CSC HOLDINGS INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 2001

OR

- --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to _______

Commission File Registrant; State of Incorporation; IRS Employer
Number Address and Telephone Number Identification No.
- ------ ---------------------------- ------------------
1-14764 Cablevision Systems Corporation 11-3415180
Delaware
1111 Stewart Avenue
Bethpage, NY 11714
(516) 803-2300

1-9046 CSC Holdings, Inc. 11-2776686
Delaware
1111 Stewart Avenue
Bethpage, NY 11714
(516) 803-2300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class: Name of each Exchange on
which Registered:
CABLEVISION SYSTEMS CORPORATION
Cablevision NY Group Class A Common Stock New York Stock Exchange
Rainbow Media Group Class A Common Stock New York Stock Exchange

CSC HOLDINGS, INC. None

Securities registered pursuant to Section 12(g) of the Act:

CABLEVISION SYSTEMS CORPORATION None
CSC HOLDINGS, INC. None

Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

Cablevision Systems Corporation Yes X No
----- -----
CSC Holdings, Inc. Yes X No
----- -----

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrants' knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. _______

Aggregate market value of voting stock held by nonaffiliates of Cablevision
Systems Corporation based on the closing price at which such stock was sold on
the New York Stock Exchange on March 15, 2002: $6,806,095,743.

Number of shares of common stock outstanding as of March 15, 2002:
Cablevision NY Group Class A Common Stock - 133,303,895
Cablevision NY Group Class B Common Stock - 42,145,986
Rainbow Media Group Class A Common Stock - 73,677,019
Rainbow Media Group Class B Common Stock - 21,072,993
CSC Holdings, Inc.Common Stock - 1,000

Documents incorporated by reference - The Registrants intend to file with the
Securities and Exchange Commission, not later than 120 days after the close of
their fiscal year, a definitive proxy statement or an amendment to this report
containing the information required to be disclosed under Part III of Form 10-K
under cover of Form 10-K/A.

TABLE OF CONTENTS

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* These items are omitted because the registrant intends to file with the
Securities and Exchange Commission, not later than 120 days after the close
of its fiscal year, a definitive proxy statement or an amendment to this
report containing the inforamtion required to be disclosed under Part III
of Form 10-K under cover of Form 10-K/A.

PART I

ITEM 1. BUSINESS.

This combined Annual Report on Form 10-K is separately filed by Cablevision
Systems Corporation and CSC Holdings, Inc.

CABLEVISION SYSTEMS CORPORATION

Cablevision Systems Corporation is a Delaware corporation which was organized in
1997. Cablevision's only asset is all of the outstanding common stock of CSC
Holdings.

CSC HOLDINGS

CSC Holdings is a Delaware corporation which was organized in 1985 and is one of
the largest cable operators in the United States. We also have investments in
cable programming networks, entertainment businesses and telecommunications
companies. As of December 31, 2001, we served about 3 million cable television
subscribers in and around the New York City metropolitan area, making us the
seventh largest cable operator in the United States based on the number of
subscribers. Through our 77.5% owned subsidiary, Rainbow Media Holdings, Inc.,
we own interests in and manage numerous national and regional programming
networks, the Madison Square Garden sports and entertainment business and cable
television advertising sales companies. Through Cablevision Lightpath, Inc., our
wholly-owned subsidiary, we provide switched telephone services and high-speed
Internet access to the business market. We also own or have interests in a
number of complementary businesses and companies that include The WIZ (a chain
of 43 consumer electronics stores), Clearview Cinemas (a chain of 59 movie
theaters) and Northcoast Communications, LLC (a wireless personal communications
services business).

TRACKING STOCK

In March 2001, we created and distributed to our stockholders one share of our
Rainbow Media Group tracking stock for every two outstanding shares of
Cablevision common stock and redesignated each share of Cablevision common stock
into one share of our Cablevision NY Group common stock. The Rainbow Media Group
Class A tracking stock trades on the New York Stock Exchange ("NYSE") under the
symbol "RMG" and the redesignated Cablevision NY Group Class A common stock
continues to trade on the NYSE under the symbol "CVC". The Rainbow Media Group
tracking stock is intended to reflect the separate economic performance of
certain of the businesses and interests of Rainbow Media Holdings, including its
national and selected regional programming assets. Cablevision NY Group common
stock is intended to reflect the performance of our assets and businesses not
attributed to the Rainbow Media Group.

When we refer in this Form 10-K to the Rainbow Media Group, we are referring to
the assets and businesses attributed to our Rainbow Media Group tracking stock,
and when we refer to the Cablevision NY Group, we are referring to the assets
and businesses attributed to our Cablevision NY Group common stock.

The following businesses and interests owned by Cablevision have been attributed
to Cablevision NY Group:

- the cable television business, including the residential telephone and
high-speed modem businesses,
- the commercial telephone and internet operations of Lightpath,
- the New York metropolitan area sports and entertainment business,
including Madison Square Garden, professional sports teams, Radio City
Music Hall, MSG Network and Fox Sports Net New York,
- the electronics retail operations of Cablevision Electronics
Investments, Inc., doing business as The WIZ,
- the motion picture theater business of CCG Holdings, Inc., doing
business as Clearview Cinemas,
- the MetroChannels, which feature local sports, news, educational and
other programming in the New York City metropolitan area,
- News12 Networks, a regional news business in the New York City
metropolitan area,
- the advertising sales representation business,
- the common stock of Charter Communications, Inc. received in September
2000 upon the sale of the Kalamazoo, Michigan cable television systems,
- the common stock of Adelphia Communications Corporation received in
November 2000 upon the sale of the cable television systems in the
greater Cleveland, Ohio metropolitan area,
- the common stock of AT&T Corp. received in January 2001 upon the sale of
cable television systems in Boston and eastern Massachusetts and the
AT&T Wireless Services, Inc. common stock received in July 2001 in a
stock distribution by AT&T,
- the interest in certain direct broadcast satellite assets, and
- the interest in Northcoast Communications, a wireless personal
communications services business.

We have a 77.5% interest in Rainbow Media Holdings. National Broadcasting
Company, Inc. ("NBC") currently owns 22.5% interest in Rainbow Media Holdings.
Certain of Rainbow Media Holdings' national programming assets and investments
are attributed to Rainbow Media Group and include:

- Rainbow Media Holdings' ownership interest in five nationally
distributed 24-hour entertainment programming networks:
- American Movie Classics (80%),
- Bravo (80%),
- The Independent Film Channel (80%),
- WE: Women's Entertainment (80%), and
- MuchMusic USA (100%),
- Rainbow Media Holdings' 60% ownership interest in the following regional
sports networks owned by Regional Programming Partners, both of which
Rainbow Media Holdings manages under the Fox Sports Net name:
- Fox Sports Net Florida, and
- Fox Sports Net Ohio,

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- Rainbow Media Holdings' 30% ownership interest in the following regional
sports networks owned by Regional Programming Partners, all of which
Rainbow Media Holdings manages under the Fox Sports Net name:
- Fox Sports Net Chicago,
- Fox Sports Net Bay Area, and
- Fox Sports Net New England,
- Rainbow Media Holdings' 50% ownership interest in National Sports
Partners, which owns and distributes Fox Sports Net,
- Rainbow Media Holdings' 50% ownership interest in National Advertising
Partners, which provides national advertising representation services to
all of the Fox Sports Net regional sports networks,
- Rainbow Network Communications, a full service network programming
origination and distribution company, and
- Sterling Digital LLC, which operates Mag Rack, is a company designed to
develop new niche audience programming.

See discussion below under "Arrangements with NBC" for our agreement with NBC to
permit NBC to exchange its interest in Rainbow Media Holdings for Rainbow Media
Group tracking stock.

THE HOLDING COMPANY REORGANIZATION AND TELE-COMMUNICATIONS TRANSACTIONS

Until March 4, 1998, CSC Holdings was known as Cablevision Systems Corporation.
On that date, CSC Holdings completed a holding company reorganization whereby it
formed a holding company (now named Cablevision Systems Corporation) and CSC
Holdings became a subsidiary of Cablevision Systems Corporation.

In the 1998 holding company reorganization, the Class A common stock and Class B
common stock of CSC Holdings were converted into identical securities of
Cablevision and the Class A common stock of Cablevision became listed on the
American Stock Exchange and traded under the symbol "CVC". On December 7, 1999,
Cablevision's Class A common stock began trading on the NYSE. Cablevision owns
all of the common stock of CSC Holdings.

TELE-COMMUNICATIONS TRANSACTIONS

On March 4, 1998, Cablevision completed transactions with Tele-Communications,
Inc. pursuant to which Cablevision acquired the Tele-Communications cable
television systems located in New Jersey, on Long Island and in New York's
Rockland, Westchester and Orange counties. Cablevision issued to certain
Tele-Communications entities an aggregate of 48,942,172 shares of Cablevision's
Class A common stock. In addition, Cablevision assumed certain related
liabilities, including an aggregate amount of indebtedness for borrowed money
equal to $669 million. The assumed debt was refinanced immediately following the
closing of the transactions with borrowings under an $800 million bridge
revolving credit facility entered into by wholly-owned subsidiaries of
Cablevision that were acquired from Tele-Communications or that hold assets
contributed by Tele-Communications. These subsidiaries were wholly-owned
(directly or indirectly) by Cablevision until April 1999 when Cablevision
contributed these entities to CSC Holdings.

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On March 9, 1999, Tele-Communications merged with a subsidiary of AT&T and
became a wholly-owned subsidiary of AT&T.

CABLE TELEVISION, MODEM AND TELEPHONY OPERATIONS

OUR CABLE TELEVISION, MODEM AND TELEPHONY OPERATIONS ARE WHOLLY ATTRIBUTED TO
CABLEVISION NY GROUP.

