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8-K - FORM 8-K - CSC HOLDINGS LLCy91897e8vk.htm
EX-99.2 - EX-99.2 - CSC HOLDINGS LLCy91897exv99w2.htm
EX-99.1 - EX-99.1 - CSC HOLDINGS LLCy91897exv99w1.htm
EXHIBIT 99.3
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
On June 30, 2011, Cablevision Systems Corporation (“Cablevision”) and CSC Holdings, LLC (“CSC Holdings”) (collectively, the “Company”) completed the spin-off of AMC Networks, Inc. (“AMC Networks”) through a tax-free distribution to its stockholders (the “AMC Distribution”). The Company contributed to AMC Networks, the Company’s subsidiary that owns directly or indirectly all of the interests in four nationally distributed programming networks: AMC, WE tv, IFC and Sundance Channel, as well as AMC/Sundance Channel Global, IFC Entertainment, Rainbow Network Communications and certain other businesses, and then distributed the common stock of AMC Networks to Cablevision’s stockholders. The distribution by the Company of the common stock of AMC Networks to Cablevision stockholders was treated as a distribution in the form of a dividend at Cablevision’s historical cost. Subsequent to the AMC Distribution, the Company will no longer consolidate the financial results of AMC Networks for the purpose of its own financial reporting. After the date of the AMC Distribution, the historical financial results of AMC Networks will be reflected in the Company’s consolidated financial statements as discontinued operations for all periods presented through the AMC Distribution date, beginning with the financial statements to be filed for the quarter ended June 30, 2011.
The accompanying unaudited pro forma consolidated financial statements reflect certain known impacts of the AMC Distribution and the separation of AMC Networks from the Company. The unaudited pro forma consolidated financial statements have been prepared giving effect to the AMC Distribution as if this transaction had occurred as of January 1, 2008 for the unaudited pro forma consolidated statements of operations for the three months ended March 31, 2011 and 2010 and for the years ended December 31, 2010, 2009 and 2008 and as of March 31, 2011 for the unaudited pro forma condensed consolidated balance sheet.
The unaudited pro forma condensed consolidated balance sheets as of March 31, 2011 and the unaudited pro forma consolidated statements of operations for the three months ended March 31, 2011 and 2010 and the years ended December 31, 2010, 2009 and 2008 are based on the historical consolidated financial statements of Cablevision and CSC Holdings, and reflect certain assumptions that we believe are reasonable, given the information currently available. While such adjustments are subject to change, in management’s opinion, the pro forma adjustments have been developed on a reasonable and rational basis.
The Company has entered into various agreements with AMC Networks and certain of its subsidiaries in connection with transition services and a number of ongoing commercial relationships, including affiliation agreements covering the carriage of certain of AMC Networks’ programming networks by Cablevision’s Telecommunications Services segment.
These unaudited pro forma consolidated financial statements reflect all other adjustments that, in the opinion of management, are necessary to present fairly the pro forma consolidated results of operations and consolidated financial position of the Company as of and for the periods indicated. The unaudited pro forma consolidated financial information is for illustrative and informational purposes only and is not intended to represent or be indicative of what the Company’s financial condition or results of operations would have been had AMC Networks operated historically as a company independent of Cablevision or if the AMC Distribution had occurred on the dates indicated. The unaudited pro forma consolidated financial information also should not be considered representative of the Company’s future consolidated financial condition or consolidated results of operations. The unaudited pro forma financial data should be read in conjunction with the historical consolidated financial statements and accompanying notes thereto included in the Company’s Form 10-K for the year ended December 31, 2010 and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011.

 


 

The following is a brief description of the amounts recorded under each of the column headings in the accompanying unaudited pro forma consolidated balance sheets and the unaudited pro forma consolidated statements of operations:
Historical
This column reflects Cablevision’s and CSC Holdings’ respective historical consolidated financial position as of March 31, 2011 and respective historical consolidated results of operations for the three months ended March 31, 2011 and 2010 and for the years ended December 31, 2010, 2009 and 2008, prior to any adjustment for the AMC Distribution and the pro forma adjustments described under the headings “Distribution of AMC Networks” and “Adjustments Relating to AMC Distribution” discussed below.
Distribution of AMC Networks
This column reflects AMC Networks’ historical consolidated financial position as of March 31, 2011 and its historical consolidated results of operations for the three months ended March 31, 2011 and 2010 and each of the years ended December 31, 2010, 2009 and 2008, prior to the pro forma adjustments described under the heading “Adjustments Relating to AMC Distribution” below.
Adjustments Relating to AMC Distribution
This column represents pro forma adjustments for transactions between the Company and AMC Networks that were previously eliminated in consolidation and will no longer be eliminated subsequent to the AMC Distribution or that arise as a direct result of the AMC Distribution and are expected to have an ongoing effect. These adjustments are more fully described in the notes to the accompanying unaudited pro forma consolidated financial information.

