<PAGE>
Exhibit 99.1
RAINBOW MEDIA GROUP
CABLEVISION NY GROUP
Combined Financial Statements and
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Three and Nine Months Ended September 30, 2000 and 1999
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - RAINBOW MEDIA GROUP - THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2000 AND 1999
TRANSACTIONS - RAINBOW MEDIA GROUP ("RMG")
2000 ACQUISITIONS. In January 2000, Regional Programming Partners ("RPP")
acquired the 70% interest in SportsChannel Florida Associates that it did not
already own from Front Row Communications, Inc., increasing RPP's ownership to
100%. In May 2000, Rainbow Media Holdings, Inc. ("Rainbow Media Holdings")
acquired the 50% interest in MuchMusic USA that it did not already own from Chum
Limited, increasing its ownership to 100%.
The above acquisitions are collectively referred to in the following section as
the "Acquisitions."
RESULTS OF OPERATIONS - RAINBOW MEDIA GROUP
The following tables set forth on a historical basis certain items related to
operations as a percentage of net revenues for the periods indicated.
STATEMENT OF OPERATIONS DATA (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------------------------
2000 1999
----------------------- ---------------------- Increase
% of net % of net (Decrease)
Amount Revenues Amount Revenues in Net Income
------ -------- ------ -------- -------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Revenues, net .......................... $ 120,916 100% $ 94,179 100% $ 26,737
Operating expenses:
Technical and operating ............. 48,788 40 34,015 36 (14,773)
Selling, general & administrative ... 41,354 34 35,082 37 (6,272)
Depreciation and amortization ....... 9,265 8 9,958 11 693
--------- --------- ---------
Operating income ....................... 21,509 18 15,124 16 6,385
Other income (expense):
Interest expense, net ............... (13,100) (11) (8,754) (9) (4,346)
Equity in net loss of affiliates, net (2,893) (2) (1,142) (1) (1,751)
Miscellaneous, net .................. (383) -- (65) -- (318)
--------- --------- ---------
Net income ............................. $ 5,133 5% $ 5,163 6% $ (30)
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------------------
2000 1999
------------------------ --------------------- Increase
% of net % of net (Decrease)
Amount Revenues Amount Revenues in Net Income
------ -------- ------ -------- -------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Revenues, net ................................... $ 353,525 100% $ 265,466 100% $ 88,059
Operating expenses:
Technical and operating ...................... 137,414 39 105,730 40 (31,684)
Selling, general & administrative ............ 118,280 33 109,691 41 (8,589)
Depreciation and amortization ................ 29,317 8 29,900 11 583
--------- --------- ---------
Operating income ................................ 68,514 20 20,145 8 48,369
Other income (expense):
Interest expense, net ........................ (36,783) (11) (23,767) (9) (13,016)
Equity in net income (loss) of affiliates, net (3,662) (1) 800 -- (4,462)
Write off of deferred financing costs ........ -- -- (1,413) (1) 1,413
Miscellaneous, net ........................... (650) -- (324) -- (326)
--------- --------- ---------
Net income (loss) ............................... $ 27,419 8% $ (4,559) (2)% $ 31,978
========= ========= =========
</TABLE>
(1)
<PAGE>
COMPARISON OF THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 VERSUS THREE AND
NINE MONTHS ENDED SEPTEMBER 30, 1999
RAINBOW MEDIA GROUP
REVENUES for the three and nine months ended September 30, 2000 increased $26.7
million (28%) and $88.1 million (33%), respectively, as compared to revenues for
the same periods in the prior year. Approximately $15.8 million (17%) and $41.9
million (16%), respectively, of the increase was a direct result of the
Acquisitions; approximately $6.0 million (6%) and $30.5 million (11%),
respectively, of the increase was attributable to internal growth in programming
network subscribers and rate increases; and approximately $4.9 million (5%) and
$15.7 million (6%), respectively, of the increase was due to increases in
advertising revenues.
TECHNICAL AND OPERATING EXPENSES for the three and nine months ended September
30, 2000 increased $14.8 million (43%) and $31.7 million (30%), respectively,
over the comparable 1999 periods. Approximately $10.6 million (31%) and $29.2
million (28%), respectively, of the increase was directly attributable to the
Acquisitions. The remaining increases of $4.2 million (12%) and $2.5 million
(2%), respectively, resulted primarily from increases in those costs directly
associated with the increases in revenues, discussed above. As a percentage of
revenues, technical and operating expenses increased 4% for the three month
period and decreased 1% for the nine month period as compared to the respective
periods in 1999.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES increased $6.3 million (18%) and
$8.6 million (8%), respectively, for the three and nine months ended September
30, 2000 compared to the same periods in the prior year. The increases for the
three and nine months ended September 30, 2000 consisted of an increase of $5.3
million (15%) and $18.5 million (17%), respectively, attributable to sales and
marketing initiatives, advertising related expenses and other general cost
increases and an increase of $4.1 million (12%) and $10.5 million (10%),
respectively, as a direct result of the Acquisitions. Such increases were offset
by decreases of $2.3 million (7%) and $18.5 million (17%), respectively, for the
three and nine month periods due to benefits attributed to RMG related to an
incentive stock plan and decreases of $0.8 million (2%) and $1.9 million (2%)
due to lower Year 2000 remediation costs. As a percentage of revenues, selling,
general and administrative expenses decreased 3% and 8% for the three and nine
month period, respectively. Excluding the effects of the incentive stock plan
and Year 2000 remediation costs, as a percentage of revenues such costs
decreased 1% for both the three and nine month periods in 2000 as compared to
the 1999 periods.
DEPRECIATION AND AMORTIZATION EXPENSE decreased $0.7 million (7%) and $0.6
million (2%), respectively, for the three and nine months ended September 30,
2000 over the same 1999 periods. Increases of $1.8 million (18%) and $5.0
million (17%), respectively, resulting from the Acquisitions were substantially
offset by lower depreciation and amortization charges as certain assets became
fully depreciated and amortized during 2000.
NET INTEREST EXPENSE increased $4.3 million (50%) and $13.0 million (55%) for
the three and nine months ended September 30, 2000 compared to the same periods
in 1999 primarily as a result of substantially higher debt balances.
EQUITY IN NET LOSSES OF AFFILIATES, NET amounted to $2.9 million for the three
months ended September 30, 2000 compared to $1.1 million in the comparable prior
year period. For the nine months ended September 30, 2000, equity in net loss of
affiliates amounted to $3.7 million compared to equity in net income of
affiliates of $0.8 million in the comparable prior year
(2)
<PAGE>
period. Such amounts consist of RMG's share of the net income and losses of
certain programming businesses, primarily regional and national sports
programming companies and a national advertising company, in which Rainbow Media
Holdings has varying minority ownership interests.
WRITE OFF OF DEFERRED FINANCING COSTS in 1999 consists of costs written off in
connection with American Movie Classics' bank debt refinancing.
RAINBOW MEDIA GROUP - NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
OPERATING ACTIVITIES
Net cash provided by operating activities amounted to $30.6 million for the nine
months ended September 30, 2000 compared to $33.2 million for the nine months
ended September 30, 1999. The 2000 cash provided by operating activities
consisted primarily of net income of $75.8 million before depreciation,
amortization and other non-cash items, partially offset by a net decrease in
cash resulting from changes in assets and liabilities of $45.2 million.
The 1999 net cash provided by operating activities of $33.2 million consisted
primarily of net income before depreciation, amortization and other non-cash
items of approximately $53.5 million, partially offset by a net decrease in cash
resulting from changes in assets and liabilities of $20.3 million.
INVESTING ACTIVITIES
Net cash used in investing activities for the nine months ended September 30,
2000 was $11.3 million compared to $4.5 million for the nine months ended
September 30, 1999. Such investing activities consisted solely of capital
expenditures.
FINANCING ACTIVITIES
Net cash used in financing activities amounted to $18.8 million for the nine
months ended September 30, 2000 compared to $28.4 million in 1999. In 2000,
financing activities consisted of net distributions to CNYG of $65.5 million and
other cash payments aggregating $3.4 million, partially offset by net proceeds
from bank debt of $50.2 million.
Net cash used in financing activities of $28.4 million for the nine months ended
September 30, 1999 consisted of net distributions to CNYG of $96.6 million and
other cash payments of $5.3 million, partially offset by net proceeds from bank
debt of $73.5 million.
YEAR 2000
For the three and nine months ended September 30, 1999, expenses relating to
Year 2000 remediation amounted to approximately $0.9 million and $2.0 million,
respectively. During 2000, such expenses were not material.
(3)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS-CABLEVISION NY GROUP - THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000
AND 1999
TRANSACTIONS - CABLEVISION NY GROUP ("CNYG")
2000 ACQUISITION. In August 2000, Rainbow Media Holdings purchased the remaining
interests in News 12 New Jersey LLC that it did not already own from the Newark
Morning Ledger Co.