GENERAL

Cable television is a service that delivers multiple channels of television
programming to subscribers who pay a monthly fee for the services they receive.
Television signals are received over-the-air or via satellite delivery by
antennas, microwave relay stations and satellite earth stations and are
modulated, amplified and distributed over a network of coaxial and fiber optic
cable to the subscribers' television sets. Cable television systems typically
are constructed and operated pursuant to non-exclusive franchises awarded by
local governmental authorities for specified periods of time.

Our cable television systems offer varying levels of service which may include,
among other programming, local broadcast network affiliates and independent
television stations, certain other news, information and entertainment channels
such as CNN, CNBC, ESPN, and MTV, and certain premium services such as HBO,
Showtime, The Movie Channel, Starz and Cinemax.

Our cable television revenues are derived principally from monthly fees paid by
subscribers. In addition to recurring subscriber revenues, we derive revenues
from the sales of pay-per-view movies and events, from the sale of advertising
time on advertiser supported programming and from installation charges. Certain
services and equipment provided by substantially all of our cable television
systems are subject to regulation.

As of December 31, 2001, our cable television systems served approximately
3,008,000 subscribers, primarily in and around the New York City metropolitan
area. See "Cable Television System Sales" below.

The following table sets forth certain statistical data regarding our cable
television and high-speed Internet access operations as of the dates indicated.

(4)

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(1) Homes passed is based upon homes actually marketed and does not include
multiple dwelling units passed by the cable plant that are not connected to
it.
(2) Based on recurring service revenues for the last month of the period,
excluding installation charges and certain other non-recurring revenues
such as pay-per-view, advertising and home shopping revenues. See
"Subscriber Rates and Services; Marketing and Sales."
(3) Homes released are homes in areas that can be serviced by our high-speed
cable modem service. Homes in additional areas are being released as we
complete our cable plant upgrade and add other necessary equipment to
support the high-speed cable modem business in those new areas. Homes
released do not include multiple dwelling units passed by the cable plant
that are not connected to it.

The Company's cable television systems are concentrated in and around the New
York City metropolitan area. We believe that these systems comprise the largest
metropolitan cluster of cable television systems under common ownership in the
United States (measured by number of subscribers).

SUBSCRIBER RATES AND SERVICES; MARKETING AND SALES.

Our cable television systems offer a package of services, generally marketed as
"Family Cable", which includes, among other programming, broadcast network local
affiliates and independent television stations and certain other news,
information and entertainment channels such as CNN, CNBC, ESPN and MTV. For
additional charges, our cable television systems provide certain premium
services such as HBO, Showtime, The Movie Channel, Starz and Cinemax, which may
be purchased either individually or in combinations or in tiers.

In addition, our cable television systems offer a basic package which includes
broadcast network local affiliates and public, educational or governmental
channels and certain leased access channels.

We have a branded product offering called "Optimum TV", which packages all of
the premium networks available on our cable television systems at discounted
prices. Optimum TV includes the Family and basic services noted above, as well
as all of the premium a la carte programming available on the cable system,
grouped into three premium packages. Optimum TV also includes additional
pay-per-view channels that offer movies and sporting events on a transactional
basis.

In other areas, we offer premium services on an individual basis and as
components of different "tiers". Successive tiers include additional premium
services for additional charges that reflect

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discounts from the charges for such services if purchased individually. For
example, in most of our cable television systems, subscribers may elect to
purchase Family Cable plus one, two or three premium services with declining
incremental costs for each successive tier.

We began the rollout of our digital cable service, branded "iO, Interactive
Optimum", in September 2001. The digital cable services initially offered to
subscribers include a mix of additional cable television programming,
interactive services and multiple channels of commercial-free digital music as
well as enhanced picture quality and CD quality sound. Digital cable programming
and services include:

- additional expanded cable channels only available to digital
subscribers,
- additional channels including multiple channels ("multiplexes") of
HBO, Showtime and other premium services,
- access to video on demand and subscription video on demand
programming for all digital customers,
- Mag Rack, "magazine rack" channels offering content for niche
audiences, and
- interactive services including news, sports, weather, traffic,
email and MSG Game Director, which allows subscribers to select
camera angles to watch New York Knicks and New York Rangers home
games.

Interactive Optimum was initially launched in certain parts of our cable system
in Nassau County and western Suffolk County, New York.

Since our existing cable television systems are substantially fully built, our
sales efforts are primarily directed toward increasing penetration and revenues
in our franchise areas. We market our cable television services through
in-person selling, as well as telemarketing, direct mail advertising,
promotional campaigns and local media and newspaper advertising.

Certain services and equipment (converters supplied to subscribers) provided by
substantially all of our cable television systems are subject to regulation. See
"Regulation - Cable Television."

SYSTEM CAPACITY.

We are engaged in an ongoing effort to upgrade the technical capabilities of our
cable plant and to increase channel capacity for the delivery of additional
programming and new services. Our cable television systems have a minimum
capacity of 42 channels. Currently 97% of our homes are served by at least 77
channels and 84% of the total plant is 750 MHz capable two-way interactive. As a
result of ongoing upgrades, we expect that by December 2002 approximately 98% of
our subscribers will be served by systems having a capacity of at least 77
channels and 95% of the total plant will be 750 MHz capable two-way interactive.
All of the system upgrades either completed or underway will utilize fiber optic
cable.

PROGRAMMING.

Adequate programming is available to the cable television systems from a variety
of sources, including that available from Rainbow Media Holdings and affiliates
of Fox Entertainment Group, Inc. Program suppliers' compensation is typically a
fixed, per subscriber monthly fee based, in most cases, either on the total
number of subscribers of the cable television systems and

(6)

certain of its affiliates, or on the number of subscribers subscribing to the
particular service. The programming contracts are generally for a fixed period
of time and are subject to negotiated renewal. Cable programming costs have
increased in recent years and are expected to continue to increase due to
additional programming being provided to most subscribers, increased costs to
produce or purchase cable programming and other factors. We believe that the
cable television systems will continue to have access to programming services at
reasonable price levels.

FRANCHISES.

The cable television systems are operated primarily in New York, New Jersey and
Connecticut under non-exclusive franchise agreements with state or municipal
franchising authorities. Franchise authorities generally charge a franchise fee
of up to 5% of certain of our revenues that are derived from the operation of
the system within such locality. As permitted by law, these fees are generally
collected from subscribers and remitted to the local franchising authority.

Franchise agreements are usually for a term of ten to fifteen years from the
date of grant, although some renewals have been for shorter terms, generally
between five and ten years in length. Some of the franchises grant us an option
to renew upon expiration of the initial term. Seven of our ten largest
franchises expire between 2007 and 2010. Of the other three, one has expired,
one expires in 2002 and one expires in 2003.

In situations where franchises have expired or not been renewed, we operate
under temporary authority granted by the state cable television regulatory
agencies, while negotiating renewal terms with franchising authorities. The
Cable Communications Policy Act of 1984 and the Cable Television Consumer
Protection and Competition Act of 1992 provide significant procedural
protections for cable operators seeking renewal of their franchises. See
"Regulation - Cable Television." In connection with a renewal, a franchise
authority may impose different and more stringent terms. We are currently
operating under temporary authority in one of our ten largest franchises.

Franchises usually require the consent of franchising authorities prior to the
sale, assignment, transfer or change in ownership or control. Federal law
generally provides localities with 120 days to consider such requests.

CABLE TELEVISION SYSTEM SALES

In September 2000, we completed the sale of our cable television system serving
Kalamazoo, Michigan (which served approximately 49,500 subscribers on the
closing date) to Charter Communications in exchange for 11,173,376 shares of
Charter Communications common stock valued at approximately $165.5 million at
closing.

In November 2000, we completed the sale of our cable television systems in the
greater Cleveland, Ohio metropolitan area (which served approximately 312,700
subscribers on the closing date) to Adelphia Communications for total
consideration of $1.35 billion ($991 million in cash and 10,800,000 shares of
Adelphia Communications Class A common stock valued at approximately $359.1
million at closing).

In January 2001, we completed the sale of our cable television systems in Boston
and eastern Massachusetts (which served approximately 362,000 subscribers on the
closing date) to AT&T

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in exchange for AT&T's cable television systems in certain northern New York
suburbs (which served approximately 130,000 subscribers on the closing date),
44,260,932 shares of AT&T stock valued at approximately $893.5 million at
closing and approximately $289.9 million in cash.

CABLE MODEM SERVICES

OUR CABLE MODEM OPERATIONS ARE ATTRIBUTED TO THE CABLEVISION NY GROUP.

We provide residential high-speed cable modem Internet access in portions of the
greater New York City metropolitan area and parts of southern Connecticut.
High-speed Internet access is provided to customers through a cable modem device
that we sell, either directly or through 28 of our The WIZ stores, to customers
who agree to subscribe to the service for a specified period.

The high-speed cable modem Internet access service, marketed as "Optimum
Online", served approximately 506,700 cable modem subscribers at December 31,
2001 for an overall penetration rate of 17% of homes released. Homes released
are homes that can be serviced by our high-speed cable modem service. We believe
that our cable modem penetration has been driven, in part, by a large number of
customers installing the necessary equipment without the need for a service
call. Cable modems sold through our The WIZ stores include a self-installation
kit that is designed to enable customers to install the cable modem without the
need for a service call.

TELEPHONY

OUR TELEPHONY OPERATIONS ARE ATTRIBUTED TO THE CABLEVISION NY GROUP.

Through Lightpath, a competitive local exchange carrier, we provide basic and
advanced local telecommunications services to the business market in portions of
the greater New York City metropolitan area. Lightpath provides a full range of
local dial tone, switched services, private line and advanced networking
features on the local and long distance levels on its own facilities and
network. As of December 31, 2001, Lightpath serviced over 1,240 buildings with
approximately 122,100 access lines.