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CABLEVISION SYSTEMS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2011
                                 
            Distribution of     Adjustments        
            AMC     Relating to AMC        
    Historical     Networks* (1)     Distribution*     Pro forma  
            (dollars in thousands)          
ASSETS
                               
 
Current Assets:
                               
 
Cash and cash equivalents
  $ 610,025     $ (84,073 )   $ 4,600 (3)   $ 530,552  
Restricted cash
    1,188       (39 )           1,149  
Accounts receivable, trade (less allowance for doubtful accounts)
    478,588       (223,908 )           254,680  
Prepaid expenses and other current assets
    178,617       (44,663 )           133,954  
Amounts due from affiliates
    5,486       (2,897 )     16,725 (2)     19,314  
Program rights, net
    199,660       (199,660 )            
Deferred tax asset
    189,853       (6,301 )     (94,935) (6)     88,617  
Investment securities pledged as collateral
    197,924                   197,924  
 
                       
Total current assets
    1,861,341       (561,541 )     (73,610 )     1,226,190  
 
                               
Property, plant and equipment, net of accumulated depreciation
    3,326,968       (65,453 )           3,261,515  
Amounts due from affiliates
    3,433       (3,433 )            
Investment securities pledged as collateral
    333,003                   333,003  
Derivative contracts
    3,559                   3,559  
Other assets
    58,348       (14,204 )           44,144  
Program rights, net
    696,030       (696,030 )            
Deferred tax asset
    127       (43,123 )     94,578 (6)     51,582  
Deferred carriage fees, net
    65,106       (65,106 )            
Affiliation, broadcast and other agreements, net of accumulated amortization
    327,589       (327,589 )            
Other amortizable intangible assets, net of accumulated amortization
    294,989       (17,515 )           277,474  
Indefinite-lived cable television franchises
    1,240,228                   1,240,228  
Other indefinite-lived intangible assets
    86,795       (19,900 )           66,895  
Goodwill
    525,240       (83,173 )           442,067  
Deferred financing and other costs, net of accumulated amortization
    140,152       (6,387 )           133,765  
 
                       
 
  $ 8,962,908     $ (1,903,454 )   $ 20,968     $ 7,080,422  
 
                       
 
*   See Note A of Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheets.

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CABLEVISION SYSTEMS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(CONTINUED)
MARCH 31, 2011
                                 
                    Adjustments        
            Distribution of AMC     Relating to AMC        
    Historical     Networks*(1)     Distribution*     Pro forma  
    (dollars in thousands)  
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
                               
 
                               
Current Liabilities:
                               
Accounts payable
  $ 523,797     $ (54,009 )   $     $ 469,788  
Accrued liabilities
    605,233       (55,708 )     900 (4)     550,425  
Amounts due to affiliate
    27,106             22,137 (2)     49,243  
Deferred revenue
    80,090       (15,844 )           64,246  
Program rights obligations
    127,344       (127,240 )           104  
Liabilities under derivative contracts
    46,050                   46,050  
Credit facility debt
    304,659       (50,000 )           254,659  
Collateralized indebtedness
    125,410                   125,410  
Capital lease obligations
    5,329       (3,838 )           1,491  
Senior notes
    325,796                   325,796  
 
                       
Total current liabilities
    2,170,814       (306,639 )     23,037       1,887,212  
 
                               
Deferred revenue
    10,373       (93 )           10,280  
Program rights obligations
    430,401       (430,401 )            
Liabilities under derivative contracts
    173,364                   173,364  
Other liabilities
    300,895       (88,746 )     58,251 (4)     270,400  
Credit facility debt
    6,150,231       (362,500 )     (1,020,000) (5)     4,767,731  
Collateralized indebtedness
    273,315                   273,315  
Capital lease obligations
    44,738       (15,360 )           29,378  
Senior notes and debentures
    5,547,023       (299,619 )           5,247,404  
Senior subordinated notes
    324,134       (324,134 )            
 
                       
Total liabilities
    15,425,288       (1,827,492 )     (938,712 )     12,659,084  
 
                       
 
                               
Redeemable noncontrolling interests
    14,330                   14,330  
 
                       
 
                               
Commitments and contingencies
                               
 
                               
Total stockholders’ deficiency
    (6,478,554 )     (75,962 )     (5,412) (2)     (5,594,836 )
 
                    965,092 (7)        
Noncontrolling interest
    1,844                   1,844  
 
                       
Total deficiency
    (6,476,710 )     (75,962 )     959,680       (5,592,992 )
 
                       
 
  $ 8,962,908     $ (1,903,454 )   $ 20,968     $ 7,080,422  
 
                       
 
*   See Note A of Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheets.

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CSC HOLDINGS, LLC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2011
                                 
            Distribution of     Adjustments        
            AMC     Relating to AMC        
    Historical     Networks* (1)     Distribution*     Pro forma  
            (dollars in thousands)          
ASSETS
                               
 
Current Assets:
                               
 
Cash and cash equivalents
  $ 609,174     $ (84,073 )   $ 4,600 (3)   $ 529,701  
Restricted cash
    1,188       (39 )           1,149  
Accounts receivable, trade (less allowance for doubtful accounts)
    478,588       (223,908 )           254,680  
Prepaid expenses and other current assets
    174,166       (44,663 )           129,503  
Amounts due from affiliates
    514,294       (2,897 )     16,725 (2)     528,122  
Program rights, net
    199,660       (199,660 )            
Deferred tax asset
    173,880       (6,301 )     (94,935) (6)     72,644  
Investment securities pledged as collateral
    197,924                   197,924  
 
                       
Total current assets
    2,348,874       (561,541 )     (73,610 )     1,713,723  
 
                               
Property, plant and equipment, net of accumulated depreciation
    3,326,968       (65,453 )           3,261,515  
Amounts due from affiliates
    3,433       (3,433 )            
Investment securities pledged as collateral
    333,003                   333,003  
Derivative contracts
    3,559                   3,559  
Other assets
    58,348       (14,204 )           44,144  
Program rights, net
    696,030       (696,030 )            
Deferred tax asset
          (43,123 )     43,123 (6)      
Deferred carriage fees, net
    65,106       (65,106 )            
Affiliation, broadcast and other agreements, net of accumulated amortization
    327,589       (327,589 )            
Other amortizable intangible assets, net of accumulated amortization
    294,989       (17,515 )           277,474  
Indefinite-lived cable television franchises
    1,240,228                   1,240,228  
Other indefinite-lived intangible assets
    86,795       (19,900 )           66,895  
Goodwill
    525,240       (83,173 )           442,067  
Deferred financing and other costs, net of accumulated amortization
    99,308       (6,387 )           92,921  
 
                       
 
  $ 9,409,470     $ (1,903,454 )   $ (30,487 )   $ 7,475,529  
 
                       
 
*   See Note A of Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheets.