2000 DISPOSITION. In September 2000, CSC Holdings, Inc. ("CSC Holdings")
completed the sale of the cable television system serving Kalamazoo, Michigan.
1999 ACQUISITIONS. In April 1999, CSC Holdings purchased ITT Corporation's
remaining minority interest in Madison Square Garden. In 1999, CSC Holdings
acquired interests in the real property and assets related to certain movie
theaters.
The above transactions are collectively referred to in the following section as
the "Transactions."
RESULTS OF OPERATIONS - CABLEVISION NY GROUP ("CNYG")
The following tables set forth on a historical basis certain items related to
operations as a percentage of net revenues for the periods indicated.
STATEMENT OF OPERATIONS DATA (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------------------------
2000 1999
----------------------- ---------------------- Increase
% of net % of net (Decrease)
Amount Revenues Amount Revenues in Net Income
------ -------- ------ -------- -------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Revenues, net ........................................ $ 919,932 100% $ 814,028 100% $ 105,904
Operating expenses:
Technical and operating ........................... 322,262 35 289,254 36 (33,008)
Retail electronics cost of sales .................. 142,008 15 111,781 14 (30,227)
Selling, general & administrative ................. 221,537 24 245,702 30 24,165
Depreciation and amortization ..................... 229,238 25 202,779 25 (26,459)
--------- --------- ---------
Operating income (loss) .............................. 4,887 1 (35,488) (4) 40,375
Other income (expense):
Interest expense, net ............................. (135,292) (15) (109,686) (13) (25,606)
Equity in net loss of affiliates, net ............. (7,872) (1) (3,355) -- (4,517)
Gain on sale of cable assets ...................... 130,758 14 -- -- 130,758
Write off of deferred financing costs ............. -- -- (19) -- 19
Miscellaneous, net ................................ (598) -- (2,157) -- 1,559
--------- --------- ---------
Net loss before dividend requirements ................ (8,117) (1) (150,705) (19) 142,588
Dividend requirements applicable to preferred stock (41,981) (5) (44,786) (6) 2,805
--------- --------- ---------
Net loss ............................................. $ (50,098) (5)% $(195,491) (24)% $ 145,393
========= ========= =========
</TABLE>
(4)
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------------------
2000 1999
------------------------ --------------------- Increase
% of net % of net (Decrease)
Amount Revenues Amount Revenues in Net Income
------ -------- ------ -------- -------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Revenues, net....................................... $2,827,383 100% $2,533,005 100% $ 294,378
---------- ---------- ----------
Operating expenses:
Technical and operating.......................... 1,077,840 38 984,917 39 (92,923)
Retail electronics cost of sales................. 383,860 14 316,569 12 (67,291)
Selling, general & administrative................ 652,756 23 789,337 31 136,581
Depreciation and amortization.................... 680,016 24 598,009 24 (82,007)
---------- ---------- ----------
Operating income (loss)............................. 32,911 1 (155,827) (6) 188,738
Other income (expense):
Interest expense, net............................ (380,452) (13) (313,371) (12) (67,081)
Equity in net loss of affiliates, net............ (9,372) - (9,657) - 285
Gain on sale of cable assets..................... 130,758 5 - - 130,758
Write off of deferred financing costs............ - - (3,012) - 3,012
Miscellaneous, net............................... (4,636) - (9,335) - 4,699
---------- ---------- ----------
Net loss before dividend requirements............... (230,791) (8) (491,202) (19) 260,411
Dividend requirements applicable to preferred stock (122,510) (4) (131,476) (5) 8,966
---------- ---------- ----------
Net loss............................................ $ (353,301) (12)% $ (622,678) (25)% $ 269,377
=========== =========== ==========
</TABLE>
(5)
<PAGE>
COMPARISON OF THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 VERSUS THREE AND
NINE MONTHS ENDED SEPTEMBER 30, 1999
COMBINED RESULTS- CABLEVISION NY GROUP
REVENUES for the three and nine months ended September 30, 2000 increased $105.9
million (13%) and $294.4 million (12%), respectively, as compared to revenues
for the same periods in the prior year. Approximately $78.6 million (10%) and
$198.9 million (8%), respectively, was from increases in revenue sources such as
Rainbow NY Group's programming and entertainment services, advertising on CNYG's
cable television systems, revenue derived from the developing telephone and
modem businesses and revenue recognized in connection with the At Home
transaction; and approximately $19.8 million (2%) and $69.6 million (3%),
respectively, resulted from higher revenue per subscriber. The remaining
increase of $7.5 million (1%) and $25.9 million (1%), respectively, was
attributable to internal growth in the average number of subscribers in CNYG's
cable television systems during the periods.
TECHNICAL AND OPERATING EXPENSES for the three and nine months ended September
30, 2000 increased $33.0 million (11%) and $92.9 million (9%), respectively,
compared to the same periods in 1999. The increase was attributable to increased
costs directly associated with the growth in revenues and subscribers discussed
above, as well as to increases in programming costs for cable television
services. As a percentage of revenues, technical and operating expenses
decreased 1% during the three and nine month periods in 2000 as compared to the
1999 periods.
RETAIL ELECTRONICS COST OF SALES for the three and nine months ended September
30, 2000 amounted to approximately $142.0 million and $383.9 million,
respectively (83% and 82%, respectively, of retail electronics sales), compared
to approximately $111.8 million and $316.6 million (81% and 80%, respectively,
of retail electronics sales) for the three and nine months ended September 30,
1999, respectively. Cost of sales include the cost of merchandise sold,
including freight costs incurred and certain occupancy and buying costs, for the
retail electronics segment.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $24.2 million (10%) and
$136.6 million (17%), respectively, for the three and nine months ended
September 30, 2000 over the comparable periods in 1999. The change for the three
and nine month periods consisted of decreases of approximately $39.8 million
(16%) and $196.9 million (25%), respectively, related to an incentive stock plan
and approximately $10.8 million (4%) and $22.6 million (3%), respectively,
related to lower Year 2000 remediation costs. Partially offsetting these
decreases were net increases of approximately $26.4 million (10%) and $82.9
million (11%), respectively, in sales and marketing and administrative costs. As
a percentage of revenues, selling, general and administrative expenses decreased
6% and 8%, respectively, during the 2000 periods compared to the 1999 periods.
Excluding the effects of the incentive stock plan and the Year 2000 remediation
costs, as a percentage of revenues such costs remained constant during the three
month period in 2000 and increased 1% during the nine month period in 2000 as
compared to the same periods in 1999.
OPERATING PROFIT BEFORE DEPRECIATION AND AMORTIZATION increased $66.8 million
(40%) to $234.1 million and $270.7 million (61%) to $712.9 million for the three
and nine months ended September 30, 2000, respectively, from $167.3 million and
$442.2 million for the comparable periods in 1999. Approximately $39.8 million
(24%) and $196.9 million (45%) of the increase resulted from reduced expenses
related to an incentive stock plan and approximately $27.0 million (16%) and
$73.9 million (16%), respectively, resulted from the combined effect of the
revenue and expense changes discussed above. On a pro forma basis, excluding the
systems held for sale, the incentive stock plan adjustments referred to above
and the costs of Year 2000 remediation,
(6)
<PAGE>
operating profit before depreciation and amortization would have increased 8.7%
and 9.4% for the three and nine month periods in 2000. Operating profit before
depreciation and amortization is presented here to provide additional
information about CNYG's ability to meet future debt service, capital
expenditures and working capital requirements. Operating profit before
depreciation and amortization should be considered in addition to and not as a
substitute for net income (loss) and cash flows as indicators of financial
performance and liquidity as reported in accordance with generally accepted
accounting principles.
DEPRECIATION AND AMORTIZATION EXPENSE increased $26.5 million (13%) and $82.0
million (14%), respectively, for the three and nine months ended September 30,
2000 as compared to the same periods in 1999. The increases resulted primarily
from depreciation on new plant assets.
NET INTEREST EXPENSE increased $25.6 million (23%) and $67.1 million (21%),
respectively, for the three and nine months ended September 30, 2000 compared to
the same periods in 1999. The net increases are primarily attributable to higher
interest rates and debt incurred to fund capital expenditures.
EQUITY IN NET LOSS OF AFFILIATES, NET consisted of CNYG's share of the net
income or losses of certain programming businesses and personal communication
services businesses in which Cablevision has varying minority ownership
interests.
GAIN ON SALE OF CABLE ASSETS of $130.8 million for the three and nine months
ended September 30, 2000 resulted from the sale of the cable television system
in Kalamazoo, Michigan.