As of December 31, 2001, we also provided residential telephone services to
approximately 13,400 subscribers in Long Island, New York and parts of southern
Connecticut.

THE WIZ

OUR RETAIL ELECTRONICS OPERATIONS ARE ATTRIBUTED TO CABLEVISION NY GROUP.

The WIZ is an electronics retailer selling primarily video and audio equipment,
home office equipment, compact disks and other pre-recorded music, digital video
disks, and VHS video and other pre-recorded movies. Our The WIZ stores provide
us with venues to sell cable modems for our Optimum Online service, and we
expect to distribute digital cable boxes for our iO, Interactive Optimum digital
cable service through The WIZ stores in the future. Distribution of the
hardware for these services through The WIZ stores is designed to encourage
sales by providing a convenient means of previewing and subscribing to the
services. The WIZ currently has 43 stores in the New York City metropolitan
area.

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THEATERS

OUR THEATER OPERATIONS ARE ATTRIBUTED TO CABLEVISION NY GROUP.

Clearview Cinemas operates 59 motion picture theaters containing 279 screens in
the New York metropolitan area. The theaters were acquired in December 1998
through 1999, as a result of the acquisition of all of the outstanding shares of
stock of Clearview Cinema Group, Inc. and the acquisition of certain theaters
from Loews Cineplex Entertainment Corporation.

PERSONAL COMMUNICATIONS SERVICE

OUR INVESTMENT IN PERSONAL COMMUNICATION SERVICE LICENSES IS ATTRIBUTED TO
CABLEVISION NY GROUP.

CSC Holdings holds a 49.9% interest, and certain preferential distribution
rights, in Northcoast Communications. Northcoast Communications holds certain
licenses to conduct a personal communications service business. CSC Holdings has
contributed an aggregate of approximately $152.8 million as of December 31, 2001
to Northcoast Communications (either directly or through loans to Northcoast
PCS, LLC, the other member in Northcoast Communications). See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Related Party Transactions."

OTHER INVESTMENTS

OUR INVESTMENT IN R/L DBS COMPANY IS ATTRIBUTED TO CABLEVISION NY GROUP.

In March 2002, Rainbow Media Holdings acquired Loral Space and Communications,
Ltd.'s 50% interest in R/L DBS Company LLC for a purchase price of up to a
present value of $33 million payable only from revenues of R/L DBS' business, if
any, or from any future sale of all or part of the interests in or assets of R/L
DBS. This purchase increased Rainbow Media Holdings' ownership of R/L DBS to
100%.

R/L DBS holds certain frequencies granted by the Federal Communications
Commission ("FCC") for the operation of a direct broadcast satellite business.
CSC Holdings has contributed an aggregate of approximately $117.1 million
through December 31, 2001 to R/L DBS or its predecessor businesses either
directly or through loans to R/L DBS.

In December 2000, the FCC granted an extension to R/L DBS' construction permit
relating to the direct broadcast satellite frequencies held by R/L DBS. The
extension requires the launch of a satellite by March 29, 2003 and commencement
of service offerings by not later than December 29, 2003, with specified six
month interim construction milestones, non-compliance with which would result in
the forfeiture of the construction permit. R/L DBS has entered into an agreement
with a satellite manufacturer for the construction of a satellite scheduled to
be launched in March 2003. The contract with the manufacturer permits R/L DBS to
terminate the contract at its option prior to May 2003 and receive a refund of a
portion of amounts paid through the date of such termination.

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OTHER ASSETS

OUR INVESTMENT IN EQUITY SECURITIES IS ATTRIBUTED TO CABLEVISION NY GROUP.

We own 11,173,376 shares of Charter Communications common stock, 10,800,000
shares of Adelphia Communications class A common stock, 44,260,932 shares of
AT&T common stock and 14,243,166 shares of AT&T Wireless Services common stock
acquired in connection with the sale of certain cable television systems, all of
which shares have been monetized under collateralized prepaid forward contracts.
See "Cable Television System Sales".

In addition, we own warrants to acquire 20,462,596 shares of common stock of At
Home Corporation for $0.25 per share. These warrants were issued to us in
exchange for certain agreements by us with respect to the distribution of the At
Home internet access service to cable subscribers. On September 28, 2001, At
Home filed a petition for reorganization in federal bankruptcy court. On January
8, 2002, At Home terminated its At Home service to all of Cablevision's
Optimum@Home subscribers. In a letter dated January 9, 2002, Cablevision advised
At Home that such termination of service constituted an election by At Home to
terminate the existing master distribution agreement entered into by and between
Cablevision and At Home and all other related agreements.

In 2001 and 2000, we recorded an asset impairment write-down of $108.5 million
and $139.7 million, respectively, related to these warrants which reduced the
carrying value to zero.

PROGRAMMING AND ENTERTAINMENT OPERATIONS

WE ATTRIBUTE CERTAIN PROGRAMMING AND ENTERTAINMENT OPERATIONS TO CABLEVISION NY
GROUP AND OTHERS TO RAINBOW MEDIA GROUP (SEE "TRACKING STOCK" ABOVE).

GENERAL.

We conduct our programming activities through Rainbow Media Holdings, a company
currently 77.5% owned by CSC Holdings and 22.5% by NBC - Rainbow Holdings, Inc.,
a subsidiary of NBC.

Rainbow Media Holdings' businesses include national and regional programming
networks and the Madison Square Garden sports and entertainment business.
Rainbow Media Holdings also owns interests in cable television advertising
businesses.

Rainbow Media Holdings' national entertainment programming networks include
American Movie Classics, Bravo, WE: Women's Entertainment, MuchMusic USA and The
Independent Film Channel.

In April 2001, Metro-Goldwyn-Mayer Inc. ("MGM") acquired a 20% interest in four
programming services of Rainbow Media Holdings (American Movie Classics, Bravo,
The Independent Film Channel, and WE: Women's Entertainment) for $825 million in
cash.

Rainbow Media Holdings owns a 60% interest in, and manages, Regional Programming
Partners, a partnership with Fox Sports Networks, LLC. Regional Programming
Partners owns Madison Square Garden, a sports and entertainment company that
owns and operates the

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Madison Square Garden Arena and the adjoining Theater at Madison Square Garden,
the New York Knickerbockers professional basketball team, the New York Rangers
professional hockey team, the New York Liberty professional women's basketball
team, the Hartford Wolf Pack professional hockey team, the Madison Square Garden
Network, Fox Sports Net New York and Radio City Entertainment (which operates
Radio City Music Hall in New York City). Additionally, Madison Square Garden
manages and operates the Hartford Civic Center in Connecticut. Regional
Programming Partners also owns interests in regional sports networks that
provide regional sports programming to the New England, Chicago, Cincinnati,
Cleveland, San Francisco and Florida areas, in addition to Madison Square Garden
Network and Fox Sports Net New York which provide regional sports programming to
the New York City metropolitan area, as well as MetroChannels which provide
regional and local sports, news, educational and other programming to the New
York metropolitan area. All of the New York area assets are attributed to the
Cablevision NY Group.

National Sports Partners is a national sports network featuring Fox Sports Net,
which provides national sports programming to regional sports networks. National
Sports Partners is 50% owned by Rainbow Media Holdings and is managed and 50%
owned by Fox Sports Networks.

Rainbow Media Holdings owns Rainbow News 12 which operates regional news
networks servicing suburban areas surrounding New York City. Rainbow Media
Holdings also owns and operates Rainbow Advertising Sales Corporation, a cable
television advertising company, and owns a 50% interest in National Advertising
Partners, which sells national advertising for regional sports networks and is
managed and 50% owned by Fox Sports Networks.

The following table sets forth ownership information and estimated subscriber
information as of December 31, 2001 for each of the programming and related
businesses whose ownership interest is held directly or indirectly by Rainbow
Media Holdings. Regional Programming Partners is a 60% owned subsidiary of
Rainbow Media Holdings, with the remaining 40% interest owned by Fox Sports
Networks. See "Arrangements with NBC" below for a summary of NBC's agreement to
exchange its interest in Rainbow Media Holdings for Rainbow Media Group tracking
stock.

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- ----------
(1) Represents the number of subscribers to distributors' systems that receive
the referenced programming network.
(2) Represents the total number of basic subscribers available in systems that
carry the service.
(3) Various of these programming businesses, other than those which are
wholly-owned by Rainbow Media Holdings, are subject to puts, calls, rights
of first refusal and restrictions on transfer.
(4) Rainbow Media Holdings' ownership interest increased to 100% in March 2002.
See "Other Investments" above.

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NATIONAL ENTERTAINMENT PROGRAMMING NETWORKS

The following nationally distributed entertainment networks which acquire,
produce and license programming throughout the United States are attributed to
Rainbow Media Group.

AMERICAN MOVIE CLASSICS

American Movie Classics is a 24-hour movie network featuring classic films and
award-winning original productions about the world of American film. The service
offers background information, lifestyle programming and entertainment about the
world of Hollywood.

American Movie Classics is available on cable television and other distribution
platforms such as direct broadcast satellite. It is carried on basic or expanded
basic tiers for which subscribers do not have to pay a premium to receive the
network. Affiliate revenues, which in 2001 accounted for about 90% of American
Movie Classics' revenues, are based on fees paid by the distributors for the
right to carry the programming.

Distributors generally pay the network according to the number of subscribers
actually receiving American Movie Classics. The network generally enters into
five- to seven-year distribution contracts with its distributors. American Movie
Classics' top nine affiliation agreements with multiple system operators ("MSO")
cover 90% of American Movie Classics' total viewing subscribers and affiliation
agreements covering 7% of those MSOs' subscribers expire prior to the end of
2002. There can be no assurances that these affiliation agreements will be
renewed on similar terms or at all.

