<PAGE>
RULE NO. 424(B)(5)
REGISTRATION NO. 33-62313
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 18, 1995)
$300,000,000
[LOGO] CABLEVISION
CABLEVISION SYSTEMS CORPORATION
9 1/4% SENIOR SUBORDINATED NOTES DUE 2005
----------------
Interest on the 9 1/4% Senior Subordinated Notes due 2005 (the "Notes") of
Cablevision Systems Corporation (the "Company") is payable semi-annually on
May 1 and November 1 of each year, commencing May 1, 1996. The Notes are
redeemable at the option of the Company, in whole or in part, on or after
November 1, 2000 at the redemption prices set forth herein.
The Notes represent senior subordinated unsecured obligations of the Company
and will rank pari passu in right of payment with all other senior
subordinated unsecured indebtedness of the Company. The Notes are subordinated
to all existing and future Senior Indebtedness (as defined) of the Company.
The amount of Senior Indebtedness outstanding at September 30, 1995, adjusted
to give pro forma effect to the transactions described under "Capitalization",
including the application of the estimated net proceeds from the sale of the
Notes offered hereby, would have been approximately $534.4 million.
INVESTMENT IN THE NOTES INVOLVES SIGNIFICANT RISKS DISCUSSED UNDER
"RISK FACTORS" ON PAGE 3 OF THE ACCOMPANYING PROSPECTUS WHICH SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note............................... 100% 2.5% 97.5%
- -------------------------------------------------------------------------------
Total.................................. $300,000,000 $7,500,000 $292,500,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from November 7, 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting".
(3) Before deducting expenses of the Company estimated at $300,000.
----------------
The Notes are offered by the several Underwriters, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of certain
legal matters by counsel for the Underwriters and certain other conditions.
The Underwriters reserve the right to withdraw, cancel or modify such offer
and to reject orders in whole or in part. It is expected that delivery of the
Notes will be made in New York, New York on or about November 7, 1995.
----------------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO.
INCORPORATED
TORONTO DOMINION SECURITIES (USA) INC.
----------------
The date of this Prospectus Supplement is November 2, 1995.
<PAGE>
As used herein, unless the context otherwise requires, the term "Company"
refers to Cablevision Systems Corporation and its subsidiaries. The term
"Consolidated Financial Statements" refers to the Company's Consolidated
Financial Statements and the notes thereto incorporated by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1994 (the "Form 10-K") and the term "Management's Discussion and Analysis"
refers to the Management's Discussion and Analysis of Financial Condition and
Results of Operations incorporated by reference from the Form 10-K and the
Company's Quarterly Reports on Form 10-Q. See "Incorporation of Certain
Documents by Reference" in the accompanying Prospectus.
----------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the information
appearing elsewhere in this Prospectus Supplement and the accompanying
Prospectus and in the documents and financial statements incorporated therein
by reference.
THE COMPANY
The Company is one of the largest operators of cable television systems in
the United States, with approximately 2,687,000 subscribers in 19 states as of
September 30, 1995 based on the number of basic subscribers in systems which
the Company manages and which it owns or in which it has investments. The
Company also has ownership interests in companies that produce and distribute
national and regional programming services and provide advertising sales
services for the cable television industry. The Company was formed in 1985 to
effect a reorganization of its predecessors.
CABLE TELEVISION
The cable television systems that are majority owned and managed by the
Company (the "Company's cable television systems") served approximately
1,887,000 subscribers as of September 30, 1995 in New York, Ohio, Connecticut,
New Jersey, Michigan and Massachusetts. In addition, the Company has non-
majority investments in and manages cable television systems which served
approximately 800,000 subscribers as of September 30, 1995 in Alabama,
Arkansas, Florida, Illinois, Kansas, Kentucky, Maine, Massachusetts,
Mississippi, Missouri, New Jersey, New York, North Carolina, Oklahoma,
Pennsylvania and Tennessee. The Company's cable television systems have
generally been characterized by relatively high revenues per subscriber ($36.69
for September 1995) and ratios of premium service units to basic subscribers
(1.7:1 for September 1995). In calculating revenue per subscriber, the Company
includes only recurring service revenues and excludes installation charges and
certain other revenues such as advertising, pay-per-view and home shopping
revenues.
PROGRAMMING SERVICES
The Company conducts its programming activities through Rainbow Programming
Holdings, Inc. ("Rainbow Programming"), its wholly-owned subsidiary, and
through subsidiaries of Rainbow Programming in partnership with certain
unaffiliated entities, including National Broadcasting Company, Inc. ("NBC")
and Liberty Media Corporation. Rainbow Programming's businesses include eight
regional SportsChannel services, four national entertainment services (American
Movie Classics Company, Bravo Network, MuchMusic and the Independent Film
Channel), Rainbow News 12 Company (a regional news service serving Long Island)
and the national backdrop sports services of Prime SportsChannel Networks.
Rainbow Programming also owns an interest in Madison Square Garden Corporation.
ADVERTISING SERVICES
Rainbow Advertising Sales Corporation sells advertising time to national,
regional and local advertisers on behalf of the Company's cable television
systems and the SportsChannel and News 12 programming services, as well as on
behalf of unaffiliated cable television systems.
S-3
<PAGE>
THE OFFERING
Securities Offered.......... $300,000,000 principal amount of 9 1/4% Senior
Subordinated Notes due 2005 (the "Notes")
offered by the Company (the "Offering").
Maturity Date............... November 1, 2005.
Interest Payment Dates...... May 1 and November 1, commencing May 1, 1996.
Optional Redemption......... On and after November 1, 2000, the Notes are
redeemable, at the option of the Company, in
whole or in part, at the redemption prices set
forth herein plus accrued and unpaid interest
thereon to the redemption date. See "Description
of the Notes".
Subordination............... Subordinated to all existing and future Senior
Indebtedness (as defined) of the Company. The
Notes will rank pari passu with the Company's
$275,000,000 of 10 3/4% Senior Subordinated
Debentures due 2004, the Company's $200,000,000
of 9 7/8% Senior Subordinated Debentures due
2013 and the Company's $150,000,000 of 9 7/8%
Senior Subordinated Debentures due 2023
(collectively, the "Existing Debentures"). The
amount of Senior Indebtedness outstanding at
September 30, 1995, adjusted to give pro forma
effect to the transactions described under
"Capitalization" and the application of the
estimated net proceeds to the Company from the
offering of the Notes and of the Company's 8
1/2% Series I Cumulative Convertible
Exchangeable Preferred Stock (the "Series I
Preferred Stock") represented by depositary
shares (the "Offerings"), would have been
approximately $534.4 million. At September 30,
1995, the Company also had outstanding $956.4
million of senior subordinated indebtedness and
obligations (including $332.8 million of
indebtedness of subsidiaries guaranteed by the
Company, included in indebtedness of
consolidated subsidiaries set forth in the next
sentence) that would have ranked pari passu with
the Notes. Also, at September 30, 1995,
consolidated subsidiaries of the Company had
outstanding, adjusted to give pro forma effect
to the transactions described under
"Capitalization", approximately $1,382.7 million
of indebtedness which, insofar as the assets of
those subsidiaries are concerned, would have
been effectively senior to the Notes.
Certain Restrictions........ The Indenture for the Notes will, among other
things, contain restrictions (with certain
exceptions) on the ability of the Company and
its Restricted Subsidiaries (as defined) to
incur additional indebtedness, make certain
dividend payments or payments to redeem or
retire capital stock, invest in Unrestricted
Subsidiaries (as defined) or affiliates, engage
in certain transactions with affiliates and
merge or consolidate with or transfer all or
substantially all of their assets to another
entity. The Indenture also prohibits the Company
from issuing any indebtedness that is senior in
right of payment to the Notes and expressly
subordinate in right of payment to any other
indebtedness of the Company.
S-4
<PAGE>
Absence of Public Market.... There is no public market for these Notes. The
Company does not intend to apply for listing of
the Notes on any securities exchange or for
quotation through the National Association of
Securities Dealers Automated Quotation System.
Although Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Bear,
Stearns & Co. Inc., Morgan Stanley & Co.
Incorporated and Toronto Dominion Securities
(USA) Inc. have informed the Company that they
currently intend to make a market in the Notes,
they are not obligated to do so and any such
market making may be discontinued at any time
without notice. Accordingly, there can be no
assurance as to the development or liquidity of
any market for the Notes.
Concurrent Offering......... The Company is concurrently with the offering of
the Notes offering its depositary shares (the
"Depositary Shares") representing the Series I
Preferred Stock with an aggregate liquidation
preference of $300 million. The Company expects
to use the net proceeds from that offering
(estimated to be $290.6 million) to repay
borrowings under the Company's principal bank
credit agreement. The consummation of the
offering of the Depositary Shares is not a
condition to the consummation of the offering of
the Notes offered hereby, nor is the
consummation of the offering of the Notes a
condition to the offering of the Depositary
Shares.
Use of Proceeds............. The net proceeds to be received by the Company
from the Offering of the Notes (estimated to be
$292.2 million) will initially be applied to
repay borrowings under the Company's principal
bank credit agreement. The Company expects to
raise additional funds in the future. See "Use
of Proceeds".
