x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended
|
June 30, 2014
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
|
|
to
|
|
|
Commission File Number
|
|
Registrant; State of Incorporation; Address and Telephone Number
|
|
IRS Employer Identification No.
|
|
|
|
|
|
1-14764
|
|
Cablevision Systems Corporation
|
|
11-3415180
|
|
|
Delaware
|
|
|
|
|
1111 Stewart Avenue
|
|
|
|
|
Bethpage, New York 11714
|
|
|
|
|
(516) 803-2300
|
|
|
|
|
|
|
|
1-9046
|
|
CSC Holdings, LLC
|
|
27-0726696
|
|
|
Delaware
|
|
|
|
|
1111 Stewart Avenue
|
|
|
|
|
Bethpage, New York 11714
|
|
|
|
|
(516) 803-2300
|
|
|
Cablevision Systems Corporation
|
Yes
|
x
|
|
No
|
o
|
|
CSC Holdings, LLC
|
Yes
|
x
|
|
No
|
o
|
|
Large accelerated
filer
|
|
Accelerated
filer
|
|
Non-accelerated
filer
|
|
Smaller
Reporting
Company
|
|||||||||||||||
Cablevision Systems Corporation
|
Yes
|
x
|
|
No
|
o
|
|
Yes
|
o
|
|
No
|
x
|
|
Yes
|
o
|
|
No
|
x
|
|
Yes
|
o
|
No
|
x
|
CSC Holdings, LLC
|
Yes
|
o
|
|
No
|
x
|
|
Yes
|
o
|
|
No
|
x
|
|
Yes
|
x
|
|
No
|
o
|
|
Yes
|
o
|
No
|
x
|
Cablevision Systems Corporation
|
Yes
|
o
|
|
No
|
x
|
CSC Holdings, LLC
|
Yes
|
o
|
|
No
|
x
|
Cablevision NY Group Class A Common Stock -
|
216,995,518
|
Cablevision NY Group Class B Common Stock -
|
54,137,673
|
CSC Holdings, LLC Interests of Member -
|
17,631,479
|
|
|
Page
|
PART I.
|
FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
Financial Statements of Cablevision Systems Corporation and Subsidiaries
|
|
|
2
|
|
|
|
|
|
4
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
|
Financial Statements of CSC Holdings, LLC and Subsidiaries
|
|
|
|
|
|
7
|
|
|
|
|
|
9
|
|
|
|
|
|
10
|
|
|
|
|
|
11
|
|
|
|
|
|
12
|
|
|
|
|
Item 2.
|
30
|
|
|
|
|
Item 3.
|
62
|
|
|
|
|
Item 4.
|
63
|
|
|
|
|
PART II.
|
OTHER INFORMATION
|
|
|
|
|
Item 1.
|
64
|
|
|
|
|
Item 6.
|
64
|
|
|
|
|
65
|
PART I.
|
FINANCIAL INFORMATION
|
· | the level of our revenues; |
· | competition for subscribers from existing competitors (such as telephone companies, direct broadcast satellite ("DBS") distributors, and Internet-based providers) and new competitors (such as high-speed wireless providers) entering our franchise areas; |
· | demand for our video, high-speed data and voice services, which is impacted by competition from other services and the other factors discussed herein; |
· | industry conditions; |
· | changes in the laws or regulations under which we operate; |
· | the outcome of litigation and other proceedings, including the matters described in Note 13 of the combined notes to our condensed consolidated financial statements; |
· | general economic conditions in the areas in which we operate; |
· | the state of the market for debt securities and bank loans; |
· | demand for advertising in our newspapers along with subscriber and single copy outlet sales demand for our newspapers; |
· | the level of our capital expenditures; |
· | the level of our expenses, including the cost of programming; |
· | future acquisitions and dispositions of assets; |
· | market demand for new services; |
· | demand for advertising on our cable television systems; |
· | the tax-free treatment of the MSG Distribution and the AMC Networks Distribution (each as defined herein); |
· | whether pending uncompleted transactions, if any, are completed on the terms and at the times set forth (if at all); |
· | other risks and uncertainties inherent in the cable television and newspaper publishing businesses, and our other businesses; |
· | financial community and rating agency perceptions of our business, operations, financial condition and the industries in which we operate; and |
· | the factors described in our filings with the Securities and Exchange Commission, including under the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein. |
Item 1.
|
Financial Statements
|
|
June 30,
2014
|
December 31, 2013
|
||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
906,789
|
$
|
702,224
|
||||
Restricted cash
|
250
|
250
|
||||||
Accounts receivable, trade (less allowance for doubtful accounts of $15,754 and $14,614)
|
287,285
|
283,079
|
||||||
Prepaid expenses and other current assets
|
159,753
|
158,183
|
||||||
Amounts due from affiliates
|
1,660
|
1,520
|
||||||
Deferred tax asset
|
22,599
|
159,824
|
||||||
Investment securities pledged as collateral
|
576,459
|
419,354
|
||||||
Total current assets
|
1,954,795
|
1,724,434
|
||||||
|
||||||||
Property, plant and equipment, net of accumulated depreciation of $9,356,863 and $9,264,848
|
2,960,014
|
2,978,353
|
||||||
Other receivables
|
1,269
|
1,683
|
||||||
Investment securities pledged as collateral
|
576,459
|
696,730
|
||||||
Derivative contracts
|
8,980
|
3,385
|
||||||
Other assets
|
46,480
|
29,184
|
||||||
Amortizable intangible assets, net of accumulated amortization of $82,162 and $78,047
|
45,762
|
49,952
|
||||||
Indefinite-lived cable television franchises
|
731,848
|
731,848
|
||||||
Trademarks and other indefinite-lived intangible assets
|
7,450
|
7,450
|
||||||
Goodwill
|
264,690
|
264,690
|
||||||
Deferred financing costs, net of accumulated amortization of $50,147 and $42,602
|
103,381
|
103,367
|
||||||
|
$
|
6,701,128
|
$
|
6,591,076
|
|
June 30,
2014
|
December 31,
2013
|
||||||
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
427,396
|
$
|
422,929
|
||||
Accrued liabilities
|
530,066
|
500,925
|
||||||
Amounts due to affiliates
|
31,173
|
30,941
|
||||||
Deferred revenue
|
50,518
|
47,229
|
||||||
Liabilities under derivative contracts
|
68,386
|
99,577
|
||||||
Credit facility debt
|
63,869
|
47,463
|
||||||
Collateralized indebtedness
|
417,273
|
248,388
|
||||||
Capital lease obligations
|
14,733
|
12,025
|
||||||
Notes payable
|
12,948
|
3,744
|
||||||
Senior notes
|
-
|
27,831
|
||||||
Total current liabilities
|
1,616,362
|
1,441,052
|
||||||
|
||||||||
Deferred revenue
|
4,928
|
5,235
|
||||||
Liabilities under derivative contracts
|
9,431
|
47,370
|
||||||
Other liabilities
|
320,186
|
381,830
|
||||||
Deferred tax liability
|
516,645
|
570,056
|
||||||
Credit facility debt
|
2,946,378
|
3,718,682
|
||||||
Collateralized indebtedness
|
516,635
|
569,562
|
||||||
Capital lease obligations
|
24,169
|
19,265
|
||||||
Notes payable
|
16,780
|
1,590
|
||||||
Senior notes and debentures
|
5,862,828
|
5,110,684
|
||||||
Total liabilities
|
11,834,342
|
11,865,326
|
||||||
Commitments and contingencies
|
||||||||
Redeemable noncontrolling interests
|
9,621
|
9,294
|
||||||
Stockholders' Deficiency:
|
||||||||
Preferred Stock, $.01 par value, 50,000,000 shares authorized, none issued
|
-
|
-
|
||||||
CNYG Class A common stock, $.01 par value, 800,000,000 shares authorized, 296,907,162 and 292,489,017 shares issued and 217,045,478 and 213,598,590 shares outstanding
|
2,969
|
2,925
|
||||||
CNYG Class B common stock, $.01 par value, 320,000,000 shares authorized, 54,137,673 shares issued and outstanding
|
541
|
541
|
||||||
RMG Class A common stock, $.01 par value, 600,000,000 shares authorized, none issued
|
-
|
-
|
||||||
RMG Class B common stock, $.01 par value, 160,000,000 shares authorized, none issued
|
-
|
-
|
||||||
Paid-in capital
|
849,760
|
885,601
|
||||||
Accumulated deficit
|
(4,362,326
|
)
|
(4,546,299
|
)
|
||||
|
(3,509,056
|
)
|
(3,657,232
|
)
|
||||
Treasury stock, at cost (79,861,684 and 78,890,427 CNYG Class A common shares)
|
(1,591,018
|
)
|
(1,584,404
|
)
|
||||
Accumulated other comprehensive loss
|
(43,127
|
)
|
(42,694
|
)
|
||||
Total stockholders' deficiency
|
(5,143,201
|
)
|
(5,284,330
|
)
|
||||
Noncontrolling interest
|
366
|
786
|
||||||
Total deficiency
|
(5,142,835
|
)
|
(5,283,544
|
)
|
||||
|
$
|
6,701,128
|
$
|
6,591,076
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Revenues, net (including revenues, net from affiliates of $1,586, $2,035, $2,910, and $3,179, respectively) (See Note 15)
|
$
|
1,628,137
|
$
|
1,569,619
|
$
|
3,203,723
|
$
|
3,080,847
|
||||||||
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Technical and operating (excluding depreciation, amortization and impairments shown below and including net charges from affiliates of $45,714, $39,221, $91,782, and $85,342, respectively) (See Note 15)
|
788,317
|
764,343
|
1,561,300
|
1,552,384
|
||||||||||||
Selling, general and administrative (including net charges from affiliates of $1,014, $570, $2,316, and $1,376, respectively) (See Note 15)
|
363,187
|
378,517
|
743,407
|
769,753
|
||||||||||||
Restructuring expense (credits)
|
(348
|
)
|
(273
|
)
|
667
|
(638
|
)
|
|||||||||
Depreciation and amortization (including impairments)
|
221,088
|
229,269
|
435,373
|
454,198
|
||||||||||||
|
1,372,244
|
1,371,856
|
2,740,747
|
2,775,697
|
||||||||||||
|
||||||||||||||||
Operating income
|
255,893
|
197,763
|
462,976
|
305,150
|
||||||||||||
|
||||||||||||||||
Other income (expense):
|
||||||||||||||||
Interest expense, net
|
(143,135
|
)
|
(159,303
|
)
|
(284,017
|
)
|
(312,587
|
)
|
||||||||
Gain (loss) on investments, net
|
78,612
|
(2,789
|
)
|
36,837
|
96,669
|
|||||||||||
Gain (loss) on equity derivative contracts, net
|
(32,613
|
)
|
19,206
|
6,036
|
(52,510
|
)
|
||||||||||
Loss on extinguishment of debt and write-off of deferred financing costs
|
(7,687
|
)
|
(6,637
|
)
|
(8,298
|
)
|
(6,637
|
)
|
||||||||
Miscellaneous, net
|
1,806
|
489
|
2,537
|
868
|
||||||||||||
|
(103,017
|
)
|
(149,034
|
)
|
(246,905
|
)
|
(274,197
|
)
|
||||||||
Income from continuing operations before income taxes
|
152,876
|
48,729
|
216,071
|
30,953
|
||||||||||||
Income tax expense
|
(61,848
|
)
|
(20,507
|
)
|
(34,909
|
)
|
(9,864
|
)
|
||||||||
