----------------------------------------------------------------------
September 30, June 30, September 30,
RAINBOW 2005 2005 2004
------- ------------- --------- -------------
Viewing Subscribers
(in thousands)
AMC 77,200 77,300 75,600
WE 50,600 50,300 49,300
IFC 36,700 36,000 33,600
fuse 35,100 34,700 32,500
Consolidated Regional Sports
(Bay Area & Chicago) 6,000 6,000 7,200
Non-Consolidated Regional Sports
(New England) 3,800 3,700 3,700
CABLEVISION SYSTEMS CORPORATION
CAPITALIZATION AND LEVERAGE
(Dollars in thousands)
(Unaudited)
CAPITALIZATION
--------------
September 30,
2005
---------------
Cash and Cash Equivalents $ 351,401
===============
Bank debt $ 2,057,277
Collateralized indebtedness 1,269,594
Senior notes and debentures 5,992,461
Senior subordinated notes and debentures 746,524
Notes payable 17,486
Capital lease obligations 61,724
---------------
Debt $ 10,145,066
===============
LEVERAGE
--------
Debt $10,145,066
Less: collateralized indebtedness (a) and cash (1,620,995)
-----------
Net debt $ 8,524,071
===========
Ratio
------------
Consolidated net debt/adjusted operating cash flow(b) 5.3
Restricted Group leverage (Bank Test) 4.5
CSC Holdings notes and debentures ratio(c) 4.5
Cablevision notes ratio(d) 5.6
Rainbow National Services notes ratio(e) 5.5
(a) Collateralized indebtedness is excluded from 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.
(b) 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.
(c) Reflects debt to cash flow ratio applicable under the CSC Holdings
senior and senior subordinated notes indentures. The annualized
AOCF (as defined) used in the Restricted Group bank leverage test
and for the CSC Holdings indentures test is $1.3 billion.
(d) Reflects debt to cash flow ratio under the Cablevision senior
notes indentures.
(e) Reflects debt to cash flow ratio under the Rainbow National
Services notes indentures. The annualized AOCF (as defined) used
in the notes ratio is $255.5 million.
CABLEVISION SYSTEMS CORPORATION
CAPITAL EXPENDITURES
(Dollars in thousands)
(Unaudited)
Three Months Ended
September 30,
-------------------
2005(a) 2004(a)
--------- ---------
CAPITAL EXPENDITURES
--------------------
Consumer premise equipment $118,382 $125,481
Scalable infrastructure 22,431 22,658
Line extensions 7,351 9,092
Upgrade/rebuild 2,030 2,034
Support 10,574 14,440
--------- ---------
Total Cable Television(b) 160,768 173,705
Lightpath(b) 7,646 10,440
--------- ---------
Total Telecommunications 168,414 184,145
Rainbow 6,809 7,298
MSG 6,157 3,487
Other (Corporate and Theatres) 5,160 1,183
--------- ---------
Total Cablevision $186,540 $196,113
========= =========
Nine Months Ended
September 30,
-------------------
2005(a) 2004(a)
--------- ---------
CAPITAL EXPENDITURES
--------------------
Consumer premise equipment $345,299 $348,953
Scalable infrastructure 50,881 43,800
Line extensions 23,923 20,407
Upgrade/rebuild 5,479 7,515
Support 51,122 32,531
--------- ---------
Total Cable Television(b) 476,704 453,206
Lightpath(b) 19,391 30,268
--------- ---------
Total Telecommunications 496,095 483,474
Rainbow 19,637 20,698
MSG 11,398 6,527
Other (Corporate and Theatres) 12,928 8,033
--------- ---------
Total Cablevision $540,058 $518,732
========= =========
(a) Excludes the capital expenditures of FSN Ohio, FSN Florida and
Rainbow DBS (distribution operations) which are reported as
discontinued operations.
(b) Optimum Online for business has been reclassified from Lightpath
to Cable Television for all periods presented.
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