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CSC HOLDINGS, LLC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(CONTINUED)
MARCH 31, 2011
                                 
                    Adjustments        
            Distribution of AMC     Relating to AMC        
    Historical     Networks*(1)     Distribution*     Pro forma  
            (dollars in thousands)          
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
                               
 
Current Liabilities:
                               
Accounts payable
  $ 523,797     $ (54,009 )   $     $ 469,788  
Accrued liabilities
    550,795       (55,708 )     900 (4)     495,987  
Amounts due to affiliate
    27,000             22,137 (2)     49,137  
Deferred revenue
    80,090       (15,844 )           64,246  
Program rights obligations
    127,344       (127,240 )           104  
Liabilities under derivative contracts
    46,050                   46,050  
Credit facility debt
    304,659       (50,000 )           254,659  
Collateralized indebtedness
    125,410                   125,410  
Capital lease obligations
    5,329       (3,838 )           1,491  
Senior notes
    325,796                   325,796  
 
                       
Total current liabilities
    2,116,270       (306,639 )     23,037       1,832,668  
 
                               
Deferred revenue
    10,373       (93 )           10,280  
Program rights obligations
    430,401       (430,401 )            
Liabilities under derivative contracts
    173,364                   173,364  
Other liabilities
    299,671       (88,746 )     58,251 (4)     269,176  
Deferred tax liability
    492,527             (45,200) (6)     447,327  
Credit facility debt
    6,150,231       (362,500 )     (1,020,000) (5)     4,767,731  
Collateralized indebtedness
    273,315                   273,315  
Capital lease obligations
    44,738       (15,360 )           29,378  
Senior notes and debentures
    3,381,028       (299,619 )           3,081,409  
Senior subordinated notes
    324,134       (324,134 )            
 
                       
Total liabilities
    13,696,052       (1,827,492 )     (983,912 )     10,884,648  
 
                       
 
                               
Redeemable noncontrolling interests
    14,330                   14,330  
 
                       
 
                               
Commitments and contingencies
                               
 
                               
Total stockholders’ deficiency
    (4,302,756 )     (75,962 )     (5,412) (2)     (3,425,293 )
 
                    958,837 (7)        
 
                               
Noncontrolling interest
    1,844                   1,844  
 
                       
Total deficiency
    (4,300,912 )     (75,962 )     953,425       (3,423,449 )
 
                       
 
  $ 9,409,470     $ (1,903,454 )   $ (30,487 )   $ 7,475,529  
 
                       
 
*   See Note A of Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheets.

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Note A — Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheets as of March 31, 2011 (dollars in thousands)
(1)   Distribution of AMC Networks. As a result of the AMC Distribution, AMC Networks will be distributed to Cablevision’s stockholders. These adjustments reflect the elimination of the historical assets and liabilities (excluding intercompany balances between the Company and AMC Networks) of AMC Networks from the Company’s consolidated balance sheet as of March 31, 2011 in the form of a dividend to stockholders at book value.
 
(2)   Intercompany balances with AMC Networks. Adjustments include historical intercompany balances between the Company’s subsidiaries and AMC Networks that prior to the AMC Distribution were eliminated in consolidation and which, as a result of the AMC Distribution, would no longer be eliminated in consolidation.
 
(3)   Cash and cash equivalents. Adjustments include: (i) the receipt of payment from AMC Networks for the unfunded portion of its employees’ participant accounts (net of assets held in a trust) in the Company’s cash balance pension plan of approximately $4,000, (ii) the receipt of approximately $6,900 from AMC Networks representing the payment of outstanding stock appreciation rights and long-term incentive plan liabilities relating to corporate employees that were previously allocated to AMC Networks that will be paid by AMC Networks to the Company in connection with distribution, and (iii) the payment of approximately $6,300 by the Company to AMC Networks for the historical contributions (net of benefits paid) made by AMC Networks on behalf of its employees in the Company’s unqualified excess cash balance pension plan and excess 401(k) savings plan.
 
(4)   Other liabilities. Represents (i) an increase of $57,451 for liabilities relating to uncertain tax positions that were recorded by AMC Networks but will be an obligation of Cablevision pursuant to the tax disaffiliation agreement between Cablevision and AMC Networks, (ii) an increase of approximately $6,900 representing outstanding stock appreciation rights and long-term incentive plan liabilities relating to corporate employees that were previously allocated to AMC Networks that will remain as a liability of the Company until settlement, however a payment will be received from AMC Networks in connection with the AMC Distribution, (iii) an increase of approximately $1,500 in the projected benefit obligation of the Company’s cash balance pension plan as a result of the remeasurement of AMC Networks’ employees who will remain in the Plan but will no longer receive future service credits but will be eligible to receive their account balance, (iv) a decrease of approximately $3,400 in the liability resulting from the transfer to AMC Networks from the Company of AMC Networks’ employees’ participant accounts in the Company’s excess cash balance pension plan, and (v) a decrease in the liability of approximately $3,300 resulting from the transfer to AMC Networks from the Company of AMC Networks’ employees’ participant accounts in the Company’s excess 401(k) savings plan.
 
