<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
___________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 16, 1995
CABLEVISION SYSTEMS CORPORATION
(Exact Name of Registrant as specified in its charter)
Delaware
(State of Incorporation)
1-9046 11-2776686
(Commission File Number) (IRS Employer
Identification Number)
One Media Crossways, Woodbury, New York 11797
(Address of principal executive offices)
Registrant's telephone number, including area code:
(516) 364-8450
Item 5. Other Events
(a) On October 16, 1995, the Board of Directors of
Cablevision Systems Corporation (the "Registrant" or the
"Company") elected James L. Dolan to succeed Charles F. Dolan
as Chief Executive Officer of the Company effective
immediately. Charles F. Dolan remains as Chairman of the
Board of the Company. James L. Dolan, a son of Charles F.
Dolan, has been Chief Executive Officer of Rainbow Programming
Holdings, Inc. since 1992 and has been a member of the Board
of Directors of the Company since 1991.
(b) The Company hereby restates the discussion under
"Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources" in
the Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1995 as follows:
Liquidity and Capital Resources
For financing purposes, the Company is structured as the
Restricted Group, consisting of Cablevision Systems
Corporation and certain of its subsidiaries and an
unrestricted group of certain subsidiaries which includes V
Cable, Inc. ("V Cable"), Rainbow Programming Holdings, Inc.
("Rainbow Programming") and Cablevision MFR, Inc. On
October 14, 1994, Cablevision of New York City ("Cablevision
of NYC"), formerly an unrestricted subsidiary, became a member
of the Restricted Group.
<PAGE>
The following table presents selected historical results
of operations and other financial information related to the
captioned groups or entities for the six months ended June 30,
1995. (Rainbow Programming, Rainbow Advertising Sales
Corporation ("Rainbow Advertising"), American Movie Classics
Company ("AMCC"), and a radio station located in Cleveland,
Ohio are included in "Other Unrestricted Subsidiaries").
<TABLE>
<CAPTION>
Core Total Other Cablevision
Restricted Restricted V Cable, Cablevision Unrestricted Systems
Group CNYC Group Inc. MFR Subsidiaries Corporation
---------- ---- ---------- -------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
(Dollars in thousands)
Net revenues $ 229,381 $ 97,725 $ 327,106 $ 72,789 $ 37,570 $ 71,670 $ 509,135
Operating expenses:
Technical 85,261 45,150 130,411 29,016 12,200 21,616 193,243
Selling, general and
administrative 37,106 25,779 62,885 10,844 5,924 51,958 131,611
Depreciation and
amortization 60,846 20,637 81,483 33,965 32,657 11,432 159,537
---------- --------- ----------- --------- -------- -------- ----------
Operating profit (loss) $ 46,168(1) $ 6,159(1) $ 52,327 $ (1,036) $(13,211) $(13,336) $ 24,744
========== ========= =========== ========= ======== ======== ==========
Currently payable
interest expense $ 74,541 $ 5,751 $ 80,292 $ 25,450 $ 14,119 $ 6,712 $ 126,573
========== ========= =========== ========= ======== ======== ==========
Total interest expense $ 75,829 $ 6,207 $ 82,036 $ 51,496 $ 14,328 $ 7,458 $ 155,318
========== ========= =========== ========= ======== ======== ==========
Senior debt $1,014,375 $ 138,600 $ 1,152,975 $880,888 $209,000 $148,028 $2,390,891
========== ========= =========== ========= ======== ======== ==========
Subordinated debt $ 623,571 $ - $ 623,571 $ - $141,268(3) $ - $ 764,839
========== ========= =========== ========= ======== ======== ==========
Obligation to related
party $ - $ 190,212(2) $ 190,212 $ - $ - $ - $ 190,212
========== ========= =========== ========= ======== ======== ==========
Deficit investment
in affiliates $ 420,098 $ - $ 420,098 $ - $ - $ 16,223 $ 436,321
========== ========= =========== ========= ======== ======== ==========
Capital expenditures $ 52,015 $ 45,213 $ 97,228 $ 13,163 $ 5,840 $ 2,955 $ 119,180(4)
========== ========= =========== ========= ======== ======== ==========
Ending cable
subscribers 950,000 371,000 1,321,000 372,000 173,000 - 1,866,000
========== ========= =========== ========= ======== ======== ==========
</TABLE>
_________________________
(1) Includes management fees from CNYC of $3,420.
(2) Obligation of NYC LP Corp., a wholly-owned Restricted Group subsidiary,
relating to the CNYC acquisition.
(3) Guaranteed by the Restricted Group.
(4) Includes intercompany elimination of $6.
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<PAGE>
Restricted Group
On March 10, 1995 the Company, through Rainbow Programming,
invested $110 million in the acquisition of Madison Square Garden.
The funds were provided by borrowings under the Restricted Group's
$1.5 billion credit agreement (the "Credit Agreement").
On August 4, 1995 the Restricted Group, including Cablevision of
NYC, had total usage under the Credit Agreement of $1,149.6 million
and Letters of Credit of $22.4 million issued on behalf of the Company
and Cablevision of NYC. Unrestricted and undrawn funds available to
the Restricted Group under the Credit Agreement amounted to
approximately $328 million at August 4, 1995. The Credit Agreement
contains certain financial covenants that may limit the Restricted
Group's ability to utilize all of the undrawn funds available
thereunder, including covenants requiring the Restricted Group to
maintain certain financial ratios and restricting the permitted uses
of borrowed funds.