NET MISCELLANEOUS EXPENSE decreased $1.6 million to $0.6 million for the three
months ended September 30, 2000 and decreased $4.7 million to $4.6 million for
the nine months ended September 30, 2000 as compared to the same periods in
1999. For the three and nine months ended September 30, 2000, miscellaneous
expense included a $2.2 million income tax provision and various other items.
For the three and nine months ended September 30, 1999, miscellaneous expense
included $1.1 million and $4.4 million, respectively, related to federal, state
and local income taxes and approximately $1.1 million and $0.7 million,
respectively, relating to various other items. Additionally, the nine month
period in 1999 included a charge of approximately $15.1 million resulting from
the write off of an investment held by Rainbow Media Holdings and attributable
to CNYG, and a gain of approximately $10.9 million resulting from the sale of
certain marketable securities.
BUSINESS SEGMENTS RESULTS - CABLEVISION NY GROUP
CNYG classifies its business interests into three fundamental areas:
Telecommunication Services, consisting principally of its cable television,
telephone and modem services operations; Rainbow NY Group, consisting
principally of interests in cable television programming networks in the New
York metropolitan area and MSG, which owns and operates professional sports
teams, regional cable television networks, live productions and entertainment
venues; and Retail Electronics, which represents the operations of Cablevision
Electronics Investments, Inc.'s ("Cablevision Electronics") retail electronics
stores. CSC Holdings allocates certain costs to each segment based upon their
proportionate estimated usage of services.
TELECOMMUNICATION SERVICES
Refer to Cablevision Systems Corporation's September 30, 2000 Quarterly Report
on Form 10-Q.
(7)
<PAGE>
RAINBOW NY GROUP
The tables below set forth, for the periods presented, certain historical
financial information and the percentage that those items bear to revenue for
Rainbow NY Group.
<TABLE>
<CAPTION>
Three Months Ended September 30,
-------------------------------------------------------------
2000 1999
---------------------------- ---------------------------
% of Net % of Net
Amount Revenues Amount Revenues
--------------- ----------- -------------- -----------
(dollars in thousands)
<S> <C> <C> <C> <C>
Revenues, net...................................... $169,748 100% $135,402 100%
Technical and operating expenses................... 103,012 61 78,347 58
Selling, general and administrative expenses....... 47,461 28 53,056 39
Depreciation and amortization...................... 31,452 18 30,270 22
---------- ----------
Operating loss................................ $ (12,177) (7)% $ (26,271) (19)%
========= =========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------------------------------------
2000 1999
---------------------------- ---------------------------
% of Net % of Net
Amount Revenues Amount Revenues
--------------- ----------- -------------- -----------
(dollars in thousands)
<S> <C> <C> <C> <C>
Revenues, net...................................... $648,652 100% $554,723 100%
Technical and operating expenses................... 426,697 66 369,818 67
Selling, general and administrative expenses....... 149,888 23 190,612 34
Depreciation and amortization...................... 108,247 17 89,692 16
--------- ---------
Operating loss................................ $ (36,180) (6)% $ (95,399) (17)%
========= =========
</TABLE>
REVENUES for the three and nine months ended September 30, 2000 increased $34.3
million (25%) and $93.9 million (17%), respectively, as compared to revenues for
the same period in the prior year. Approximately $13.5 million (10%) and $41.2
million (7%), respectively, of the increase was attributable to internal growth
in programming network subscribers and rate increases, approximately $13.1
million (10%) and $24.9 million (4%), respectively, of the increase was
primarily the result of a greater number of concerts, special events and
sporting events at Madison Square Garden and Radio City Music Hall and
approximately $5.0 million (3%) and $19.8 million (4%), respectively, was due to
increases in advertising revenues. The remaining $2.7 million (2%) and $8.0
million (2%) was a direct result of the Transactions.
TECHNICAL AND OPERATING EXPENSES for the three and nine months ended September
30, 2000 increased $24.7 million (32%) and $56.9 million (15%), respectively,
over the comparable 1999 periods. The increase was primarily attributable to
increased costs directly associated with the net increases in revenues discussed
above. As a percentage of revenues, technical and operating expenses increased
3% and decreased 1%, respectively, during the three and nine month periods ended
September 30, 2000 over the comparable periods in 1999.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $5.6 million (11%) and
$40.7 million (21%), respectively, for the three and nine months ended September
30, 2000 over the same 1999 periods. The net decrease for the three months ended
September 30, 2000 consisted of a $6.9 million (13%) decrease related to an
incentive stock plan and a $3.3 million (6%) decrease attributable to lower Year
2000 remediation costs, partially offset by a $2.5 million (4%) increase related
primarily to higher sales and marketing costs and a $2.1 million (4%) increase
resulting from the Transactions. The net decrease for the nine months ended
September 30, 2000 consisted of a decrease of $46.2 million (24%) related to an
incentive stock plan and a decrease of $8.0 million (4%) attributable to lower
Year 2000 remediation costs, partially offset by an $8.0 million (4%) increase
related to sales and marketing initiatives, advertising and other
(8)
<PAGE>
general cost increases and $5.5 million (3%) increase resulting from the
Transactions. As a percentage of revenues, selling, general and administrative
expenses decreased 11% for both the three and nine month periods. Excluding the
effects of the incentive stock plan and Year 2000 remediation costs, as a
percentage of revenues such costs decreased 3% and 2%, respectively, for the
three and nine month periods.
DEPRECIATION AND AMORTIZATION EXPENSE increased $1.2 million (4%) and $18.6
million (21%) for the three and nine months ended September 30, 2000 over the
same 1999 periods. The increase resulted primarily from depreciation on capital
expenditures made during the periods.
RETAIL ELECTRONICS
Refer to Cablevision Systems Corporation's September 30, 2000 Quarterly Report
on Form 10-Q.
CABLEVISION NY GROUP - NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
OPERATING ACTIVITIES
Net cash provided by operating activities amounted to $188.7 million for the
nine months ended September 30, 2000 compared to $150.3 million for the nine
months ended September 30, 1999. The 2000 cash provided by operating activities
consisted primarily of $317.6 million of income before depreciation,
amortization and other non-cash items, partially offset by a net decrease in
cash resulting from changes in assets and liabilities of $128.9 million.
The 1999 cash provided by operating activities of $150.3 million consisted
primarily of $106.5 million of net income before depreciation, amortization and
other non-cash items and an increase in cash resulting from changes in assets
and liabilities of $43.8 million.
INVESTING ACTIVITIES
Net cash used in investing activities for the nine months ended September 30,
2000 was $1,060.1 million compared to $734.3 million for the nine months ended
September 30, 1999. The 2000 investing activities consisted of $879.3 million of
capital expenditures, payments for acquisitions of $128.7 million and other net
cash payments aggregating $52.1 million.
Net cash used in investing activities for the nine months ended September 30,
1999 of $734.3 million consisted of $590.9 million of capital expenditures,
$114.4 million of payments for acquisitions and other net cash payments
aggregating $29.0 million.
FINANCING ACTIVITIES
Net cash provided by financing activities amounted to $846.7 million for the
nine months ended September 30, 2000 compared to $475.4 million for the nine
months ended September 30, 1999. In 2000, financing activities consisted
primarily of additional bank borrowings of $805.0 million and net capital
contributions from RMG of $65.5 million, partially offset by other cash payments
aggregating $23.8 million.
Net cash provided by financing activities of $475.4 million for the nine months
ended September 30, 1999 consisted primarily of $497.7 million from the issuance
of senior notes and net capital contributions from RMG of $96.6 million,
partially offset by repayment of bank debt of $77.9 million and other cash
payments aggregating $41.0 million.
(9)
<PAGE>
YEAR 2000
For the nine months ended September 30, 2000 and 1999, CNYG recorded
approximately $3.4 million and $26.0 million, respectively, of expenses relating
to Year 2000 remediation.
LIQUIDITY AND CAPITAL RESOURCES
Cablevision Systems Corporation ("Cablevision" or the "Company") does not have
any operations independent of its subsidiaries. In addition, Cablevision has no
borrowings and does not have any securities outstanding other than its Class A
common stock and Class B common stock, or, if the proposed Rainbow Media Group
tracking stock is issued, Cablevision NY Group Class A common stock, Cablevision
NY Group Class B common stock, Rainbow Media Group Class A tracking stock and
Rainbow Media Group Class B tracking stock, on which it does not intend to pay
any dividends in the foreseeable future. Accordingly, Cablevision does not have
cash needs independent of the needs of its subsidiaries.
The following table presents selected historical results of operations and other
financial information related to the captioned groups or entities as of and for
the nine months ended September 30, 2000.