American Movie Classics' film library consists of films that are licensed from
major studios such as Columbia TriStar, Twentieth Century Fox, Paramount, Warner
Brothers, Universal, MGM/UA and RKO under long-term contracts. American Movie
Classics has adequate product to program the channel fully through 2004.
American Movie Classics generally structures its contracts for the exclusive
cable television right to carry the films during identified windows.

BRAVO

Bravo premiered in December 1980 as the first national cable network for the
performing arts. Bravo features films and performing arts programming including
jazz, classical music, ballet, opera, dance, theatrical performances, and
original programs on the arts as well as original and licensed television
series.

Bravo is generally carried as part of the basic or expanded basic service where
subscribers do not have to pay a premium fee to receive the network. Affiliate
revenues, which accounted for approximately 58% of total revenues in 2001, are
based on fees paid by the distributors for the right to carry the programming.
Distributors generally pay the network according to the number of subscribers
actually receiving Bravo. Bravo generally enters into five- to ten-year
distribution contracts with its distributors. Bravo's top nine affiliation
agreements with MSOs cover 88% of Bravo's total viewing subscribers and
affiliation agreements covering 9% of those MSOs' subscribers expire prior to
the end of 2002. There can be no assurances that these affiliation agreements
will be renewed on similar terms or at all.

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Bravo's program library consists of films, series and other productions that are
licensed from major studios such as Universal, Disney, Twentieth Century Fox,
Paramount, Sony and Warner Bros. and smaller studios such as Artisan, New Line,
USA, Lion's Gate and Miramax under long-term contracts, in addition to Bravo's
original productions. Bravo has adequate product to program the channel fully
through 2005. Bravo generally structures its contracts for the exclusive cable
television rights to carry the programs during identified window periods.

Beginning in 1998, Bravo launched a traditional format of advertising with
commercial program interruptions and the utilization of Nielsen ratings to gauge
viewership. Advertising revenue represented about 39% of Bravo's revenues for
2001.

THE INDEPENDENT FILM CHANNEL

The Independent Film Channel was launched in 1994 and is the first network
dedicated to independent films and related features and programming. It presents
feature-length films (domestically and internationally produced), documentaries,
shorts, animation, new works, "cult classics" and originally produced programs
which chronicle independent film trends. The Independent Film Channel has
adequate product to program the channel fully through 2005.

The Independent Film Channel's top nine affiliation agreements with MSOs cover
93% of The Independent Film Channel's total viewing subscribers and affiliation
agreements covering 23% of those MSOs' subscribers expire prior to the end of
2002. There can be no assurances that these affiliation agreements will be
renewed on similar terms or at all.

WE: WOMEN'S ENTERTAINMENT

Launched in 1997 as Romance Classics, WE: Women's Entertainment is a 24-hour
entertainment service for women. It is designed to be "time-out TV" to help
women disconnect from the stresses of the everyday world and reconnect with
themselves. WE: Women's Entertainment features recent hit movies, original
biographies of inspiring women and lifestyle programs on subjects like travel,
beauty, home, entertaining and relationships.

WE: Women's Entertainment's top nine affiliation agreements with MSOs cover 92%
of WE: Women's Entertainment's total viewing subscribers and affiliation
agreements covering 16% of those MSOs' subscribers expire prior to the end of
2002. There can be no assurances that these affiliation agreements will be
renewed on similar terms or at all.

WE: Women's Entertainment has licensed exclusive film titles to supplement its
slate of original programming, providing adequate product volume through 2005.
Exclusive deals have been concluded with major Hollywood studios such as
Twentieth Century Fox, Universal and Columbia as well as independents such as
Castle Hill and Artisan.

MUCHMUSIC USA

MuchMusic USA is a 24-hour, all-music entertainment programming network which
was launched in the United States in July 1994 and currently features a lineup
of music videos, concerts, interviews and drop-in performances of established
and new artists in a mix of U.S. produced programming and the MuchMusic
programming feed produced by Chum Limited, a

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Canadian programmer. A license agreement with Chum Limited allows MuchMusic USA
to use all or part of the MuchMusic programming.

MuchMusic's top nine affiliation agreements with MSOs cover 96% of MuchMusic's
total viewing subscribers and affiliation agreements covering 16% of those MSOs'
subscribers expire prior to the end of 2002. There can be no assurances that
these affiliation agreements will be renewed on similar terms or at all.

REGIONAL SPORTS NETWORKS - attributed to Rainbow Media Group

Rainbow Media Holdings has a 60% interest in two regional sports networks, in
Ohio and Florida, operating under the Fox Sports Net name and has a 30% interest
in three other regional sports networks, in Chicago, New England and the Bay
Area, also operating under the Fox Sports Net name. Rainbow Media Holdings
manages each of these regional sports networks, which are distributed in their
respective region in the United States through cable television as well as
through direct broadcast satellite and TVRO distributors.

NATIONAL SPORTS PARTNERS - attributed to Rainbow Media Group

Fox Sports Net is distributed by National Sports Partners, a 50%/50% partnership
between Rainbow Media Holdings and Fox Sports Networks that was formed in
December 1997 and is managed by Fox Sports Networks. Fox Sports Net was launched
during January 1998 and links 22 regional sports networks under the Fox Sports
Net name, including the five Fox Sports Net networks in which Rainbow Media
Holdings owns an interest described above, and delivers local, regional and
national sports programming.

OTHER SERVICES - attributed to Rainbow Media Group

NATIONAL ADVERTISING PARTNERS

National Advertising Partners is a 50%/50% partnership between Rainbow Media
Holdings and Fox Sports Networks that was formed in December 1997 and began
operations under the management of Fox Sports Networks in January 1998. National
Advertising Partners provides national advertising representation services for
Fox Sports Net and the Fox Sports Net regional programming networks, offering
advertisers access to millions of sports fans in the nation's top television
markets and covering most of the Major League Baseball, National Basketball
Association and National Hockey League teams.

RAINBOW NETWORK COMMUNICATIONS

Rainbow Network Communications, which is wholly-owned by Rainbow Media Holdings,
is a full service network programming origination and distribution company. Its
services include origination, transmission, video engineering, uplinking,
encryption, affiliate engineering, technology consulting, transponder
negotiation, content ordering, quality control and editing.

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STERLING DIGITAL LLC

Sterling Digital LLC, which operates Mag Rack, is designed to develop new niche
audience programming to be distributed and marketed using new media platforms.
Our iO, Interactive Optimum digital cable service includes Mag Rack.

ARRANGEMENTS WITH NBC

Through March 31, 2002, NBC has exchanged 3.5% of its interest in Rainbow
Media Holdings for 7,674,940 shares of Rainbow Media Group Class A tracking
stock. As a result, NBC currently owns 22.5% of the equity securities of Rainbow
Media Holdings. We own the remaining 77.5% of Rainbow Media Holdings.

In connection with the distribution of the Rainbow Media Group tracking stock,
NBC was given the right to exchange its 26% interest in Rainbow Media Holdings
common stock (at the date of the tracking stock distribution) over a period of
up to 9 years for approximately 44.7 million shares of Rainbow Media Group
tracking stock ( a 34% interest), based on the number of shares of Rainbow Media
Group tracking stock outstanding on the date of the tracking stock distribution.
NBC's exchange occurs on a deferred basis in the following steps:

- First, we effected a recapitalization of Rainbow Media Holdings and
created a new class of Rainbow Media Holdings preferred stock which is
held by us that is entitled to receive any and all dividends and
distributions on, and carries a liquidation preference with respect to,
Cablevision NY Group businesses and interests owned by Rainbow Media
Holdings. NBC converted all of its Rainbow Media Holdings common stock
into Rainbow Media Holdings Class A common stock and has the right to
exchange its Rainbow Media Holdings Class A common stock, representing
26% of the outstanding equity securities of Rainbow Media Holdings (at
the date of the tracking stock distribution), for 34% of the Rainbow
Media Group Class A tracking stock.
- Second, NBC may exchange each share of Rainbow Media Holdings common
stock held by it for approximately 16,868 shares of Rainbow Media Group
Class A tracking stock, for an aggregate of approximately 44.7 million
shares. NBC can make this exchange, in whole or in part, at its
election, each calendar quarter prior to December 31, 2009, and any
shares not exchanged prior to December 31, 2009 will be exchanged then.
Through March 31, 2002, NBC exchanged 3.5% of its interest in Rainbow
Media Holdings for 7,674,940 shares of Rainbow Media Group Class A
tracking stock.
- NBC agreed not to transfer any shares of Rainbow Media Group tracking
stock received upon an exchange for Rainbow Media Holdings common stock
(other than to other wholly-owned subsidiaries of NBC) until March 29,
2002. After March 29, 2002, NBC is entitled to transfer any shares of
Rainbow Media Group tracking stock subject to certain limitations.
- NBC has demand registration rights with respect to shares of its Rainbow
Media Group Class A tracking stock.

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SALES OF CABLEVISION COMMON STOCK BY AT&T

In October 2001, AT&T sold 19,151,285 shares of the Cablevision NY Group Class A
common stock it held under a registration statement filed by Cablevision with
the Securities and Exchange Commission, and concurrently with that sale,
subsidiaries of AT&T, through a trust, sold 26,918,195 units of a mandatorily
exchangeable trust security exchangeable into 26,918,195 shares of Cablevision
NY Group Class A common stock on or after November 15, 2004. Until termination
of the trust, AT&T will continue to beneficially own and vote the shares. AT&T
has agreed not to engage in any additional transactions relating to its
remaining 2,872,692 shares of Cablevision NY Group Class A common stock until
April 21, 2002.