Income from continuing operations
|
91,028
|
28,222
|
181,162
|
21,089
|
||||||||||||
Income from discontinued operations, net of income taxes
|
3,510
|
107,495
|
3,076
|
98,230
|
||||||||||||
Net income
|
94,538
|
135,717
|
184,238
|
119,319
|
||||||||||||
Net income attributable to noncontrolling interests
|
(328
|
)
|
(358
|
)
|
(265
|
)
|
(101
|
)
|
||||||||
Net income attributable to Cablevision Systems Corporation stockholders
|
$
|
94,210
|
$
|
135,359
|
$
|
183,973
|
$
|
119,218
|
||||||||
|
||||||||||||||||
Basic income per share attributable to Cablevision Systems Corporation stockholders:
|
||||||||||||||||
|
||||||||||||||||
Income from continuing operations
|
$
|
0.34
|
$
|
0.11
|
$
|
0.69
|
$
|
0.08
|
||||||||
|
||||||||||||||||
Income from discontinued operations
|
$
|
0.01
|
$
|
0.41
|
$
|
0.01
|
$
|
0.38
|
||||||||
|
||||||||||||||||
Net income
|
$
|
0.36
|
$
|
0.52
|
$
|
0.70
|
$
|
0.46
|
||||||||
|
||||||||||||||||
Basic weighted average common shares (in thousands)
|
263,730
|
260,614
|
263,033
|
260,060
|
||||||||||||
|
||||||||||||||||
Diluted income per share attributable to Cablevision Systems Corporation stockholders:
|
||||||||||||||||
|
||||||||||||||||
Income from continuing operations
|
$
|
0.34
|
$
|
0.11
|
$
|
0.67
|
$
|
0.08
|
||||||||
|
||||||||||||||||
Income from discontinued operations
|
$
|
0.01
|
$
|
0.41
|
$
|
0.01
|
$
|
0.37
|
||||||||
|
||||||||||||||||
Net income
|
$
|
0.35
|
$
|
0.51
|
$
|
0.68
|
$
|
0.45
|
||||||||
|
||||||||||||||||
Diluted weighted average common shares (in thousands)
|
269,260
|
264,828
|
268,729
|
264,434
|
||||||||||||
|
||||||||||||||||
Amounts attributable to Cablevision Systems Corporation stockholders:
|
||||||||||||||||
Income from continuing operations, net of income taxes
|
$
|
90,700
|
$
|
27,864
|
$
|
180,897
|
$
|
20,988
|
||||||||
Income from discontinued operations, net of income taxes
|
3,510
|
107,495
|
3,076
|
98,230
|
||||||||||||
Net income
|
$
|
94,210
|
$
|
135,359
|
$
|
183,973
|
$
|
119,218
|
||||||||
Cash dividends declared per share of common stock
|
$
|
0.15
|
$
|
0.15
|
$
|
0.30
|
$
|
0.30
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
||||||||||||||||
Net income
|
$
|
94,538
|
$
|
135,717
|
$
|
184,238
|
$
|
119,319
|
||||||||
|
||||||||||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Defined benefit pension plans and postretirement plans:
|
||||||||||||||||
Unrecognized gain (loss) due to remeasurement
|
3,116
|
-
|
(3,128
|
)
|
-
|
|||||||||||
Amortization of actuarial losses, net included in net periodic benefit cost
|
400
|
210
|
730
|
419
|
||||||||||||
Settlement loss included in net periodic benefit cost
|
875
|
-
|
1,965
|
-
|
||||||||||||
|
||||||||||||||||
Comprehensive income
|
98,929
|
135,927
|
183,805
|
119,738
|
||||||||||||
Comprehensive income attributable to noncontrolling interests
|
(328
|
)
|
(358
|
)
|
(265
|
)
|
(101
|
)
|
||||||||
Comprehensive income attributable to Cablevision Systems Corporation stockholders
|
$
|
98,601
|
$
|
135,569
|
$
|
183,540
|
$
|
119,637
|
|
2014
|
2013
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
184,238
|
$
|
119,319
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Income from discontinued operations, net of income taxes
|
(3,076
|
)
|
(98,230
|
)
|
||||
Depreciation and amortization (including impairments)
|
435,373
|
454,198
|
||||||
Gain on investments, net
|
(36,837
|
)
|
(96,669
|
)
|
||||
Loss (gain) on equity derivative contracts, net
|
(6,036
|
)
|
52,510
|
|||||
Loss on extinguishment of debt and write-off of deferred financing costs
|
8,298
|
6,637
|
||||||
Amortization of deferred financing costs and discounts on indebtedness
|
11,324
|
13,432
|
||||||
Share-based compensation expense related to equity classified awards
|
22,601
|
28,292
|
||||||
Settlement loss and amortization of actuarial losses related to pension and postretirement plans | 4,565 | 709 | ||||||
Deferred income taxes
|
81,485
|
8,645
|
||||||
Provision for doubtful accounts
|
21,043
|
27,262
|
||||||
Excess tax benefit related to share-based awards
|
(746
|
)
|
-
|
|||||
Changes in other assets and liabilities
|
(14,754
|
)
|
(14,539
|
)
|
||||
Net cash provided by operating activities
|
707,478
|
501,566
|
||||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(425,193
|
)
|
(495,850
|
)
|
||||
Proceeds related to sale of equipment, including costs of disposal
|
3,209
|
3,748
|
||||||
Increase in other investments
|
(616
|
)
|
-
|
|||||
Additions to other intangible assets
|
(540
|
)
|
(2,183
|
)
|
||||
Net cash used in investing activities
|
(423,140
|
)
|
(494,285
|
)
|
||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Proceeds from credit facility debt, net of discount
|
-
|
3,296,760
|
||||||
Repayment of credit facility debt
|
(759,861
|
)
|
(3,274,001
|
)
|
||||
Repayment of notes payable
|
(2,306
|
)
|
-
|
|||||
Proceeds from issuance of senior notes
|
750,000
|
-
|
||||||
Repurchase of senior notes, including fees
|
(27,173
|
)
|
-
|
|||||
Proceeds from collateralized indebtedness
|
273,519
|
326,445
|
||||||
Repayment of collateralized indebtedness and related derivative contracts
|
(226,250
|
)
|
(288,108
|
)
|
||||
Proceeds from stock option exercises
|
21,159
|
3,722
|
||||||
Dividend distributions to common stockholders
|
(80,630
|
)
|
(81,242
|
)
|
||||
Principal payments on capital lease obligations
|
(7,030
|
)
|
(7,505
|
)
|
||||
Deemed repurchases of restricted stock
|
(6,608
|
)
|
(11,384
|
)
|
||||
Additions to deferred financing costs
|
(13,579
|
)
|
(26,535
|
)
|
||||
Distributions to noncontrolling interests, net
|
(778
|
)
|
(250
|
)
|
||||
Excess tax benefit related to share-based awards
|
746
|
-
|
||||||
Net cash used in financing activities
|
(78,791
|
)
|
(62,098
|
)
|
||||
|
||||||||
Net increase (decrease) in cash and cash equivalents from continuing operations
|
205,547
|
(54,817
|
)
|
|||||
|
||||||||
Cash flows of discontinued operations:
|
||||||||
Net cash provided by (used in) operating activities
|
(786
|
)
|
224,528
|
|||||
Net cash used in investing activities
|
(196
|
)
|
(28,683
|
)
|
||||
Net cash used in financing activities
|
-
|
(38,735
|
)
|
|||||
Effect of change in cash related to discontinued operations
|
-
|
14,607
|
||||||
Net increase (decrease) in cash and cash equivalents from discontinued operations
|
(982
|
)
|
171,717
|
|||||
|
||||||||
Cash and cash equivalents at beginning of year
|
702,224
|
332,610
|
||||||
|
||||||||
Cash and cash equivalents at end of period
|
$
|
906,789
|
$
|
449,510
|
|
June 30,
2014
|
December 31, 2013
|
||||||
ASSETS
|
||||||||
|
||||||||
Current Assets:
|
||||||||
|
||||||||
Cash and cash equivalents
|
$
|
857,930
|
$
|
651,058
|
||||
Restricted cash
|
250
|
250
|
||||||
Accounts receivable, trade (less allowance for doubtful accounts of $15,754 and $14,614)
|
287,285
|
283,079
|
||||||
Prepaid expenses and other current assets
|
156,460
|
154,626
|
||||||
Amounts due from affiliates
|
1,656
|
115,538
|
||||||
Investment securities pledged as collateral
|
576,459
|
419,354
|
||||||
Total current assets
|
1,880,040
|
1,623,905
|
||||||
|
||||||||
Property, plant and equipment, net of accumulated depreciation of $9,356,863 and $9,264,848
|
2,960,014
|
2,978,353
|
||||||
Other receivables
|
1,269
|
1,683
|
||||||
Investment securities pledged as collateral
|
576,459
|
696,730
|
||||||
Derivative contracts
|
8,980
|
3,385
|
||||||
Other assets
|
46,480
|
29,184
|
||||||
Amortizable intangible assets, net of accumulated amortization of $82,162 and $78,047
|
45,762
|
49,952
|
||||||
Indefinite-lived cable television franchises
|
731,848
|
731,848
|
||||||
Trademarks and other indefinite-lived intangible assets
|
7,450
|
7,450
|
||||||
Goodwill
|
264,690
|
264,690
|
||||||
Deferred financing costs, net of accumulated amortization of $27,824 and $23,376
|
65,898
|
61,367
|
||||||
|
$
|
6,588,890
|
$
|
6,448,547
|
|
June 30,
2014
|
December 31, 2013
|
||||||
LIABILITIES AND MEMBER DEFICIENCY
|
||||||||
|
||||||||
Current Liabilities:
|
||||||||
|
||||||||
Accounts payable
|
$
|
427,396
|
$
|
422,929
|
||||
Accrued liabilities
|
472,455
|
443,550
|
||||||
Amounts due to affiliates
|
74,256
|
30,887
|
||||||
Deferred tax liability
|
118,306
|
60,582
|
||||||
Deferred revenue
|
50,518
|
47,229
|
||||||
Liabilities under derivative contracts
|
68,386
|
99,577
|
||||||
Credit facility debt
|
63,869
|
47,463
|
||||||
Collateralized indebtedness
|
417,273
|
248,388
|
||||||
Capital lease obligations
|
14,733
|
12,025
|
||||||
Notes payable
|
12,948
|
3,744
|
||||||
Total current liabilities
|
1,720,140
|
1,416,374
|
||||||
|
||||||||
Deferred revenue
|
4,928
|
5,235
|
||||||
Liabilities under derivative contracts
|
9,431
|
47,370
|
||||||
Other liabilities
|
317,151
|
377,221
|
||||||
Deferred tax liability
|
539,600
|
617,837
|
||||||
Credit facility debt
|
2,946,378
|
3,718,682
|
||||||
Collateralized indebtedness
|
516,635
|
569,562
|
||||||
Capital lease obligations
|
24,169
|
19,265
|
||||||
Notes payable
|
16,780
|
1,590
|
||||||
Senior notes and debentures
|
3,060,735
|
2,309,403
|
||||||
Total liabilities
|
9,155,947
|
9,082,539
|
||||||
|
||||||||
Commitments and contingencies
|
||||||||
|
||||||||
Redeemable noncontrolling interests
|
9,621
|
9,294
|
||||||
|
||||||||
Member's Deficiency:
|
||||||||
Accumulated deficit
|
(2,224,186
|
)
|
(2,486,073
|
)
|
||||
Senior notes due from Cablevision
|
(611,455
|
)
|
(611,455
|
)
|
||||
Other member's equity (17,631,479 membership units issued and outstanding)
|
301,724
|
496,150
|
||||||
|
(2,533,917
|
)
|
(2,601,378
|
)
|
||||
Accumulated other comprehensive loss