<TABLE>
<CAPTION>
Revenues AOCF*
-------- -----
(dollars in thousands)
<S> <C> <C>
Cablevision NY Group:
Restricted Group**.................................................. $1,666,302 $ 748,482
New Media***........................................................ 89,922 (51,885)
Rainbow NY Group.................................................... 648,652 72,393
Retail Electronics.................................................. 467,440 (49,806)
Other (including eliminations)...................................... (44,933) (2,017)
---------- -----------
Cablevision NY Group............................................. $2,827,383 $ 717,167
========== ===========
Rainbow Media Group................................................... $ 353,525 $ 97,952
=========== ============
<CAPTION>
Interest Capital
Expense Expenditures
------- ------------
(dollars in thousands)
<S> <C> <C>
Cablevision NY Group:
Restricted Group**.................................................. $ 352,535 $ 696,155
New Media***........................................................ 2 132,661
Rainbow NY Group.................................................... 23,598 25,197
Retail Electronics.................................................. 10,231 23,327
Other (including eliminations)...................................... (746) 1,989
------------ -----------
Cablevision NY Group............................................. $ 385,620 $ 879,329
============ ===========
Rainbow Media Group................................................... $ 37,471 $ 11,316
============ ===========
</TABLE>
-------------------------------------------------
* Defined as operating income (loss) before depreciation and amortization and
excluding incentive stock plan expense of $816 and $72 and the costs of
Year 2000 remediation of $3,424 and $49 for Cablevision NY Group and
Rainbow Media Group, respectively.
** Includes results of the Kalamazoo, MI system through September 6, 2000, as
well as results of the Cleveland, Ohio area system and of the Massachusetts
systems held for sale, through September 30, 2000.
*** Consists of developmental operations, including those of systems held
for sale.
(10)
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES -- CABLEVISION NY GROUP
Funding for Cablevision NY Group's ongoing capital investment and operational
requirements is generally provided through separate financial arrangements made
available to the Restricted Group, Madison Square Garden and Cablevision
Electronics. Debt and redeemable preferred stock of CSC Holdings attributable to
the Cablevision NY Group, as of September 30, 2000, are outlined in the table
below.
<TABLE>
<CAPTION>
Restricted Other
Group Entities Total
----- -------- -----
(dollars in thousands)
<S> <C> <C>
Senior Debt:
Restricted Group senior debt.............................. $2,231,094 -- $2,231,094
MSG senior debt........................................... -- $274,325 274,325
Retail Electronics senior debt............................ -- 94,970 94,970
Other senior debt and capital leases...................... -- 15,124 15,124
Senior notes and debentures............................... 2,693,057 -- 2,693,057
Subordinated notes and debentures......................... 1,048,614 -- 1,048,614
---------- -------- -----------
5,972,765 384,419 6,357,184
Redeemable preferred stock of CSC Holdings.................. 1,514,257 -- 1,514,257
---------- -------- ----------
Total debt and redeemable preferred stock................... $7,487,022 $384,419 $7,871,441
========== ======== ==========
</TABLE>
RESTRICTED GROUP
Cablevision NY Group's Restricted Group currently consists of CSC Holdings and
its cable operations in and around the greater New York City metropolitan area
and around the Boston, Massachusetts metropolitan area, as well as the
commercial telephone operations of Cablevision Lightpath, Inc. on Long Island,
New York. At September 30, 2000, the Restricted Group encompassed approximately
3,502,700 cable television subscribers, including approximately 356,900
subscribers in its Massachusetts system and 313,800 subscribers, which comprised
the recently sold Cleveland, Ohio area cable system. In November 2000, CSC
Holdings completed the sale of its Ohio cable system to Adelphia Communications
Corporation ("Adelphia") for $991.0 million in cash and 10.8 million shares of
Adelphia common stock. The cash proceeds received in the transaction were used
to repay outstanding bank debt under CSC Holdings' revolving credit facility and
to retire a $450 million bridge loan facility. In September 2000, CSC Holdings
completed the sale of its Kalamazoo, Michigan cable system to Charter
Communications, Inc. ("Charter") in exchange for 11.2 million shares of Charter
common stock.
In April 2000, CSC Holdings announced the sale of its cable systems in Boston
and Eastern Massachusetts to AT&T Corporation ("AT&T") in exchange for cable
systems in certain northern New York suburbs, approximately $878 million in AT&T
stock and approximately $284 million in cash, subject to certain adjustments.
The consummation of this transaction is subject to the receipt of franchise
transfer and other required approvals. CSC Holdings expects to apply the cash
proceeds from the Massachusetts transactions, as well as any cash proceeds
received from the monetization of any of its holdings of common stock, toward
the reduction of outstanding debt.
The Restricted Group's plant upgrade, combined with additional amounts required
for the start up and operation of new businesses such as high speed internet
access, digital video services, the expansion of residential telephone services
and the roll out of non-Long Island based commercial telephone business
(collectively, "New Media"), as well as additional investments or acquisitions,
including potential investments in the Rainbow NY Group programming entities
(11)
<PAGE>
other than MSG, will require significant additional funding.
The Restricted Group expects to obtain the requisite funds through internally
generated cash, amounts available under existing credit facilities, proceeds
from asset sales and/or additional capital markets issuances.
As of November 2, 2000, the Restricted Group had in total $2.2 billion in
reducing revolving credit facilities, consisting of a $1.2 billion facility
available to Cablevision MFR, Inc. and certain of CSC Holdings' New Jersey
subsidiaries and a $1.0 billion facility available to CSC Holdings and other
Restricted Group subsidiaries. Both facilities mature in March 2007, with
commitments beginning to reduce in June 2001. On July 31, 2000, CSC Holdings
closed on a $450 million term loan facility which provided additional
availability until certain pending cable system sales closed. This facility was
repaid and terminated on November 2, 2000 with cash proceeds from the sale of
CSC Holdings' Ohio cable system to Adelphia. As of November 2, 2000, the
Restricted Group had outstanding borrowings under its credit facilities of
$1,356 million and letters of credit of $41.6 million. Unrestricted and undrawn
funds available to the Restricted Group amounted to approximately $802.4 million
as of the same date.
<TABLE>
<CAPTION>
As of November 2, 2000
------------------------------------------------
CSC
Holdings Mfr Total
-------- --- -----
(in thousands)
<S> <C> <C> <C>
Total revolving credit facility............ $1,000,000 $1,200,000 $2,200,000
Outstanding debt........................... 398,000 958,000 1,356,000
Outstanding letters of credit.............. 41,633 -- 41,633
---------- ---------- ----------
Availability............................. $ 560,367 $ 242,000 $ 802,367
========== ========== ==========
</TABLE>
The Restricted Group's credit facilities contain certain financial covenants
that may limit its ability to utilize all of the undrawn funds available
thereunder, including covenants requiring the Restricted Group to maintain
certain financial ratios and restricting the permitted uses of borrowed funds.
As of November 2, 2000, CSC Holdings had entered into interest exchange (swap)
agreements with several of its banks covering a notional principal amount of
$250 million requiring CSC Holdings to pay a floating rate of interest. These
swaps mature in 2001 and 2002.
In November 1999, CSC Holdings entered into an interest rate cap agreement with
American Movie Classics, a Rainbow Media Group entity, in a notional principal
amount of $105 million. The agreement caps American Movie Classics' floating
interest costs paid on the basis of LIBOR at 7.0% through May 2001 and at 7.5%
from May 2001 through May 2002 in exchange for a cash payment made to CSC
Holdings.
MADISON SQUARE GARDEN
Madison Square Garden ("MSG") has a $500 million revolving credit facility
maturing on December 31, 2004. As of November 2, 2000, outstanding debt under
this facility was $280 million. In addition, MSG had outstanding letters of
credit of $13 million, resulting in unrestricted and undrawn funds available of
$207 million. The MSG credit facility contains
(12)
<PAGE>
certain financial covenants that may limit its ability to utilize all of the
undrawn funds available thereunder, including covenants requiring MSG to
maintain certain financial ratios. The Company believes that for MSG, internally
generated funds, together with funds available under its existing credit
agreement, will be sufficient to meet its projected funding requirements for the
next twelve months, including requirements of certain of Rainbow NY Group's
programming-related entities.
Garden Programming LLC, an unrestricted subsidiary of MSG, had a $20 million
term loan maturing on July 11, 2002. The loan was replaced with borrowings under
the MSG credit facility and cancelled on September 29, 2000.
RETAIL ELECTRONICS
Cablevision Electronics has a $130 million stand alone credit facility, which
matures in February 2001. Under the terms of the credit facility, the total
amount of borrowing available to Cablevision Electronics is subject to an
availability calculation based on a percentage of eligible inventory. On
November 2, 2000, total outstanding debt under the credit facility was $95
million with no additional availability.