In December 2001, AT&T sold 14,679,750 shares of the Rainbow Media Group Class A
common stock it held under a registration statement filed by Cablevision with
the Securities and Exchange Commission, and concurrently with that sale,
subsidiaries of AT&T, through a trust, sold 9,791,336 units of a mandatorily
exchangeable trust security exchangeable into 9,791,336 shares of Rainbow Media
Group Class A common stock on or after February 15, 2005. Until termination of
the trust, AT&T will continue to beneficially own and vote these shares.

Subsidiaries of AT&T have certain rights and obligations relating to Cablevision
under Cablevision's stockholders agreement with AT&T, including registration
rights. Upon the sale by AT&T of its shares of Cablevision NY Group Class A
common stock as described above, the Stockholders Agreement ceased to be
effective and will remain ineffective unless AT&T retains ownership of 5% or
more of the shares of Cablevision NY Group Class A common stock upon termination
of the trusts. Cablevision understands that AT&T has the right to cash settle
the prepaid forward contracts under which the trusts agreed to purchase
26,918,195 shares of Cablevision NY Group Class A common stock and 9,791,336
shares of Rainbow Media Group Class A common stock. In that event, if certain
conditions are satisfied, AT&T will continue to own those shares and may have
certain registration rights with respect to those shares under the stockholders
agreement.

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COMPETITION

CABLE TELEVISION

Our cable television systems compete with a variety of other television
programming delivery systems. The extent of our competition from broadcasters
depends upon the number and quality of the broadcast television signals
available to homes within our market by over-the-air reception, as compared to
the number and quality of signals distributed by our cable systems.

The primary competitor to our cable television systems is direct broadcast
satellite (DBS). DBS systems permit satellite transmissions from the low-power
C-Band or the higher power Ku-Band to be received by a dish antenna at the
viewer's home. Two DBS systems, EchoStar and DirecTV, are now available to our
customers. Their application to merge is being reviewed by the Department of
Justice and the FCC. The federal copyright laws now permit DBS systems to
retransmit local broadcast television signals to their customers. This has
enhanced the competitive position of DBS.

A telephone company may now, due to the Telecommunications Act of 1996, become a
cable system operator, fully subject to the franchising, rate and other federal
regulations applied to a cable system. Or it can operate an "open video system,"
(OVS) subject only to selected portions of the federal regulations applicable to
our cable systems. A post-1996 court decision, however, restored certain local
municipal franchising powers over OVS, making it a less attractive alternative
to cable's competitors. Companies have sought OVS status in areas in which our
cable television systems operate in New York City, Westchester County, and
northern New Jersey. One, RCN Corporation, is currently operating both OVS and
franchised cable television systems that compete with us in portions of New York
City and New Jersey.

Multichannel multipoint distribution services ("MMDS") also compete with us.
MMDS deliver television programming over microwave super-high frequency channels
received by subscribers with a special antenna. An MMDS operator is not required
to obtain a municipal franchise, and is subject to fewer FCC regulatory
requirements than are our cable systems.

Satellite master antenna ("SMATV") systems, like MMDS, generally serve large
multiple dwelling units under an agreement with the landlord. The FCC has
preempted all state and local regulation of SMATV. The statutory definition of a
cable system excludes facilities that do not use public rights-of-way. This
exempts SMATV, like MMDS, from local franchise and other requirements applicable
to cable system operators.

The FCC has established a wireless local multipoint distribution service
("LMDS") in the higher bands of the electromagnetic spectrum that could be used
to offer multichannel video in competition with our cable television systems, as
well as offer two-way communications services. The FCC has held auctions to
select LMDS licensees, but LMDS has not yet become a significant video
competitor in our market.

Although substantially all the franchises of our cable television system are
non-exclusive, and municipalities are prohibited by law from unreasonably
refusing to grant competitive franchises, most franchising authorities have
granted only one franchise in each area we serve. Other cable television
operators, however, could receive cable franchises for areas where our cable
television

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systems are operated, or a municipality that regulates us could build its own
cable system to compete with us.

The full extent to which developing media will compete with our cable television
systems may not be known for several years. There can be no assurance that
existing, proposed or as yet undeveloped technologies, including technologies
that provide video over the Internet, will not become dominant in the future and
render our cable television systems less profitable or even obsolete.

PROGRAMMING AND ENTERTAINMENT

Rainbow Media Holdings' programming networks compete in two basic markets, each
of which is highly competitive. First, Rainbow Media Holdings' programming
networks compete in the market for distribution of programming networks to cable
television systems and other distributors of video services, such as direct
broadcast satellite services. For example, American Movie Classics and Fox
Sports Net Chicago compete with other networks for the right to be carried on
cable television systems and ultimately for viewing by each system's
subscribers. Second, Rainbow Media Holdings' programming networks compete with
other networks that sell to cable television systems and other video service
distributors as well as and with broadcast and other programming entities to
secure desired entertainment and sports programming. In each of these markets,
some of Rainbow Media Holdings' competitors are large publicly held companies
that have greater financial resources than us, Rainbow Media Holdings and the
Rainbow Media Group.

In addition to the proposed merger of DirecTV and EchoStar, the Department of
Justice and the FCC are currently reviewing the proposed merger of AT&T
Broadband and Comcast. If either merger is ultimately approved and consummated,
it is likely that Rainbow Media Holdings' networks will face increased
competition in the future both for the right to be carried, and the right to be
carried on a preferential "tier," by the distribution systems owned by the
combined companies.

DISTRIBUTION OF PROGRAMMING NETWORKS

The business of distributing programming networks to cable television systems
and other video service distributors is highly competitive, and most existing
channel capacity is in use. In distributing a programming network, Rainbow Media
Holdings faces competition with other providers of programming networks for the
right to be carried by a particular cable system and for the right to be carried
by that cable system on a preferential "tier". Once Rainbow Media Holdings'
network is selected by a cable system or satellite distributor, that network
competes not only with the other channels available on the cable network for
viewers, but also with off-air broadcast television, pay-per-view and
video-on-demand networks, online, radio, print, media, motion picture theaters,
video cassettes and other sources of information, sporting events, and
entertainment.

Important to Rainbow Media Holdings' success in each area of competition it
faces are the prices it charges for its programming network, the quantity,
quality and variety of the programming offered on its network, and the
effectiveness of the networks' marketing efforts. The competition for viewers in
the context of non-premium programming networks is directly

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correlated with the competition for advertising revenues with each of the
competitors discussed above.

Competition with other programming networks may be hampered because the cable
television systems through which distribution is sought may be affiliated with
other programming networks. In addition, because such affiliated cable
television systems may have a substantial number of subscribers, the ability of
such programming networks to obtain distribution on affiliated cable television
operators may lead to increased subscriber and advertising revenue for such
networks because of their increased penetration compared to Rainbow Media
Holdings' programming networks. Even if such affiliated cable television
operators were to continue to carry Rainbow Media Holdings' programming
networks, there is no assurance that such cable television operators would not
move Rainbow Media Holdings' networks to less desirable tiers in the operator's
services offering while moving the affiliated programming network to a more
desirable tier, thereby giving the affiliated programming network a competitive
advantage.

New programming networks with affiliations to desired broadcasting networks may
also have a competitive advantage over Rainbow Media Holdings' new networks in
obtaining distribution through the "bundling" of affiliation agreements with the
right to carry the broadcasting network.

An important part of our strategy involves exploiting identified niches of the
cable television viewing audience that are generally well-defined and limited in
size. Rainbow Media Holdings has faced and will continue to face increasing
competition as other programming networks are launched that seek to serve the
same or similar niches.

SOURCES OF PROGRAMMING

Rainbow Media Holdings also competes with other programming networks to secure
desired programming. Although some of this programming is generated internally
through Rainbow Media Holdings' efforts in original programming, most of Rainbow
Media Holdings' programming is obtained through agreements with other parties
that have produced or own the rights to such programming. Competition for such
programming will increase as the number of programming networks increases. Other
programming networks that are affiliated with programming sources such as movie
or television studios, film libraries, or sports teams may have a competitive
advantage over Rainbow Media Holdings in this area.

COMPETITION FOR ENTERTAINMENT PROGRAMMING SOURCES. With respect to the
acquisition of entertainment programming, such as syndicated programs and
movies, which are not produced by or specifically for programming networks,
competitors include:

- national commercial broadcast television networks,
- local commercial broadcast television stations,
- the Public Broadcasting Service and local public television stations,
- pay-per-view programs
- other cable program networks

Some of these competitors have exclusive contracts with motion picture studios
or independent motion picture distributors or own film libraries.

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COMPETITION FOR SPORTS PROGRAMMING SOURCES. Because the loyalty of the sports
viewing audience to a sports programming network is driven by loyalty to a
particular team or teams, access to adequate sources of sports programming is
particularly critical to Rainbow Media Holdings' sports networks. Our sports
networks compete for national rights for teams or events principally with:

- national cable networks that specialize in or carry sports programming,
- television "superstations" which distribute sports and other programming
by satellite,
- the national commercial broadcast television networks,
- independent syndicators that acquire and resell such rights nationally,
regionally and locally, and
- direct broadcast satellite operators.

Rainbow Media Holdings' sports networks also compete for local and regional
rights with the same group of competitors, with local commercial broadcast
television stations, with other local commercial and regional sports networks
and with the sports teams which hold such rights.

The owners of distribution outlets such as cable television systems may also
contract directly with the sports teams in their local service areas for the
right to distribute a number of such teams' games on their systems. Some of
these competitors may also have ownership interests in sports teams or sports
promoters, which may give them an advantage in obtaining broadcast rights for
such teams or the sports promoted by such promoters.