(5)   Credit facility debt. Adjustment represents the approximately $1,020,000 of outstanding borrowings under the Company’s revolving and extended revolving loan facilities that will be satisfied and discharged with a portion of the debt to be issued by AMC Networks to the Company in connection with the AMC Distribution. At the date of the AMC Distribution, the new AMC Networks debt will be used to satisfy and discharge approximately $1,250,000 of outstanding borrowings under the Company’s revolving and extended revolving loan facilities.
 
(6)   Tax adjustments. Represents (i) the elimination of deferred tax assets of AMC Networks, (ii) an adjustment resulting from the remeasurement of the remaining deferred tax assets of the Company to reflect the estimated applicable effective corporate income tax rate adjusted to exclude the state apportionment factors of AMC Networks, (iii) a reclassification of a portion of the current deferred tax asset for projected net operating loss utilization to noncurrent deferred tax asset and (iv) an

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    increase in the deferred tax asset relating to the historical recognition of share-based compensation expense for employees of the Company that was allocated to AMC Networks.
 
(7)   Stockholders’ deficiency. Adjustments include (i) a decrease of approximately $1,020,000 representing a portion of the debt to be issued by AMC Networks in connection with the AMC Distribution that will be used to satisfy and discharge the outstanding borrowings under the Company’s revolving and extended revolving loan facilities, (ii) a decrease relating to the contribution to the Company by AMC Networks for the unfunded portion of its employees’ participant accounts (net of assets held in a trust) in the Company’s cash balance pension plan of approximately $4,000, and (iii) a decrease of approximately $400 related to accumulated other comprehensive loss. These decreases were offset by an increase in stockholders’ deficiency of approximately $57,808 (for Cablevision) and $64,063 (for CSC Holdings) as a result of the tax adjustments discussed in (6) above, and approximately $1,500 from the increase in the projected benefit obligation of the Company’s cash balance pension plan discussed in (4) above.

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CABLEVISION SYSTEMS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2011
                                 
            Distribution     Adjustments        
            of AMC     Relating to        
            Networks*     AMC        
    Historical     (8)     Distribution*     Pro forma  
    (dollars in thousands, except per share amounts)  
Revenues, net
  $ 1,921,554     $ (272,903 )   $ 6,473 (9)   $ 1,655,124  
 
                       
 
                               
Operating expenses:
                               
Technical and operating (excluding depreciation, amortization and impairments shown below)
    822,466       (90,411 )     6,090 (9)     738,145  
Selling, general and administrative
    453,114       (86,921 )     383 (9)     374,594  
 
                    8,018 (10)        
Restructuring expense
    137       34             171  
Depreciation and amortization (including impairments)
    270,109       (24,926 )           245,183  
 
                       
 
    1,545,826       (202,224 )     14,491       1,358,093  
 
                       
 
                               
Operating income
    375,728       (70,679 )     (8,018 )     297,031  
 
                       
Other income (expense):
                               
Interest expense
    (209,507 )     18,350             (191,157 )
Interest income
    530       (457 )           73  
Gain on sale of programming interests, net
    161       (161 )            
Gain on investments, net
    59,072                   59,072  
Loss on equity derivative contracts, net
    (40,058 )                 (40,058 )
Loss on interest rate swap contracts, net
    (4,189 )                 (4,189 )
Miscellaneous, net
    289       (72 )           217  
 
                       
 
    (193,702 )     17,660             (176,042 )
 
                       
Income from continuing operations before income taxes
    182,026       (53,019 )     (8,018 )     120,989  
Income tax expense
    (77,982 )     23,201       1,734 (11)     (53,047 )
 
                       
Income from continuing operations after income taxes
    104,044       (29,818 )     (6,284 )     67,942  
Net loss attributable to noncontrolling interests
    21                   21  
 
                       
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 104,065     $ (29,818 )   $ (6,284 )   $ 67,963  
 
                       
 
                               
Basic income per share:
                               
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 0.37                     $ 0.24  
 
                           
Basic weighted average common shares (in thousands)
    282,123                       282,123  
 
                           
 
                               
Diluted income per share:
                               
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 0.36                     $ 0.23  
 
                           
 
                               
Basic weighted average common shares (in thousands)
    291,221                       291,221  
 
                           
 
*   See Note B of Notes to Unaudited Pro Forma Consolidated Statements of Operations.

9


 

CABLEVISION SYSTEMS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2010
                                 
            Distribution     Adjustments        
            of AMC     Relating to        
            Networks*     AMC        
    Historical     (8)     Distribution*     Pro forma  
    (dollars in thousands, except per share amounts)  
Revenues, net
  $ 1,752,401     $ (248,372 )   $ 5,762 (9)   $ 1,509,791  
 
                       
 
                               
Operating expenses:
                               
Technical and operating (excluding depreciation, amortization and impairments shown below)
    737,596       (82,425 )     5,525 (9)     660,696  
Selling, general and administrative
    418,048       (78,444 )     244 (9)     355,176  
 
                    15,328 (10)        
Restructuring expense (credits)
    (209 )     212             3  
Depreciation and amortization (including impairments)
    241,893       (26,690 )           215,203  
 
                       
 
    1,397,328       (187,347 )     21,097       1,231,078  
 
                       
 
                               
Operating income
    355,073       (61,025 )     (15,335 )     278,713  
 
                       
Other income (expense):
                               