CSC Holdings' investment in Cablevision Electronics was approximately $158.9
million at September 30, 2000. Through November 2, 2000, Cablevision Electronics
has received other financial support from CSC Holdings of approximately $201.8
million in the form of letters of credit, guarantees and intercompany loans. The
Company believes that Cablevision Electronics will require additional financial
support from CSC Holdings in respect of planned increases in inventory, capital
expenditures and other operating requirements and that funds available under
Cablevision Electronics' credit agreement, assuming the credit facility can be
renewed at maturity, together with this additional financial support, will be
sufficient to meet its projected funding requirements for the next twelve
months; however, no assurances can be given as to the Company's ability to renew
the credit facility at maturity on acceptable terms and conditions, or at all.
(13)
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES -- RAINBOW MEDIA GROUP
Financing for the Rainbow Media Group entities has historically been provided by
a combination of bank credit facilities, intercompany borrowings, sales of
interests in programming entities, and, from time to time, by equity
contributions from partners. Currently, Rainbow Media Holdings and American
Movie Classics each have bank credit facilities. Borrowings under the Rainbow
Media Holdings credit facility have been used primarily to support businesses of
the Rainbow Media Group and, to a considerably lesser extent, certain Rainbow NY
Group entities. All outstanding debt of Rainbow Media Holdings is being
attributed to the Rainbow Media Group.
The Rainbow Media Group's potential future investments in new programming
content and services, such as new digital channels, will require significant
funding. The Company intends to obtain this funding with up to a $1 billion bank
credit facility currently being arranged for Rainbow Media Group, LLC (a
subsidiary of Rainbow Media Holdings). The new facility would repay and replace
the existing Rainbow Media Holdings and American Movie Classics credit
facilities and provide availability to fund cash requirements of all of the
Rainbow Media Group. As of November 2, 2000, the Company had received
commitments in excess of $800 million and expects to close the facility during
December. However, no assurances can be given that the facility can be completed
on acceptable terms and conditions, or at all.
As of November 2, 2000, Rainbow Media Holdings' existing credit facility
consisted of a $300 million non-amortizing revolving credit facility maturing on
December 31, 2000, which was reduced to $294 million as of October 31, 2000 as a
result of the sale of Rainbow Media Holdings' interest in one of its
subsidiaries. Rainbow Media Holdings is restricted from accessing $21.5 million
of the facility in order to provide for repayment of a like amount of
intercompany borrowings from RPP. Direct borrowings as of November 2, 2000,
amounted to $244.5 million, leaving a balance of $28 million available to
Rainbow Media Holdings under the credit facility as of that date.
American Movie Classics, a wholly-owned subsidiary of Rainbow Media Holdings and
part of the Rainbow Media Group, has a $425 million credit facility consisting
of a $200 million reducing revolving credit facility and a $225 million
amortizing term loan, both of which will mature on March 31, 2006. The amount of
the available commitment will not begin to be reduced until June 2004. As of
November 2, 2000, American Movie Classics had outstanding borrowings of $352
million and unrestricted funds available of $73 million.
Both the Rainbow Media Holdings and American Movie Classics credit facilities
contain certain financial covenants that may limit the ability to utilize all of
the undrawn funds available, including covenants requiring that certain
financial ratios be maintained.
In November 1999, CSC Holdings entered into an interest rate cap agreement with
American Movie Classics in a notional principal amount of $105 million. The
agreement caps American Movie Classics' floating interest costs paid on the
basis of LIBOR at 7.0% through May 2001 and at 7.5% from May 2001 through May
2002 in exchange for a cash payment made to CSC Holdings.
(14)
<PAGE>
FINANCIAL INFORMATION
The information set forth herein for the Rainbow Media Group sets forth
information for certain businesses and interests included within the Rainbow
Media Holdings subsidiary referred to as the Rainbow Media Group. The Company
has filed definitive proxy materials with the Securities and Exchange Commission
related to the vote of Cablevision shareholders that is required to amend the
Cablevision charter to authorize and issue a new series of Cablevision common
stock called Rainbow Media Group tracking stock and distributed definitive proxy
materials to Cablevision shareholders. That series of Cablevision common stock
would be designed to track the economic performance of the Rainbow Media Group.
No solicitation is being made hereby.
The proxy materials filed with the Securities and Exchange Commission state that
Rainbow Media Group tracking stock may be issued following a favorable
shareholder vote, but there are no assurances that an issuance will be made or
as to the manner in which an issuance may be accomplished. Only the definitive
proxy materials distributed to Cablevision shareholders should be relied upon in
reviewing the businesses, financial condition or results of operations of the
Rainbow Media Group.
A Cablevision tracking stock, such as the Rainbow Media Group common stock that
may be issued after a Cablevision shareholder vote, represents an interest in
Cablevision and is not a direct interest in the businesses and interests
included in the Rainbow Media Group. If the Rainbow Media Group tracking stock
is issued, dividends (if any), entitlements in the event of a merger or similar
transaction and rights in liquidation will not necessarily be related to the
performance of the Rainbow Media Group or the value of the assets in the Rainbow
Media Group. Instead, such determinations will be made by the Cablevision Board
of Directors, subject to the provisions of the Cablevision charter. The Company
does not expect to pay any dividends on any series of Cablevision common stock
for the foreseeable future.
In connection with the preparation of the financial information for the Rainbow
Media Group tracking stock, the Company has made certain allocations of
Cablevision costs based on existing policies. If the Company were to alter those
policies, which the Company is entitled to do at any time, there could be
material adverse effects on the Rainbow Media Group financial statements.
This factor should be considered in analyzing the financial information set
forth.
(15)
<PAGE>
ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED
Statement of Financial Accounting Standards No. 133, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES" ("SFAS 133"), requires that all derivative
financial instruments, such as interest rate swap contracts, be recognized in
the financial statements and measured at fair value regardless of the purpose or
intent for holding them. Changes in the fair value of derivative financial
instruments are either recognized periodically in income or stockholders' equity
(as a component of comprehensive income), depending on whether the derivative is
being used to hedge changes in fair value or cash flows. SFAS 133, as amended,
is effective for fiscal years beginning after June 15, 2000. CNYG and RMG do not
expect that the adoption of SFAS 133 will have a material effect on their
financial condition or results of operations.
In December 1999, the SEC issued Staff Accounting Bulletin No. 101, "REVENUE
RECOGNITION IN FINANCIAL STATEMENTS" ("SAB 101") which summarizes certain of the
SEC staff's views in applying generally accepted accounting principles to
revenue recognition in financial statements. CNYG and RMG will be required to
adopt the accounting provisions of SAB 101 during the fourth quarter of 2000.
CNYG and RMG do not believe that the implementation of SAB 101 will have a
significant effect on their financial condition or results of operations.
Statement of Position 00-02 "ACCOUNTING BY PRODUCERS OR DISTRIBUTORS OF FILMS"
("SOP 00-02") replaces Statement of Financial Accounting Standards No. 53, and
provides guidance covering revenue recognition for sales or licenses of films
and the accounting and reporting of film production costs. SOP 00-02 is
effective for financial statements for fiscal years beginning after December 31,
2000. RMG does not believe that the adoption of SOP 00-02 will have a
significant effect on its financial position or results of operations.
(16)
<PAGE>
RAINBOW MEDIA GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
COMBINED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------ -----------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash................................................................................. $ 627 $ 105
Trade accounts receivable (less allowance for doubtful accounts of
$16,073 and $9,126)............................................................... 69,810 46,950
Accounts receivable-affiliates, net.................................................. 73,203 39,175
Prepaid expenses and other current assets............................................ 23,682 4,386
Feature film inventory, net.......................................................... 56,905 50,068
---------- ---------
Total current assets........................................................... 224,227 140,684
Long-term feature film inventory, net................................................... 258,794 284,708
Property and equipment, net............................................................. 61,142 49,274
Investments in affiliates............................................................... 58,673 47,398
Other investments....................................................................... 1,684 -
Deferred carriage fees and contractual rights (less accumulated
amortization of $14,601 and $4,605).................................................. 19,667 19,757
Deferred financing costs (less accumulated amortization of
$2,332 and $1,769)................................................................... 2,658 3,212
Deferred transmission costs (less accumulated amortization of
$1,298 and $1,174)................................................................... 702 825
Intangible assets (less accumulated amortization of
$153,823 and $132,206)............................................................... 200,664 103,638
---------- ---------
$828,211 $649,496
========== =========
</TABLE>
See accompanying notes to
combined financial statements.