In order to remain competitive in the acquisition and retention of rights to
sports programming, Rainbow Media Holdings' sports networks attempt to secure
long-term rights agreements with teams and athletic conferences. Rainbow Media
Holdings also attempts to include, in rights agreements with teams, terms that
provide Rainbow Media Holdings' sports networks with exclusive negotiation
periods prior to the scheduled expiration of the term of such agreements and/or
which provide Rainbow Media Holdings' sports networks with the right to match an
offer made by a competing distributor of sports programming. Rainbow Media
Holdings' sports networks, however, are not always successful in attaining these
objectives, and Rainbow Media Holdings cannot be assured that its strategy will
enable its sports networks to offer sports programming of the type and in the
quantity or quality necessary for such networks to remain competitive.

In addition to the above considerations, Rainbow Media Holdings operates in an
environment that is affected by changes in technology. It is difficult to
predict the future effect of technology on many of the factors affecting Rainbow
Media Holdings' competitive position. For example, data compression technology
may make it possible for most video programming distributors to increase their
channel capacity, thereby reducing the competition among programming networks
and broadcasters for channel space. As more channel space becomes available, the
position of Rainbow Media Holdings' programming networks in the most favorable
tiers of these distributors would be an important goal. Likewise, Rainbow Media
Holdings' inability to place its programming networks on distributors' favorable
tiers would be a competitive disadvantage.

Numerous businesses compete with Madison Square Garden, Radio City Entertainment
and CCG Holdings, Inc. for the entertainment expenditures of consumers.

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TELEPHONE SERVICES

Lightpath faces substantial competition from incumbent local exchange carriers
("ILECs"), such as Verizon, which are the dominant providers of local telephone
services in their respective service areas. ILECs have significant advantages
over Lightpath, including greater capital resources, an existing fully
operational local network, and long-standing relationships with customers.

While Lightpath and the ILECs are competitors, Lightpath must enter into
interconnection agreements with each ILEC so that Lightpath's customers can make
and receive calls to and from customers served by the ILEC. Federal and State
law and regulations require ILECs to enter into such agreements and provide such
facilities and services, at prices subject to regulation. The specific price,
terms and conditions of each agreement, however, depend on the outcome of
negotiations between Lightpath and an ILEC. Agreements are also subject to
approval by the state public service commission. Lightpath has entered into
interconnection agreements with Verizon for New York, New Jersey, and
Connecticut, which have been approved by the respective state commissions.

Lightpath also faces competition from one or more competitive access providers
("CAPs") and other new entrants in the local telecommunications marketplace,
Competitive Local Exchange Carriers ("CLECs"), such as Teleport Communications
Group, Inc. ("Teleport"), now part of AT&T, and MFS Communications Company, Inc.
("MFS"), now part of WorldCom as well as many others. In addition to the ILECs
and competitive service providers, other potential competitors capable of
offering local, private line and special access services include electric
utilities, long distance carriers, microwave carriers, wireless telephone system
operators (such as cellular, PCS, and specialized mobile radio), and private
networks built by large end users. A continuing trend toward business
combinations and alliances in the telecommunications industry may create
significant new competitors to Lightpath.

Many ILECs and certain of Lightpath's other potential competitors have
financial, personnel and other resources significantly greater than those of
Lightpath. Some of these competitors have existing networks or conduits that
could be adapted to provide local exchange services. There can be no assurance
that Lightpath will be able to compete effectively against these competitors.
Lightpath may also face competition from new technologies and services
introduced in the future.

RETAIL ELECTRONICS

The consumer retail electronics business is highly competitive. Cablevision
Electronics competes with national and regional retail electronics chains which
continue to expand in the New York metropolitan area, as well as with computer,
office product and entertainment superstores, general merchandise retailers,
discount stores and factory direct and Internet retailers. Some of these
competitors operate on a significantly larger scale than Cablevision Electronics
and are able to translate their scale to purchasing and pricing advantage.
Competition is primarily based on price, service and selection of merchandise.
Cablevision Electronics competes on the basis of these factors, with special
emphasis placed on the quality of the customer experience in the stores and on
selling and bundling merchandise that supports the in-home connectivity of our
high speed data, video and telephony services.

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REGULATION

CABLE TELEVISION

Our cable television systems are regulated under Congressionally imposed uniform
national guidelines, first set in the 1984 Cable Act and amended by the Cable
Television Consumer Protection and Competition Act of 1992 and the
Telecommunications Act of 1996.

This federal legislation authorizes states or localities to franchise our cable
television systems but sets limits on their franchising powers. It sets a
ceiling on cities imposing franchise fees of more than 5% of our gross revenues
from our provision of cable services. It prohibits localities from requiring us
to carry specific programming services, and protects us in seeking franchise
renewals by limiting the factors a locality may consider and requiring a due
process hearing before denial of renewal. Our franchising authorities cannot
grant an exclusive cable franchise to us and cannot unreasonably refuse to award
an additional franchise to compete with us.

Localities may require free access to public, educational or governmental
channels on our systems. We must make a limited number of commercial leased
access channels available for potentially competitive video services. Federal
law prohibits obscene programming and requires us to sell or lease devices to
block programming considered offensive by a customer.

Under the 1984 Cable Act, rates were unregulated for the cable services provided
by substantially all of our cable television systems. The 1992 Cable Act
reintroduced rate regulation for certain cable services and equipment that is
provided by substantially all of our systems.

Federal law requires us to establish a "basic service" package consisting, at a
minimum, of all local broadcast signals and all non-satellite delivered distant
broadcast signals that we choose to carry, as well as all public, educational
and governmental access programming carried by our systems.

The rates for our basic service package are still subject to regulation by local
franchising authorities.

Local municipalities or state cable television regulators may also still
regulate the rates we charge for the installation and lease of the equipment
used by subscribers to receive the basic service package, including equipment
that may also be used to receive other packages of programming, and the
installation and monthly use of connections for additional television sets.

The FCC's rules prevent us, unless we can justify higher rates on the basis of
our costs, from raising the rates we charge for the basic service package beyond
an inflation indexed amount, plus increases in certain costs beyond our control,
such as taxes, franchise fees and increased programming costs that exceed the
inflation index. Increases in fees we pay to broadcast stations for the
retransmission of their signals, may also be passed through to our subscribers.

The FCC also adopted guidelines for "cost-of-service" showings, pursuant to
which we can attempt to justify rates in excess of the basic service package
benchmarks. The FCC in addition permits rate adjustments attributed to the cost
of a rebuild or a substantial upgrade of our cable systems plant.

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The FCC's authority to reduce the rates for our service packages other than our
basic service package, in response to complaints by a franchising authority, if
the FCC found that our rates were unreasonable, has now sunset. Services that we
offer on a per channel or per program basis, like HBO, have never been subject
to rate regulation by either local municipalities or the FCC.

We are required by federal law to carry all local broadcast stations, or, at the
option of a local broadcaster, to obtain the broadcaster's prior consent for
retransmission of its signal. A substantial number of local broadcast stations
currently carried by our cable television systems have elected to negotiate for
retransmission consent. Our cable television systems have reached retransmission
consent agreements with most broadcast stations they currently carry, but the
potential remains for discontinued broadcast station carriage if such an
agreement is not renewed following its expiration.

The FCC is currently considering whether to adopt similar "must carry" rules for
broadcasters' new digital TV channels. The FCC last year reached the tentative
conclusion that "dual must carry" rules would be unconstitutional, if our
systems were required to carry these digital channels, in addition to
broadcasters' existing analog broadcast channels, before the statutorily
required transition from analog to digital broadcasting in 2006. But the FCC has
asked for additional information to help it finally resolve this issue.

In some instances, Rainbow Media Holdings has been ordered by the FCC to provide
its satellite-delivered programming to multichannel video programmers after such
programmers have filed complaints pursuant to federal "program-access" rules.

Congress has required the FCC to set limits on the number of channels that we
can program with programming services we control, and a national limit on the
number of subscribers we can serve. The FCC established a 40% limit on the
number of channels of one of our cable television systems that can be occupied
by programming services in which we have an attributable interest. The FCC also
set a national limit of 30% on the number of multichannel video households that
we can serve. The FCC later modified its cable ownership attribution rules,
maintaining its 5% voting stock benchmark, but attributing cable subscribers to
a partnership if a limited partner is involved in the partnership's "video
programming" activities. Both rule modifications affected us because of AT&T's
investment in us.

Last year, a federal appellate court held unconstitutional the FCC's rules
establishing the 30% national multichannel subscriber limit and the 40% channel
occupancy limit. It also eliminated the FCC's rule attributing cable subscribers
in a system held by a partnership to a limited partner if the limited partner is
involved in the partnership's "video programming" activities. The court upheld
the FCC's 5% voting stock benchmark for an "attributable interest" in a cable
system. This year, a different panel of the same court invalidated an FCC rule
that barred us from owning a broadcast station in the same market in which we
own a cable system.

The Telecommunications Act of 1996, besides deregulating the rates for our
non-basic tiers of service, also permitted our regulated equipment rates to be
computed by aggregating our costs of broad categories of equipment at the
franchise, system, regional or company level.

All our local rate regulation, including regulation of our basic service
package, is by federal law eliminated if one of our cable systems is subject to
"effective competition" from another

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multichannel video programming provider, such as a telephone company, a DBS
operator, or a competing OVS or cable company like RCN. The 1996 Act expanded
the definition of "effective competition" to include instances in which a local
telephone company or its affiliate (or a multichannel video programming
distributor using the facilities of a telephone company or its affiliates)
offers video programming comparable to ours to subscribers in our franchise area
by any means other than DBS. Our cable television systems gain greater
flexibility in packaging and pricing when the FCC makes a finding of "effective
competition" based on such competition. We have been successful in obtaining
from the FCC such an "effective competition" finding in certain communities in
our market.

The FCC was required by federal law to initiate a process through which the
cable industry would develop standards to allow subscribers to use set top boxes
purchased or leased from any distributor to access programming on their local
cable system. These standards have now been developed.