S-5
<PAGE>
SELECTED FINANCIAL DATA
The historical consolidated statement of operations data (except for book
value per common share, deficiency of earnings available to cover fixed charges
and deficiency of earnings available to cover fixed charges and preferred stock
dividends) and balance sheet data for each year ended December 31 and as of
December 31 in each year in the five-year period ended December 31, 1994,
included in the following selected financial data have been derived from the
Consolidated Financial Statements of the Company, audited by KPMG Peat Marwick
LLP, independent public accountants. The historical consolidated statement of
operations data and balance sheet data for the periods ended and as of
September 30, 1995 and 1994 included in the following selected financial data
have been derived from financial statements of the Company that have not been
audited, but that, in the opinion of the management of the Company, reflect all
adjustments necessary for the fair presentation of such data for the interim
periods. The results of operations for the nine-month period ended September
30, 1995 are not necessarily indicative of the results of operations for the
full year although the Company expects to incur a substantial loss for the year
ending December 31, 1995.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA(1):
Net revenues............. $ 787,293 $ 591,645 $ 837,169 $ 666,724 $ 572,487 $ 603,272 $ 562,989
Operating expenses:
Technical............... 302,385 215,202 302,885 241,877 204,449 213,059 202,850
Selling, general and ad-
ministrative........... 194,821 121,801 195,942 172,687 120,356 121,527 118,825
Restructuring charge.... -- 4,306(2) 4,306(2) -- -- -- --
Depreciation and amorti-
zation................. 236,788 175,954 271,343 194,904 168,538 215,326 216,288
--------- --------- --------- --------- --------- --------- ---------
Operating profit......... 53,299 74,382 62,693 57,256 79,144 53,360 25,026
Other income (expense):
Interest expense, net... (235,372) (187,711) (261,781) (230,327) (193,379) (257,189) (261,114)
Provision for preferen-
tial payment to
related party.......... (4,200) (4,200) (5,600) (5,600) (2,662) -- --
Provision for loss on
Olympics
venture................ -- -- -- -- (50,000)(3) -- --
Loss on sale of pre-
ferred stock........... -- -- -- -- (20,000)(4) -- --
Write-off of deferred
financing costs........ (2,888)(5) -- (9,884)(5) (1,044)(5) (12,284)(5) -- --
Loss on redemption of
debentures............. -- -- (7,088)(5) -- -- -- --
Share of affiliates' net
loss................... (73,090) (54,662) (82,864) (61,017) (47,278) (23,780) (39,980)
Gain (loss) on sale of
programming and other
interests, net......... 36,198 -- -- (330) 7,053 15,505 --
Minority interest....... (6,229) (1,656) (3,429) 3,000 -- -- --
Gain on sale of market-
able
securities, net........ -- -- -- -- 733 5,806 --
Settlement of litigation
and related
matters................ -- -- -- -- (5,655) (9,677) --
Transaction fees........ -- -- -- -- -- -- 14,759
Miscellaneous, net...... (4,836) (4,885) (7,198) (8,720) (6,175) (11,224) (10,066)
--------- --------- --------- --------- --------- --------- ---------
Net loss................. (237,118) (178,732) (315,151) (246,782) (250,503) (227,199) (271,375)
Preferred dividend re-
quirement............... (7,272) (4,098) (6,385) (885) (885) (4,464) (4,065)
--------- --------- --------- --------- --------- --------- ---------
Net loss applicable to
common
shareholders............ $(244,390) $(182,830) $(321,536) $(247,667) $(251,388) $(231,663) $(275,440)
========= ========= ========= ========= ========= ========= =========
Net loss per common
share................... $ (10.29) $ (7.82) $ (13.72) $ (10.83) $ (11.17) $ (10.32) $ (12.36)
========= ========= ========= ========= ========= ========= =========
Average number of common
shares
outstanding (in thou-
sands).................. 23,745 23,386 23,444 22,859 22,512 22,446 22,290
========= ========= ========= ========= ========= ========= =========
Book value per common
share................... $ (86.51) $ (67.04) $ (76.93) $ (64.61) $ (55.28) $ (41.49) $ (31.36)
========= ========= ========= ========= ========= ========= =========
Deficiency of earnings
available to
cover fixed charges..... $(237,062) $(178,621) $(315,003) $(246,644) $(250,429) $(227,124) $(271,301)
========= ========= ========= ========= ========= ========= =========
Deficiency of earnings
available to
cover fixed charges and
preferred
stock dividends......... $(244,334) $(182,719) $(321,388) $(247,529) $(251,314) $(231,588) $(275,366)
========= ========= ========= ========= ========= ========= =========
</TABLE>
(footnotes on following page)
S-6
<PAGE>
<TABLE>
<CAPTION>
AS OF AS OF DECEMBER 31,
SEPTEMBER 30, -------------------------------------------------------------
1995 1994 1993 1992 1991 1990
------------- ----------- ----------- ----------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SUBSCRIBER DATA)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA(1):
Total assets........... $ 2,342,444 $ 2,176,413 $ 1,309,444 $ 1,251,157 $1,475,672 $1,641,612
Total debt............. 3,224,228 3,169,236 2,235,499 2,004,452 2,211,056 2,170,275
Cumulative redeemable
preferred stock(4).... -- -- -- -- 32,094 28,515
Series G Redeemable Ex-
changeable Preferred
Stock(6).............. 250,000 -- -- -- -- --
Stockholders' deficien-
cy.................... (2,068,606) (1,818,535) (1,503,244) (1,250,248) (932,428) (702,448)
STATISTICAL DATA(1):
Homes passed(7)........ 3,028,000 2,899,000 2,240,000 2,019,000 2,005,000 1,976,000
Basic service subscrib-
ers................... 1,887,000 1,768,000 1,379,000 1,262,000 1,372,000 1,326,000
Basic penetration(8)... 62.3% 61.0% 61.5% 62.5% 68.4% 67.1%
Number of premium tele-
vision units.......... 3,237,000 3,208,000 3,003,000 2,802,000 2,326,000 2,401,000
Average number of pre-
mium units per basic
subscriber............ 1.7 1.8 2.2 2.2 1.7 1.8
Average monthly revenue
per basic subscrib-
er(9)................. $ 36.69 $ 36.33 $ 36.59 $ 37.64 $ 34.43 $ 34.09
</TABLE>
- --------
(1) The consolidated statement of operations, balance sheet and statistical
data reflect (i) the deconsolidation of A-R Cable Services, Inc. ("A-R
Cable"), effective as of January 1, 1992, as a result of the restructuring
of A-R Cable, (ii) the acquisition of Cablevision of New York City
("Cablevision of NYC"), effective as of July 10, 1992, and (iii) various
acquisitions of cable television systems and other businesses during the
periods presented. See "Business--Cable Television Operations" in the Form
10-K and "Condensed Pro Forma Consolidated Financial Information" herein.
Acquisitions made by the Company during the periods presented were
accounted for under the purchase method of accounting and, accordingly, the
acquisition costs were allocated to the net assets acquired based on their
fair value, except for the acquisition of partnership interests in
Cablevision of NYC from Charles F. Dolan and entities affiliated with him,
which were recorded at Mr. Dolan's and such entities' historical costs.
Acquisitions are reflected in the consolidated statement of operations,
balance sheet and statistical data from the time of acquisition. Certain
reclassifications have been made to the 1991 and 1990 financial statement
amounts to conform to the 1992 presentation.
(2) The Company recorded a one-time charge in the first quarter of 1994 to
provide for employee severance and related costs resulting from a
restructuring of its operations.
(3) In 1992, the Company recognized a $50.0 million loss in connection with
Rainbow Programming's commitment in respect of its venture with NBC
relating to the 1992 Summer Olympics, which the Company paid in January
1993.
(4) In connection with the 1992 V Cable Reorganization (as defined under "The
Company--Cable Television"), the Company redeemed A-R Cable's redeemable
preferred stock on May 11, 1992, incurring a loss of $20 million.
(5) In connection with the 1992 V Cable Reorganization, the Company wrote off
approximately $7.5 million of deferred financing costs related to the debt
of V Cable, Inc. Also, a portion of the Company's deferred financing costs
of approximately $4.8 million in 1992 and $1.0 million in 1993, related to
the replacement of bank debt with subordinated debt, were written off. In
October 1994, the Company entered into a new bank credit agreement and
redeemed $200 million of its reset debentures. The related deferred
financing costs and unamortized discount relating to each were written off
and approximately $2.0 million in redemption fees was incurred in
connection with the redemption of the reset debentures. In January 1995,
Rainbow Programming amended its credit agreement to refinance its existing
borrowings and to provide funds for the acquisition of SportsChannel (New
York) Associates and Rainbow News 12 Company, resulting in an approximately
$2.3 million write-off of deferred financing costs.
(6) On September 26, 1995, the Company issued 2.5 million shares of its 11 3/4%
Series G Redeemable Exchangeable Preferred Stock.
(7) Homes passed is based upon homes passed by cable actually marketed and does
not include multiple dwelling units passed by the cable plant that are not
connected to it.
(8) Basic penetration represents basic service subscribers at the end of the
period as a percentage of homes passed at the end of the period.
(9) Based on recurring service revenues, excluding installation charges and
certain other revenues such as advertising, pay-per-view and home shopping
revenues, for the last month of the period, divided by average basic
subscribers for that month.
S-7
<PAGE>
SUPPLEMENTAL FINANCIAL AND OPERATING DATA
The following tables set forth information concerning the Company's Core
Restricted Group, Cablevision of NYC, combined Restricted Group (which includes
Cablevision of NYC), V Cable and Monmouth Cable and Riverview Cable. In October
1994, Cablevision of NYC became a member of Cablevision's Restricted Group. The
data should be read in conjunction with the Company's Consolidated Financial
Statements and "Management's Discussion and Analysis".
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------- ----------------------------------
FINANCIAL DATA 1995 1994 1994 1993 1992
-------------- ---------- ---------- ---------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CORE RESTRICTED GROUP:
STATEMENT OF OPERATIONS
DATA:
Net revenues........... $ 348,773 $ 322,640 $ 435,171 $ 393,815 $ 378,171
Operating profit before
depreciation and amor-
tization(1)(2)........ 166,682 162,602 212,388 196,760 192,553
Depreciation and amor-
tization.............. 89,952 81,290 119,760 90,407 85,939
Operating profit(2).... 76,730 81,312 92,628 106,353 106,614
Total interest expense. 114,970 101,834 138,154 129,799 112,137
BALANCE SHEET DATA:
Total assets........... $1,057,031 $ 905,156 $ 929,376 $ 661,303 $ 547,373
Senior debt............ 814,363(3) 522,024 829,895(3) 359,022 585,381
Subordinated debt...... 623,590 822,892 623,534 822,781 474,247
Total debt............. 1,437,953(3) 1,344,916 1,453,429(3) 1,181,803 1,059,628
FINANCIAL RATIOS AND
OTHER DATA:
Operating profit before
depreciation and
amortization to net
revenues.............. 47.8% 50.4% 48.8% 50.0% 50.9%
Total debt to operating
profit before
depreciation and
amortization.......... 6.5x(4) 6.2x(4) 6.8x 6.0x 5.5x
Operating profit before
depreciation and
amortization to total
interest expense...... 1.4x 1.6x 1.5x 1.5x 1.7x
Capital expenditures... $ 91,083 $ 102,950 $ 147,534 $ 106,379 $ 65,331
CABLEVISION OF NYC:
STATEMENT OF OPERATIONS
DATA:
Net revenues........... $ 151,112 $ 106,270 $ 149,396 $ 101,539 $ 67,409
Operating profit before
depreciation and
amortization(1)....... 42,611 26,222 36,928 18,803 11,731
FINANCIAL RATIOS AND
OTHER DATA:
Operating profit before
depreciation and
amortization to net
revenues.............. 28.2% 24.7% 24.7% 18.5% 17.4%
Capital expenditures... $ 65,392 $ 74,421 $ 103,544 $ 86,669 $ 55,652
RESTRICTED GROUP:
STATEMENT OF OPERATIONS
DATA:
Net revenues........... $ 499,885 $ 428,910 $ 584,567 $ 495,354 $ 445,580
Operating profit before
depreciation and
amortization(1)....... 209,293 188,824 249,316 215,563 204,284
Depreciation and
amortization.......... 121,815 104,701 154,187 111,366 102,015
Operating profit....... 87,478 84,123 95,129 104,197 102,269
Total interest expense. 124,297 110,739 150,626 137,960 118,230
BALANCE SHEET DATA:
Total assets........... $1,232,640 $1,125,987 $1,119,882 $ 838,746 $ 660,002
Senior debt............ 932,963(3) 699,465 969,895(3) 488,128 664,081
Subordinated debt...... 623,590 822,892 623,534 822,781 474,247
Obligation to related
party................. 191,579 90,114 193,079 91,619 67,000
Total debt............. 1,748,132(3) 1,612,471 1,786,508(3) 1,402,528 1,205,328
FINANCIAL RATIOS AND
OTHER DATA:
Operating profit before
depreciation and
amortization to net
revenues.............. 41.9% 44.0% 42.6% 43.5% 45.8%
Total debt to operating
profit before
depreciation and
amortization.......... 6.3x(4) 6.4x(4) 7.2x 6.5x 5.9x
Operating profit before
depreciation and
amortization to total
interest expense...... 1.7x 1.7x 1.7x 1.6x 1.7x
Capital expenditures... $ 156,475 $ 177,371 $ 251,078 $ 193,048 $ 120,983
</TABLE>
S-8
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------- ----------------------------
FINANCIAL DATA 1995 1994 1994 1993 1992