|
(43,127
|
)
|
(42,694
|
)
|
||||
Total member's deficiency
|
(2,577,044
|
)
|
(2,644,072
|
)
|
||||
Noncontrolling interest
|
366
|
786
|
||||||
Total deficiency
|
(2,576,678
|
)
|
(2,643,286
|
)
|
||||
|
$
|
6,588,890
|
$
|
6,448,547
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Revenues, net (including revenues, net from affiliates of $1,586, $2,035, $2,910, and $3,179, respectively) (See Note 15)
|
$
|
1,628,137
|
$
|
1,569,619
|
$
|
3,203,723
|
$
|
3,080,847
|
||||||||
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Technical and operating (excluding depreciation, amortization and impairments shown below and including net charges from affiliates of $45,714, $39,221, $91,782, and $85,342, respectively) (See Note 15)
|
788,317
|
764,343
|
1,561,300
|
1,552,384
|
||||||||||||
Selling, general and administrative (including net charges from affiliates of $1,014, $570, $2,316, and $1,376, respectively) (See Note 15)
|
363,187
|
378,517
|
743,407
|
769,753
|
||||||||||||
Restructuring expense (credits)
|
(348
|
)
|
(273
|
)
|
667
|
(638
|
)
|
|||||||||
Depreciation and amortization (including impairments)
|
221,088
|
229,269
|
435,373
|
454,198
|
||||||||||||
|
1,372,244
|
1,371,856
|
2,740,747
|
2,775,697
|
||||||||||||
|
||||||||||||||||
Operating income
|
255,893
|
197,763
|
462,976
|
305,150
|
||||||||||||
|
||||||||||||||||
Other income (expense):
|
||||||||||||||||
Interest expense
|
(87,580
|
)
|
(102,507
|
)
|
(172,800
|
)
|
(199,071
|
)
|
||||||||
Interest income
|
12,117
|
14,855
|
24,202
|
29,712
|
||||||||||||
Gain (loss) on investments, net
|
78,612
|
(2,789
|
)
|
36,837
|
96,669
|
|||||||||||
Gain (loss) on equity derivative contracts, net
|
(32,613
|
)
|
19,206
|
6,036
|
(52,510
|
)
|
||||||||||
Loss on extinguishment of debt and write-off of deferred financing costs
|
(7,687
|
)
|
(6,637
|
)
|
(7,687
|
)
|
(6,637
|
)
|
||||||||
Miscellaneous, net
|
1,806
|
489
|
2,537
|
868
|
||||||||||||
|
(35,345
|
)
|
(77,383
|
)
|
(110,875
|
)
|
(130,969
|
)
|
||||||||
Income from continuing operations before income taxes
|
220,548
|
120,380
|
352,101
|
174,181
|
||||||||||||
Income tax expense
|
(91,227
|
)
|
(50,331
|
)
|
(93,025
|
)
|
(70,177
|
)
|
||||||||
Income from continuing operations
|
129,321
|
70,049
|
259,076
|
104,004
|
||||||||||||
Income from discontinued operations, net of income taxes
|
3,510
|
106,492
|
3,076
|
97,227
|
||||||||||||
Net income
|
132,831
|
176,541
|
262,152
|
201,231
|
||||||||||||
Net income attributable to noncontrolling interests
|
(328
|
)
|
(358
|
)
|
(265
|
)
|
(101
|
)
|
||||||||
Net income attributable to CSC Holdings, LLC's sole member
|
$
|
132,503
|
$
|
176,183
|
$
|
261,887
|
$
|
201,130
|
||||||||
|
||||||||||||||||
Amounts attributable to CSC Holdings, LLC's sole member:
|
||||||||||||||||
Income from continuing operations, net of income taxes
|
$
|
128,993
|
$
|
69,691
|
$
|
258,811
|
$
|
103,903
|
||||||||
Income from discontinued operations, net of income taxes
|
3,510
|
106,492
|
3,076
|
97,227
|
||||||||||||
Net income
|
$
|
132,503
|
$
|
176,183
|
$
|
261,887
|
$
|
201,130
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
||||||||||||||||
Net income
|
$
|
132,831
|
$
|
176,541
|
$
|
262,152
|
$
|
201,231
|
||||||||
|
||||||||||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Defined benefit pension plans and postretirement plans:
|
||||||||||||||||
Unrecognized gain (loss) due to remeasurement
|
3,116
|
-
|
(3,128
|
)
|
-
|
|||||||||||
Amortization of actuarial losses, net included in net periodic benefit cost
|
400
|
210
|
730
|
419
|
||||||||||||
Settlement loss included in net periodic benefit cost
|
875
|
-
|
1,965
|
-
|
||||||||||||
|
||||||||||||||||
Comprehensive income
|
137,222
|
176,751
|
261,719
|
201,650
|
||||||||||||
Comprehensive income attributable to noncontrolling interests
|
(328
|
)
|
(358
|
)
|
(265
|
)
|
(101
|
)
|
||||||||
Comprehensive income attributable to CSC Holdings, LLC's sole member
|
$
|
136,894
|
$
|
176,393
|
$
|
261,454
|
$
|
201,549
|
|
2014
|
2013
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
262,152
|
$
|
201,231
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Income from discontinued operations, net of income taxes
|
(3,076
|
)
|
(97,227
|
)
|
||||
Depreciation and amortization (including impairments)
|
435,373
|
454,198
|
||||||
Gain on investments, net
|
(36,837
|
)
|
(96,669
|
)
|
||||
Loss (gain) on equity derivative contracts, net
|
(6,036
|
)
|
52,510
|
|||||
Loss on extinguishment of debt and write-off of deferred financing costs
|
7,687
|
6,637
|
||||||
Amortization of deferred financing costs and discounts on indebtedness
|
7,263
|
9,627
|
||||||
Share-based compensation expense related to Cablevision equity classified awards
|
22,601
|
28,292
|
||||||
Settlement loss and amortization of actuarial losses related to pension and postretirement plans
|
4,565 | 709 | ||||||
Deferred income taxes
|
(19,940
|
)
|
30,738
|
|||||
Provision for doubtful accounts
|
21,043
|
27,262
|
||||||
Excess tax benefit related to share-based awards
|
(1,587
|
)
|
(8,760
|
)
|
||||
Changes in other assets and liabilities
|
140,803
|
53,745
|
||||||
Net cash provided by operating activities
|
834,011
|
662,293
|
||||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(425,193
|
)
|
(495,850
|
)
|
||||
Proceeds related to sale of equipment, including costs of disposal
|
3,209
|
3,748
|
||||||
Increase in other investments
|
(616
|
)
|
-
|
|||||
Additions to other intangible assets
|
(540
|
)
|
(2,183
|
)
|
||||
Net cash used in investing activities
|
(423,140
|
)
|
(494,285
|
)
|
||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Proceeds from credit facility debt, net of discount
|
-
|
3,296,760
|
||||||
Repayment of credit facility debt
|
(759,861
|
)
|
(3,274,001
|
)
|
||||
Repayment of notes payable
|
(2,306
|
)
|
-
|
|||||
Proceeds from issuance of senior notes
|
750,000
|
-
|
||||||
Proceeds from collateralized indebtedness
|
273,519
|
326,445
|
||||||
Repayment of collateralized indebtedness and related derivative contracts
|
(226,250
|
)
|
(288,108
|
)
|
||||
Distributions to Cablevision
|
(218,319
|
)
|
(231,645
|
)
|
||||
Principal payments on capital lease obligations
|
(7,030
|
)
|
(7,505
|
)
|
||||
Additions to deferred financing costs
|
(13,579
|
)
|
(26,535
|
)
|
||||
Distributions to noncontrolling interests, net
|
(778
|
)
|
(250
|
)
|
||||
Excess tax benefit related to share-based awards
|
1,587
|
8,760
|
||||||
Net cash used in financing activities
|
(203,017
|
)
|
(196,079
|
)
|
||||
|
||||||||
Net increase (decrease) in cash and cash equivalents from continuing operations
|
207,854
|
(28,071
|
)
|
|||||
|
||||||||
Cash flows of discontinued operations:
|
||||||||
Net cash provided by (used in) operating activities
|
(786
|
)
|
224,528
|
|||||
Net cash used in investing activities
|
(196
|
)
|
(28,683
|
)
|
||||
Net cash used in financing activities
|
-
|
(38,735
|
)
|
|||||
Effect of change in cash related to discontinued operations
|
-
|
14,607
|
||||||
Net increase (decrease) in cash and cash equivalents from discontinued operations
|
(982
|
)
|
171,717
|
|||||
|
||||||||
Cash and cash equivalents at beginning of year
|
651,058
|
256,744
|
||||||
|
||||||||
Cash and cash equivalents at end of period
|
$
|
857,930
|
$
|
400,390
|
NOTE 1.
|
BUSINESS
|
NOTE 2.
|
BASIS OF PRESENTATION
|
NOTE 3.
|
DIVIDENDS
|
Declaration Date
|
Dividend Per Share
|
Record Date
|
Payment Date
|
||||
February 25, 2014
|
$
|
0.15
|
March 14, 2014
|
April 3, 2014
|
|||
May 6, 2014
|
$
|
0.15
|
May 23, 2014
|
June 13, 2014
|
· | Cablevision's dividends paid; |
· | Cablevision's interest payments on its senior notes; |
· | Cablevision’s repurchases of certain outstanding senior notes; and |
· | Cablevision's payments for the acquisition of treasury shares related to statutory minimum tax withholding obligations upon the vesting of certain restricted shares. |
NOTE 4.
|
INCOME PER SHARE ATTRIBUTABLE TO STOCKHOLDERS
|
|
Three Months
|
Six Months
|
Three Months
|
Six Months
|
||||||||||||
|
Ended June 30, 2014
|
Ended June 30, 2013
|
||||||||||||||
|
(in thousands)
|
|||||||||||||||
Basic weighted average shares outstanding
|
263,730
|
263,033
|
260,614
|
260,060
|
||||||||||||
Effect of dilution:
|
||||||||||||||||
Stock options
|
3,456
|
3,420
|
2,661
|
2,425
|
||||||||||||
Restricted stock awards
|
2,074
|
2,276
|
1,553
|
1,949
|
||||||||||||
Diluted weighted average shares outstanding
|
269,260
|
268,729
|
264,828
|
264,434
|
NOTE 5.
|
GROSS VERSUS NET REVENUE RECOGNITION
|
NOTE 6.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Six Months Ended June 30,
|
|||||||
|
2014
|
2013
|
||||||
Non-Cash Investing and Financing Activities of Cablevision and CSC Holdings:
|
||||||||
Continuing Operations:
|
||||||||
Capital lease obligations
|
$
|
14,642
|
$
|
11,331
|
||||
Intangible asset obligations
|
157
|
3,570
|
||||||
Property and equipment accrued but unpaid
|
41,593
|
74,054
|
||||||
Notes payable to vendor
|
34,522
|
-
|
||||||
Non-Cash Investing and Financing Activities of Cablevision:
|
||||||||
Dividends payable on unvested restricted share awards
|
1,830
|
1,930
|
||||||
Supplemental Data:
|
||||||||
Continuing Operations - Cablevision:
|
||||||||
Cash interest paid
|
269,231
|
298,862
|
||||||
Income taxes paid, net
|
5,081
|
5,754
|
||||||
Continuing Operations - CSC Holdings:
|
||||||||
Cash interest paid
|
161,413
|
190,412
|
||||||
Income taxes paid, net
|
5,081
|
5,754
|
||||||
Discontinued Operations - Cablevision and CSC Holdings:
|
||||||||
Cash interest paid
|
-
|
26,606
|
NOTE 7.