Interest expense
    (183,301 )     19,666             (163,635 )
Interest income
    641       (550 )           91  
Gain on sale of programming interests, net
    102       (102 )            
Gain on investments, net
    42,292                   42,292  
Loss on equity derivative contracts, net
    (35,033 )                 (35,033 )
Loss on interest rate swap contracts, net
    (35,109 )                 (35,109 )
Miscellaneous, net
    373       (26 )           347  
 
                       
 
    (210,035 )     18,988             (191,047 )
 
                       
Income from continuing operations before income taxes
    145,038       (42,037 )     (15,335 )     87,666  
Income tax expense
    (66,728 )     17,948       5,405 (11)     (43,375 )
 
                       
Income from continuing operations after income taxes
    78,310       (24,089 )     (9,930 )     44,291  
 
                               
Net income attributable to noncontrolling interests
    (28 )                 (28 )
 
                       
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 78,282     $ (24,089 )   $ (9,930 )   $ 44,263  
 
                       
 
                               
Basic income per share:
                               
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 0.27                     $ 0.15  
 
                           
Basic weighted average common shares (in thousands)
    293,884                       293,884  
 
                           
 
                               
Diluted income per share:
                               
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 0.26                     $ 0.14  
 
                           
 
                               
Basic weighted average common shares (in thousands)
    302,826                       302,826  
 
                           
 
*   See Note B of Notes to Unaudited Pro Forma Consolidated Statements of Operations.

10


 

CABLEVISION SYSTEMS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010
                                 
            Distribution     Adjustments        
            of AMC     Relating to        
            Networks*     AMC        
    Historical     (8)     Distribution*     Pro forma  
    (dollars in thousands, except per share amounts)  
Revenues, net
  $ 7,231,249     $ (1,078,300 )   $ 24,626 (9)   $ 6,177,575  
 
                       
 
                               
Operating expenses:
                               
Technical and operating (excluding depreciation, amortization and impairments shown below)
    3,007,883       (366,093 )     21,960 (9)     2,663,750  
Selling, general and administrative
    1,703,173       (328,134 )     2,632 (9)     1,440,731  
 
                    63,060 (10)        
Restructuring credits
    (2,276 )     2,218             (58 )
Depreciation and amortization (including impairments)
    993,547       (106,455 )           887,092  
 
                       
 
    5,702,327       (798,464 )     87,652       4,991,515  
 
                       
 
                               
Operating income
    1,528,922       (279,836 )     (63,026 )     1,186,060  
 
                       
Other income (expense):
                               
Interest expense
    (787,093 )     75,800             (711,293 )
Interest income
    2,930       (2,388 )           542  
Gain on sale of programming and affiliate interests, net
    2,518       (467 )           2,051  
Gain on investments, net
    109,810                   109,810  
Loss on equity derivative contracts, net
    (72,044 )                 (72,044 )
Loss on interest rate swap contracts, net
    (85,013 )                 (85,013 )
Loss on extinguishment of debt and write-off of deferred financing costs
    (110,049 )                 (110,049 )
Miscellaneous, net
    1,288       162             1,450  
 
                       
 
    (937,653 )     73,107             (864,546 )
 
                       
 
                               
Income from continuing operations before income taxes
    591,269       (206,729 )     (63,026 )     321,514  
Income tax expense
    (225,550 )     88,264       21,510 (11)     (115,776 )
 
                       
Income from continuing operations after income taxes
    365,719       (118,465 )     (41,516 )     205,738  
Net income attributable to noncontrolling interests
    (649 )                 (649 )
 
                       
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 365,070     $ (118,465 )   $ (41,516 )   $ 205,089  
 
                       
 
                               
Basic income per share:
                               
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 1.25                     $ 0.70  
 
                           
Basic weighted average common shares (in thousands)
    293,165                       293,165  
 
                           
 
                               
Diluted income per share:
                               
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 1.21                     $ 0.68  
 
                           
 
                               
Basic weighted average common shares (in thousands)
    301,880                       301,880  
 
                           
 
*   See Note B of Notes to Unaudited Pro Forma Consolidated Statements of Operations.

11


 

CABLEVISION SYSTEMS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2009
                                 
            Distribution     Adjustments        
            of AMC     Relating to        
            Networks*     AMC        
    Historical     (8)     Distribution*     Pro forma  
    (dollars in thousands, except per share amounts)  
Revenues, net
  $ 6,847,301     $ (973,656 )   $ 26,429 (9)   $ 5,900,074  
 
                       
 
                               
Operating expenses:
                               
Technical and operating (excluding depreciation, amortization and impairments shown below)
    2,818,468       (310,360 )     24,736 (9)     2,532,844  
Selling, general and administrative
    1,643,731       (313,900 )     1,646 (9)     1,389,525  
 
                    58,048 (10)        
Restructuring expense
    10,728       (5,146 )           5,582  
Depreciation and amortization (including impairments)
    1,022,912       (106,504 )           916,408  
 
                       
 
    5,495,839       (735,910 )     84,430       4,844,359  
 
                       
 
                               
Operating income
    1,351,462       (237,746 )     (58,001 )     1,055,715  
 
                       
Other income (expense):
                               
Interest expense
    (749,735 )     76,543             (673,192 )
Interest income
    4,214       (836 )           3,378  
Gain (loss) on sale of programming and affiliate interests, net
    2,130       (2,130 )            
Loss on investments, net
    (981 )     4             (977 )
Gain on equity derivative contracts, net
    631                   631  
Loss on interest rate swap contracts, net
    (78,868 )     3,237             (75,631 )
Loss on extinguishment of debt and write-off of deferred financing costs
    (73,457 )                 (73,457 )
Miscellaneous, net
    734       (192 )           542  
 