-------------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
V CABLE:
STATEMENT OF OPERATIONS
DATA:
Net revenues........... $110,612 $104,943 $140,691 $137,853 $129,409
Operating profit before
depreciation and amor-
tization(1)........... 50,730 51,767 68,592 65,789 63,773
Depreciation and amor-
tization.............. 47,208 60,097 83,671 80,287 69,148
Operating profit
(loss)................ 3,522 (8,330) (15,079) (14,498) (5,375)
Total interest expense. 77,972 71,607 96,723 94,452 79,494
BALANCE SHEET DATA:
Total assets........... $403,201 $468,203 $447,381 $536,629 $558,988
Total debt............. 888,596 853,262 862,440 832,964 799,098
FINANCIAL RATIOS AND
OTHER DATA:
Operating profit before
depreciation and amor-
tization to net reve-
nues.................. 45.9% 49.3% 48.8% 47.7% 49.3%
Total debt to operating
profit before depreci-
ation and amortiza-
tion.................. 13.1x(4) 12.4x(4) 12.6x 12.7x 12.5x
Operating profit before
depreciation and
amortization to total
interest expense...... 0.7x 0.7x 0.7x 0.7x 0.8x
Capital expenditures... $ 18,694 $ 13,123 $ 19,981 $ 20,304 $ 17,608
MONMOUTH CABLE AND RIV-
ERVIEW CABLE:
BALANCE SHEET DATA:
Total assets........... $335,866 $391,049 $375,982 -- --
Senior debt............ 206,200 233,300 230,000 -- --
Subordinated debt...... 141,268 141,268 141,268 -- --
Total debt............. 347,468 374,568 371,268 -- --
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
AS OF SEPTEMBER 30, ---------------------------------
STATISTICAL DATA 1995 1994 1993 1992
---------------- ------------------- --------- --------- ---------
<S> <C> <C> <C> <C>
CORE RESTRICTED GROUP:
Homes passed(5)........ 1,320,000 1,309,000 1,086,000 1,079,000
Basic service subscrib-
ers at end of period.. 957,000 928,000 815,000 790,000
Basic penetration(6)... 72.5% 70.9% 75.0% 73.2%
Number of premium tele-
vision units.......... 1,488,000 1,572,000 1,504,000 1,586,000
Average number of pre-
mium units per basic
subscriber............ 1.6 1.7 1.8 2.0
Average revenue per ba-
sic subscriber(7)..... $37.66 $37.10 $38.01 $38.85
CABLEVISION OF NYC:
Homes passed(5)........ 930,000 829,000 645,000 436,000
Basic service subscrib-
ers at end of period.. 382,000 315,000 214,000 134,000
Basic penetration(6)... 41.0% 37.9% 33.1% 30.7%
Number of premium tele-
vision units.......... 1,267,000 1,127,000 1,053,000 730,000
Average number of pre-
mium units per basic
subscriber............ 3.3 3.6 4.9 5.4
Average revenue per ba-
sic subscriber(7)..... $40.55 $41.84 $41.12 $46.62
RESTRICTED GROUP:
Homes passed(5)........ 2,250,000 2,138,000 1,731,000 1,515,000
Basic service subscrib-
ers at end of period.. 1,339,000 1,243,000 1,029,000 924,000
Basic penetration(6)... 59.5% 58.1% 59.4% 61.0%
Number of premium tele-
vision units.......... 2,755,000 2,699,000 2,557,000 2,316,000
Average number of pre-
mium units per basic
subscriber............ 2.1 2.2 2.5 2.5
Average revenue per ba-
sic subscriber(7)..... $38.48 $38.29 $38.65 $39.96
V CABLE:
Homes passed(5)........ 516,000 513,000 509,000 504,000
Basic service subscrib-
ers at end of period.. 374,000 364,000 350,000 338,000
Basic penetration(6)... 72.5% 71.1% 68.7% 67.1%
Number of premium tele-
vision units.......... 367,000 375,000(8) 446,000 485,000
Average number of pre-
mium units per basic
subscriber............ 1.0 1.0 1.3 1.4
Average revenue per ba-
sic subscriber(7)..... $31.05 $30.41 $30.56 $31.30
MONMOUTH CABLE AND RIV-
ERVIEW CABLE:
Homes passed(5)........ 262,000 248,000 -- --
Basic service subscrib-
ers at end of period.. 174,000 161,000 -- --
Basic penetration(6)... 66.4% 65.1% -- --
Number of premium tele-
vision units.......... 116,000 133,000 -- --
Average number of pre-
mium units per basic
subscriber............ 0.7 0.8 -- --
Average revenue per ba-
sic subscriber(7)..... $35.05 $34.67 -- --
</TABLE>
(footnotes on following page)
S-9
<PAGE>
FOOTNOTES
(1) Operating profit before depreciation and amortization is presented here to
provide additional information about the Company'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 and cash flows as
indicators of financial performance and liquidity as reported in accordance
with generally accepted accounting principles.
(2) Includes management fees from Cablevision of NYC of $5.3 million, $3.7
million, $5.2 million, $3.5 million and $2.4 million, respectively.
(3) Excludes Cablevision MFR, Inc. seller note in the amount of approximately
$141.3 million that is guaranteed by the Core Restricted Group (as defined
under "The Company--Cable Television").
(4) Operating profit before depreciation and amortization is annualized for
purposes of preparing interim financial ratios that include balance sheet
items.
(5) Homes passed is based upon homes passed by cable actually marketed and does
not include multiple dwelling units passed by the cable plant that are not
connected to it.
(6) Basic penetration represents basic service subscribers at the end of the
period as a percentage of homes passed at the end of the period.
(7) Based on recurring service revenues, excluding installation charges and
certain other revenues such as advertising, pay-per-view and home shopping
revenues, for the last month in the period presented, divided by the
average number of basic subscribers for that month.
(8) Reflects the reclassification of units of Madison Square Garden Network
subscribers to non-premium units in February 1994.
S-10
<PAGE>
THE COMPANY
The Company is one of the largest operators of cable television systems in
the United States, with approximately 2,687,000 subscribers in 19 states as of
September 30, 1995 based on the number of basic subscribers in systems which
the Company manages and which it owns or in which it has investments. The
Company also has ownership interests in companies that produce and distribute
national and regional programming services and provide advertising sales
services for the cable television industry.
For financing purposes, the Company is structured as a restricted group
(collectively, the "Restricted Group"), consisting of Cablevision Systems
Corporation and certain of its subsidiaries, including Cablevision of New York
City ("Cablevision of NYC"), and an unrestricted group of subsidiaries,
consisting primarily of V Cable, Inc. ("V Cable"), Cablevision MFR, Inc.
("Cablevision MFR") and Rainbow Programming Holdings, Inc., including Rainbow
Advertising Sales Corporation ("Rainbow Advertising") (together, "Rainbow
Programming"). In addition, the Company has an unrestricted group of
investments, consisting of investments in A-R Cable Services, Inc. ("A-R
Cable"), U.S. Cable Television Group, L.P. ("U.S. Cable"), Cablevision of
Framingham Holding, Inc. ("CFHI"), A-R Cable Partners, Cablevision of Boston
Limited Partnership ("Cablevision of Boston") and Cablevision of Newark. The
Company's unrestricted subsidiaries and investments are collectively referred
to herein as the "Unrestricted Group". The Restricted Group and each member of
the Unrestricted Group that operates cable television systems are individually
and separately financed. The indebtedness of V Cable and A-R Cable is non-
recourse to the Company, other than with respect to the capital stock of such
entities owned by the Company. Rainbow Programming's cash requirements have
been financed to date by the Restricted Group, by sales of equity interests in
the programming businesses and, as set forth below under "--Programming
Services", through separate external debt financing. See "Management's
Discussion and Analysis--Liquidity and Capital Resources" for a discussion of
the restrictions on investments by the Restricted Group and certain other
matters.
STRATEGY
The Company's strategy has been to concentrate its cable television systems
in and around two major metropolitan areas, New York City and Cleveland, Ohio,
with a view to being the largest cable provider in each of these markets; to
maximize its revenue per subscriber through the use of "tiered" packaging
strategies for marketing premium services; to develop and promote niche
programming services; and to remain an industry leader in upgrading the
technological capabilities of its systems.
The Company believes that its cable television systems on Long Island, New
York comprise the largest contiguous group of cable television systems under
common ownership in the United States (measured by number of subscribers). By
developing systems in and around major metropolitan areas, including expansion
through acquisitions in areas in which the Company has existing systems, the
Company has been able to realize economies of scale in the operation and
management of its systems, and capitalize on opportunities to create and
market programming of regional interest.
Through the current and planned upgrade of its cable plant, including the
utilization of fiber optic cable and associated electronics, the Company is
seeking to significantly increase its analog channel capacity and add new
digital channel capacity that will facilitate the development of such adjunct
new businesses as video on demand, near video on demand, information services,
interactive services, including Internet access, residential telephony and
commercial telephony. To implement successfully and roll out these adjunct new
businesses beyond the initial development phases, the Company will require
additional capital from the sale of equity in the capital markets or to a
strategic investor.
CABLE TELEVISION
The cable television systems that are majority owned and managed by the
Company (the "Company's cable televisions systems") served approximately
1,887,000 subscribers as of September 30, 1995 in New York, Ohio,
S-11
<PAGE>
Connecticut, New Jersey, Michigan and Massachusetts. In addition, the Company
has non-majority investments in and manages cable television systems which
served approximately 800,000 subscribers as of September 30, 1995 in Alabama,
Arkansas, Florida, Illinois, Kansas, Kentucky, Maine, Massachusetts,
Mississippi, Missouri, New Jersey, New York, North Carolina, Oklahoma,
Pennsylvania and Tennessee. The Company's cable television systems have
generally been characterized by relatively high revenues per subscriber
($36.69 for September 1995) and ratios of premium service units to basic
subscribers (1.7:1 for September 1995). In calculating revenue per subscriber,
the Company includes only recurring service revenues and excludes installation
charges and certain other revenues such as advertising, pay-per-view and home
shopping revenues.
The cable television operations in the Restricted Group (other than those of
Cablevision of NYC) (such operations, the "Core Restricted Group") served
approximately 957,000 subscribers as of September 30, 1995, primarily on Long
Island, New York, in Connecticut (principally Fairfield County), in northern
New Jersey, in Westchester County, New York and in Cleveland, Ohio. The
revenue per subscriber and ratio of premium service units to basic subscribers
for cable television systems in the Core Restricted Group for September 1995
were $37.66 and 1.6:1, respectively.
In July 1992, the Company acquired from Charles F. Dolan, the Company's
Chairman, substantially all of Cablevision of NYC (the "Cablevision of NYC
Acquisition"), a cable television system under development in The Bronx and in
parts of Brooklyn, New York. Prior to the acquisition, the Company had a 15%
interest in Cablevision of NYC. Mr. Dolan remains a partner in Cablevision of
NYC with a 1% interest and the right to certain preferential payments. See
"Business--Consolidated Cable Affiliates--Cablevision of New York City" in the
Form 10-K. As of September 30, 1995, Cablevision of NYC passed approximately
930,000 homes and served approximately 382,000 subscribers. Construction of
the systems in The Bronx and in Brooklyn has been substantially completed. The
Company expects that the remaining costs to complete the construction of the
Cablevision of NYC systems will be financed by cash flow generated from the
operations of Cablevision of NYC and the amounts available under the Company's
principal bank credit agreement (the "Credit Agreement"). See "Management's
Discussion and Analysis--Liquidity and Capital Resources--Cablevision of NYC".
The cable television operations of the Unrestricted Group are conducted
through the Company's unrestricted subsidiaries, V Cable and Cablevision MFR,
through its unrestricted investments, consisting of A-R Cable, U.S. Cable,
CFHI, A-R Cable Partners, Cablevision of Boston, and Cablevision of Newark.
In August 1994, Cablevision MFR, a wholly-owned subsidiary of the Company,
acquired substantially all of the assets of Monmouth Cablevision Associates
("Monmouth Cable") and Riverview Cablevision Associates, L.P. ("Riverview
Cable"), consisting of cable television systems in New Jersey. Also in August
1994, CFHI, a corporation jointly-owned by the Company and E.M. Warburg Pincus
Investors, L.P., acquired substantially all of the assets of Framingham
Cablevision Associates Limited Partnership ("Framingham Cable"), consisting of
a cable television system in Massachusetts. Additionally, in June 1994, a
partnership comprised of subsidiaries of the Company and E.M. Warburg, Pincus
& Co. Inc. completed the purchase of certain assets of Nashoba Communications,
a group of three limited partnerships that operate three cable television
systems in Massachusetts.