(17)
<PAGE>
RAINBOW MEDIA GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
COMBINED BALANCE SHEETS
(Dollars in thousands)
(continued)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------ -----------
(unaudited)
<S> <C> <C>
LIABILITIES AND GROUP DEFICIENCY
Current liabilities:
Bank debt, current................................................................... $260,082 $ 53,773
Current portion of capital lease obligations......................................... 4,943 4,381
Accounts payable..................................................................... 39,981 45,051
Accrued employee related costs....................................................... 25,348 34,566
Other accrued expenses............................................................... 25,281 17,224
Accounts payable - affiliates........................................................ 69,431 35,168
Deferred revenue..................................................................... 8,222 --
Note payable - affiliate............................................................. -- 90,000
Feature film rights payable, current................................................. 42,740 60,409
------------- ------------
Total current liabilities...................................................... 476,028 340,572
Bank debt, long-term.................................................................... 338,750 308,000
Feature film rights payable, long-term.................................................. 178,163 206,476
Capital lease obligations, long-term.................................................... 29,741 29,236
------------- ------------
Total liabilities.............................................................. 1,022,682 884,284
Deficit investment in affiliates........................................................ 2,868 2,966
Commitments and contingencies
Group deficiency..................................................................... (197,339) (237,754)
------------- ------------
$ 828,211 $ 649,496
============= ============
</TABLE>
See accompanying notes
to combined financial statements.
(18)
<PAGE>
RAINBOW MEDIA GROUP
(a combination of certain assets and businesses of
Cablevision Systems Corporation)
COMBINED STATEMENTS OF OPERATIONS
Three and Nine Months Ended September 30, 2000 and 1999
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------------------- ---------------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues, net.................................. $353,525 $265,466 $120,916 $ 94,179
-------- -------- -------- ---------
Operating expenses:
Technical and operating..................... 137,414 105,730 48,788 34,015
Selling, general and administrative......... 118,280 109,691 41,354 35,082
Depreciation and amortization............... 29,317 29,900 9,265 9,958
---------- ---------- ----------- -----------
285,011 245,321 99,407 79,055
--------- --------- ---------- ----------
Operating income...................... 68,514 20,145 21,509 15,124
---------- ---------- ---------- ---------
Other income (expense):
Interest expense............................ (37,471) (23,800) (13,344) (8,775)
Interest income............................. 688 33 244 21
Equity in net income (loss)
of affiliates, net...................... (3,662) 800 (2,893) (1,142)
Write off of deferred financing costs....... - (1,413) - -
Miscellaneous, net.......................... (650) (324) (383) (65)
----------- ----------- ----------- ------------
(41,095) (24,704) (16,376) (9,961)
--------- --------- --------- ----------
Net income (loss)........................... $ 27,419 $ (4,559) $ 5,133 $ 5,163
======== ========= ========= ==========
</TABLE>
See accompanying notes
to combined financial statements.
(19)
<PAGE>
RAINBOW MEDIA GROUP
(a combination of certain assets and businesses
of Cablevision Systems Corporation)
COMBINED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2000 and 1999
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss).................................................. $ 27,419 $ (4,559)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization.................................... 29,317 29,900
Amortization and write-off of deferred costs..................... 686 1,971
Equity in net loss (income) of affiliates, net................... 3,662 (800)
Non-cash expenses attributed to RMG, net......................... 14,697 26,957
Changes in assets and liabilities, net of effects of acquisitions:
Trade accounts receivable, net............................... (10,293) (17,068)
Accounts receivable-affiliates, net.......................... (30,110) (3,380)
Prepaid expenses and other current assets.................... (6,479) 5,972
Feature film inventory, net.................................. 19,077 (4,707)
Accounts payable and accrued expenses........................ (3,466) 1,163
Accounts payable affiliates.................................. 31,155 5,175
Feature film rights payable.................................. (45,982) (7,472)
Deferred revenue............................................. 906 -
------------ --------------
Net cash provided by operating activities............... 30,589 33,152
---------- ----------
Cash flows from investing activities:
Capital expenditures............................................... (11,316) (4,510)
---------- -----------
Net cash used in investing activities................... (11,316) (4,510)
---------- -----------
Cash flows from financing activities:
Net proceeds from bank debt........................................ 50,209 73,460
Distributions to CNYG, net......................................... (65,541) (96,633)
Principal payments on capital lease obligations.................... (3,409) (2,965)
Financing costs on bank debt....................................... (10) (2,260)
------------ ----------
Net cash used in financing activities................... (18,751) (28,398)
--------- ---------
Net increase in cash.................................................. 522 244
Cash at beginning of year............................................. 105 99
----------- -----------
Cash at end of period................................................. $ 627 $ 343
========== ==========
</TABLE>
See accompanying notes
to combined financial statements.
(20)
<PAGE>
RAINBOW MEDIA GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
(unaudited)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited combined financial statements of Rainbow Media Group
("RMG") have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
NOTE 2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS
The financial statements as of and for the three and nine month periods ended
September 30, 2000 and 1999 presented are unaudited; however, in the opinion of
management, such statements include all adjustments, consisting solely of normal
recurring adjustments, necessary for a fair presentation of the results for the
periods presented.
The interim financial statements should be read in conjunction with the audited
financial statements and notes thereto for the year ended December 31, 1999.
The results of operations for the interim periods are not necessarily indicative
of the results that might be expected for future interim periods or for the full
year ending December 31, 2000.
NOTE 3. LIQUIDITY
Although RMG had a working capital deficit as of September 30, 2000, RMG is
operated as an integral part of Cablevision Systems Corporation ("Cablevision").
Cablevision intends to provide RMG with sufficient liquidity to meet its working
capital requirements through (i) renegotiation or replacement of existing credit
facilities, (ii) the sale of debt or equity securities, or, if necessary, (iii)
advances from Cablevision NY Group ("CNYG").
NOTE 4. INVESTMENTS
RMG accounts for its investments in marketable securities in accordance with
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." RMG has classified such investments
as available-for-sale. Accordingly, these investments are stated at fair value
and unrealized holding gains and losses are included in accumulated other
comprehensive income as a component of group deficiency.
NOTE 5. CASH FLOWS
For purposes of the combined statements of cash flows, RMG considers short-term
investments with a maturity at date of purchase of three months or less to be
cash equivalents. RMG paid cash interest expense of approximately $22,718 and
$12,751 for the nine months ended
(21)
<PAGE>
RAINBOW MEDIA GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
(unaudited)
(continued)
September 30, 2000 and 1999, respectively. RMG's noncash financing and investing
activities for the nine months ended September 30, 2000 and 1999 included
capital lease obligations of $4,476 and $4,919, respectively, incurred when RMG
entered into leases for new equipment and the receipt of Salon.com common shares
valued at $7,300 in 2000. For the nine months ended September 30, 2000 and 1999,
CNYG made contributions of $20,258 and $30,126, respectively, to equity method
investee companies attributed to RMG. Such amounts have been reflected as
capital contributions from CNYG to RMG. For the nine months ended September 30,
2000 and 1999, CNYG received net proceeds of $96,928, and made net repayments of
$21,638, respectively, on indebtedness and made payments of $14,153 and $5,417,
respectively, of related interest attributed to RMG. Such amounts have been
reflected as capital transactions between RMG and CNYG. For the nine months
ended September 30, 2000 and 1999, CNYG made payments of $9,806 and $11,087,
respectively, relating to stock plan obligations attributed to RMG. Such amounts
have been reflected as capital contributions from CNYG to RMG.
Non-cash expenses attributed to RMG consisted primarily of (i) interest of
$14,625 and $8,347 related to a portion of indebtedness of Rainbow Media
Holdings, and (ii) expenses of $72 and $18,610 related to an incentive stock
plan of Cablevision for the nine months ended September 30, 2000 and 1999,
respectively.
During the nine months ended September 30, 2000, CNYG acquired controlling
interests in three programming businesses for approximately $145,200 (including
cash acquired of $4,459). Such acquisitions have been attributed to RMG and
have been reflected as contributions to RMG.
NOTE 6. ACQUISITIONS
In January 2000, Regional Programming Partners acquired the 70% interest in
SportsChannel Florida Associates that it did not already own and held by Front
Row Communications for approximately $130,600 (including the repayment of
$20,000 in debt) increasing its ownership to 100%. In May 2000, Rainbow Media
Holdings, Inc. ("Rainbow Media Holdings") acquired the 50% interest in MuchMusic
USA that it did not already own from Chum Limited for $10,000 increasing its
ownership to 100%. Such acquisitions have been attributed to RMG as
contributions from CNYG. These acquisitions were accounted for as purchases with
the operations of the acquired businesses being combined with those of RMG as of
the acquisition date. The purchase prices will be allocated to the specific
assets acquired when independent appraisals are obtained. Had the acquisition of
SportsChannel Florida Associates occurred on January 1, 1999, pro forma revenue
and net loss would have been $302,327 and $6,839, respectively, for the nine
months ended September 30, 1999.
(22)
<PAGE>
RAINBOW MEDIA GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
(unaudited)
(continued)
NOTE 7. DEFERRED REVENUE
In January 2000, Rainbow Media Holdings acquired 1,125,000 common shares of
Salon.com, representing 10% of Salon.com's outstanding common stock at that
time, in exchange for the provision of future advertising and promotional time
on certain of Rainbow Media Holdings' programming services. The fair market
value of the common stock at closing of approximately $7,300 has been recorded
in other investments and in deferred revenue in the accompanying combined
balance sheet. The deferred revenue will be amortized to income as the services
are provided to Salon.com.