FCC rules require that we black out certain network and sports programming on
imported distant broadcast television signals upon request. The FCC also
requires that we delete syndicated programming carried on distant signals upon
the request of any local television/broadcast station holding the exclusive
right to broadcast the same program within our local television market and, in
certain cases, upon the request of the copyright owner of such programs. These
rules affect the diversity and cost of programming options for our cable
television systems.

The FCC regulates us in such areas as customer service, technical standards,
equal employment opportunity, privacy, rates for leased access channels, and
obscenity and indecency. The FCC is also tasked by Congress to promote
compatibility between cable television systems and other consumer electronic
equipment such as "cable ready" television sets and videocassette recorders.

The FCC also imposes restrictions on our origination cablecasting channels and
rules governing political broadcasts; ownership and control of cable home wiring
in single family residences and multiple dwelling units; and limitations on
advertising contained in children's programming that we carry.

The FCC requires us to pay annual "regulatory fees" for its services that we may
pass on to subscribers as "external cost" adjustments to our basic cable service
rates. Other fees are assessed for the FCC licenses we hold for business radio,
cable television relay systems and earth stations. These fees may not be
collected from our subscribers.

The FCC has authority to regulate utility company rates for cable rental of
pole and conduit space unless states establish preemptive regulations in this
area. The states in which our cable television systems operate have adopted
such regulations. The 1996 Act requires that utilities provide cable
television systems and telecommunications carriers with nondiscriminatory
access to any pole, conduit or right-of-way controlled by the utility.

The FCC has adopted regulations to govern the charges for pole attachments used
by companies providing telecommunications services, including cable operators
like us. These pole attachment regulations did not become effective until last
year, and subsequent increases in attachment rates resulting from the FCC's new
regulations will be phased in throughout equal annual increments over five
years, until 2006. The FCC's authority to set pole access rates for cable
Internet access services was recently upheld by the Supreme Court.

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Some parties have proposed in the past few years federal, state and local
requirements that would force cable systems to provide carriage to third-party
Internet service providers in addition to services the system itself provides,
such as our Optimum Online cable modem service. Several federal court decisions
have invalidated local franchising authority requirements that the cable system
in the community provide access to all third-party Internet service providers.
Some local franchising authorities where we operate might attempt to impose a
similar requirement on us. Faced with this uncertainty, the FCC opened an
inquiry into how to classify the provision of this service by a cable system for
regulatory purposes. In March, 2002, the FCC determined that services like
Optimum Online should be classified as "information services." This category of
services are traditionally subjected by the FCC to a lesser degree of regulation
than "telecommunications services," which normally must offer their facilities
to all comers on a common carrier basis. The FCC has put out for public comment
the proper regulatory consequences of its classification decision.

FEDERAL COPYRIGHT REGULATION. There are no restrictions on the number of distant
broadcast television signals that our systems may legally import, but we are
required to pay copyright royalty fees to receive a statutory compulsory license
to carry them. The U.S. Copyright Office has increased our royalty fees from
time to time and has, at times, recommended to Congress changes in the statutory
compulsory licenses for cable television carriage of broadcast signals. Such
changes could adversely affect the ability of our cable television systems to
obtain such programming, and could increase the cost of such programming.

STATE AND MUNICIPAL REGULATION OF CABLE TELEVISION. Regulatory responsibility
for local aspects of the cable business such as franchisee selection, system
design and construction, safety, and consumer services remains with either state
or local officials and, in some jurisdictions, with both. Federal law limits the
damages for certain constitutional claims by cable operators and others against
franchising authorities for their franchising activities.

New York law provides for comprehensive state-wide cable regulation, including
approval of transfers of our cable franchises and consumer protection
legislation. New Jersey and Connecticut also regulate us at the state level.
State and local franchising jurisdiction, however, must be exercised
consistently with federal law. Among the more significant federal restrictions
is a 5% ceiling on franchise fees and mandatory renegotiation of certain
franchise requirements if warranted by changed circumstances.

PROGRAMMING AND ENTERTAINMENT

Cable television program distributors, such as Rainbow Media Holdings, and
including the businesses attributed to the Rainbow Media Group, are not directly
regulated by the FCC. But they are regulated indirectly when they are affiliated
with a cable television system operator like Cablevision. Moreover, to the
extent that regulations and laws, either presently in force or proposed, hinder
or stimulate the growth of the cable television and satellite industries, which
are directly regulated by the FCC, Rainbow Media Holdings' business will be
directly affected.

Federal law limits our ability to freely manage the sale of Rainbow Media
Holdings' services. The "program access" provisions of federal law require that
Rainbow Media Holdings' programming services, to the extent that they are
delivered by satellite, be sold to other multichannel video programming
providers, such as MMDS, SMATV and DBS, that compete with our local cable
television systems. Rainbow Media Holdings cannot have exclusive

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contracts with cable operators, nor can it unreasonably discount as to prices,
terms and conditions of sale or distribution.

The FCC has declined to extend these program-access rules to cover
terrestrially-delivered sports or news programming created by cable-system
affiliated programmers such as Rainbow Media Holdings, and proposals by our
competitors made to Congress to adopt such extensions have not been successful.
It is not possible to predict whether such an expansion of the program access
rules might in the future be adopted by the FCC or Congress and, if so, what
effect it might have on Rainbow Media Holdings.

Broadcast stations have the right to be carried on our cable television systems
and those of other cable companies under the so-called "must carry" rules. This
reduces significantly the amount of channel space that is available for carriage
by cable television systems of networks distributed by Rainbow Media Holdings.
The FCC is currently considering whether to require cable television systems
also to carry each broadcast station's digital broadcast signal, as well as its
existing analog broadcast signal, during the transition period to complete
conversion of all broadcast television stations from analog technology to
digital technology: This transition is currently scheduled to occur by December
31, 2006. This "dual must carry," would even more significantly reduce the
amount of channel space available for Rainbow Media Holdings' services both on
our cable television systems and those owned by other companies. The FCC last
year tentatively determined that such "dual must carry" obligations would be
unconstitutional, but is continuing to study the issue.

The FCC has also imposed requirements on cable operators that, in effect,
require certain of Rainbow Media Holdings' services to provide closed captioning
for the hearing-impaired.

All satellite carriers must under federal law offer their service to deliver
Rainbow Media Holdings and its competitor programming networks on a
nondiscriminatory basis (including by means of a lottery). A satellite carrier
cannot unreasonably discriminate against any customer in its charges or
conditions of carriage. Numerous competing satellite services today provide
transponders that Rainbow could use to deliver its programming networks.

TELEPHONE SERVICES

The 1996 Act was enacted to remove barriers to entry in the local telephone
market that continues to be monopolized by the Bell Operating Companies ("BOCs")
and other ILECs by preempting state and local laws that restrict competition and
by requiring ILECs to provide competitors, such as cable operators and long
distance companies, with nondiscriminatory access and interconnection to the BOC
and ILEC networks. The law permits the BOCs to enter the market for long
distance service (through a separate subsidiary), on a state-by-state basis,
after they satisfy a "competitive checklist." The 1996 Act also facilitates the
entry of utility companies into the telecommunications market.

The 1996 Act entitles Lightpath to certain rights, but as a telecommunications
carrier, it also subjects Lightpath to regulation by the FCC. Lightpath's
designation as a telecommunications carrier also results in other regulations
that may affect Lightpath and the services it offers. The rights and obligations
to which CLECs are entitled and subject have been and likely will continue to be
subject to litigation in the courts and further review and revision by the FCC
and Congress.

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The 1996 Act requires Lightpath to interconnect directly or indirectly with
other telecommunications carriers. In some cases, interconnecting carriers must
compensate each other for the transport and termination of calls on their
network (I.E., reciprocal compensation). Accordingly, Lightpath is entitled, in
some cases, to reciprocal compensation from carriers when it terminates their
originating calls on its network. With regard to reciprocal compensation, the
FCC issued an order capping compensation for some ISP-bound traffic and
eliminating compensation for other ISP-bound traffic. This matter is on appeal
to the courts and is before the FCC on reconsideration. Further, the FCC is
exploring methods to unify intercarrier compensation and access charges and is
considering a bill-and-keep approach (i.e., no compensation is paid between
carriers) as well as other alternative modifications to the existing
intercarrier compensation regimes. Lightpath's revenues may be negatively
affected by FCC and court decisions on both compensation matters.

In addition to these proceedings and matters arising under the obligations of
the 1996 Act, there are several other competition-related issues that the FCC is
reviewing as part of its ongoing examination of the competitive marketplace.
First, the FCC is considering whether to adopt a set of performance measures and
standards for certain ILEC services provided to CLECs to improve the quality of
service competitors receive with respect to those services. Second, the FCC is
considering how to regulate broadband services provisioned by ILECs and other
wireline providers of broadband Internet access services, which includes
Lightpath. The outcome of this broadband proceeding may affect the degree of
regulation to which Lightpath's services are subject in the future, including
increased costs due to a finding that these services should be subject to
universal service contribution requirements discussed below.

Lightpath is subject to federal and state regulations that implement universal
service support for access to advanced telecommunications services and
information services by rural, high-cost, and low-income markets at reasonable
rates; and access to advanced telecommunications services by schools, libraries,
and rural health care providers. Currently, the FCC assesses Lightpath for
payments and other subsidies on the basis of a percentage of interstate revenue
it receives from certain customers. The FCC is reviewing the basis for
contribution to universal service and considering assessments based on a
flat-fee charge, such as a per-line charge. States may also assess such payments
and subsidies for state universal service programs. Changes to universal service
contributions may affect Lightpath's revenues.

Lightpath is also subject to other FCC requirements in connection with the
interstate long distance services it provides, including the payment of
regulatory fees to fund the Telecommunication Relay Services fund, local number
portability administration, and the North American Numbering Plan.