V Cable was formed by the Company in February 1989 and served approximately
374,000 subscribers as of September 30, 1995, principally in the suburbs of
Cleveland, Ohio and on Long Island. The revenue per subscriber and ratio of
premium service units to basic subscribers for V Cable's systems for September
1995 were $31.05 and 1.0:1, respectively. As described under "Business--
Consolidated Cable Affiliates--V Cable" in the Form 10-K, the Company
consummated a significant restructuring and reorganization involving V Cable
and U.S. Cable (the "1992 V Cable Reorganization") on December 31, 1992. See
also "Recent Developments--Proposed V Cable Transactions" for a description of
certain transactions involving V Cable.
PROGRAMMING SERVICES
The Company conducts its programming activities through Rainbow Programming,
its wholly-owned subsidiary and member of the Unrestricted Group, and through
subsidiaries of Rainbow Programming in
S-12
<PAGE>
partnership with certain unaffiliated entities, including National
Broadcasting Company, Inc. ("NBC") and Liberty Media Corporation ("Liberty").
Rainbow Programming's businesses include eight regional SportsChannel
services, four national entertainment services (American Movie Classics
Company ("AMCC"), Bravo Network ("Bravo"), MuchMusic ("MM") and the
Independent Film Channel ("IFC")), Rainbow News 12 Company (a regional news
service serving Long Island) and the national backdrop sports services of
Prime SportsChannel Networks ("Prime SportsChannel"). Rainbow Programming also
owns an interest in Madison Square Garden Corporation (discussed below).
Rainbow Programming's SportsChannel services provide regional sports
programming to the New York, Philadelphia, New England, Chicago, Cincinnati,
Cleveland, San Francisco and Florida areas. AMCC is a national program service
featuring classic, unedited and non-colorized films from the 1930s through the
1970s. Bravo is a national program service offering international films and
performing arts programs, including jazz, dance, classical music, opera and
theatrical programs. See "Business--Programming Operations--General" in the
Form 10-K. MM is a Canadian music service featuring music primarily from
Canadian artists. IFC is a national program service that airs independent
films made outside the traditional Hollywood system.
In July 1994, Rainbow Programming purchased Liberty's 50% interest in AMCC
for a purchase price of approximately $181.0 million pursuant to a buy-sell
procedure set forth in the Partnership Agreement of AMCC. In July 1995,
Rainbow Programming purchased NBC's interest in SportsChannel (New York)
Associates and Rainbow News 12 Company (the "NBC Option") for an aggregate
purchase price of approximately $95.5 million, and, effective as of such date,
consolidated the results of operations of SportsChannel (New York) Associates
and Rainbow News 12 Company with those of the Company. See "Recent
Developments--NBC Option" and "Business--Programming Services" in the Form 10-
K.
On March 10, 1995, MSG Holdings, L.P. ("MSG Holdings"), a partnership
between a subsidiary of Rainbow Programming and a subsidiary of ITT
Corporation ("ITT"), acquired Madison Square Garden Corporation ("MSG") in a
transaction in which MSG was merged with and into MSG Holdings. MSG owns the
Madison Square Garden Arena and the adjoining Paramount Theater, the New York
Rangers professional hockey team, the New York Knicks professional basketball
team and the Madison Square Garden Network, a sports programming network with
over five million subscribers. Rainbow Programming has the option until March
10, 1996 to (i) acquire interests in MSG Holdings from ITT sufficient to
equalize the interests of ITT and Rainbow Programming in MSG Holdings, (ii)
maintain its investment at the initial level, or (iii) require ITT to purchase
50% of Rainbow Programming's initial interest in MSG Holdings at the price
paid by Rainbow Programming for such interest plus an adjustment for Rainbow
Programming's share of MSG Holdings' operating income after interest expense,
if any, following the closing of the acquisition of MSG. Rainbow Programming
has not determined which alternative it will pursue. See "Business--
Programming Services" in the Form 10-K.
ADVERTISING SERVICES
Rainbow Advertising sells advertising time to national, regional and local
advertisers on behalf of the Company's cable television systems and the
SportsChannel and Rainbow News 12 Company programming services, as well as on
behalf of unaffiliated cable television systems.
RECENT DEVELOPMENTS
PROPOSED V CABLE TRANSACTIONS
The Company, V Cable and VC Holding, Inc. ("VC Holding") have entered into a
general, non-binding letter of intent with General Electric Capital
Corporation ("GECC"). In the transactions contemplated by the letter of
intent, the Company would issue to GECC preferred stock having an initial
aggregate liquidation preference of $500 million for an aggregate purchase
price of $500 million. Fifty percent of the preferred stock would become
convertible into the Company's Class A Common Stock four years after the date
of issuance and the remaining fifty percent would become convertible into the
Company's Class A Common Stock six years after the date of issuance (unless
conversion is accelerated upon the occurrence of certain events), in each
case, in
S-13
<PAGE>
whole or in part, and at a conversion rate based upon the trading value of the
Class A Common Stock at the time of conversion. The terms of the preferred
stock would give the Company the right to redeem the preferred stock for cash
at any time prior to conversion, although there can be no assurance that the
Company would be able to do so. It is also anticipated that the Company would
grant GECC registration rights with respect to the preferred stock and to the
Class A Common Stock issuable upon any conversion of such preferred stock. The
Company would make an equity capital contribution to V Cable of the gross
proceeds from such issuance and V Cable would apply such amounts as set forth
below.
As part of the proposed transactions contemplated by the letter of intent
(together with the issuance of the preferred stock to GECC, the "Proposed V
Cable Transactions"), the $500 million capital contribution received by V
Cable would be applied as follows: (i) approximately $27 million to repay V
Cable's outstanding indebtedness to GECC; (ii) approximately $95 million to
repay to GECC a portion of the debt of U.S. Cable payable by V Cable under
certain circumstances; (iii) approximately $328 million to repay to GECC a
portion of VC Holding's indebtedness; and (iv) approximately $50 million would
be used by VC Holding to make a preferred capital contribution to U.S. Cable
as discussed below.
The Proposed V Cable Transactions also contemplate that V Cable will enter
into one or more agreements pursuant to which, following the receipt of any
required franchise and regulatory approvals, (i) the U.S. Cable partnership
will redeem the 80% of U.S. Cable's partnership interests not already owned by
V Cable for approximately $4 million, (ii) VC Holding will make a preferred
capital contribution to U.S. Cable of approximately $50 million, and (iii) the
U.S. Cable partnership will refinance $165 million of U.S. Cable indebtedness
payable to GECC.
As part of the Proposed V Cable Transactions, GECC would also agree to
provide two new credit facilities, a $325 million three year revolving credit
facility for V Cable's Ohio subsidiary (approximately $215 million of which
would be drawn upon entering into such agreement) and a $260 million two year
revolving credit facility for V Cable's Long Island subsidiary (approximately
$224 million of which would be drawn upon entering into such agreement). The
initial amounts drawn under the respective revolving credit facilities will be
used to repay all remaining VC Holding debt to GECC. Both the Ohio and Long
Island credit facilities would be entered into upon completion of final
documentation and the receipt of any required franchise or regulatory
approvals.
The letter of intent between the Company and GECC is a general, non-binding
letter of intent. There can be no assurance that the Proposed V Cable
Transactions will be consummated or will be consummated in the form described
in the letter of intent. If the Proposed V Cable Transactions, or similar
transactions with respect to V Cable, fail to occur, then V Cable believes
that it is likely that it will be unable to meet certain of its financial
covenants as of December 31, 1995. To remedy the anticipated covenant
defaults, V Cable may request waivers and/or amendments to its credit
agreement and/or seek equity contributions from the Restricted Group. During
1995, the Restricted Group has made equity contributions aggregating $2.3
million to enable V Cable to meet certain of its financial covenants. There
can be no assurance as to V Cable's ability to accomplish either of these
alternatives in the future or the terms or timing of such alternatives.
Assuming any covenant defaults are waived or cured, V Cable anticipates that
its cash flow from operations and amounts available under the VC Holding
revolving credit line will be sufficient to service its debt, to fund its
capital expenditures and to meet its working capital requirements through
1996.
NBC OPTION
On July 12, 1995, Rainbow Programming consummated the purchase of NBC's
interest in SportsChannel (New York) Associates and Rainbow News 12 Company
pursuant to the NBC Option, which Rainbow Programming entered into with NBC in
connection with the MSG Acquisition, for an aggregate purchase price of
approximately $95.5 million, and, effective as of such date, consolidated the
results of operations of SportsChannel (New York) Associates and Rainbow News
12 Company with those of the Company. The purchase was financed principally by
a drawdown of approximately $94.0 million under Rainbow Programming's $202
million amended and restated credit facility and an equity contribution by the
Company of the balance of the purchase price.
S-14
<PAGE>
ISSUANCE OF SERIES G PREFERRED STOCK
On September 26, 1995, the Company issued 2.5 million shares of its 11 3/4%
Series G Redeemable Exchangeable Preferred Stock (the "Series G Preferred
Stock") with an aggregate liquidation preference of $250 million. The Company
is required to redeem the Series G Preferred Stock on October 1, 2007 at a
redemption price per share equal to the liquidation preference of $100 per
share, plus accrued and unpaid dividends thereon. Before October 1, 2000,
dividends may, at the option of the Company, be paid in cash or by issuing
fully paid and nonassessable shares of the Series G Preferred Stock with an
aggregate liquidation preference equal to the amount of such dividends. On and
after October 1, 2000, dividends must be paid in cash. The terms of the Series
G Preferred Stock permit the Company, at its option, after January 1, 1996 to
exchange the Series G Preferred Stock for the Company's 11 3/4% Senior
Subordinated Debentures due 2007 (the "11 3/4% Debentures") in an aggregate
principal amount equal to the aggregate liquidation preference of the shares
of Series G Preferred Stock.
Of the net proceeds of approximately $239.3 million received by the Company
from the issuance and sale of the Series G Preferred Stock, $136.2 million was
applied to repay borrowings under the Company's Credit Agreement and $103.1
million was applied to the redemption of the Company's outstanding Series E
Redeemable Exchangeable Convertible Preferred Stock (the "Series E Preferred
Stock") on October 26, 1995 at a redemption price equal to the aggregate
liquidation preference plus accrued and unpaid dividends thereon.
CABLEVISION OF BOSTON ACQUISITION
In June 1994, the Company and Cablevision of Boston entered into an
agreement which is designed to give the Company full ownership of Cablevision
of Boston. The agreement provides for the acquisition by the Company of the
interests of Cablevision of Boston which it does not already own in a series
of transactions. See "Condensed Pro Forma Consolidated Financial Information".
Consummation of the transactions would result in the limited partners in
Cablevision of Boston receiving Class A Common Stock of the Company with an
expected aggregate market value of approximately $40 million. Upon
consummation of the acquisition of Cablevision of Boston, the Company expects
Cablevision of Boston to become a member of the Restricted Group. All
outstanding subordinated advances made by the Company to Cablevision of Boston
will become intercompany indebtedness if the acquisition of Cablevision of
Boston is consummated. In addition, the Company, along with certain of its
affiliates, are parties to a lawsuit filed with respect to the Company's
acquisition of Cablevision of Boston. The action is brought on behalf of a
purported class consisting of limited partners in Cablevision of Boston and
seeks, among other matters, to enjoin the proposed acquisition of Cablevision
of Boston and damages. The Company, along with the other defendants, is
defending the action.