                       
 
    (895,332 )     76,626             (818,706 )
 
                       
Income from continuing operations before income taxes
    456,130       (161,120 )     (58,001 )     237,009  
Income tax expense
    (206,669 )     71,292       22,009 (11)     (113,368 )
 
                       
Income from continuing operations after income taxes
    249,461       (89,828 )     (35,992 )     123,641  
Net loss attributable to noncontrolling interests
    273                   273  
 
                       
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 249,734     $ (89,828 )   $ (35,992 )   $ 123,914  
 
                       
 
                               
Basic income per share:
                               
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 0.86                     $ 0.42  
 
                           
Basic weighted average common shares (in thousands)
    291,759                       291,759  
 
                           
 
                               
Diluted income per share:
                               
Income from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ 0.84                     $ 0.42  
 
                           
 
                               
Basic weighted average common shares (in thousands)
    298,444                       298,444  
 
                           
 
*   See Note B of Notes to Unaudited Pro Forma Consolidated Statements of Operations.

 


 

CABLEVISION SYSTEMS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2008
                                 
            Distribution     Adjustments        
            of AMC     Relating to        
            Networks*     AMC        
    Historical     (8)     Distribution*     Pro forma  
    (dollars in thousands, except per share amounts)  
Revenues, net
  $ 6,319,852     $ (902,362 )   $ 63,309 (9)   $ 5,480,799  
 
                       
 
                               
Operating expenses:
                               
Technical and operating (excluding depreciation, amortization and impairments shown below)
    2,645,831       (316,205 )     61,766 (9)     2,391,392  
Selling, general and administrative
    1,504,862       (307,637 )     1,530 (9)     1,252,828  
 
                    54,073 (10)        
Restructuring expense
    49,883       (46,834 )           3,049  
Depreciation and amortization (including impairments)
    1,441,532       (108,431 )           1,333,101  
 
                       
 
    5,642,108       (779,107 )     117,369       4,980,370  
 
                       
 
                               
Operating income
    677,744       (123,255 )     (54,060 )     500,429  
 
                       
Other income (expense):
                               
Interest expense
    (793,656 )     98,650             (695,006 )
Interest income
    8,863       (1,582 )           7,281  
Gain on sale of programming and affiliate interests, net
    805       (805 )            
Loss on investments, net
    (136,414 )     103,238             (33,176 )
Gain on equity derivative contracts, net
    118,219       (66,447 )           51,772  
Loss on interest rate swap contracts, net
    (205,683 )     2,843             (202,840 )
Loss on extinguishment of debt and write-off of deferred financing costs
    (2,424 )     2,424              
Miscellaneous, net
    1,264       (379 )           885  
 
                       
 
    (1,009,026 )     137,942             (871,084 )
 
                       
Loss from continuing operations before income taxes
    (331,282 )     14,687       (54,060 )     (370,655 )
Income tax benefit
    88,944       4,021       20,239 (11)     113,204  
 
                       
Loss from continuing operations after income taxes
    (242,338 )     18,708       (33,821 )     (257,451 )
Net loss attributable to noncontrolling interests
    8,108                   8,108  
 
                       
Loss from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ (234,230 )   $ 18,708     $ (33,821 )   $ (249,343 )
 
                       
 
                               
Basic and diluted loss per share:
                               
Loss from continuing operations attributable to Cablevision Systems Corporation shareholders
  $ (0.81 )                   $ (0.86 )
 
                           
 
                               
Basic weighted average common shares (in thousands)
    290,286                       290,286  
 
                           
 
*   See Note B of Notes to Unaudited Pro Forma Consolidated Statements of Operations.

 


 

CSC HOLDINGS, LLC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2011
                                 
            Distribution     Adjustments        
            of AMC     Relating to        
            Networks*     AMC        
    Historical     (8)     Distribution*     Pro forma  
    (dollars in thousands)  
Revenues, net
  $ 1,921,554     $ (272,903 )   $ 6,473 (9)   $ 1,655,124  
 
                       
 
                               
Operating expenses:
                               
Technical and operating (excluding depreciation, amortization and impairments shown below)
    822,466       (90,411 )     6,090 (9)     738,145  
Selling, general and administrative
    453,114       (86,921 )     383 (9)     374,594  
 
                    8,018 (10)        
Restructuring expense
    137       34             171  
Depreciation and amortization (including impairments)
    270,109       (24,926 )           245,183  
 
                       
 
    1,545,826       (202,224 )     14,491       1,358,093  
 
                       
 
                               
Operating income
    375,728       (70,679 )     (8,018 )     297,031  
 
                       
Other income (expense):
                               
Interest expense
    (163,690 )     18,350             (145,340 )
Interest income
    15,292       (457 )           14,835  
Gain on sale of programming interests, net
    161       (161 )            
Gain on investments, net
    59,072                   59,072  
Loss on equity derivative contracts, net
    (40,058 )                 (40,058 )
Loss on interest rate swap contracts, net
    (4,189 )                 (4,189 )
Miscellaneous, net
    289       (72 )           217  
 
                       
 
    (133,123 )     17,660             (115,463 )
 
                       
Income from continuing operations before income taxes
    242,605       (53,019 )     (8,018 )     181,568  
Income tax expense
    (102,569 )     23,201       1,389 (11)     (77,979 )
 
                       
Income from continuing operations after income taxes
    140,036       (29,818 )     (6,629 )     103,589  
Net loss attributable to noncontrolling interests
    21                   21  
 
                       
Income from continuing operations attributable to CSC Holdings, LLC sole member
  $ 140,057     $ (29,818 )   $ (6,629 )   $ 103,610  
 
                       
 
*   See Note B of Notes to Unaudited Pro Forma Consolidated Statements of Operations.