Like ILECs, CLECs may assess interstate access charges on interexchange carriers
whose customers access the ILEC or CLEC's local network. CLECs have not been
subject to the extensive regulation to which ILECs have been subject and CLECs
have been able to set their own interstate access rates so long as they are
just, reasonable, and not unreasonably discriminatory. However, the FCC has
issued an order implementing a benchmark of decreasing access rates that CLECs
can charge, moving such rates in alignment with lower ILEC access rates. The
order is under reconsideration by the FCC.

Finally, as ILECs obtain authority to offer long distance services bundled with
local services, which allows them to enter the long distance market and to
compete with other interexchange

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carriers like Lightpath, Lightpath's revenues may be affected by customers who
choose to obtain local and long distance services from the dominant service
provider in the market, the BOC.

Lightpath is also subject to regulation by the state public service commission
in each state in which it provides service. In order to provide service,
Lightpath must seek approval from each such state commission. Lightpath is
currently authorized to provide service in New York, Connecticut, and New
Jersey.

Lightpath's regulatory obligations vary from state to state and include some or
all of the following requirements: filing tariffs (rates, terms and conditions);
filing operational, financial, and customer service reports; seeking approval to
transfer the assets or capital stock of the telephone company; seeking approval
to issue stocks, bonds, and other forms of indebtedness of the telephone
company; filing all contracts or other documentation involving transactions
between the telephone company and its affiliates; reporting customer service and
quality of service requirements; making contributions to state universal service
support programs; geographic build-out; and other matters relating to
competition.

EMPLOYEES AND LABOR RELATIONS

As of December 31, 2001, we had 16,204 full-time, 3,700 part-time and 6,876
temporary employees of which 493, 1,115 and 3,440, respectively, were covered
under collective bargaining agreements. We believe that our relations with our
employees are satisfactory.

ITEM 2. PROPERTIES.

We lease certain real estate where our business offices, microwave receiving
antennae, earth stations, transponders, microwave towers, warehouses, headend
equipment, hub sites, program production studios and access studios are located.
We occupy several leased business offices in Woodbury, New York with an
aggregate of approximately 296,000 square feet of space, business offices in
Jericho, New York with approximately 621,000 square feet of space, and warehouse
space in Farmingdale, New York with approximately 34,000 square feet. Other
significant leasehold properties include approximately 309,000 square feet
housing Madison Square Garden's office operations and warehouse and
approximately 569,000 square feet comprising Radio City Music Hall. The WIZ
leases 43 retail store locations, a warehouse and a corporate office aggregating
approximately 1,766,000 square feet.

We own our headquarters building located in Bethpage, New York with
approximately 546,000 square feet of space and through Madison Square Garden,
also own the Madison Square Garden arena and theater complex in New York City
comprising approximately 1,016,000 square feet. We generally own all assets
(other than real property) related to our cable television operations, including
our program production equipment, headend equipment (towers, antennae,
electronic equipment and satellite earth stations), cable system plant
(distribution equipment, amplifiers, subscriber drops and hardware), converters,
test equipment, tools and maintenance equipment. We also generally own our
service and other vehicles.

Clearview Cinemas leases 48 theaters with approximately 43,800 seats and owns an
additional 11 theaters with approximately 9,200 seats.

We believe our properties are adequate for our use.

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ITEM 3. LEGAL PROCEEDINGS.

We are party to various lawsuits, some involving substantial amounts. Management
does not believe that the resolution of such lawsuits will have a material
adverse impact on our financial position.

On April 25, 2001, At Home commenced a lawsuit in the Court of Chancery of the
State of Delaware alleging that Cablevision had breached its obligations under
certain agreements with At Home. The suit seeks a variety of remedies including:
recision of the agreements between At Home and Cablevision and cancellation of
all warrants currently held by Cablevision, damages, and/or an order prohibiting
Cablevision from continuing to offer its Optimum Online service and requiring it
to convert its Optimum Online customers to the Optimum@Home service and to roll
out the Optimum@Home service. Cablevision has filed an answer to the complaint
denying the material allegations and asserting various affirmative defenses. On
September 28, 2001, At Home filed a petition for reorganization in federal
bankruptcy court.

On January 8, 2002, At Home terminated its At Home service to all of
Cablevision's Optimum@Home subscribers. In a letter dated January 9, 2002,
Cablevision advised At Home that such termination of service constituted an
election by At Home to terminate the existing master distribution agreement
entered into by and between Cablevision and At Home and all other related
agreements.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

PART II

ITEM 5. MARKET FOR THE REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

Cablevision NY Group Class A common stock and Cablevision's Class A common stock
prior to its re-designation as Cablevision NY Group Class A common stock, on
March 30, 2001, were traded on the NYSE under the symbol "CVC". On March 30,
2001, Rainbow Media Group Class A tracking stock began trading on the NYSE under
the symbol "RMG".

PRICE RANGE OF CABLEVISION CLASS A COMMON STOCK

The following table sets forth for the periods indicated the intra-day high and
low sales prices per share of the Cablevision Class A common stock prior to its
re-designation as Cablevision NY Group Class A common stock on March 30, 2001,
as reported on the NYSE.

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PRICE RANGE OF CABLEVISION NY GROUP CLASS A COMMON STOCK

The following table sets forth for the periods indicated the intra-day high and
low sales prices per share of the Cablevision NY Group Class A common stock
after the re-designation on March 30, 2001, as reported on the NYSE.

PRICE RANGE OF RAINBOW MEDIA GROUP CLASS A TRACKING STOCK

The following table sets forth for the periods indicated the intra-day high and
low sales prices per share of Rainbow Media Group Class A tracking stock after
the initial issuance and distribution on March 30, 2001, as reported on the
NYSE.

As of March 15, 2002, there were 1,018 holders of record of Cablevision NY Group
Class A common stock and 967 holders of record of Rainbow Media Group Class A
tracking stock.

See Item 1. "Business - Tracking Stock" for a description of the tracking stock
distributed to Cablevision's stockholders on March 29, 2001.

There is no public trading market for the Cablevision NY Group Class B common
stock, par value $.01 per share or the Rainbow Media Group Class B common stock,
par value $.01 per share. As of March 15, 2002, there were 30 holders of record
of each of Cablevision NY Group Class B common stock and Rainbow Media Group
Class B common stock.

All outstanding shares of common stock of CSC Holdings are held by Cablevision.

See Item 1. "Business - The Holding Company Reorganization and
Tele-Communications Transactions" for a description of the changes to our
capitalization as a result of the 1998 holding company reorganization.

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DIVIDENDS. Neither CSC Holdings nor Cablevision have paid any dividends on
shares of Class A or Class B common stock. Cablevision does not anticipate
paying any cash dividends on shares of Cablevision NY Group Class A or Class B
common stock or Rainbow Media Group Class A or Class B common stock in the
foreseeable future.

Cablevision and CSC Holdings may pay cash dividends on their capital stock only
from surplus as determined under Delaware law. If dividends are paid on the
Cablevision NY Group common stock, holders of the Cablevision NY Group Class A
common stock and Cablevision NY Group Class B common stock are entitled to
receive dividends, and other distributions in cash, stock or property, equally
on a per share basis, except that stock dividends with respect to Cablevision NY
Group Class A common stock may be paid only with shares of Cablevision NY Group
Class A common stock and stock dividends with respect to Cablevision NY Group
Class B common stock may be paid only with shares of Cablevision NY Group Class
B common stock. If dividends are paid on the Rainbow Media Group common stock,
holders of the Rainbow Media Group Class A common stock and Rainbow Media Group
Class B common stock are entitled to receive dividends, and other distributions
in cash, stock or property, equally on a per share basis, except that stock
dividends with respect to Rainbow Media Group Class A common stock may be paid
only with shares of Rainbow Media Group Class A common stock and stock dividends
with respect to Rainbow Media Group Class B common stock may be paid only with
shares of Rainbow Media Group Class B common stock.

Subject to the above, dividends may be declared and paid on Cablevision NY Group
common stock and/or Rainbow Media Group common stock in equal or unequal
amounts.

CSC Holdings paid $174.5 million of cash dividends on the Series H and M
Preferred Stock in 2001 and paid $25.5 million of cash dividends on the Series H
Preferred Stock and $139.8 million of dividends in additional shares of Series H
and M Preferred Stock in 2000. CSC Holdings is restricted from paying dividends
on its preferred stock under the provisions of its senior credit agreement if a
default has occurred and is continuing under such agreement. Additionally, CSC
Holdings' senior credit agreement, senior debentures and senior subordinated
debt instruments may restrict the payment of dividends in respect of any shares
of capital stock in certain circumstances.

Dividends may not be paid in respect of shares of Cablevision's common stock
unless all dividends due and payable in respect of the preferred stock of CSC
Holdings have been paid or provided for. See Item 7. - "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources."

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ITEM 6. SELECTED FINANCIAL DATA.

SELECTED FINANCIAL AND STATISTICAL DATA

The operating and balance sheet data included in the following selected
financial data have been derived from the consolidated financial statements of
Cablevision Systems Corporation and CSC Holdings, Inc. Acquisitions made by
these companies were accounted for under the purchase method of accounting and,
accordingly, the acquisition costs were allocated to the net assets acquired
based on their fair value, except for assets previously owned by Charles F.
Dolan or affiliates of Mr. Dolan which were recorded at historical cost.
Acquisitions are reflected in operating, balance sheet and statistical data from
the time of acquisition. CSC Holdings, Inc.'s operating, balance sheet and
statistical data prior to April 5, 1999 has been restated to include the
financial position, results of operations and statistical information of the
systems acquired from Tele-Communications from March 4, 1998, the date of
acquisition by the Company. The selected financial data presented below should
be read in conjunction with the consolidated financial statements of Cablevision
Systems Corporation and CSC Holdings, Inc. and the notes thereto included in
Item 8 of this Report.

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