IMPACT OF PENDING TELECOMMUNICATIONS LEGISLATION ON FCC CABLE RATE REGULATION
Both the U.S. Senate and the House of Representatives have passed
legislation that would significantly relax cable rate regulation. The Senate
bill would modify the 1992 Cable Act's definition of "effective competition"
to deregulate all cable rates, including basic service rates, whenever a
telephone company begins to offer comparable video programming services to
subscribers in a cable operator's franchise area. The Senate bill also limits
the FCC's ability to regulate rates for non-basic services offered by an
operator not subject to "effective competition" only to instances in which an
operator's rates for such services substantially exceed the national average.
The House bill would deregulate non-basic rates charged by a cable operator,
on a franchise area by franchise area basis, as soon as a telephone company
has been authorized to construct video dialtone facilities or has been
authorized by the FCC or local franchising authorities to provide video
programming to subscribers in the operator's franchise area by any means. Non-
basic rates in all franchise areas would be deregulated 15 months after the
date of enactment, whether or not a telephone company has been so authorized
in a particular franchise area. The regulation of rates for basic service
offered by an operator not subject to "effective competition" would remain
unchanged.
The differences between the House and Senate passed bills would need to be
reconciled before the legislation could become law. A House-Senate conference
committee has begun meeting to attempt to resolve these differences. The
Company cannot at this point predict whether any legislation ultimately will
be enacted into law or the final form any such legislation would take.
S-15
<PAGE>
USE OF PROCEEDS
The net proceeds to be received by the Company from the Offering are
estimated to be $292.2 million. The Company will initially apply the net
proceeds from the Offering to the repayment of borrowings under the Company's
Credit Agreement. The Company expects to raise additional amounts under the
Credit Agreement in the future for general corporate purposes. See
"Management's Discussion and Analysis--Liquidity and Capital Resources" for
information concerning the Company's significant expected expenditures.
The borrowings under the Credit Agreement being repaid bear interest at
floating rates, currently 8.3%, and mature in installments over the 1997-2003
time period. See "Management's Discussion and Analysis--Liquidity and Capital
Resources".
The Company is concurrently with the offering of the Notes offering its
Series I Preferred Stock represented by Depositary Shares with an aggregate
liquidation preference of $300 million. The Company expects to use the net
proceeds from that offering (estimated to be $290.6 million) to repay
borrowings under the Credit Agreement. The consummation of the offering of the
Depositary Shares is not a condition to the consummation of the offering of
the Notes offered hereby, nor is the consummation of the offering of the Notes
a condition to the offering of the Depositary Shares.
S-16
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company and its consolidated subsidiaries at September 30, 1995 and as
adjusted to reflect the pro forma consolidated capitalization of the Company
and its consolidated subsidiaries at September 30, 1995, adjusted to give
effect to (i) the proposed acquisition of Cablevision of Boston, (ii) the
Proposed V Cable Transactions and (iii) the redemption of the Company's Series
E Preferred Stock on October 26, 1995, as further adjusted to reflect the
issuance of $300 million principal amount of the Notes offered hereby and the
Series I Preferred Stock being offered by the Company concurrently, and the
application of the estimated net proceeds to the Company from such offerings.
See "Recent Developments", "Use of Proceeds" and "Condensed Pro Forma
Consolidated Financial Statements".
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1995
-----------------------------------
PRO AS ADJUSTED
HISTORICAL FORMA PRO FORMA
---------- ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
LONG-TERM DEBT:
Restricted Group:
Bank indebtedness(1)(2)................ $ 925,366 $1,107,683 $ 524,933
10 3/4% Senior Subordinated Debentures
due 2004.............................. 275,000 275,000 275,000
9 1/4% Senior Subordinated Notes due
2005 offered hereby................... -- -- 300,000
9 7/8% Senior Subordinated Debentures
due 2013.............................. 198,914 198,914 198,914
9 7/8% Senior Subordinated Debentures
due 2023.............................. 149,676 149,676 149,676
Capitalized lease obligations.......... 7,597 9,481 9,481
---------- ---------- ----------
Total................................ 1,556,553 1,740,754 1,458,004
---------- ---------- ----------
V Cable:
Senior debt............................ 888,596 438,596 438,596
---------- ---------- ----------
MFR:
Senior bank debt....................... 206,200 206,200 206,200
Subordinated notes..................... 141,268 141,268 141,268
---------- ---------- ----------
Total................................ 347,468 347,468 347,468
---------- ---------- ----------
Other Unrestricted Subsidiaries:
Other indebtedness..................... 240,032 405,032 405,032
Obligation to related party(3)......... 191,579 191,579 191,579
---------- ---------- ----------
Total................................ 431,611 596,611 596,611
---------- ---------- ----------
Total long-term debt............... 3,224,228 3,123,429 2,840,679
---------- ---------- ----------
Series G Redeemable Exchangeable Preferred
Stock:
Authorized--4,500,000 shares
Issued--2,500,000 shares................. 250,000 250,000 250,000
---------- ---------- ----------
STOCKHOLDERS' DEFICIENCY:
Series C/D Cumulative Preferred Stock:
Authorized--225,000 shares
Issued--110,622 shares................. 1 1 1
Series E Redeemable Exchangeable
Convertible Preferred Stock:
Authorized--100,000 shares
Issued--100,000 shares................. 1 -- --
Series I Cumulative Convertible
Exchangeable Preferred Stock............. -- -- 12
Series J Redeemable Convertible Preferred
Stock(4)................................. -- 5 5
Class A Common Stock:
Authorized--50,000,000 shares
Issued--12,338,111 shares.............. 123 129 129
Class B Common Stock:
Authorized--20,000,000 shares
Issued--11,573,909 shares.............. 116 116 116
Capital contributed in excess of (less
than) par value......................... (79,478) 354,022 644,560
Accumulated deficit...................... (1,986,132) (2,016,475) (2,016,475)
---------- ---------- ----------
(2,065,369) (1,662,202) (1,371,652)
Treasury stock........................... (3,237) (3,237) (3,237)
---------- ---------- ----------
Total stockholders' deficiency....... (2,068,606) (1,665,439) (1,374,889)
---------- ---------- ----------
Total capitalization............... $1,405,622 $1,707,990 $1,715,790
========== ========== ==========
</TABLE>
(footnotes on following page)
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<PAGE>
FOOTNOTES
(1) See "Management's Discussion and Analysis--Liquidity and Capital
Resources" and the Consolidated Financial Statements for a description of
the bank indebtedness. This indebtedness consists of the Company's
indebtedness under its principal bank credit agreement, the New Jersey
subsidiary credit agreement and the Cablevision of NYC credit agreement.
These amounts do not include approximately $20.4 million reserved under
the Company's bank credit agreements for certain letters of credit issued
on behalf of the Company. The Company and its New Jersey subsidiary are
jointly and severally liable under the New Jersey subsidiary credit
agreement.
(2) On October 26, 1995, the Company borrowed $103.1 million of bank debt in
order to redeem the Company's outstanding Series E Preferred Stock. This
amount is reflected in the pro forma amounts.
(3) Obligation of NYC LP Corp., a wholly-owned Unrestricted Group subsidiary,
relating to the acquisition of Cablevision of NYC, which obligation has
been guaranteed by the Company. NYC LP Corp.'s obligation under such
guarantee may be paid in cash or, at the Company's option, shares of the
Company's Common Stock. Under the Credit Agreement, the Company is
currently prohibited from paying all but $40.0 million of this obligation
in cash and, accordingly, without the consent of the Company's bank
lenders, would be required to pay it in shares of the Company's Common
Stock.
(4) Issuable in connection with the Proposed V Cable Transactions. See "Recent
Developments--Proposed V Cable Transactions" for a discussion of such
transactions.
S-18
<PAGE>
CONDENSED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following condensed pro forma consolidated balance sheet as of September
30, 1995 presents the Company's financial position as adjusted to give effect
to the proposed acquisition of Cablevision of Boston and the Proposed V Cable
Transactions, as if they had occurred as of that date. The following condensed
pro forma consolidated statement of operations for the year ended December 31,
1994 presents the Company's consolidated results of operations as adjusted to
give effect to (i) the acquisition (the "AMCC Acquisition") of partnership
interests in AMCC, (ii) the acquisition of substantially all of the assets of
Monmouth Cable, Riverview Cable and Framingham Cablevision Associates, Limited
Partnership ("Framingham Cable"), (iii) the proposed acquisition of
Cablevision of Boston, and (iv) the Proposed V Cable Transactions as if the
acquisition of interests in AMCC, the acquisition of Monmouth Cable, Riverview
Cable and Framingham Cable, the acquisition of Cablevision of Boston and the
Proposed V Cable Transactions had occurred at the beginning of the periods
presented. The following condensed pro forma consolidated statement of
operations for the nine months ended September 30, 1995 presents the Company's
consolidated results of operations as adjusted to give effect to the proposed
acquisition of Cablevision of Boston and the Proposed V Cable Transactions as
if the proposed acquisition of Cablevision of Boston and the Proposed V Cable
Transactions had occurred at the beginning of the periods presented. The
condensed pro forma consolidated financial statements should be read in
conjunction with the notes thereto and the historical consolidated financial
statements and notes thereto incorporated herein by reference. The pro forma
financial information is not necessarily indicative of what the actual
financial position or results of operations of the Company would have been had
the transactions occurred on the dates indicated nor does it purport to
indicate the future results of operations or the future financial condition of
the Company.
S-19
<PAGE>
CONDENSED PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS*
----------------------------
PROPOSED
CABLEVISION OF V CABLE
HISTORICAL BOSTON TRANSACTIONS PRO FORMA
---------- -------------- ------------ ----------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equiva-
lents.................. $ 21,950 $ 6,426 (1) $ 1,653 (4) $ 23,029
(3,000)(2) (4,000)(5)
Accounts receivable,
trade.................. 84,949 2,354 (1) 1,105 (4) 88,408
Notes and other receiv-
ables.................. 18,543 789 (1) 363 (4) 19,695
Prepaid expenses and
other assets........... 18,244 326 (1) 471 (4) 19,041
Property, plant and
equipment, net......... 941,853 36,071 (1) 102,679 (4) 1,080,603
Investments in and ad-
vances to affiliates... 172,562 (18,510)(1) 154,052
Feature film inventory.. 144,219 144,219
Intangible assets, net.. 859,663 113,544 (2) 136,664 (6) 1,108,647
(1,224)(3)
Deferred financing, in-
terest expense and
other costs, net....... 80,461 1,000 (2) (30,343)(5) 51,118
---------- -------- -------- ----------
$2,342,444 $137,776 $208,592 $2,688,812
========== ======== ======== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Accounts payable........ $ 119,634 $ 9,657 (1) $ 10,055 (4) $ 139,346
Accrued expenses........ 226,866 9,766 (1) 13,392 (4) 250,024
Accounts payable to af-
filiates............... 16,235 642 (1) 488 (4) 17,365
Feature film rights pay-
able................... 136,355 136,355
Bank debt............... 1,371,585 79,217 (2) 1,450,802
Senior debt............. 888,596 215,000 (4) 603,596
(500,000)(5)
Subordinated debentures. 623,590 623,590
Subordinated notes pay-
able................... 141,268 141,268
Obligation to related
party.................. 191,579 191,579
Capital lease obliga-
tions and other debt... 7,610 1,884 (1) 9,494
---------- -------- -------- ----------
3,723,318 101,166 (261,065) 3,563,419
---------- -------- -------- ----------
Deficit investment in
affiliates............. 437,732 437,732
---------- -------- -------- ----------
Series G Redeemable Ex-
changeable Preferred
Stock.................. 250,000 250,000
---------- -------- -------- ----------
Stockholders' deficien-
cy:
Preferred stock....... 2 5 (5) 7
Common stock.......... 239 6 (2) 245
Par value in excess of
capital contributed.. (79,478) 37,828 (2) 499,995 (5) 457,121
(1,224)(3)
Accumulated deficit... (1,986,132) (30,343)(5) (2,016,475)
---------- -------- -------- ----------
(2,065,369) 36,610 469,657 (1,559,102)
Less treasury stock, at
cost (50,000 shares)... (3,237) (3,237)
---------- -------- -------- ----------
(2,068,606) 36,610 469,657 (1,562,339)
---------- -------- -------- ----------
$2,342,444 $137,776 $208,592 $2,688,812
========== ======== ======== ==========
</TABLE>
- --------
*See Note A of Notes to Condensed Pro Forma Consolidated Financial Statements.