NOTE 8. COMPREHENSIVE LOSS
Other comprehensive loss for the three and nine months ended September 30, 2000
of $5,632 represents unrealized losses on available-for-sale securities.
NOTE 9. INCOME TAXES
RMG's tax provision for the three and nine months ended September 30, 2000 and
the three months ended September 30, 1999 was reduced to $0 as a result of
available loss carryovers.
(23)
<PAGE>
CABLEVISION NY GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
COMBINED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
---- ----
(unaudited)
<S> <C> <C>
ASSETS
------
Cash and cash equivalents............................................................... $ 37,930 $ 62,560
Accounts receivable trade (less allowance for doubtful accounts of
$26,863 and $26,231)................................................................. 196,811 179,354
Notes and other receivables............................................................. 124,306 128,852
Inventory, prepaid expenses and other assets............................................ 269,090 208,587
Property, plant and equipment, net...................................................... 2,985,752 2,703,221
Investments in affiliates............................................................... 15,166 13,991
Other investments....................................................................... 438,678 256,442
Advances to affiliates.................................................................. 88,159 153,044
Net assets held for sale................................................................ 531,191 269,349
Franchises, net of accumulated amortization of
$740,307 and $703,237................................................................ 460,119 651,777
Affiliation and other agreements, net of accumulated amortization of
$196,209 and $165,474................................................................ 75,845 106,580
Excess costs over fair value of net assets acquired and other intangible assets,
net of accumulated amortization of
$717,382 and $673,702................................................................ 1,672,898 1,779,062
Deferred financing, acquisition and other costs, net of
accumulated amortization of $55,158 and $48,119...................................... 129,469 116,493
------------ ------------
$7,025,414 $6,629,312
============ ============
</TABLE>
See accompanying notes to
combined financial statements.
(24)
<PAGE>
CABLEVISION NY GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
COMBINED BALANCE SHEETS
(Dollars in thousands)
(continued)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
---- ----
(unaudited)
<S> <C> <C>
LIABILITIES AND GROUP DEFICIENCY
Accounts payable...................................................................... $ 427,824 $ 387,119
Accrued liabilities:
Interest.......................................................................... 109,107 114,972
Employee related costs............................................................ 345,429 429,359
Other............................................................................. 445,452 452,502
Contract obligations.................................................................. 78,430 104,241
Deferred revenue...................................................................... 333,485 274,043
Bank debt............................................................................. 2,530,865 1,892,714
Senior notes and debentures........................................................... 2,693,057 2,692,602
Subordinated notes and debentures..................................................... 1,048,614 1,048,513
Capital lease obligations and other debt.............................................. 84,648 65,482
------------- -------------
Total liabilities................................................................. 8,096,911 7,461,547
Series H Redeemable Exchangeable Preferred Stock...................................... 434,181 409,757
Series M Redeemable Exchangeable Preferred Stock...................................... 1,080,076 994,754
Commitments and contingencies
Group deficiency................................................................... (2,585,754) (2,236,746)
----------- -----------
$7,025,414 $6,629,312
=========== ===========
</TABLE>
See accompanying notes
to combined financial statements.
(25)
<PAGE>
CABLEVISION NY GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
COMBINED STATEMENTS OF OPERATIONS
Three and Nine Months Ended September 30, 2000 and 1999
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------------- -------------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues, net (including retail electronics
sales of $467,440, $396,853, $171,682
and $137,505)............................... $2,827,383 $2,533,005 $ 919,932 $ 814,028
---------- ---------- ----------- -----------
Operating expenses:
Technical and operating..................... 1,077,840 984,917 322,262 289,254
Retail electronics cost of sales............ 383,860 316,569 142,008 111,781
Selling, general and
administrative............................ 652,756 789,337 221,537 245,702
Depreciation and amortization............... 680,016 598,009 229,238 202,779
----------- ----------- ------------ ------------
2,794,472 2,688,832 915,045 849,516
---------- ---------- ------------ ------------
Operating income (loss)............... 32,911 (155,827) 4,887 (35,488)
------------ ----------- ------------ ------------
Other income (expense):
Interest expense............................ (385,620) (324,423) (136,849) (113,168)
Interest income............................. 5,168 11,052 1,557 3,482
Equity in net loss of affiliates, net....... (9,372) (9,657) (7,872) (3,355)
Gain on sale of cable assets................ 130,758 -- 130,758 --
Write off of deferred financing costs....... -- (3,012) -- (19)
Miscellaneous, net.......................... (4,636) (9,335) (598) (2,157)
------------ ----------- ------------ ------------
(263,702) (335,375) (13,004) (115,217)
------------ ----------- ------------ ------------
Net loss before dividend requirements.......... (230,791) (491,202) (8,117) (150,705)
Dividend requirements applicable to
preferred stock............................. (122,510) (131,476) (41,981) (44,786)
------------ ----------- ------------ ------------
Net loss ...................................... $ (353,301) $ (622,678) $ (50,098) $ (195,491)
========== ========== ============ ==========
</TABLE>
See accompanying notes
to combined financial statements.
(26)
<PAGE>
CABLEVISION NY GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
COMBINED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2000 and 1999
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss......................................................................... $ (230,791) $ (491,202)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization............................................... 680,016 598,009
Equity in net loss of affiliates............................................ 9,372 9,657
Gain on sale of investments................................................. -- (10,861)
Gain on sale of cable assets................................................ (130,758) --
Write off of investment in affiliate........................................ -- 15,100
Write off of deferred financing costs....................................... -- 3,012
(Gain) loss on sale of equipment, net....................................... (2,931) 3,269
Amortization of deferred financing and debenture discount................... 7,369 6,423
Non-cash expenses attributed to RMG........................................... (14,697) (26,957)
Change in assets and liabilities, net of effects of acquisitions and
dispositions:
Accounts receivable trade............................................... (21,648) 9,948
Notes and other receivables............................................. 129 8,796
Inventory, prepaid expenses and other assets............................ (61,350) (35,673)
Advances to affiliates.................................................. (25,127) (15,472)
Other deferred costs.................................................... (23,740) 985
Accounts payable........................................................ 57,627 (22,446)
Accrued liabilities..................................................... (86,587) 117,183
Contract obligations.................................................... (27,613) (33,729)
Deferred revenue........................................................ 59,442 14,240
-------------- --------------
Net cash provided by operating activities...................................... 188,713 150,282
-------------- --------------
Cash flows from investing activities:
Capital expenditures............................................................. (879,329) (590,919)
Payments for acquisitions, net of cash acquired.................................. (7,984) (114,447)
Payments for acquisitions, net of cash acquired, attributed to RMG............... (120,736) --
Proceeds from sale of equipment.................................................. 107 722
Proceeds from sale of investments................................................ -- 10,861
Increase in investments in affiliates, net....................................... (51,539) (31,038)
Increase in other investments.................................................... (494) (1,736)
Additions to other intangible assets............................................. (92) (7,740)
-------------- --------------
Net cash used in investing activities.......................................... $(1,060,067) $ (734,297)
-------------- --------------
</TABLE>
See accompanying notes
to combined financial statements.
(27)
<PAGE>
CABLEVISION NY GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
COMBINED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2000 and 1999
(Dollars in thousands)
(unaudited)
(continued)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Cash flows from financing activities:
Net proceeds from (repayments) of bank debt..................................... $ 805,001 $ (77,898)
Issuance of senior notes........................................................ -- 497,670
Preferred stock dividends....................................................... (12,764) (21,910)
Issuance of Cablevision common stock............................................ 17,106 11,024
Payments on capital lease obligations and other debt............................ (26,197) (12,442)
Additions to deferred financing and other costs................................. (1,963) (17,190)
Purchase of Cablevision treasury stock.......................................... -- (499)
Capital contributions from RMG, net............................................. 65,541 96,633
------------ -----------
Net cash provided by financing activities..................................... 846,724 475,388
----------- ----------
Net decrease in cash and cash equivalents.......................................... (24,630) (108,627)
Cash and cash equivalents at beginning of year..................................... 62,560 173,727
------------ ----------
Cash and cash equivalents at end of period......................................... $ 37,930 $ 65,100
=========== =========
</TABLE>
See accompanying notes
to combined financial statements.
(28)
<PAGE>
CABLEVISION NY GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
(unaudited)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited combined financial statements of Cablevision NY Group
("CNYG") have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
NOTE 2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS
The financial statements as of and for the three and nine month periods ended
September 30, 2000 and 1999 presented are unaudited; however, in the opinion of
management, such statements include all adjustments, consisting solely of normal
recurring adjustments, necessary for a fair presentation of the results for the
periods presented.