|
DISCONTINUED OPERATIONS
|
|
Three Months Ended June 30, 2014
|
|||||||||||
|
Bresnan
Cable(a)
|
Clearview Cinemas
|
Total
|
|||||||||
Revenues, net
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Income (loss) before income taxes
|
$
|
6,598
|
$
|
(408
|
)
|
$
|
6,190
|
|||||
Income tax benefit (expense)
|
(2,847
|
)
|
167
|
(2,680
|
)
|
|||||||
Income (loss) from discontinued operations, net of income taxes
|
$
|
3,751
|
$
|
(241
|
)
|
$
|
3,510
|
|
Six Months Ended June 30, 2014
|
|||||||||||
|
Bresnan
Cable(a)
|
Clearview Cinemas
|
Total
|
|||||||||
Revenues, net
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Income (loss) before income taxes
|
$
|
5,932
|
$
|
(477
|
)
|
$
|
5,455
|
|||||
Income tax benefit (expense)
|
(2,574
|
)
|
195
|
(2,379
|
)
|
|||||||
Income (loss) from discontinued operations, net of income taxes
|
$
|
3,358
|
$
|
(282
|
)
|
$
|
3,076
|
|
Three Months Ended June 30, 2013
|
|||||||||||||||
|
Bresnan
|
Clearview(b)
|
Litigation Settlement(c)
|
Total
|
||||||||||||
Revenues, net
|
$
|
132,041
|
$
|
14,868
|
$
|
-
|
$
|
146,909
|
||||||||
Income (loss) before income taxes
|
$
|
29,274
|
$
|
(22,996
|
)
|
$
|
174,001
|
$
|
180,279
|
|||||||
Income tax benefit (expense)
|
(11,996
|
)
|
9,393
|
(70,181
|
)
|
(72,784
|
)
|
|||||||||
Income (loss) from discontinued operations, net of income taxes - Cablevision
|
17,278
|
(13,603
|
)
|
103,820
|
107,495
|
|||||||||||
Income tax benefit recognized at Cablevision, not applicable to CSC Holdings
|
-
|
-
|
(1,003
|
)
|
(1,003
|
)
|
||||||||||
Income (loss) from discontinued operations, net of income taxes - CSC Holdings
|
$
|
17,278
|
$
|
(13,603
|
)
|
$
|
102,817
|
$
|
106,492
|
|
Six Months Ended June 30, 2013
|
|||||||||||||||
|
Bresnan
|
Clearview(b)(d)
|
Litigation Settlement(c)
|
Total
|
||||||||||||
Revenues, net
|
$
|
262,323
|
$
|
27,307
|
$
|
-
|
$
|
289,630
|
||||||||
Income (loss) before income taxes
|
$
|
30,050
|
$
|
(39,091
|
)
|
$
|
173,687
|
$
|
164,646
|
|||||||
Income tax benefit (expense)
|
(12,335
|
)
|
15,971
|
(70,052
|
)
|
(66,416
|
)
|
|||||||||
Income (loss) from discontinued operations, net of income taxes - Cablevision
|
17,715
|
(23,120
|
)
|
103,635
|
|
98,230
|
||||||||||
Income tax benefit recognized at Cablevision, not applicable to CSC Holdings
|
-
|
-
|
(1,003
|
)
|
(1,003
|
)
|
||||||||||
Income (loss) from discontinued operations, net of income taxes - CSC Holdings
|
$
|
17,715
|
$
|
(23,120
|
)
|
$
|
102,632
|
$
|
97,227
|
(a) | Represents primarily a gain recognized upon the settlement of a contingency related to Montana property taxes. |
(b) | Includes the pretax loss recognized in connection with the Clearview Sale of approximately $18,820. |
(c) | Represents primarily the proceeds from the final allocation of the DISH Network, LLC litigation settlement. |
(d) | As a result of the Company's annual impairment test in the first quarter of 2013, the Company recorded an impairment charge of $10,347, relating to goodwill of the Company's Clearview business which reduced the carrying value to zero. The Company determined the fair value of the Clearview business, which was a single reporting unit, assuming highest and best use, based on either an income or market approach on a theater by theater basis. |
NOTE 8.
|
DEBT
|
NOTE 9.
|
DERIVATIVE CONTRACTS AND COLLATERALIZED INDEBTEDNESS
|
Derivatives Not
Designated as
Hedging
Instruments
|
Balance
Sheet
Location
|
Asset Derivatives
|
Liability Derivatives
|
|||||||||||||||
Fair Value at
June 30,
2014
|
Fair Value at
December 31, 2013
|
Fair Value at
June 30,
2014
|
Fair Value at
December 31,
2013
|
|||||||||||||||
Prepaid forward contracts
|
Current derivative contracts
|
$
|
-
|
$
|
-
|
$
|
68,386
|
$
|
99,577
|
|||||||||
Prepaid forward contracts
|
Long-term derivative contracts
|
8,980
|
3,385
|
9,431
|
47,370
|
|||||||||||||
Total derivative contracts |
$
|
8,980
|
$
|
3,385
|
$
|
77,817
|
$
|
146,947
|
Number of shares
|
5,401,059
|
|||
Collateralized indebtedness settled
|
$
|
(157,561
|
)
|
|
Derivative contracts settled
|
(68,689
|
)
|
||
|
(226,250
|
)
|
||
Proceeds from new monetization contracts
|
273,519
|
|||
Net cash receipt
|
$
|
47,269
|
NOTE 10.
|
FAIR VALUE MEASUREMENT
|
· | Level I - Quoted prices for identical instruments in active markets. |
· | Level II - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
· | Level III - Instruments whose significant value drivers are unobservable. |
At June 30, 2014:
|
||||||||||||||||
|
Level I
|
Level II
|
Level III
|
Total
|
||||||||||||
Assets:
|
||||||||||||||||
Money market funds
|
$
|
801,265
|
$
|
-
|
$
|
-
|
$
|
801,265
|
||||||||
Investment securities
|
138
|
-
|
-
|
138
|
||||||||||||
Investment securities pledged as collateral
|
1,152,918
|
-
|
-
|
1,152,918
|
||||||||||||
Prepaid forward contracts
|
-
|
8,980
|
-
|
8,980
|
||||||||||||
Liabilities:
|
||||||||||||||||
Liabilities under derivative contracts:
|
||||||||||||||||
Prepaid forward contracts
|
-
|
77,817
|
-
|
77,817
|
||||||||||||
At December 31, 2013:
|
||||||||||||||||
|
Level I
|
Level II
|
Level III
|
Total
|
||||||||||||
Assets:
|
||||||||||||||||
Money market funds
|
$
|
608,225
|
$
|
-
|
$
|
-
|
$
|
608,225
|
||||||||
Investment securities
|
138
|
-
|
-
|
138
|
||||||||||||
Investment securities pledged as collateral
|
1,116,084
|
-
|
-
|
1,116,084
|
||||||||||||
Prepaid forward contracts
|
-
|
3,385
|
-
|
3,385
|
||||||||||||
Liabilities:
|
||||||||||||||||
|
||||||||||||||||
Liabilities under derivative contracts:
|
||||||||||||||||
Prepaid forward contracts
|
-
|
146,947
|
-
|
146,947
|
|
|
June 30, 2014
|
|||||||
Fair Value
Hierarchy
|
Carrying
Amount
|
Estimated
Fair Value
|
|||||||
CSC Holdings notes receivable:
|
|
||||||||
Cablevision senior notes held by Newsday Holdings LLC(a)
|
Level II
|
$
|
611,455
|
$
|
692,435
|
||||
Debt instruments:
|
|
||||||||
Credit facility debt(b)
|
Level II
|
$
|
3,010,247
|
$
|
3,016,899
|
||||
Collateralized indebtedness
|
Level II
|
933,908
|
914,760
|
||||||
Senior notes and debentures
|
Level II
|
3,060,735
|
3,386,799
|
||||||
Notes payable
|
Level II
|
29,728
|
29,334
|
||||||
CSC Holdings total debt instruments
|
|
7,034,618
|
7,347,792
|
||||||
|
|
||||||||
Cablevision senior notes
|
Level II
|
2,802,093
|
3,133,318
|
||||||
Cablevision total debt instruments
|
|
$
|
9,836,711
|
$
|
10,481,110
|
|
|
December 31, 2013
|
|||||||
Fair Value
Hierarchy
|
Carrying
Amount
|
Estimated
Fair Value
|
|||||||
CSC Holdings notes receivable:
|
|
||||||||
Cablevision senior notes held by Newsday Holdings LLC(a)
|
Level II
|
$
|
611,455
|
$
|
682,887
|
||||
Debt instruments:
|
|
||||||||
Credit facility debt(b)
|
Level II
|
$
|
3,766,145
|
$
|
3,776,760
|
||||
Collateralized indebtedness
|
Level II
|
817,950
|
809,105
|
||||||
Senior notes and debentures
|
Level II
|
2,309,403
|
2,608,885
|
||||||
Notes payable
|
Level II
|
5,334
|
5,334
|
||||||
CSC Holdings total debt instruments
|
|
6,898,832
|
7,200,084
|
||||||
Cablevision senior notes
|
Level II
|
2,829,112
|
3,101,373
|
||||||
Cablevision total debt instruments
|
|
$
|
9,727,944
|
$
|
10,301,457
|
(a) | These notes are eliminated at the consolidated Cablevision level. |
(b) | The principal amount of the Company's credit facility debt, which bears interest at variable rates, approximates its fair value. |
NOTE 11.
|
INCOME TAXES
|
NOTE 12.
|
EQUITY PLANS
|
Risk-free interest rate
|
2.12
|
%
|
||
Expected life (in years)
|
6.5
|
|||
Dividend yield
|
3.79
|
%
|
||
Volatility
|
42.80
|
%
|
||
Grant date fair value
|
$
|
5.27
|
|
Shares
Under Option
|
Weighted
Average
Exercise
Price Per
Share
|
Weighted
Average Remaining
Contractual
Term
(in years)
|
Aggregate
Intrinsic
Value(a)
|
||||||||||||||||
|
Time
Vesting
Options
|
Performance
Based Vesting
Options
|
||||||||||||||||||
Balance, December 31, 2013
|
4,514,479
|
10,639,125
|
$
|
13.20
|
7.21
|
$
|
71,823
|
|||||||||||||
Granted(b)
|
2,000,000
|
-
|
17.64
|
|||||||||||||||||
Exercised
|
(65,886
|
)
|
(1,531,505
|
)
|
13.68
|
|||||||||||||||
Forfeited/Expired
|
-
|
-
|
-
|
|||||||||||||||||
Balance, June 30, 2014
|
6,448,593
|
9,107,620
|
$
|
13.72
|
7.02
|
$
|
61,296
|
|||||||||||||
Options exercisable at June 30, 2014
|
2,448,593
|
9,107,620
|
$
|
13.00
|
6.27
|
$
|
53,936
|
|||||||||||||
Options expected to vest in the future
|
4,000,000
|
-
|
$
|
15.81
|
9.18
|
$
|
7,360
|
(a) | The aggregate intrinsic value is calculated as the difference between (i) the exercise price of the underlying award and (ii) the quoted price of CNYG Class A common stock on June 30, 2014 or December 31, 2013, as indicated, and June 30, 2014 in the case of options exercisable and options expected to vest in the future. |
(b) | Options are scheduled to cliff vest at the end of three years and expire 10 years from the date of grant. |
|
Number of
Restricted
Shares
|
Number of
Performance
Based
Restricted
Shares
|
Weighted
Average Fair
Value Per
Share at Date of
Grant
|
|||||||||
Unvested award balance, December 31, 2013
|
4,670,513
|
1,534,700
|
$
|
15.89
|
||||||||
Granted
|
2,070,960
|
692,100
|
17.62
|
|||||||||
Vested
|
(652,556
|
)
|
(236,600
|
)
|
25.94
|
|||||||
Awards forfeited
|
(606,127
|
)
|
-
|
14.92
|
||||||||
Unvested award balance, June 30, 2014
|
5,482,790
|
1,990,200
|
$
|
15.41
|
NOTE 13.
|
COMMITMENTS AND CONTINGENCIES
|
NOTE 14.