S-20
<PAGE>
CONDENSED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS*
--------------------------------------------------------
MONMOUTH
CABLE,
RIVERVIEW
CABLE
AMERICAN AND CABLEVISION PROPOSED
MOVIE FRAMINGHAM OF V CABLE
HISTORICAL CLASSICS CABLE BOSTON TRANSACTIONS PRO FORMA
---------- -------- ---------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues............ $ 837,169 $50,951 (7) $ 47,286 (13) $59,239 (19) $ 71,960 (22) $1,066,605
--------- ------- -------- ------- -------- ----------
Operating expenses:
Technical.............. 302,885 16,262 (7) 15,127 (13) 26,749 (19) 29,674 (22) 390,697
Selling, general and
administrative........ 195,942 16,105 (7) 9,199 (13) 17,119 (19) 20,776 (22) 254,162
(859)(11) (2,028)(16) (2,092)(20)
Restructuring charge... 4,306 4,306
Depreciation and amor-
tization.............. 271,343 142 (7) 12,488 (13) 8,428 (19) 41,861 (22) 379,719
10,827 (12) 27,273 (14) 10,974 (20) (3,617)(26)
--------- ------- -------- ------- -------- ----------
774,476 42,477 62,059 61,178 88,694 1,028,884
--------- ------- -------- ------- -------- ----------
Operating profit
(loss)................ 62,693 8,474 (14,773) (1,939) (16,734) 37,721
Other income (expense)
Interest expense....... (263,299) (1,510)(7) (4,657)(13) (8,955)(19) (24,195)(22) (266,226)
(7,615)(9) (11,093)(15) 1,769 (21) 47,323 (23)
6,006 (25)
Interest income........ 1,518 305 (7) 59 (13) 216 (19) 236 (22) 2,334
Share of affiliates'
net loss.............. (82,864) (4,304)(10) (521)(17) 8,594 (22) (79,367)
(272)(18)
Write off of deferred
financing costs....... (9,884) (9,884)
Loss on redemption of
debt.................. (7,088) (7,088)
Provision for preferen-
tial payment to re-
lated party........... (5,600) (5,600)
Minority interest...... (3,429) (4,321)(8) (7,750)
Miscellaneous, net..... (7,198) (23)(7) (131)(13) (307)(19) (1,280)(22) (8,939)
--------- ------- -------- ------- -------- ----------
Loss before extraordi-
nary item.............. (315,151) (8,994) (31,388) (9,216) 19,950 (344,799)
Extraordinary item:
Loss on redemption of
debt.................. (40,457)(23) (40,457)
--------- ------- -------- ------- -------- ----------
Net loss................ (315,151) (8,994) (31,388) (9,216) (20,507) (385,256)
Preferred stock dividend
requirement............ (6,385) (43,403)(24) (49,788)
--------- ------- -------- ------- -------- ----------
Net loss applicable to
common
shareholders........... $(321,536) $(8,994) $(31,388) $(9,216) $(63,910) $ (435,044)
========= ======= ======== ======= ======== ==========
Loss per common share
before
extraordinary item..... $ (13.72) $ (16.39)
Extraordinary item...... -- (1.68)
--------- ----------
Net loss per common
share.................. $ (13.72) $ (18.07)
========= ==========
Average number of common
shares
outstanding (in thou-
sands)................. 23,444 635 (19) 24,079
========= ======= ==========
</TABLE>
- --------
* See Note B of Notes to Condensed Pro Forma Consolidated Financial
Statements.
S-21
<PAGE>
CONDENSED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS*
---------------------------
CABLEVISION PROPOSED
OF V CABLE
HISTORICAL BOSTON TRANSACTIONS PRO FORMA
---------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Net Revenues............... $ 787,293 $46,477 (27) $57,324 (30) $ 891,094
--------- ------- ------- ---------
Operating expenses:
Technical................. 302,385 21,425 (27) 25,695 (30) 349,505
Selling, general and ad-
ministrative............. 194,821 14,383 (27) 15,661 (30) 223,223
(1,642)(28)
Depreciation and amortiza-
tion..................... 236,788 6,440 (27) 27,859 (30) 278,744
8,231 (28) (574)(34)
--------- ------- ------- ---------
733,994 48,837 68,641 851,472
--------- ------- ------- ---------
Operating profit (loss).... 53,299 (2,360) (11,317) 39,622
Other income (expense)
Interest expense.......... (236,680) (7,999)(27) (19,395)(30) (209,647)
2,670 (29) 46,281 (31)
5,476 (33)
Interest income........... 1,308 184 (27) 53 (30) 1,545
Share of affiliates' net
income (loss)............ (73,090) 2,840 (30) (70,250)
Write off of deferred fi-
nancing costs............ (2,888) (2,888)
Gain on sale of affiliate
interests................ 36,198 36,198
Provision for preferential
payment to related party. (4,200) (4,200)
Minority interest......... (6,229) (6,229)
Miscellaneous, net........ (4,836) (165)(27) (284)(30) (5,285)
--------- ------- ------- ---------
Net loss.................. (237,118) (7,670) 23,654 (221,134)
Preferred stock dividend
requirement.............. (7,272) (32,239)(32) (39,511)
--------- ------- ------- ---------
Net loss applicable to
common
shareholders............. $(244,390) $(7,670) $(8,585) $(260,645)
========= ======= ======= =========
Net loss per common share. $ (10.29) $ (10.69)
========= =========
Average number of common
shares
outstanding (in thou-
sands)................... 23,745 635 (27) 24,380
========= ======= =========
</TABLE>
- --------
* See Note C of Notes to Condensed Pro Forma Consolidated Financial
Statements.
NOTE A--NOTES TO CONDENSED PRO FORMA BALANCE SHEET AS OF SEPTEMBER 30, 1995
CABLEVISION OF BOSTON ACQUISITION
(1) As a result of the proposed acquisition of Cablevision of Boston, the
assets and liabilities purchased will be combined with the Company's
consolidated balance sheet amounts. The adjustments referenced by this
Note (1) reflect the consolidation of such amounts as of the balance
sheet date.
(2) Represents (a) the total cost of interests in Cablevision of Boston not
owned by the Company to be paid by the issuance of Class A Common Stock
of the Company valued at $37,834,000, (b) estimated transaction costs of
$2,000,000 and financing costs of $1,000,000, (c) bank borrowings of
$79,217,000 to be used to refinance Cablevision of Boston's bank debt and
accrued interest thereon of $59,096,000 and repay amounts owed to Charles
F. Dolan aggregating $20,121,000 for management fees, loans, accrued
interest thereon and preferred equity and (d) the excess ($113,544,000)
of the purchase price over the value of the net liabilities acquired.
(3) Represents the amount paid to Mr. Dolan for his general partnership
interest and the assumption of his share of the excess liabilities over
net assets of Cablevision of Boston ($1,224,000) (such amount to be
charged to par value in excess of capital contributed). Interests in the
Dolan-owned assets and liabilities are recorded in the pro forma balance
sheet at Cablevision of Boston's historical cost.
S-22
<PAGE>
PROPOSED V CABLE TRANSACTIONS
(4) As a result of the proposed acquisition of 80% of the partnership
interests in U.S. Cable not already owned by V Cable to be effected in
connection with the Proposed V Cable Transactions, the assets and
liabilities of U.S. Cable will be combined with the Company's
consolidated balance sheet amounts. The adjustments referenced by this
Note (4) reflect the consolidation of such amounts as of the balance
sheet date.
(5) In connection with the Proposed V Cable Transactions, the Company will
redeem the outstanding preferred stock on the books of U.S. Cable for
$4,000,000 and will issue $500,000,000 of its preferred stock to GECC.
The proceeds from this issuance will be used to repay $450,000,000 of V
Cable and/or VC Holding debt to GECC and provide V Cable with $50,000,000
to make a preferred capital contribution to U.S. Cable, which will repay
an equivalent amount of its debt to GECC. Deferred interest expense of
$30,343,000 related to V Cable's assumption of U.S. Cable's debt in the
1992 V Cable Reorganization will be written off in connection with the
repayment of such debt.
(6) Represents the excess ($136,664,000) of the purchase price of U.S. Cable
over the value of the net liabilities acquired.
NOTE B--NOTES TO CONDENSED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR
THE YEAR ENDED DECEMBER 31, 1994
AMERICAN MOVIE CLASSICS COMPANY ACQUISITION
(7) As a result of the AMCC Acquisition, which was consummated on July 11,
1994, the results of operations of AMCC are combined with the Company's
consolidated results of operations. The adjustments referenced by this
Note (7) reflect the consolidation of such amounts for the period January
1, 1994 through July 10, 1994.
(8) Represents the 25.1% minority partnership interest in the results of
operations of AMCC owned by National Broadcasting Company, Inc. and
Liberty Media Corporation.
(9) Represents interest expense, at 8.0% per annum, on the $181,903,000 of
debt incurred by the Company to fund the purchase of the additional
approximate 50% interest in AMCC. NBC will not share in this expense.
(10) Represents the income of AMCC previously recorded by the Company using
the equity method of accounting.
(11) Represents the elimination of management fees paid to the former partner
by AMCC. In connection with the purchase of the approximate 50% interest
in AMCC, the Company also purchased the right to receive such fees in the
future.
(12) Represents the amortization, based on an average 10-year life, of the
excess cost over fair value of assets acquired resulting from the
purchase of the additional approximate 50% interest in AMCC. NBC will not
share in this expense.
MONMOUTH CABLE, RIVERVIEW CABLE AND FRAMINGHAM CABLE ACQUISITION
(13) As a result of the acquisition of Monmouth Cable and Riverview Cable,
which was consummated on August 8, 1994, the results of operations of
Monmouth Cable and Riverview Cable are combined with the Company's
consolidated results of operations. The adjustments referenced by this
Note (13) reflect the consolidation of such amounts for the period
January 1, 1994 through August 7, 1994.
(14) Represents the depreciation and amortization, based on an average 10-year
life, of the step-up in property, plant and equipment, franchise costs
and the excess cost over fair value of assets acquired of $39,761,000 for
the period, offset by the elimination of pre-acquisition depreciation and
amortization of $12,488,000.
(15) Represents interest expense of $15,750,000 attributable to $237,800,000
of bank borrowings (interest expense of $10,444,000 at a 7.32% interest
rate); $132,158,000 of 6% senior subordinated notes (interest expense of
$4,758,000); $9,110,000 of a 6% indemnification note (interest expense of
$328,000); and
S-23
<PAGE>
amortization of deferred finance costs of $220,000, offset by pre-
acquisition interest expense of $4,657,000 incurred by Monmouth Cable and
Riverview Cable.
(16) Represents the elimination of management fees of $2,378,000 paid to
former general partners by Monmouth Cable and Riverview Cable and the
elimination of an adjustment ($350,000) made in the first half of 1994 to
reduce prior period overaccruals of franchise fees.