14


 

CSC HOLDINGS, LLC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2010
                                 
            Distribution     Adjustments        
            of AMC     Relating to        
            Networks*     AMC        
    Historical     (8)     Distribution*     Pro forma  
    (dollars in thousands)  
Revenues, net
  $ 1,752,401     $ (248,372 )   $ 5,762 (9)   $ 1,509,791  
 
                       
 
                               
Operating expenses:
                               
Technical and operating (excluding depreciation, amortization and impairments shown below)
    737,596       (82,425 )     5,525 (9)     660,696  
Selling, general and administrative
    418,048       (78,444 )     244 (9)     355,176  
 
                    15,328 (10)        
Restructuring expense (credits)
    (209 )     212             3  
Depreciation and amortization (including impairments)
    241,893       (26,690 )           215,203  
 
                       
 
    1,397,328       (187,347 )     21,097       1,231,078  
 
                       
 
                               
Operating income
    355,073       (61,025 )     (15,335 )     278,713  
 
                       
Other income (expense):
                               
Interest expense
    (142,535 )     19,666             (122,869 )
Interest income
    16,337       (550 )           15,787  
Gain on sale of programming interests, net
    102       (102 )            
Gain on investments, net
    42,292                   42,292  
Loss on equity derivative contracts, net
    (35,033 )                 (35,033 )
Loss on interest rate swap contracts, net
    (35,109 )                 (35,109 )
Miscellaneous, net
    373       (26 )           347  
 
                       
 
    (153,573 )     18,988             (134,585 )
 
                       
Income from continuing operations before income taxes
    201,500       (42,037 )     (15,335 )     144,128  
Income tax expense
    (86,515 )     17,948       5,151 (11)     (63,416 )
 
                       
Income from continuing operations after income taxes
    114,985       (24,089 )     (10,184 )     80,712  
 
                               
Net income attributable to noncontrolling interests
    (28 )                 (28 )
 
                       
Income from continuing operations attributable to CSC Holdings, LLC sole member
  $ 114,957     $ (24,089 )   $ (10,184 )   $ 80,684  
 
                       
 
*   See Note B of Notes to Unaudited Pro Forma Consolidated Statements of Operations.

15


 

CSC HOLDINGS, LLC
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010
                                 
            Distribution     Adjustments        
            of AMC     Relating to        
            Networks*     AMC        
    Historical     (8)     Distribution*     Pro forma  
    (dollars in thousands)  
Revenues, net
  $ 7,231,249     $ (1,078,300 )   $ 24,626 (9)   $ 6,177,575  
 
                       
 
                               
Operating expenses:
                               
Technical and operating (excluding depreciation, amortization and impairments shown below)
    3,007,883       (366,093 )     21,960 (9)     2,663,750  
Selling, general and administrative
    1,703,173       (328,134 )     2,632 (9)     1,440,731  
 
                    63,060 (10)        
Restructuring credits
    (2,276 )     2,218             (58 )
Depreciation and amortization (including impairments)
    993,547       (106,455 )           887,092  
 
                       
 
    5,702,327       (798,464 )     87,652       4,991,515  
 
                       
 
                               
Operating income
    1,528,922       (279,836 )     (63,026 )     1,186,060  
 
                       
Other income (expense):
                               
Interest expense
    (607,010 )     75,800             (531,210 )
Interest income
    63,260       (2,388 )           60,872  
Gain on sale of programming and affiliate interests, net
    2,518       (467 )           2,051  
Gain on investments, net
    109,810                   109,810  
Loss on equity derivative contracts, net
    (72,044 )                 (72,044 )
Loss on interest rate swap contracts, net
    (85,013 )                 (85,013 )
Miscellaneous, net
    1,274       162             1,436  
 
                       
 
    (587,205 )     73,107             (514,098 )
 
                       
Income from continuing operations before income taxes
    941,717       (206,729 )     (63,026 )     671,962  
Income tax expense
    (362,669 )     88,264       19,512 (11)     (254,893 )
 
                       
Income from continuing operations after income taxes
    579,048       (118,465 )     (43,514 )     417,069  
Net income attributable to noncontrolling interests
    (649 )                 (649 )
 
                       
Income from continuing operations attributable to CSC Holdings, LLC sole member
  $ 578,399     $ (118,465 )   $ (43,514 )   $ 416,420  
 
                       
 
*   See Note B of Notes to Unaudited Pro Forma Consolidated Statements of Operations.

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CSC HOLDINGS, LLC
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2009
                                 
            Distribution     Adjustments        
            of AMC     Relating to        
            Networks*     AMC        
    Historical     (8)     Distribution*     Pro forma  
    (dollars in thousands)  
Revenues, net
  $ 6,847,301     $ (973,656 )   $ 26,429 (9)   $ 5,900,074  
 
                       
 
                               
Operating expenses:
                               
Technical and operating (excluding depreciation, amortization and impairments shown below)
    2,818,468       (310,360 )     24,736 (9)     2,532,844  
Selling, general and administrative
    1,643,731       (313,900 )     1,646 (9)     1,389,525  
 
                    58,048 (10)        
Restructuring expense
    10,728       (5,146 )           5,582  
Depreciation and amortization (including impairments)
    1,022,912       (106,504 )           916,408  
 
                       
 
    5,495,839       (735,910 )     84,430       4,844,359  
 
                       
 