|
SEGMENT INFORMATION
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Revenues, net from continuing operations
|
||||||||||||||||
Cable
|
$
|
1,454,911
|
$
|
1,402,392
|
$
|
2,872,059
|
$
|
2,758,189
|
||||||||
Lightpath
|
88,030
|
82,469
|
174,784
|
164,945
|
||||||||||||
Other
|
94,868
|
94,521
|
176,350
|
177,439
|
||||||||||||
Inter-segment eliminations(a)
|
(9,672
|
)
|
(9,763
|
)
|
(19,470
|
)
|
(19,726
|
)
|
||||||||
|
$
|
1,628,137
|
$
|
1,569,619
|
$
|
3,203,723
|
$
|
3,080,847
|
||||||||
|
||||||||||||||||
Inter-segment revenues
|
||||||||||||||||
Cable
|
$
|
(436
|
)
|
$
|
(508
|
)
|
$
|
(961
|
)
|
$
|
(891
|
)
|
||||
Lightpath
|
(4,554
|
)
|
(4,552
|
)
|
(9,167
|
)
|
(9,417
|
)
|
||||||||
Other
|
(4,682
|
)
|
(4,703
|
)
|
(9,342
|
)
|
(9,418
|
)
|
||||||||
|
$
|
(9,672
|
)
|
$
|
(9,763
|
)
|
$
|
(19,470
|
)
|
$
|
(19,726
|
)
|
||||
Adjusted operating cash flow (deficit) from continuing operations
|
||||||||||||||||
Cable
|
$
|
478,875
|
$
|
450,777
|
$
|
921,907
|
$
|
829,549
|
||||||||
Lightpath
|
39,262
|
35,776
|
77,745
|
70,620
|
||||||||||||
Other
|
(30,809
|
)
|
(47,518
|
)
|
(78,035
|
)
|
(113,167
|
)
|
||||||||
|
$
|
487,328
|
$
|
439,035
|
$
|
921,617
|
$
|
787,002
|
||||||||
Depreciation and amortization (including impairments) included in continuing operations
|
||||||||||||||||
Cable(b)
|
$
|
(190,649
|
)
|
$
|
(186,046
|
)
|
$
|
(375,855
|
)
|
$
|
(375,192
|
)
|
||||
Lightpath(b)
|
(20,897
|
)
|
(20,739
|
)
|
(40,501
|
)
|
(41,706
|
)
|
||||||||
Other
|
(9,542
|
)
|
(22,484
|
)
|
(19,017
|
)
|
(37,300
|
)
|
||||||||
|
$
|
(221,088
|
)
|
$
|
(229,269
|
)
|
$
|
(435,373
|
)
|
$
|
(454,198
|
)
|
||||
Share-based compensation expense included in continuing operations
|
||||||||||||||||
Cable
|
$
|
(7,519
|
)
|
$
|
(7,454
|
)
|
$
|
(15,602
|
)
|
$
|
(17,613
|
)
|
||||
Lightpath
|
(1,357
|
)
|
(1,571
|
)
|
(2,776
|
)
|
(3,406
|
)
|
||||||||
Other
|
(1,819
|
)
|
(3,251
|
)
|
(4,223
|
)
|
(7,273
|
)
|
||||||||
|
$
|
(10,695
|
)
|
$
|
(12,276
|
)
|
$
|
(22,601
|
)
|
$
|
(28,292
|
)
|
||||
|
||||||||||||||||
Restructuring credits (expense) included in continuing operations
|
||||||||||||||||
Cable
|
$
|
141
|
$
|
-
|
$
|
19
|
$
|
-
|
||||||||
Lightpath
|
11
|
-
|
15
|
-
|
||||||||||||
Other
|
196
|
273
|
(701
|
)
|
638
|
|||||||||||
|
$
|
348
|
$
|
273
|
$
|
(667
|
)
|
$
|
638
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Operating income (loss) from continuing operations
|
||||||||||||||||
Cable
|
$
|
280,848
|
$
|
257,277
|
$
|
530,469
|
$
|
436,744
|
||||||||
Lightpath
|
17,019
|
13,466
|
34,483
|
25,508
|
||||||||||||
Other
|
(41,974
|
)
|
(72,980
|
)
|
(101,976
|
)
|
(157,102
|
)
|
||||||||
|
$
|
255,893
|
$
|
197,763
|
$
|
462,976
|
$
|
305,150
|
(a) | Inter-segment eliminations relate primarily to revenues recognized from the sale of local programming and voice services to our Cable segment. |
(b) | The Cable and Lightpath segments share portions of each other's network infrastructure. Depreciation charges are recorded by the segment that acquired the respective asset. |
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Operating income for reportable segments
|
$
|
255,893
|
$
|
197,763
|
$
|
462,976
|
$
|
305,150
|
||||||||
Items excluded from operating income:
|
||||||||||||||||
CSC Holdings interest expense
|
(87,580
|
)
|
(102,507
|
)
|
(172,800
|
)
|
(199,071
|
)
|
||||||||
CSC Holdings interest income
|
103
|
86
|
175
|
173
|
||||||||||||
CSC Holdings intercompany interest income
|
12,014
|
14,769
|
24,027
|
29,539
|
||||||||||||
Gain (loss) on investments, net
|
78,612
|
(2,789
|
)
|
36,837
|
96,669
|
|||||||||||
Gain (loss) on equity derivative contracts, net
|
(32,613
|
)
|
19,206
|
6,036
|
(52,510
|
)
|
||||||||||
Loss on extinguishment of debt and write-off of deferred financing costs
|
(7,687
|
)
|
(6,637
|
)
|
(7,687
|
)
|
(6,637
|
)
|
||||||||
Miscellaneous, net
|
1,806
|
489
|
2,537
|
868
|
||||||||||||
CSC Holdings income from continuing operations before income taxes
|
220,548
|
120,380
|
352,101
|
174,181
|
||||||||||||
Cablevision interest expense
|
(55,662
|
)
|
(56,896
|
)
|
(111,398
|
)
|
(113,723
|
)
|
||||||||
Intercompany interest expense
|
(12,014
|
)
|
(14,769
|
)
|
(24,027
|
)
|
(29,539
|
)
|
||||||||
Cablevision interest income
|
4
|
14
|
6
|
34
|
||||||||||||
Write-off of deferred financing costs, net of gain on extinguishment of debt
|
-
|
-
|
(611
|
)
|
-
|
|||||||||||
Cablevision income from continuing operations before income taxes
|
$
|
152,876
|
$
|
48,729
|
$
|
216,071
|
$
|
30,953
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Capital expenditures
|
||||||||||||||||
Cable
|
$
|
207,255
|
$
|
222,513
|
$
|
352,580
|
$
|
421,367
|
||||||||
Lightpath
|
26,097
|
26,324
|
52,967
|
52,738
|
||||||||||||
Other
|
5,766
|
9,673
|
19,646
|
21,745
|
||||||||||||
|
$
|
239,118
|
$
|
258,510
|
$
|
425,193
|
$
|
495,850
|
NOTE 15.
|
RELATED PARTY TRANSACTIONS
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Revenues, net
|
$
|
1,586
|
$
|
2,035
|
$
|
2,910
|
$
|
3,179
|
||||||||
Operating expenses (credits):
|
||||||||||||||||
Technical expenses, net of credits(a)
|
$
|
45,714
|
$
|
39,221
|
$
|
91,782
|
$
|
85,342
|
||||||||
Selling, general and administrative expenses, net of credits
|
1,014
|
570
|
2,316
|
1,376
|
||||||||||||
Operating expenses, net
|
46,728
|
39,791
|
94,098
|
86,718
|
||||||||||||
Net charges
|
$
|
45,142
|
$
|
37,756
|
$
|
91,188
|
$
|
83,539
|
(a) | Technical expenses include primarily costs incurred by the Company for the carriage of the MSG networks and Fuse program services of Madison Square Garden, and the AMC, WE tv, IFC and Sundance program services of AMC Networks on the Company's cable systems. The Company also purchases certain programming signal transmission and production services from AMC Networks. |
NOTE 16.
|
SUBSEQUENT EVENTS
|
|
Three Months Ended June 30,
|
|||||||||||||||||||
|
2014
|
2013
|
||||||||||||||||||
|
% of Net
|
% of Net
|
Favorable
|
|||||||||||||||||
|
Amount
|
Revenues
|
Amount
|
Revenues
|
(Unfavorable)
|
|||||||||||||||
Revenues, net
|
$
|
1,628,137
|
100
|
%
|
$
|
1,569,619
|
100
|
%
|
$
|
58,518
|
||||||||||
Operating expenses:
|
||||||||||||||||||||
Technical and operating (excluding depreciation, amortization and impairments shown below)
|
788,317
|
48
|
764,343
|
49
|
(23,974
|
)
|
||||||||||||||
Selling, general and administrative
|
363,187
|
22
|
378,517
|
24
|
15,330
|
|||||||||||||||
Restructuring credits
|
(348
|
)
|
-
|
(273
|
)
|
-
|
75
|
|||||||||||||
Depreciation and amortization (including impairments)
|
221,088
|
14
|
229,269
|
15
|
8,181
|
|||||||||||||||
Operating income
|
255,893
|
16
|
197,763
|
13
|
58,130
|
|||||||||||||||
Other income (expense):
|
||||||||||||||||||||
Interest expense, net
|
(143,135
|
)
|
(9
|
)
|
(159,303
|
)
|
(10
|
)
|
16,168
|
|||||||||||
Gain (loss) on investments, net
|
78,612
|
5
|
(2,789
|
)
|
-
|
81,401
|
||||||||||||||
Gain (loss) on equity derivative contracts, net
|
(32,613
|
)
|
(2
|
)
|
19,206
|
1
|
(51,819
|
)
|
||||||||||||
Loss on extinguishment of debt and write-off of deferred financing costs
|
(7,687
|
)
|
-
|
(6,637
|
)
|
-
|
(1,050
|
)
|
||||||||||||
Miscellaneous, net
|
1,806
|
-
|
489
|
-
|
1,317
|
|||||||||||||||
Income from continuing operations before income taxes
|
152,876
|
9
|
48,729
|
3
|
104,147
|
|||||||||||||||
Income tax expense
|
(61,848
|
)
|
(4
|
)
|
(20,507
|
)
|
(1
|
)
|
(41,341
|
)
|
||||||||||
Income from continuing operations
|
91,028
|
6
|
28,222
|
2
|
62,806
|
|||||||||||||||
Income from discontinued operations, net of income taxes
|
3,510
|
-
|
107,495
|
7
|
(103,985
|
)
|
||||||||||||||
Net income
|
94,538
|
6
|
135,717
|
9
|
(41,179
|
)
|
||||||||||||||
Net income attributable to noncontrolling interests
|
(328
|
)
|
-
|
(358
|
)
|
-
|
30
|
|||||||||||||
Net income attributable to Cablevision Systems Corporation stockholders
|
$
|
94,210
|
6
|
%
|
$
|
135,359
|
9
|
%
|
$
|
(41,149
|
)
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
2014
|
2013
|
||||||||||||||||||
|
% of Net
|
% of Net
|
Favorable
|
|||||||||||||||||
|
Amount
|
Revenues
|
Amount
|
Revenues
|
(Unfavorable)
|
|||||||||||||||
Revenues, net
|
$
|
3,203,723
|
100
|
%
|
$
|
3,080,847
|
100
|
%
|
$
|
122,876
|
||||||||||
Operating expenses:
|
||||||||||||||||||||
Technical and operating (excluding depreciation, amortization and impairments shown below)
|
1,561,300
|
49
|
1,552,384
|
50
|
(8,916
|
)
|
||||||||||||||
Selling, general and administrative
|
743,407
|
23
|
769,753
|
25
|
26,346
|
|||||||||||||||
Restructuring expense (credits)
|
667
|
-
|
(638
|
)
|
-
|
(1,305
|
)
|
|||||||||||||
Depreciation and amortization (including impairments)
|
435,373
|
14
|
454,198
|
15
|
18,825
|
|||||||||||||||
Operating income
|
462,976
|
14
|
305,150
|
10
|
157,826
|
|||||||||||||||
Other income (expense):
|
||||||||||||||||||||
Interest expense, net
|
(284,017
|
)
|
(9
|
)
|
(312,587
|
)
|
(10
|
)
|
28,570
|
|||||||||||
Gain on investments, net
|
36,837
|
1
|
96,669
|
3
|
(59,832
|
)
|
||||||||||||||
Gain (loss) on equity derivative contracts, net
|
6,036
|
-
|
(52,510
|
)
|
(2
|
)
|
58,546
|
|||||||||||||
Loss on extinguishment of debt and write-off of deferred financing costs
|
(8,298
|
)
|
-
|
(6,637