(17) As a result of the acquisition of Framingham Cable, which was consummated
on August 8, 1994, by the Company and Warburg Pincus Investors, L.P., a
30% Pre-Payout Interest in the results of Framingham Cable will be
combined with the Company's consolidated results of operations. The
adjustment referenced by this Note (17) reflects the 30% Pre-Payout
Interest for the period January 1, 1994 through August 7, 1994.
(18) Represents the Company's 30% share of reduced costs for Framingham Cable
management fees of $56,000, offset by additional expenses relating to the
Framingham Cable acquisition for depreciation and amortization of
$249,000 and interest of $79,000.
CABLEVISION OF BOSTON ACQUISITION
(19) As a result of the proposed acquisition of Cablevision of Boston (and
related issuance of approximately 635,000 shares of the Company's Class A
Common Stock (based on the price per share of Class A Common Stock on
September 30, 1995)), the results of operations of Cablevision of Boston
will be combined with the Company's consolidated results of operations.
The adjustments referenced by this Note (19) reflect the consolidation of
such amounts for the year ended December 31, 1994.
(20) Represents the amortization, based on an average 10-year life, of the
excess cost over fair value of assets acquired of $11,232,000 for the
period, offset by the elimination of previous amortization of intangibles
of $258,000 and the elimination from selling, general and administrative
expenses of management fees payable ($2,092,000) by Cablevision of Boston
to Cablevision Systems Services Corporation, a company wholly-owned by
Charles F. Dolan.
(21) Represents interest expense of $6,971,000 attributable to $79,217,000 of
bank debt (8.8% interest rate) reduced by pre-acquisition interest
expense of $8,740,000 incurred by Cablevision of Boston on its bank debt
and debt owed to Mr. Dolan and the Company.
PROPOSED V CABLE TRANSACTIONS
(22) As a result of the proposed acquisition of 80% of the partnership
interests in U.S. Cable not already owned by V Cable to be effected in
connection with the Proposed V Cable Transactions, the results of
operations of U.S. Cable will be combined with the Company's consolidated
results of operations. The adjustments referenced by this Note (22)
reflect the consolidation of such amounts for the year ended December 31,
1994 and the elimination of the Company's share of losses in U.S. Cable
previously recorded on the equity basis.
(23) Represents the reduction in interest expense of $47,323,000, at an
average interest rate of 10.5%, resulting from the net repayment of
$450,000,000 of V Cable and/or VC Holding debt from the proceeds of the
issuance of the preferred stock in the Proposed V Cable Transactions. In
addition, the Company will write off deferred interest and financing
costs of $40,457,000 in connection with the repayment of U.S. Cable debt
assumed by V Cable in the 1992 V Cable Reorganization.
(24) Represents the dividends payable to GECC on the preferred stock to be
issued in the Proposed V Cable Transactions. This amount does not take
into account any gross up required to be paid to a holder of preferred
stock failing to obtain a dividends received deduction.
(25) Represents the reduction in interest expense, at an average interest rate
of 12.0%, resulting from the repayment of $50,000,000 of U.S. Cable debt
from the proceeds of the issuance of preferred stock and certain
reductions in U.S. Cable's debt resulting from the Proposed V Cable
Transactions.
(26) Represents the depreciation and amortization, based on an average 10-year
life, of the step-up in property, plant and equipment, franchise costs
and the excess cost over fair value of assets acquired, aggregating
$38,244,000 for the period, offset by the elimination of pre-acquisition
depreciation and amortization of $41,861,000.
S-24
<PAGE>
NOTE C--NOTES TO CONDENSED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 1995
CABLEVISION OF BOSTON ACQUISITION
(27) As a result of the proposed acquisition of Cablevision of Boston (and
related issuance of approximately 635,000 shares of the Company's Class A
Common Stock), the results of operations of Cablevision of Boston will be
combined with the Company's consolidated results of operations. The
adjustments referenced by this Note (27) reflect the consolidation of
such amounts for the nine months ended September 30, 1995.
(28) Represents the amortization, based on an average 10-year life, of the
excess cost over fair value of assets acquired of $8,424,000 for the
period, offset by the elimination of previous amortization of intangibles
of $193,000 and the elimination from selling, general and administrative
expenses of management fees payable by Cablevision of Boston to
Cablevision Systems Services Corporation ($1,642,000).
(29) Represents interest expense of $5,214,000 attributable to $79,217,000 of
bank debt (8.8% interest rate) reduced by pre-acquisition interest
expense of $7,884,000 incurred by Cablevision of Boston on its bank debt
and debt owed to Mr. Dolan and the Company.
PROPOSED V CABLE TRANSACTIONS
(30) As a result of the proposed acquisition of 80% of the partnership
interests in U.S. Cable not already owned by V Cable to be effected in
connection with the Proposed V Cable Transactions, the results of
operations of U.S. Cable will be combined with the Company's consolidated
results of operations. The adjustments referenced by this Note (30)
reflect the consolidation of such amounts for the nine months ended
September 30, 1995 and the elimination of the Company's share of losses
in U.S. Cable previously recorded on the equity basis.
(31) Represents the reduction in interest expense of $36,167,000, at an
average interest rate of 10.7%, resulting from the net repayment of
$450,000,000 of V Cable and/or VC Holding debt from the proceeds of the
issuance of the preferred stock in the Proposed V Cable Transactions. In
addition, amortization of deferred interest and financing costs of
$10,114,000 is eliminated in connection with the repayment of U.S. Cable
debt assumed by V Cable in the 1992 V Cable Reorganization. Because the
write-off of deferred interest and financing costs related to this
transaction has been reflected in the Condensed Pro Forma Consolidated
Statement of Operations for the year ended December 31, 1994, no such
write-off has been made in the Condensed Pro Forma Consolidated Statement
of Operations for the nine months ended September 30, 1995.
(32) Represents the dividends payable to GECC on the preferred stock to be
issued in the Proposed V Cable Transactions. This amount does not take
into account any gross up required to be paid to a holder of preferred
stock failing to obtain a dividends received deduction.
(33) Represents the reduction in interest expense, at an average interest rate
of 11.6%, resulting from the repayment of $50,000,000 of U.S. Cable debt
from the proceeds of the issuance of preferred stock and certain
reductions in U.S. Cable's debt resulting from the Proposed V Cable
Transactions.
(34) Represents the depreciation and amortization, based on an average 10-year
life, of the step-up in property, plant and equipment, franchise costs
and the excess cost over fair value of assets acquired, aggregating
$27,285,000 for the period, offset by the elimination of pre-acquisition
depreciation and amortization of $27,859,000.
S-25
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes supplements
and, to the extent inconsistent therewith, supersedes the description of the
general terms of the Debt Securities set forth under the heading "Description
of Debt Securities" in the accompanying Prospectus, to which description
reference is made.
The Notes will be issued under an Indenture to be dated as of November 1,
1995 (the "Indenture"), between the Company and The Bank of New York, trustee
(the "Trustee"). The Indenture is subject to and is governed by the Trust
Indenture Act of 1939, as amended. The following summaries of certain
provisions of the Indenture do not purport to be complete, and where reference
is made to particular provisions of the Indenture, such provisions, including
the definitions of certain terms, are incorporated by reference as a part of
such summaries, which are qualified in their entirety by such reference. The
definitions of certain capitalized terms used in the Indenture and in the
following summary are set forth below under "Description of Debt Securities--
Certain Definitions" in the accompanying Prospectus.
GENERAL
The Notes are limited to $300,000,000 aggregate principal amount and will be
issued in fully registered form, without coupons, in denominations of $1,000
and integral multiples thereof. The Notes will mature on November 1, 2005.
The Notes will bear interest from November 7, 1995 at a rate of 9 1/4% per
annum, payable semi-annually on May 1 and November 1 of each year, commencing
May 1, 1996. Interest on the Notes will be computed on the basis of a 360-day
year of twelve 30-day months and is payable to the person in whose name each
Note was registered at the close of business on the preceding April 15 and
October 15, respectively, subject to certain exceptions. The Notes will be
unsecured obligations of the Company. The Notes will be subordinated to all
existing and future Senior Indebtedness of the Company.
Principal of and premium, if any, and interest on the Notes will be payable,
and the Notes will be exchangeable and transferable, at the office or agency
of the Company in The City of New York (which initially will be the Corporate
Trust Office of the Trustee); provided, however, that payment of interest, to
the extent paid in cash, may be made at the option of the Company by check
mailed to the person entitled thereto as shown on the Register of the Notes.
No service charge will be made for any registration of transfer or exchange of
Notes, except for any tax or other governmental charge that may be imposed in
connection therewith.
The Indenture will not contain any provisions that limit the ability of the
Company to incur indebtedness or that afford Holders of the Notes protection
in the event of a highly leveraged or similar transaction involving the
Company, other than as described under "Description of Debt Securities--
Certain Covenants of the Company--Limitation on Indebtedness" in the
accompanying Prospectus.
SINKING FUND
The Notes will not be entitled to the benefits of a sinking fund.
OPTIONAL REDEMPTION
The Notes will be subject to redemption at any time on or after November 1,
2000, at the option of the Company, in whole or in part, on not less than 30
nor more than 60 days' prior notice at the following redemption prices
(expressed as percentages of the principal amount), if redeemed during the 12-
month period beginning November 1 of the years indicated:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICe
---- ----------
<S> <C>
2000.............................. 104.625%
2001.............................. 103.100
2002.............................. 101.500
</TABLE>
S-26
<PAGE>
and thereafter at 100% of the principal amount, in each case together with
accrued interest to the redemption date (subject to the right of Holders of
record on relevant record dates to receive interest due on an interest payment
date). If less than all of the Notes are to be redeemed, the Trustee shall
select the Notes or portions thereof to be redeemed either pro rata or by lot.
The Credit Agreement currently prohibits the Company from making optional
redemptions of the Notes other than through the issuance of subordinated
indebtedness, preferred stock or common stock.
SUBORDINATION
The indebtedness represented by the Notes will be subordinated in right of
payment to the prior payment in full of all Senior Indebtedness.
Upon the maturity of any Senior Indebtedness, by lapse of time, acceleration
or otherwise, or upon any payment default (with or without the giving of
notice or lapse of time or both in accordance with the terms of the instrument
governing such Senior Indebtedness, and without any waiver or forgiveness)
with respect to any Senior Indebtedness, all obligations with respect to such
Senior Indebtedness must first be paid in full, or such payment duly provided
for, before any payment is made with respect to the Notes or before any
acquisition of Notes by the Company.
Upon (i) a default with respect to any Senior Indebtedness (other than under
circumstances when the terms of the previous paragraph are applicable), as
such default is defined therein or in the instrument under which it is
outstanding, permitting the holders of Senior Indebtedness to accelerate the
maturity thereof, and (ii) written notice thereof ("Default Notice") given to
the Company and the Trustee by the agent or agents under the Credit Agreement,
then, unless and until such default shall have been cured or waived by the
holders of such Senior Indebtedness or shall have ceased to exist, no direct
or indirect payment may be made by the Company with respect to the principal
of, premium, if any, or interest on the Notes (other than payments made in
Junior Securities) or to acquire any of the Notes or on account of the
redemption provisions of the Notes (except mandatory redemption payments made,
in accordance with the terms of the Notes, in Notes acquired by the Company
before the Default Notice; provided, however, that such provision shall not
prevent the making of any payment (which is not otherwise prohibited by the
previous paragraph) for more than 120 days after the Default Notice shall have
been given unless the Senior Indebtedness in respect of which such event of
default exists has been declared due and payable in its entirety, in which
case no such payment may be made until such acceleration has been rescinded or
annulled or such Senior Indebtedness has been paid in full. Notwithstanding
the foregoing, not more than one Default Notice may be given with respect to
Senior Indebtedness within a period of 240 consecutive days.