                               
Operating income
    1,351,462       (237,746 )     (58,001 )     1,055,715  
 
                       
Other income (expense):
                               
Interest expense
    (635,615 )     76,543             (559,072 )
Interest income
    66,236       (836 )           65,400  
Gain (loss) on sale of programming and affiliate interests, net
    2,130       (2,130 )            
Loss on investments, net
    (981 )     4             (977 )
Gain on equity derivative contracts, net
    631                   631  
Loss on interest rate swap contracts, net
    (78,868 )     3,237             (75,631 )
Loss on extinguishment of debt and write-off of deferred financing costs
    (72,870 )                 (72,870 )
Miscellaneous, net
    734       (192 )           542  
 
                       
 
    (718,603 )     76,626             (641,977 )
 
                       
Income from continuing operations before income taxes
    632,859       (161,120 )     (58,001 )     413,738  
Income tax expense
    (277,747 )     71,292       21,885 (11)     (184,570 )
 
                       
Income from continuing operations after income taxes
    355,112       (89,828 )     (36,116 )     229,168  
Net loss attributable to noncontrolling interests
    273                   273  
 
                       
Income from continuing operations attributable to CSC Holdings, LLC sole member
  $ 355,385     $ (89,828 )   $ (36,116 )   $ 229,441  
 
                       
 
*   See Note B of Notes to Unaudited Pro Forma Consolidated Statements of Operations.

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CSC HOLDINGS, LLC
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2008
                                 
            Distribution     Adjustments        
            of AMC     Relating to        
            Networks*     AMC        
    Historical     (8)     Distribution*     Pro forma  
    (dollars in thousands)  
Revenues, net
  $ 6,319,852     $ (902,362 )   $ 63,309 (9)   $ 5,480,799  
 
                       
 
                               
Operating expenses:
                               
Technical and operating (excluding depreciation, amortization and impairments shown below)
    2,645,831       (316,205 )     61,766 (9)     2,391,392  
Selling, general and administrative
    1,504,862       (307,637 )     1,530 (9)     1,252,828  
 
                    54,073 (10)        
Restructuring expense
    49,883       (46,834 )           3,049  
Depreciation and amortization (including impairments)
    1,441,532       (108,431 )           1,333,101  
 
                       
 
    5,642,108       (779,107 )     117,369       4,980,370  
 
                       
 
                               
Operating income
    677,744       (123,255 )     (54,060 )     500,429  
 
                       
Other income (expense):
                               
Interest expense
    (667,782 )     98,650             (569,132 )
Interest income
    34,427       (1,582 )           32,845  
Gain on sale of programming and affiliate interests, net
    805       (805 )            
Loss on investments, net
    (136,414 )     103,238             (33,176 )
Gain on equity derivative contracts, net
    118,219       (66,447 )           51,772  
Loss on interest rate swap contracts, net
    (205,683 )     2,843             (202,840 )
Loss on extinguishment of debt and write-off of deferred financing costs
    (2,424 )     2,424              
Miscellaneous, net
    1,260       (379 )           881  
 
                       
 
    (857,592 )     137,942             (719,650 )
 
                       
Loss from continuing operations before income taxes
    (179,848 )     14,687       (54,060 )     (219,221 )
Income tax benefit
    29,299       4,021       20,375 (11)     53,695  
 
                       
Loss from continuing operations after income taxes
    (150,549 )     18,708       (33,685 )     (165,526 )
Net loss attributable to noncontrolling interests
    8,108                   8,108  
 
                       
Loss from continuing operations attributable to CSC Holdings, LLC sole member
  $ (142,441 )   $ 18,708     $ (33,685 )   $ (157,418 )
 
                       
 
*   See Note B of Notes to Unaudited Pro Forma Consolidated Statements of Operations.

 


 

    Note B — Notes to Unaudited Pro Forma Consolidated Statements of Operations for the Three Months Ended March 31, 2011 and 2010 and for the Years Ended December 31, 2010, 2009 and 2008 (dollars in thousands)
     
(8)   Distribution of AMC Networks. Represents the condensed consolidated statements of operations of AMC Networks and subsidiaries for the three months ended March 31, 2011 and 2010 and for the years ended December 31, 2010, 2009 and 2008, respectively.
     
(9)   Transactions with AMC Networks. Adjustments include (i) normal recurring intercompany transactions between the Company’s subsidiaries and AMC Networks that prior to the AMC Distribution were eliminated in consolidation (primarily revenues recognized by AMC Networks, including VOOM HD for the period January 1, 2008 through January 2009, from the sale of programming to the Company’s Telecommunications Services segment and an equivalent amount of programming expense recognized by the Company’s Telecommunications Services segment) which as a result of the AMC Distribution would no longer be eliminated in consolidation.
   
(10)   Selling, general and administrative expense. Represents the actual corporate overhead and costs related to corporate employees’ participation in long-term incentive plans and employee stock-based compensations plans historically allocated to AMC Networks that would remain with the Company after the AMC Distribution. This adjustment includes the elimination of the management fee charged to certain subsidiaries of AMC Networks by the Company, which was recorded by the Company as a contra-expense and which will no longer be charged to AMC Networks after the AMC Distribution. In addition, for the three months ended March 31, 2011 and the year ended December 31, 2010, the adjustment includes the reclassification to discontinued operations of $8,021 and $1,466, respectively, of transactions costs related to the AMC Distribution.
     
(11)   Income tax benefit (expense). Represents the (i) income tax benefit (expense) impact related to the pro forma adjustments discussed above, and (ii) an adjustment related to the impact of the AMC Distribution on the Company’s effective income tax rate.

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