|
)
|
-
|
(1,661
|
)
|
||||||||||||
Miscellaneous, net
|
2,537
|
-
|
868
|
-
|
1,669
|
|||||||||||||||
Income from continuing operations before income taxes
|
216,071
|
7
|
30,953
|
1
|
185,118
|
|||||||||||||||
Income tax expense
|
(34,909
|
)
|
(1
|
)
|
(9,864
|
)
|
-
|
(25,045
|
)
|
|||||||||||
Income from continuing operations
|
181,162
|
6
|
21,089
|
1
|
160,073
|
|||||||||||||||
Income from discontinued operations, net of income taxes
|
3,076
|
-
|
98,230
|
3
|
(95,154
|
)
|
||||||||||||||
Net income
|
184,238
|
6
|
119,319
|
4
|
64,919
|
|||||||||||||||
Net income attributable to noncontrolling interests
|
(265
|
)
|
-
|
(101
|
)
|
-
|
(164
|
)
|
||||||||||||
Net income attributable to Cablevision Systems Corporation stockholders
|
$
|
183,973
|
6
|
%
|
$
|
119,218
|
4
|
%
|
$
|
64,755
|
|
Three Months Ended June 30,
|
|||||||||||
|
2014
|
2013
|
Favorable
|
|||||||||
|
Amount
|
Amount
|
(Unfavorable)
|
|||||||||
Operating income
|
$
|
255,893
|
$
|
197,763
|
$
|
58,130
|
||||||
Share-based compensation
|
10,695
|
12,276
|
(1,581
|
)
|
||||||||
Restructuring credits
|
(348
|
)
|
(273
|
)
|
(75
|
)
|
||||||
Depreciation and amortization (including impairments)
|
221,088
|
229,269
|
(8,181
|
)
|
||||||||
AOCF
|
$
|
487,328
|
$
|
439,035
|
$
|
48,293
|
|
Six Months Ended June 30,
|
|||||||||||
|
2014 | 2013 |
Favorable
|
|||||||||
|
Amount
|
Amount
|
(Unfavorable)
|
|||||||||
Operating income
|
$
|
462,976
|
$
|
305,150
|
$
|
157,826
|
||||||
Share-based compensation
|
22,601
|
28,292
|
(5,691
|
)
|
||||||||
Restructuring expense (credits)
|
667
|
(638
|
)
|
1,305
|
||||||||
Depreciation and amortization (including impairments)
|
435,373
|
454,198
|
(18,825
|
)
|
||||||||
AOCF
|
$
|
921,617
|
$
|
787,002
|
$
|
134,615
|
· | Cable, consisting principally of our video, high-speed data, and VoIP services; |
· | Lightpath, which provides Ethernet-based data, Internet, voice and video transport and managed services to the business market in the New York metropolitan area; and |
· | Other, consisting principally of (i) Newsday, (ii) the News 12 Networks, (iii) Cablevision Media Sales, and (iv) certain other businesses and unallocated corporate costs. |
|
Three Months
|
Six Months
|
||||||
|
Ended June 30, 2014
|
|||||||
Increase in revenues of the Cable segment
|
$
|
52,519
|
$
|
113,870
|
||||
Increase in revenues of the Lightpath segment
|
5,561
|
9,839
|
||||||
Increase (decrease) in revenues of the Other segment
|
347
|
(1,089
|
)
|
|||||
Inter-segment eliminations
|
91
|
256
|
||||||
|
$
|
58,518
|
$
|
122,876
|
· | cable programming costs which are costs paid to programmers (net of amortization of any incentives received from programmers for carriage) for cable content and are generally paid on a per-subscriber basis; |
· | network management and field service costs, which represent costs associated with the maintenance of our broadband network, including costs of certain customer connections; |
· | interconnection, call completion and circuit fees relating to our telephone and VoIP businesses which represent the transport and termination of calls with other telecommunications carriers; and |
· | content, production and distribution costs of our Newsday business. |
|
Three Months
|
Six Months
|
||||||
|
Ended June 30, 2014
|
|||||||
Increase in expenses of the Cable segment
|
$
|
30,231
|
$
|
25,700
|
||||
Increase (decrease) in expenses of the Lightpath segment
|
775
|
(20
|
)
|
|||||
Decrease in expenses of the Other segment
|
(7,173
|
)
|
(17,180
|
)
|
||||
Inter-segment eliminations
|
141
|
416
|
||||||
|
$
|
23,974
|
$
|
8,916
|
|
Three Months
|
Six Months
|
||||||
|
Ended June 30, 2014
|
|||||||
Decrease in expenses of the Cable segment
|
$
|
(5,745
|
)
|
$
|
(6,199
|
)
|
||
Increase in expenses of the Lightpath segment
|
1,086
|
2,104
|
||||||
Decrease in expenses of the Other segment
|
(10,621
|
)
|
(22,091
|
)
|
||||
Inter-segment eliminations
|
(50
|
)
|
(160
|
)
|
||||
|
$
|
(15,330
|
)
|
$
|
(26,346
|
)
|
|
Three Months
|
Six Months
|
||||||
|
Ended June 30, 2014
|
|||||||
Increase in expenses of the Cable segment
|
$
|
4,603
|
$
|
663
|
||||
Increase (decrease) in expenses of the Lightpath segment
|
158
|
(1,205
|
)
|
|||||
Decrease in expenses of the Other segment
|
(12,942
|
)
|
(18,283
|
)
|
||||
|
$
|
(8,181
|
)
|
$
|
(18,825
|
)
|
|
Three Months
|
Six Months
|
||||||
|
Ended June 30, 2014
|
|||||||
Increase in AOCF of the Cable segment
|
$
|
28,098
|
$
|
92,358
|
||||
Increase in AOCF of the Lightpath segment
|
3,486
|
7,125
|
||||||
Increase in AOCF of the Other segment
|
16,709
|
35,132
|
||||||
|
$
|
48,293
|
$
|
134,615
|
|
Three Months
|
Six Months
|
||||||
|
Ended June 30, 2014
|
|||||||
Decrease due to lower average interest rates on our indebtedness
|
$
|
(5,774
|
)
|
$
|
(12,453
|
)
|
||
Decrease due to change in average debt balances
|
(2,257
|
)
|
(7,592
|
)
|
||||
Lower (higher) interest income
|
(7
|
)
|
26
|
|||||
Other net decreases due primarily to fees related to the CSC Holdings' credit facility refinancing in 2013, and lower capital lease obligations
|
(8,130
|
)
|
(8,551
|
)
|
||||
|
$
|
(16,168
|
)
|
$
|
(28,570
|
)
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Litigation settlement, net of legal fees, net of income taxes
|
$
|
-
|
$
|
103,820
|
$
|
-
|
$
|
103,635
|
||||||||
Income of Bresnan Cable, net of income taxes(a)
|
3,751
|
17,278
|
3,358
|
17,715
|
||||||||||||
Loss of Clearview, including loss on sale, net of income taxes
|
(241
|
)
|
(13,603
|
)
|
(282
|
)
|
(23,120
|
)
|
||||||||
Income from discontinued operations, net of income taxes - Cablevision
|
3,510
|
107,495
|
3,076
|
98,230
|
||||||||||||
Income tax benefit recognized at Cablevision, not applicable to CSC Holdings
|
-
|
(1,003
|
)
|
-
|
(1,003
|
)
|
||||||||||
Income from discontinued operations, net of income taxes - CSC Holdings
|
$
|
3,510
|
$
|
106,492
|
$
|
3,076
|
$
|
97,227
|
(a) | The income for the three and six months ended June 30, 2014 represents primarily a gain recognized upon the settlement of a contingency related to Montana property taxes. |
|
Three Months Ended June 30,
|
|||||||||||||||||||
|
2014
|
2013
|
||||||||||||||||||
|
Amount
|
% of Net
Revenues
|
Amount
|
% of Net
Revenues
|
Favorable
(Unfavorable)
|
|||||||||||||||
Revenues, net
|
$
|
1,454,911
|
100
|
%
|
$
|
1,402,392
|
100
|
%
|
$
|
52,519
|
||||||||||
Technical and operating expenses (excluding depreciation and amortization shown below)
|
709,028
|
49
|
678,797
|
48
|
(30,231
|
)
|
||||||||||||||
Selling, general and administrative expenses
|
274,527
|
19
|
280,272
|
20
|
5,745
|
|||||||||||||||
Restructuring credits
|
(141
|
)
|
-
|
-
|
-
|
141
|
||||||||||||||
Depreciation and amortization
|
190,649
|
13
|
186,046
|
13
|
(4,603
|
)
|
||||||||||||||
Operating income
|
$
|
280,848
|
19
|
%
|
$
|
257,277
|
18
|
%
|
$
|
23,571
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
2014
|
2013
|
||||||||||||||||||
|
Amount
|
% of Net
Revenues
|
Amount
|
% of Net
Revenues
|
Favorable
(Unfavorable)
|
|||||||||||||||
Revenues, net
|
$
|
2,872,059
|
100
|
%
|
$
|
2,758,189
|
100
|
%
|
$
|
113,870
|
||||||||||
Technical and operating expenses (excluding depreciation and amortization shown below)
|
1,404,690
|
49
|
1,378,990
|
50
|
(25,700
|
)
|
||||||||||||||
Selling, general and administrative expenses
|
561,064
|
20
|
567,263
|
21
|
6,199
|
|||||||||||||||
Restructuring credits
|
(19
|
)
|
-
|
-
|
-
|
19
|
||||||||||||||
Depreciation and amortization
|
375,855
|
13
|
375,192
|
14
|
(663
|
)
|
||||||||||||||
Operating income
|
$
|
530,469
|
18
|
%
|
$
|
436,744
|
16
|
%
|
$
|
93,725
|
|
Three Months Ended June 30,
|
|||||||||||
|
2014
|
2013
|
Favorable
|
|||||||||
|
Amount
|
Amount
|
(Unfavorable)
|
|||||||||
Operating income
|
$
|
280,848
|
$
|
257,277
|
$
|
23,571
|
||||||
Share-based compensation
|
7,519
|
7,454
|
65
|
|||||||||
Restructuring credits
|
(141
|
)
|
-
|
(141
|
)
|
|||||||
Depreciation and amortization
|
190,649
|
186,046
|
4,603
|
|||||||||
AOCF
|
$
|
478,875
|
$
|
450,777
|
$
|
28,098
|
|
Six Months Ended June 30,
|
|||||||||||
|
2014
|
2013
|
Favorable
|
|||||||||
|
Amount
|
Amount
|
(Unfavorable)
|
|||||||||
Operating income
|
$
|
530,469
|
$
|
436,744
|
$
|
93,725
|
||||||
Share-based compensation
|
15,602
|
17,613
|
(2,011
|
)
|
||||||||
Restructuring credits
|
(19
|
)
|
-
|
(19
|
)
|
|||||||
Depreciation and amortization
|
375,855
|
375,192
|
663
|
|||||||||
AOCF
|
$
|
921,907
|
$
|
829,549
|
$
|
92,358
|
|
Three Months Ended June 30,
|
Increase
|
Percent Increase
|
|||||||||||||
|
2014
|
2013
|
(Decrease)
|
(Decrease)
|
||||||||||||
Video (including equipment rental, DVR, video-on-demand and pay-per-view)
|
$
|
805,852
|
$
|
793,154
|
$
|
12,698
|
2
|
%
|
||||||||
High-speed data
|
354,376
|
337,942
|
16,434
|
5
|
||||||||||||
Voice
|
226,833
|
211,472
|
15,361
|
7
|
||||||||||||
Advertising
|
41,046
|
36,588
|
4,458
|
12
|
||||||||||||
Other (including installation, advertising sales commissions, home shopping, and other products)
|
26,804
|
23,236
|
3,568
|
15
|
||||||||||||
Total Cable
|
$
|
1,454,911
|
$
|
1,402,392
|
$
|
52,519
|
4
|
%
|
|
Six Months Ended June 30,
|
Increase
|
Percent Increase
|
|||||||||||||
|
2014
|
2013
|
(Decrease)
|
(Decrease)