The Indenture will provide that, upon any payment by or distribution of the
assets of the Company to creditors upon any dissolution, winding up,
liquidation, bankruptcy, reorganization, assignment for the benefit of
creditors, or any insolvency, receivership or similar proceeding relating to
the Company, all Senior Indebtedness must be paid in full, or such payment
duly provided for, before any payment or distribution (other than in Junior
Securities) is made on account of the principal of or premium, if any, or
interest on the Notes.
By reason of such subordination, in the event of liquidation or insolvency,
creditors of the Company who are holders of Senior Indebtedness may recover
more, ratably, than other creditors of the Company and creditors of the
Company who are not holders of Senior Indebtedness or of the Notes (or the
Company's 10 3/4% Debentures due 2004, the 9 7/8% Debentures due 2013 and the
9 7/8% Debentures due 2023 (collectively, the "Existing Debentures")) may
recover more, ratably, than the Holders of the Notes.
S-27
<PAGE>
A Holder of Notes by his acceptance of Notes agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purpose.
The amount of Senior Indebtedness outstanding at September 30, 1995,
adjusted to give pro forma effect to the transactions described under
"Capitalization" and the application of the net proceeds to the Company from
the Offerings, would have been approximately $534.4 million.
CERTAIN COVENANTS OF THE COMPANY
Limitation on Indebtedness. The Indenture provides that the Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly
incur, create, issue, assume, guarantee or otherwise become liable for,
contingently or otherwise, or become responsible for the payment of,
contingently or otherwise, any Indebtedness (other than Indebtedness between
or among any of the Company and Restricted Subsidiaries) unless, after giving
effect thereto, the Cash Flow Ratio shall be less than or equal to 9 to 1. At
September 30, 1995, such Cash Flow Ratio was approximately 6.2 to 1 (after
giving effect to the borrowing of $103.1 million on October 26, 1995 in
connection with the redemption of the Series E Preferred Stock but not to any
other proposed transaction described herein).
Limitation on Senior Subordinated Indebtedness. The Indenture provides that
the Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become liable for, contingently or otherwise, or become responsible for the
payment of, contingently or otherwise, any Indebtedness which is both (i)
senior in right of payment to the Notes and (ii) expressly subordinate in
right of payment to any other Indebtedness of the Company. For purposes of
this covenant, Indebtedness is deemed to be senior in right of payment of the
Notes if it is not subordinate in right of payment to Senior Indebtedness at
least to the same extent as the Notes are subordinate to Senior Indebtedness.
Limitation on Restricted Payments. The Indenture provides that, so long as
any of the Notes remain outstanding, the Company will not, and will not permit
any Restricted Subsidiary to, make any Restricted Payment if (a) at the time
of such proposed Restricted Payment, a Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence of such Restricted
Payment or (b) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments that shall have been made on or after
July 1, 1988 would exceed the sum of:
(i) $25,000,000, plus
(ii) an amount equal to the difference between (A) the Cumulative Cash
Flow Credit and (B) 1.2 multiplied by Cumulative Interest Expense.
Notwithstanding the foregoing, so long as no Default or Event of Default
shall have occurred and be continuing, the Company may make any Permitted
Restricted Payment; provided, however, that such Permitted Restricted Payment
shall thereafter be counted as a Restricted Payment solely for purposes of
calculating whether any future Restricted Payments are permitted under clause
(b) of the preceding sentence.
For purposes of the "Limitation on Restricted Payments" covenant, the amount
of any Restricted Payment or Permitted Restricted Payment, if other than cash,
shall be based upon fair market value as determined by the Board of Directors
of the Company, whose good faith determination shall be conclusive.
The foregoing provisions do not prevent: (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at such date of
declaration such payment complied with the above provisions; (ii) the
retirement or redemption of any shares of the Company's capital stock or
warrants, rights or options to acquire capital stock of the Company, in
exchange for, or out of the proceeds of a substantially concurrent sale of,
other shares of the Company's capital stock or warrants, rights or options to
acquire capital stock of the Company (other than Disqualified Stock); and
(iii) the redemption of or payments of cash dividends on the Company's 8%
S-28
<PAGE>
Series C Cumulative Preferred Stock (the "Series C Preferred Stock")
outstanding on January 1, 1995, which redemptions or dividends are provided
for by the terms of the Series C Preferred Stock in effect on such date (or
the redemption of or payment of cash dividends on any security of the Company
issued in exchange for or upon the conversion of such Series C Preferred
Stock; provided that the aggregate amount payable pursuant to the terms of
such security is no greater than the aggregate amount payable pursuant to the
terms of the Series C Preferred Stock). For purposes of determining the
aggregate permissible amount of Restricted Payments in accordance with clause
(b) of the first paragraph of this covenant, all amounts expended pursuant to
clauses (i) and (iii) of this paragraph shall be included and all amounts
expended or received pursuant to clause (ii) of this paragraph shall be
excluded; provided, however, that amounts paid pursuant to clause (i) of this
paragraph shall be included only to the extent that such amounts were not
previously included in calculating Restricted Payments.
For the purposes of the foregoing provisions, the net proceeds from the
issuance of shares of capital stock of the Company upon conversion of
Indebtedness shall be deemed to be an amount equal to (i) the accreted value
of such Indebtedness on the date of such conversion and (ii) the additional
consideration, if any, received by the Company upon such conversion thereof,
less any cash payment on account of fractional shares (such consideration, if
in property other than cash, to be determined by the Board of Directors of the
Company, whose good faith determination shall be conclusive). If the Company
makes a Restricted Payment which, at the time of the making of such Restricted
Payment, would in the good faith determination of the Company be permitted
under the requirements of this covenant, such Restricted Payment shall be
deemed to have been made in compliance with this covenant notwithstanding any
subsequent adjustments made in good faith to the Company's financial
statements affecting Cumulative Cash Flow Credit or Cumulative Interest
Expense for any period.
As of September 30, 1995, the Company would have been permitted to make
Restricted Payments of $331.2 million and, after giving effect to the offering
of the Depositary Shares and the redemption of the Series E Preferred Stock,
approximately $518.2 million.
Limitation on Investments in Unrestricted Subsidiaries and Affiliates. The
Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly (i) make any Investment or
(ii) allow any Restricted Subsidiary to become an Unrestricted Subsidiary (a
"redesignation of a Restricted Subsidiary"), in each case unless (a) no
Default or Event of Default shall have occurred and be continuing or shall
occur as a consequence of such Investment or such redesignation of a
Restricted Subsidiary, and (b) after giving effect thereto, the Cash Flow
Ratio shall be less than or equal to 9 to 1.
The foregoing provisions of this covenant shall not prohibit (i) any renewal
or reclassification of any Investment existing on the date hereof or (ii)
trade credit extended on usual and customary terms in the ordinary course of
business.
Transactions with Affiliates. The Indenture provides that the Company shall
not, and shall not permit any of its subsidiaries to, sell, lease, transfer or
otherwise dispose of any of its properties or assets to or purchase any
property or assets from, or enter into any contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, an Affiliate of the
Company that is not a subsidiary of the Company, having a value, or for
consideration having a value, in excess of $10,000,000 individually or in the
aggregate unless the Board of Directors of the Company shall make a good faith
determination that the terms of such transaction are, taken as a whole, no
less favorable to the Company or such subsidiary, as the case may be, than
those which might be available in a comparable transaction with an unrelated
Person. For purposes of clarification, this provision shall not apply to
Restricted Payments or Permitted Restricted Payments permitted under
"Limitation on Restricted Payments".
REGARDING THE TRUSTEE
The Bank of New York ("BONY") will be the Trustee under the Indenture and is
the trustee under the indentures relating to the Company's Existing
Debentures. BONY is a party to certain credit agreements with the Company and
its subsidiaries, including the Credit Agreement, borrowings under which
constitute Senior Indebtedness under the Indenture. BONY may also maintain
other banking arrangements with the Company in the ordinary course of
business.
S-29
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Purchase Agreement, the
Company has agreed to sell to each of the Underwriters named below, and each
of the Underwriters has severally agreed to purchase, the principal amount of
the Notes set forth opposite its name below. The Underwriters have agreed to
purchase all the Notes if any are purchased.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................................... $150,000,000
Bear, Stearns & Co. Inc. ...................................... 60,000,000
Morgan Stanley & Co. Incorporated.............................. 60,000,000
Toronto Dominion Securities (USA) Inc. ........................ 30,000,000
------------
Total..................................................... $300,000,000
============
</TABLE>
The Underwriters have advised the Company that they propose initially to
offer the Notes directly to the public at the public offering price set forth
on the cover page of this Prospectus Supplement, and to certain dealers at
such price less a concession not in excess of .25% of the principal amount of
the Notes. The Underwriters may allow, and such dealers may reallow, a
discount not in excess of .125% of the principal amount of the Notes to
certain other dealers. After the initial public offering, the public offering
price, concession and reallowance may be changed by the Underwriters.
There is no public market for the Notes. The Company does not intend to list
the Notes on any securities exchange or to arrange for their quotation on
NASDAQ. The Company has been advised by the Underwriters that they presently
intend to make a market in the Notes after the consummation of the Offering,
although they are under no obligation to do so. No assurance can be given,
however, as to the liquidity of the trading market for the Notes or that an
active public market for the Notes will develop. If an active public market
does not develop, the market prices and liquidity of the Notes may be
adversely affected.
Each of Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
and Bear, Stearns & Co. Inc. ("Bear Stearns") has from time to time provided
investment banking services to the Company (and in the case of Merrill Lynch,
Charles F. Dolan) in connection with various transactions and proposed
transactions. In addition, Merrill Lynch, Bear Stearns and Morgan Stanley &
Co. Incorporated were the initial purchasers in the offering of the Company's
Series G Preferred Stock in September 1995 and are underwriters of the
Company's Series I Preferred Stock represented by Depositary Shares. An
affiliate of Toronto Dominion Securities (USA) Inc. is an agent and lender
under the Company's Credit Agreement and is a lender to certain affiliates of
the Company. In addition, such affiliate is the holder of the Company's Series
E Preferred Stock, which was redeemed by the Company out of the proceeds of
the Company's issuance and sale of the Series G Preferred Stock. Bear Stearns
has agreed to reimburse the Company for certain expenses of this Offering and
the concurrent offering of the Depositary Shares.
In connection with the Offering, the Company has agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
VALIDITY OF NOTES
The validity of the Notes will be passed upon for the Company by Sullivan &
Cromwell, New York, New York and for the Underwriters by Shearman & Sterling,
New York, New York.
S-30
<PAGE>
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NO DEALER, SALESPERSON OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THERE HAS NOT BEEN A CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
----------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary.................................................................... S-3
The Company................................................................ S-11
Recent Developments........................................................ S-13
Use of Proceeds............................................................ S-16
Capitalization............................................................. S-17
Condensed Pro Forma Consolidated Financial Information..................... S-19
Description of the Notes................................................... S-26
Underwriting............................................................... S-30
Validity of Notes.......................................................... S-30
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Risk Factors............................................................... 3
Use of Proceeds............................................................ 8
Ratio of Earnings to Fixed Charges......................................... 9
Description of Debt Securities............................................. 9
Description of Capital Stock............................................... 23
Description of Depositary Shares........................................... 29
Description of Warrants.................................................... 31
Plan of Distribution....................................................... 32
Validity of the Securities................................................. 33
Experts.................................................................... 33
</TABLE>
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$300,000,000
[LOGO] CABLEVISION
CABLEVISION SYSTEMS
CORPORATION
9 1/4% SENIOR SUBORDINATED
NOTES DUE 2005
----------------
PROSPECTUS SUPPLEMENT
----------------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO.
INCORPORATED
TORONTO DOMINION SECURITIES (USA) INC.
NOVEMBER 2, 1995
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