The interim financial statements should be read in conjunction with the audited
financial statements and notes thereto for the year ended December 31, 1999.
The results of operations for the interim periods are not necessarily indicative
of the results that might be expected for future interim periods or for the full
year ending December 31, 2000.
NOTE 3. RECLASSIFICATIONS
Certain reclassifications have been made to the 1999 financial statements to
conform to the 2000 presentation.
NOTE 4. INVESTMENTS
CNYG accounts for its investments in marketable securities in accordance with
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." CNYG has classified such investments
as available-for-sale. Accordingly, these investments are stated at fair value
and unrealized holding gains and losses are included in accumulated other
comprehensive income as a component of group deficiency.
NOTE 5. CASH FLOWS
For purposes of the combined statements of cash flows, CNYG considers short-term
investments with a maturity at date of purchase of three months or less to be
cash equivalents. CNYG paid cash interest expense of approximately $397,582 and
$312,469 for the nine months ended September 30, 2000 and 1999, respectively.
CNYG's noncash financing and investing activities for the nine months ended
September 30, 2000 and 1999 included capital lease obligations of $45,907 and
$40,832, respectively, incurred when CNYG entered into leases for new equipment
(29)
<PAGE>
CABLEVISION NY GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
(unaudited)
(continued)
and the receipt of Charter Communications, Inc.'s common stock valued at closing
at approximately $165,500 in connection with the sale of the cable television
system serving Kalamazoo, Michigan in 2000. For the nine months ended September
30, 2000 and 1999, CNYG made contributions of $20,258 and $30,126, respectively,
to equity method investee companies attributed to RMG. Such amounts have been
reflected as capital distributions from CNYG to RMG. For the nine months ended
September 30, 2000 and 1999, CNYG received net proceeds of $96,928, and made net
repayments of $21,638, respectively, on indebtedness and made payments of
$14,153 and $5,417, respectively, of related interest attributed to RMG. Such
amounts have been reflected as capital transactions between RMG and CNYG. For
the nine months ended September 30, 2000 and 1999, CNYG made payments of $9,806
and $11,087, respectively, relating to stock plan obligations attributed to RMG.
Such amounts have been reflected as capital contributions from CNYG to RMG.
Non-cash expenses attributed to RMG consisted primarily of (i) interest of
$14,625 and $8,347 related to a portion of indebtedness of Rainbow Media
Holdings, Inc. and (ii) expenses of $72 and $18,610 related to an incentive
stock plan of Cablevision Systems Corporation ("Cablevision") for the nine
months ended September 30, 2000 and 1999, respectively.
During the nine months ended September 30, 2000, CNYG acquired controlling
interests in three programming businesses for approximately $145,200
(including cash acquired of $4,459). Such acquisitions have been attributed
to RMG and have been reflected as contributions to RMG.
NOTE 6. DISPOSITION
In September 2000, CSC Holdings, Inc. ("CSC Holdings") completed the sale of the
cable television system serving Kalamazoo, Michigan, for 11,173,376 shares of
Charter Communications, Inc.'s common stock valued at approximately $165,500 at
closing and recognized a gain of approximately $130,800.
NOTE 7. AT HOME
As of September 30, 2000 and 1999, deferred revenue derived from the receipt of
At Home warrants, net of amortization taken, amounted to approximately $116,474
and $174,567, respectively. For the nine months ended September 30, 2000 and
1999, CNYG recognized approximately $45,000 and $37,600, respectively, of this
deferred revenue.
On June 19, 2000, Cablevision commenced an action in the Delaware Court of
Chancery to protect its rights regarding an agreement, dated as of March 28,
2000, among Excite@Home, AT&T Corp., Comcast Corporation and Cox Communications,
Inc. On June 30, 2000, Excite@Home, AT&T, Comcast and Cox filed answers in the
Delaware Court of Chancery to Cablevision's complaint. In addition, Excite@Home
asserted counterclaims against Cablevision
(30)
<PAGE>
CABLEVISION NY GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
(unaudited)
(continued)
seeking to rescind its agreements with Cablevision and cancel the Excite@Home
warrants owned by Cablevision. On August 17, 2000, Cablevision and Excite@Home
announced that the parties agreed to dismiss Cablevision's claims against
Excite@Home and its partners immediately, and Cablevision consented to
Excite@Home's completion of the transactions contemplated by the March 28, 2000
agreement. Cablevision and Excite@Home further agreed to dismiss without
prejudice Excite@Home's claims against Cablevision.
NOTE 8. SEGMENT INFORMATION
CNYG's reportable segments are strategic business units that are managed
separately. CNYG evaluates segment performance based on several factors, of
which the primary financial measure is business segment adjusted operating cash
flow (defined as operating income or loss before depreciation and amortization,
incentive stock plan income or expense and the costs of Year 2000 remediation).
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
Telecommunication Services................................. $1,756,224 $1,601,118 $ 592,867 $ 543,154
Rainbow NY Group........................................... 648,652 554,723 169,748 135,402
Retail Electronics......................................... 467,440 396,853 171,682 137,505
All Other.................................................. 55,931 64,648 19,914 25,563
Intersegment Eliminations.................................. (100,864) (84,337) (34,279) (27,596)
------------ ------------- ------------- ------------
Total............................................. $2,827,383 $2,533,005 $ 919,932 $ 814,028
========== ========== =========== ==========
ADJUSTED OPERATING CASH FLOW
Telecommunication Services................................. $ 733,859 $ 679,320 $ 250,614 $ 232,172
Rainbow NY Group........................................... 72,393 48,830 20,893 15,838
Retail Electronics......................................... (49,806) (27,005) (18,038) (10,203)
All Other.................................................. (39,279) (35,193) (12,657) (13,224)
------------- ------------- ------------- -------------
Total............................................. $ 717,167 $ 665,952 $ 240,812 $ 224,583
=========== =========== =========== ===========
</TABLE>
(31)
<PAGE>
CABLEVISION NY GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
(unaudited)
(continued)
A reconciliation of reportable segment amounts to the combined balances is as
follows:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE
Total revenue for reportable segments...................... $2,872,316 $2,552,694 $ 934,297 $ 816,061
Other revenue and intersegment eliminations................ (44,933) (19,689) (14,365) (2,033)
----------- ----------- ------------ -----------
Total consolidated revenue........................ $2,827,383 $2,533,005 $ 919,932 $ 814,028
=========== =========== ============ ===========
ADJUSTED OPERATING CASH FLOW TO NET LOSS
Total adjusted operating cash flow for
reportable segments........................................ $ 756,446 $ 701,145 $ 253,469 $ 237,807
Other adjusted operating cash flow deficit................. (39,279) (35,193) (12,657) (13,224)
Items excluded from adjusted operating cash flow:
Depreciation and amortization........................ (680,016) (598,009) (229,238) (202,779)
Incentive stock plan expense......................... (816) (197,778) (6,687) (46,536)
Year 2000 remediation................................ (3,424) (25,992) -- (10,756)
Interest expense..................................... (385,620) (324,423) (136,849) (113,168)
Interest income...................................... 5,168 11,052 1,557 3,482
Equity in net loss of affiliates, net................ (9,372) (9,657) (7,872) (3,355)
Gain on sale of cable assets......................... 130,758 -- 130,758 --
Write off of deferred financing costs................ -- (3,012) -- (19)
Miscellaneous net.................................... (4,636) (9,335) (598) (2,157)
----------- ----------- ------------ -----------
Net loss before dividend requirements...... $ (230,791) $ (491,202) $ (8,117) $ (150,705)
=========== =========== ============ ===========
</TABLE>
Substantially all revenues and assets of CNYG's reportable segments are
attributed to or located in the United States.
CNYG does not have a single external customer which represents 10 percent or
more of its combined revenues.
NOTE 9. NET ASSETS HELD FOR SALE
The net assets attributable to CNYG's cable television systems located in and
around the greater Cleveland, Ohio metropolitan area and in Boston and Eastern
Massachusetts are classified in the accompanying balance sheet as of September
30, 2000 as net assets held for sale.
NOTE 10. COMPREHENSIVE INCOME
Other comprehensive income for the three and nine months ended September 30,
2000 of $17,700 represents unrealized net gains on available-for-sale
securities.
(32)
<PAGE>
CABLEVISION NY GROUP
(a combination of certain assets and
businesses of Cablevision Systems Corporation)
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
(unaudited)
(continued)
NOTE 11. SUBSEQUENT EVENT
In November 2000, CSC Holdings completed the sale of the cable television
systems in the greater Cleveland, Ohio metropolitan area to Adelphia
Communications Corporation for $991,000 in cash and 10,800,000 shares, valued at
closing at $359,100, in Adelphia Communications Corporation common stock. CNYG
anticipates recording a gain on the sale.
(33)