|
||||||||||||
Video (including equipment rental, DVR, video-on-demand and pay-per-view)
|
$
|
1,599,298
|
$
|
1,559,686
|
$
|
39,612
|
3
|
%
|
||||||||
High-speed data
|
701,275
|
668,347
|
32,928
|
5
|
||||||||||||
Voice
|
446,955
|
420,104
|
26,851
|
6
|
||||||||||||
Advertising
|
72,709
|
63,689
|
9,020
|
14
|
||||||||||||
Other (including installation, advertising sales commissions, home shopping, and other products)
|
51,822
|
46,363
|
5,459
|
12
|
||||||||||||
Total Cable
|
$
|
2,872,059
|
$
|
2,758,189
|
$
|
113,870
|
4
|
%
|
|
June 30,
2014
|
March 31,
2014
|
June 30,
2013(a)
|
|||||||||
|
(in thousands)
|
|||||||||||
|
||||||||||||
Total customers
|
3,165
|
3,186
|
3,224
|
|||||||||
Video customers
|
2,771
|
2,799
|
2,868
|
|||||||||
High-speed data customers
|
2,779
|
2,788
|
2,787
|
|||||||||
Voice customers
|
2,273
|
2,280
|
2,290
|
|||||||||
Serviceable passings
|
5,052
|
5,048
|
5,004
|
|||||||||
|
||||||||||||
Average monthly revenue per customer ("RPC")(b)
|
$
|
152.72
|
$
|
148.22
|
$
|
144.74
|
||||||
|
||||||||||||
Average monthly revenue per video customer ("RPS")(b)
|
$
|
174.14
|
$
|
168.34
|
$
|
162.42
|
(a) | Amounts exclude customers that were located in the areas most severely impacted by Superstorm Sandy whose billing we decided to suspend temporarily during restoration of their homes. These customers represent approximately 2 thousand total, high-speed data and voice customers, respectively. |
(b) | RPC is calculated by dividing the average monthly GAAP revenues for the Cable segment for the respective quarter presented by the average number of total customers served by our cable television systems for the respective period. RPS is calculated using these same revenues divided by the average number of video customers for the respective period. |
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
(in thousands)
|
|||||||||||||||
|
||||||||||||||||
Total customers
|
(20.2
|
)
|
(11.3
|
)
|
(22.9
|
)
|
(6.2
|
)
|
||||||||
Video customers
|
(28.4
|
)
|
(20.6
|
)
|
(42.4
|
)
|
(25.3
|
)
|
||||||||
High-speed data customers
|
(9.7
|
)
|
0.8
|
(1.3
|
)
|
23.6
|
||||||||||
Voice customers
|
(6.5
|
)
|
2.9
|
1.1
|
25.8
|
Three Months
|
Six Months
|
|||||||
|
Ended June 30, 2014
|
|||||||
Increase in programming costs due primarily to contractual rate increases and new channel launches, partially offset by lower subscribers
|
$
|
31,968
|
$
|
48,838
|
||||
Increase in employee related costs, primarily merit increases in the second quarter of 2014, benefits, and an increase in the number of employees
|
6,486
|
7,008
|
||||||
Decrease in contractor costs due primarily to lower truck rolls
|
(4,552
|
)
|
(18,056
|
)
|
||||
Decrease in net expenses relating to Superstorm Sandy (includes insurance recovery of $2,997 in the six months ended June 30, 2014)
|
(1,291
|
)
|
(10,481
|
)
|
||||
Other net decreases
|
(2,380
|
)
|
(1,609
|
)
|
||||
|
$
|
30,231
|
$
|
25,700
|
|
Three Months
|
Six Months
|
||||||
|
Ended June 30, 2014
|
|||||||
Increase in advertising and marketing media placement costs
|
$
|
2,264
|
$
|
9,064
|
||||
Increase in expenses related to long-term incentive plan awards, partially offset by a decrease in share-based compensation expense
|
1,700
|
6,905
|
||||||
Decrease in employee related costs related to the elimination of certain positions in the fourth quarter of 2013, partially offset by salary increases
|
(5,411
|
)
|
(10,749
|
)
|
||||
Decrease in legal and other professional fees
|
(4,408
|
)
|
(9,730
|
)
|
||||
Other net increases (decreases) (includes insurance recovery related to Superstorm Sandy of $922 in the six months ended June 30, 2014)
|
110
|
(1,689
|
)
|
|||||
|
$
|
(5,745
|
)
|
$
|
(6,199
|
)
|
|
Three Months Ended June 30,
|
|||||||||||||||||||
|
2014
|
2013
|
||||||||||||||||||
|
Amount
|
% of Net
Revenues
|
Amount
|
% of Net
Revenues
|
Favorable
(Unfavorable)
|
|||||||||||||||
Revenues, net
|
$
|
88,030
|
100
|
%
|
$
|
82,469
|
100
|
%
|
$
|
5,561
|
||||||||||
Technical and operating expenses (excluding depreciation and amortization shown below)
|
29,235
|
33
|
28,460
|
35
|
(775
|
)
|
||||||||||||||
Selling, general and administrative expenses
|
20,890
|
24
|
19,804
|
24
|
(1,086
|
)
|
||||||||||||||
Restructuring credits
|
(11
|
)
|
-
|
-
|
-
|
11
|
||||||||||||||
Depreciation and amortization
|
20,897
|
24
|
20,739
|
25
|
(158
|
)
|
||||||||||||||
Operating income
|
$
|
17,019
|
19
|
%
|
$
|
13,466
|
16
|
%
|
$
|
3,553
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
2014
|
2013
|
||||||||||||||||||
|
Amount
|
% of Net
Revenues
|
Amount
|
% of Net
Revenues
|
Favorable
(Unfavorable)
|
|||||||||||||||
Revenues, net
|
$
|
174,784
|
100
|
%
|
$
|
164,945
|
100
|
%
|
$
|
9,839
|
||||||||||
Technical and operating expenses (excluding depreciation and amortization shown below)
|
57,423
|
33
|
57,443
|
35
|
20
|
|||||||||||||||
Selling, general and administrative expenses
|
42,392
|
24
|
40,288
|
24
|
(2,104
|
)
|
||||||||||||||
Restructuring credits
|
(15
|
)
|
-
|
-
|
-
|
15
|
||||||||||||||
Depreciation and amortization
|
40,501
|
23
|
41,706
|
25
|
1,205
|
|||||||||||||||
Operating income
|
$
|
34,483
|
20
|
%
|
$
|
25,508
|
15
|
%
|
$
|
8,975
|
|
Three Months Ended June 30,
|
|||||||||||
|
2014
|
2013
|
Favorable
|
|||||||||
|
Amount
|
Amount
|
(Unfavorable)
|
|||||||||
|
||||||||||||
Operating income
|
$
|
17,019
|
$
|
13,466
|
$
|
3,553
|
||||||
Share-based compensation
|
1,357
|
1,571
|
(214
|
)
|
||||||||
Restructuring credits
|
(11
|
)
|
-
|
(11
|
)
|
|||||||
Depreciation and amortization
|
20,897
|
20,739
|
158
|
|||||||||
AOCF
|
$
|
39,262
|
$
|
35,776
|
$
|
3,486
|
|
Six Months Ended June 30,
|
|||||||||||
|
2014
|
2013
|
Favorable
|
|||||||||
|
Amount
|
Amount
|
(Unfavorable)
|
|||||||||
|
||||||||||||
Operating income
|
$
|
34,483
|
$
|
25,508
|
$
|
8,975
|
||||||
Share-based compensation
|
2,776
|
3,406
|
(630
|
)
|
||||||||
Restructuring credits
|
(15
|
)
|
-
|
(15
|
)
|
|||||||
Depreciation and amortization
|
40,501
|
41,706
|
(1,205
|
)
|
||||||||
AOCF
|
$
|
77,745
|
$
|
70,620
|
$
|
7,125
|
|
Three Months Ended June 30,
|
|||||||||||||||||||
|
2014
|
2013
|
||||||||||||||||||
|
Amount
|
% of Net
Revenues
|
Amount
|
% of Net Revenues
|
Favorable (Unfavorable)
|
|||||||||||||||
Revenues, net
|
$
|
94,868
|
100
|
%
|
$
|
94,521
|
100
|
%
|
$
|
347
|
||||||||||
Technical and operating expenses (excluding depreciation, amortization and impairments shown below)
|
58,003
|
61
|
65,176
|
69
|
7,173
|
|||||||||||||||
Selling, general and administrative expenses
|
69,493
|
73
|
80,114
|
85
|
10,621
|
|||||||||||||||
Restructuring credits
|
(196
|
)
|
-
|
(273
|
)
|
-
|
(77
|
)
|
||||||||||||
Depreciation and amortization (including impairments)
|
9,542
|
10
|
22,484
|
24
|
12,942
|
|||||||||||||||
Operating loss
|
$
|
(41,974
|
)
|
(44
|
)%
|
$
|
(72,980
|
)
|
(77
|
)%
|
$
|
31,006
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
2014
|
2013
|
||||||||||||||||||
|
Amount
|
% of Net
Revenues
|
Amount
|
% of Net Revenues
|
Favorable (Unfavorable)
|
|||||||||||||||
Revenues, net
|
$
|
176,350
|
100
|
%
|
$
|
177,439
|
100
|
%
|
$
|
(1,089
|
)
|
|||||||||
Technical and operating expenses (excluding depreciation, amortization and impairments shown below)
|
115,228
|
65
|
132,408
|
75
|
17,180
|
|||||||||||||||
Selling, general and administrative expenses
|
143,380
|
81
|
165,471
|
93
|
22,091
|
|||||||||||||||
Restructuring expense (credits)
|
701
|
-
|
(638
|
)
|
-
|
(1,339
|
)
|
|||||||||||||
Depreciation and amortization (including impairments)
|
19,017
|
11
|
37,300
|
21
|
18,283
|
|||||||||||||||
Operating loss
|
$
|
(101,976
|
)
|
(58
|
)%
|
$
|
(157,102
|
)
|
(89
|
)%
|
$
|
55,126
|
|
Three Months Ended June 30,
|
|||||||||||
|
2014
|
2013
|
Favorable
|
|||||||||
|
Amount
|
Amount
|
(Unfavorable)
|
|||||||||
Operating loss
|
$
|
(41,974
|
)
|
$
|
(72,980
|
)
|
$
|
31,006
|
||||
Share-based compensation
|
1,819
|
3,251
|
(1,432
|
)
|
||||||||
Restructuring credits
|
(196
|
)
|
(273
|
)
|
77
|
|||||||
Depreciation and amortization (including impairments)
|
9,542
|
22,484
|
(12,942
|
)
|
||||||||
AOCF deficit
|
$
|
(30,809
|
)
|
$
|
(47,518
|
)
|
$
|
16,709
|
|
Six Months Ended June 30,
|
|||||||||||
|
2014
|
2013
|
Favorable
|
|||||||||
|
Amount
|
Amount
|
(Unfavorable)
|
|||||||||
Operating loss
|
$
|
(101,976
|
)
|
$
|
(157,102
|
)
|
$
|
55,126
|
||||
Share-based compensation
|
4,223
|
7,273
|
(3,050
|
)
|
||||||||
Restructuring expense (credits)
|
701
|
(638
|
)
|
1,339
|
||||||||
Depreciation and amortization (including impairments)
|
19,017
|
37,300
|
(18,283
|
)
|
||||||||
AOCF deficit
|
$
|
(78,035
|
)
|
$
|
(113,167
|
)
|
$
|
35,132
|
|
Three Months
|
Six Months
|
||||||
|
Ended June 30, 2014
|
|||||||
Decrease in revenues at Newsday due primarily to decreases in advertising revenues as a result of the continued challenging economic environment and competition from other media
|
$
|
(2,972
|
)
|
$
|
(7,966
|
)
|
||
Increase in revenues, primarily advertising revenues at News 12 Networks
|
3,465
|
6,659
|
||||||
Decrease in other revenues
|
(561
|
)
|
(662
|
)
|
||||
Intra-segment eliminations
|
415
|
880
|
||||||
|
$
|
347
|
$
|
(1,089
|
)
|
|
Three Months
|
Six Months
|
||||||
|
Ended June 30, 2014
|
|||||||
Decrease in expenses due to reduced activities at certain businesses, including MSG Varsity (see discussion below)
|
$
|
(4,569
|
)
|
$
|
(11,686
|
)
|
||
Decrease in costs at Newsday (from $46,041 to $43,827 for the three month period and $90,923 to $86,628 for the six month period due primarily to lower editorial content, employee related, newsprint and ink expenses)
|
(2,214
|
)
|
(4,295
|
)
|
||||
Other net decreases |
(390
|
)
|
(1,199
|
)
|
||||
|
$
|
(7,173
|
)
|
$
|
(17,180
|
)
|
|
Three Months
|
Six Months
|
||||||
|
Ended June 30, 2014
|
|||||||
Decrease in expenses due to reduced activities at certain businesses, including MSG Varsity (see discussion above)
|
$
|
(6,100
|
)
|
$
|
(12,605
|
)
|
||
Decrease in corporate costs, primarily employee related costs, net of allocations to business units
|
(1,201
|
)
|
(5,309
|
)
|
||||
Decrease in expenses at Newsday (from $26,888 to $24,048 for the three month period and from $55,267 to $50,553 for the six month period due primarily to lower employee related, marketing, and property tax expenses)
|
(2,840
|
)
|
(4,714
|
)
|
||||
Other net decreases
|
(895
|
)
|
(343
|
)
|
||||
Intra-segment eliminations
|
415
|
880
|
||||||
|
$
|
(10,621
|
)
|
$
|
(22,091
|
)
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Net income attributable to Cablevision Systems Corporation stockholders
|
$
|
94,210
|
$
|
135,359
|
$
|
183,973
|
$
|
119,218
|
||||||||
Interest expense relating to Cablevision senior notes included in Cablevision's condensed consolidated statements of income
|
55,662
|
56,896
|
111,398
|
113,723
|
||||||||||||
Interest income related to cash held at Cablevision
|
(4
|
)
|
(14
|
)
|
(6
|
)
|
(34
|
)
|
||||||||
Interest income included in CSC Holdings' consolidated statements of income related to interest on Cablevision's senior notes held by Newsday Holdings LLC (this interest income is eliminated in the condensed consolidated statements of income of Cablevision)
|
12,014
|
14,769
|
24,027
|
29,539
|
||||||||||||
Write-off of deferred financing costs, net of gain on extinguishment of debt relating to Cablevision senior notes
|
-
|
-
|
611
|
-
|
||||||||||||
Income tax benefit included in Cablevision's consolidated statements of income related to the items listed above
|
(29,379
|
)
|
(29,824
|
)
|
(58,116
|
)
|
(60,313
|
)
|
||||||||
Income tax benefit recognized at Cablevision, not applicable to CSC Holdings
|
-
|
(1,003
|
)
|
-
|
(1,003
|
)
|
||||||||||
Net income attributable to CSC Holdings, LLC's sole member
|
$
|
132,503
|
$
|
176,183
|
$
|
261,887
|
$
|
201,130
|
|
Restricted Group
|
Newsday
LLC(a)
|
Other
Entities
|
Total
CSC Holdings
|
Cablevision
|
Eliminations(b)
|
Total Cablevision
|
|||||||||||||||||||||
Credit facility debt
|
$
|
2,530,247
|
$
|
480,000
|
$
|
-
|
$
|
3,010,247
|
$
|
-
|
$
|
-
|
$
|
3,010,247
|
||||||||||||||
Senior notes and debentures
|
3,060,735
|
-
|
-
|
3,060,735
|
3,413,548
|
(611,455
|
)
|
5,862,828
|
||||||||||||||||||||
Collateralized indebtedness relating to stock monetizations
|
-
|
-
|
933,908
|
933,908
|
-
|
-
|
933,908
|
|||||||||||||||||||||
Capital lease obligations
|
38,347
|
555
|
-
|
38,902
|
-
|
-
|
38,902
|
|||||||||||||||||||||
Notes payable
|
29,728
|
-
|
-
|
29,728
|
-
|
-
|
29,728
|
|||||||||||||||||||||
Total debt
|
$
|
5,659,057
|
$
|
480,555
|
$
|
933,908
|
$
|
7,073,520
|
$
|
3,413,548
|
$
|
(611,455
|
)
|
$
|
9,875,613
|
|||||||||||||
Interest expense
|
$
|
141,348
|
$
|
9,426
|
$
|
22,026
|
$
|
172,800
|
$
|
135,425
|
$
|
(24,027
|
)
|
$
|
284,198
|
|||||||||||||
Capital expenditures
|
$
|
418,677
|
$
|
2,942
|
$
|
3,574
|
$
|
425,193
|
$
|
-
|
$
|
-
|
$
|
425,193
|
(a) | CSC Holdings has guaranteed Newsday LLC's obligation under its credit facility, which amounted to $480,000 at June 30, 2014. For purposes of the Restricted Group credit facility and indentures, guarantees are treated as indebtedness. The total debt for the Restricted Group reflected in the table above does not include the $480,000 guarantee. |
(b) | Represents the elimination of the senior notes issued by Cablevision and held by Newsday Holdings LLC. |
|
|
Interest
Rate at
June 30,
2014
|
Amounts Payable on
or prior to
June 30,
2015
|
Carrying
Value at
|
||||||||||||
Maturity
Date
|
June 30,
2014
|
December 31,
2013
|
||||||||||||||
Restricted Group:
|
|
|||||||||||||||
Revolving loan facility
|
April 17, 2018
|
-
|
%
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||
Term A loan facility
|
April 17, 2018
|
2.15
|
%
|
47,926
|
958,510
|
958,510
|
||||||||||
Term B loan facility(a)
|
April 17, 2020
|
2.65
|
%
|
15,943
|
1,571,737
|
2,327,635
|
||||||||||
Restricted Group credit facility debt
|
63,869
|
2,530,247
|
3,286,145
|
|||||||||||||
Newsday:
|
|
|||||||||||||||
Floating rate term loan facility
|
October 12, 2016
|
3.65
|
%
|
-
|
480,000
|
480,000
|
||||||||||
Total credit facility debt
|
$
|
63,869
|
$
|
3,010,247
|
$
|
3,766,145
|
(a) | The unamortized discount related to the Term B loan facility amounted to $6,652 and $10,615 at June 30, 2014 and December 31, 2013, respectively. |
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Capital Expenditures
|
||||||||||||||||
|
||||||||||||||||
Consumer premise equipment
|
$
|
68,191
|
$
|
78,361
|
$
|
124,995
|
$
|
162,087
|
||||||||
Scalable infrastructure
|
72,030
|
76,844
|
118,859
|
131,181
|
||||||||||||
Line extensions
|
7,428
|
7,992
|
8,664
|
13,950
|
||||||||||||
Upgrade/rebuild
|
11,772
|
10,710
|
19,391
|
16,997
|
||||||||||||
Support
|
47,834
|
48,606
|
80,671
|
97,152
|
||||||||||||
Total Cable
|
207,255
|
222,513
|
352,580
|
421,367
|
||||||||||||
Lightpath
|
26,097
|
26,324
|
52,967
|
52,738
|
||||||||||||
Other
|
5,766
|
9,673
|
19,646
|
21,745
|
||||||||||||
|
$
|
239,118
|
$
|
258,510
|
$
|
425,193
|
$
|
495,850
|
Declaration Date
|
Dividend Per Share
|
Record Date
|
Payment Date
|
||||
|
|
|
|||||
February 25, 2014
|
$
|
0.15
|
March 14, 2014
|
April 3, 2014
|
|||
May 6, 2014
|
$
|
0.15
|
May 23, 2014
|
June 13, 2014
|
· | Cablevision's dividends paid; |
· | Cablevision's interest payments on its senior notes; |
· | Cablevision’s repurchases of certain outstanding senior notes; and |
· | Cablevision's payments for the acquisition of treasury shares related to statutory minimum tax withholding obligations upon the vesting of certain restricted shares. |
Fair Value of Equity Derivative Contracts
|
||||
Fair value as of December 31, 2013, net liability position
|
$
|
(143,562
|
)
|
|
Change in fair value, net
|
6,036
|
|||
Settlement of contracts
|
68,689
|
|||
Fair value as of June 30, 2014, net liability position
|
$
|
(68,837
|
)
|
# of Shares
|
Hedge Price
|
Cap Price(b)
|
||||||||||||||||
Deliverable
|
Maturity
|
per Share(a)
|
Low
|
High
|
||||||||||||||
2,668,875
|
2014
|
$
|
34.03
|
$
|
44.24
|
$
|
44.24
|
|||||||||||
13,407,684
|
2015
|
$
|
38.68-$49.01
|
$
|
49.57
|
$
|
58.81
|
|||||||||||
5,401,059
|
2016
|
$
|
48.93-$52.39
|
$
|
58.72
|
$
|
68.11
|
(a) | Represents the price below which we are provided with downside protection and above which we retain upside appreciation. Also represents the price used in determining the cash proceeds payable to us at inception of the contracts. |
(b) | Represents the price up to which we receive the benefit of stock price appreciation. |
PART II.
|
OTHER INFORMATION
|
|
Amendment to Time Sharing Agreement, dated June 30, 2014, between CSC Holdings, LLC (as successor-in-interest to CSC Transport IV, Inc.) and Charles F. Dolan.
|
|
|
|
|
|
Amendment to Time Sharing Agreement, dated July 21, 2014, between CSC Holdings, LLC (as successor-in-interest to CSC Transport IV, Inc.) and James L. Dolan.
|
|
|
|
|
|
Amendment to Time Sharing Agreement, dated June 30, 2014, between CSC Holdings, LLC (as successor-in-interest to CSC Transport IV, Inc.) and Gregg G. Seibert.
|
|
|
|
|
|
Amendment to Time Sharing Agreement, dated June 30, 2014, between CSC Holdings, LLC and Brian G. Sweeney.
|
|
|
|
|
|
Amendment to Time Sharing Agreement, dated June 30, 2014, between CSC Holdings, LLC and Kristin A. Dolan.
|
|
|
|
|
|
Amendment to Time Sharing Agreement, dated July 2, 2014, between CSC Holdings, LLC (as successor-in-interest to CSC Transport IV, Inc.) and David G. Ellen.
|
|
|
|
|
|
Amendment to Aircraft Dry Lease Agreement, dated June 30, 2014, between CSC Holdings, LLC (as successor-in-interest to CSC Transport, Inc.) and Sterling Aviation, LLC.
|
|
|
|
|
|
Section 302 Certification of the CEO.
|
|
|
|
|
|
Section 302 Certification of the CFO.
|
|
|
|
|
|
Section 906 Certifications of the CEO and CFO.
|
|
|
|
|
|
101
|
The following financial statements from Cablevision Systems Corporation's and CSC Holdings, LLC's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014, filed with the Securities and Exchange Commission on August 5, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Income; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Combined Notes to Condensed Consolidated Financial Statements.
|
|
|
|
CABLEVISION SYSTEMS CORPORATION
|
|
|
|
|
CSC HOLDINGS, LLC
|
|
|
|
|
|
|
Date:
|
August 5, 2014
|
|
|
/s/ Gregg G. Seibert
|
|
|
|
By:
|
Gregg G. Seibert as Vice Chairman and Chief Financial Officer of Cablevision Systems Corporation and CSC Holdings, LLC
|