As of August 4, 1995 the Company and Cablevision of NYC had
entered into interest exchange (swap and interest rate cap) agreements
with several of their banks on a notional amount of $275 million, on
which the Company pays a fixed rate of interest and receives a
variable rate of interest for specified periods, with an average
maturity of two years. The average effective annual interest rate on
all bank debt outstanding as of July 31, 1995 was approximately 8.4%.
The Company believes for the Restricted Group that, subject to
the limitations described in the following paragraphs, internally
generated funds together with funds available under the Credit
Agreement will be sufficient through December 31, 1996 to (i) meet its
debt service requirements, including its amortization requirements
under the Credit Agreement, (ii) fund its ongoing capital
expenditures, including those related to Cablevision of NYC and the
required upgrades under the New York upgrade agreement, (iii) fund its
anticipated investments in Cablevision of NYC and the $5.6 million
annual payment to Charles F. Dolan in connection with the Cablevision
of NYC acquisition, (iv) fund payments with respect to the proposed
Cablevision of Boston Limited Partnership ("Cablevision of Boston")
acquisition and (v) fund any anticipated equity requirements in A-R
Cable Services, Inc. ("A-R Cable") and/or V Cable.
The Company intends to incur additional expenditures to
sufficiently upgrade its plant to facilitate the startup of such
adjunct businesses as information services; video on demand and near
video on demand; and residential telephony. To successfully implement
these plans, the Company will require additional capital from the sale
of equity in the capital markets or to a strategic investor.
V Cable
The long-term credit facilities extended by General Electric
Capital Corporation ("GECC") to V Cable and VC Holding, Inc. ("VC
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<PAGE>
Holding") on December 31, 1992, refinanced all of V Cable's pre-
existing debt. Under the credit agreement between V Cable and GECC
(the "V Cable Credit Agreement"), GECC has provided a term loan (the
"V Cable Term Loan") in the amount of $25.9 million, as of June 30,
1995, which loan accretes interest at a rate of 10.62% compounded
semi-annually until December 31, 1997 (the reset date) and is payable
in full on December 31, 2001. Under the credit agreement between VC
Holding and GECC, GECC has extended to VC Holding a $501.9 million
term loan (the "Series A Term Loan"), a $258.4 million term loan (the
"Series B Term Loan") and a $25 million revolving line of credit (the
"Revolving Line"). The Series A Term Loan and any amounts drawn under
the Revolving Line pay current cash interest and mature on December
31, 2001. The Series B Term Loan does not pay cash interest but
rather accretes interest at a rate of 10.62% compounded semi-annually
until December 31, 1997 (the reset date) and is payable in full on
December 31, 2001. On August 1, 1995 VC Holding had $2.5 million
outstanding under the Revolving Line and had letters of credit issued
approximating $1.1 million. Accordingly, unrestricted and undrawn
funds under VC Holding Revolving Line amounted to approximately $21.4
million on August 1, 1995.
The VC Holding Credit Agreement also provides for the assumption
by VC Holding of certain loans of U.S. Cable Television Group, L.P.
("U.S. Cable"), the present value of which amounted to $92.2 million
at June 30, 1995. VC Holding and V Cable are required to apply all
consolidated available cash flow (as defined), as well as the net
proceeds of any disposition of assets, to the reduction of the VC
Holding Term Loans and the V Cable Term Loan. A mandatory prepayment
of the Series A Term Loan amounting to approximately $3.1 million was
made on April 14, 1995 in accordance with this requirement.
For a discussion of a general, non-binding letter of intent that
V Cable and VC Holding have entered into with GECC regarding certain
transactions (the "Proposed V Cable Transactions") with respect to V
Cable and VC Holding, see "Item 5--Recent Developments--Proposed V
Cable Transactions" in the Form 8-K filed on September 7, 1995.
There can be no assurances 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.
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<PAGE>
Monmouth and Riverview
Monmouth Cablevision Associates ("Monmouth Cable") and Riverview
Cablevision Associates, L.P. ("Riverview Cable" and collectively with
Monmouth Cable, "Monmouth/Riverview") are party to a credit facility,
as amended on May 12, 1995, with a group of banks led by NationsBank
of Texas, N.A., as agent (the "Monmouth/Riverview Credit Facility").
The maximum amount available to Monmouth/Riverview under the
Monmouth/Riverview Credit Facility is $285 million with a final
maturity at June 30, 2003. The facility is a reducing revolving loan,
with scheduled facility reductions beginning on March 31, 1996
resulting in a 15% reduction by December 31, 1998. As of August 4,
1995, Monmouth/Riverview had outstanding bank borrowings of $207
million. Unrestricted and undrawn funds available to
Monmouth/Riverview under the Monmouth/Riverview Credit Facility
amounted to approximately $78 million at August 4, 1995. The
Monmouth/Riverview Credit Facility contains certain financial
covenants that may limit Monmouth/Riverview's ability to utilize all
of the undrawn funds available thereunder, including covenants
requiring Monmouth/Riverview to maintain certain financial ratios.
Under the terms of the Monmouth/Riverview Credit Facility,
Monmouth/Riverview is prohibited from transferring funds to
Cablevision MFR. The weighted average interest rate on all bank
indebtedness as of July 31, 1995 was approximately 8.6%.
Monmouth/Riverview have entered into interest rate swap and cap
agreements with several banks on a notional amount of $130 million on
which the Company pays a fixed rate of interest and receives a
variable rate of interest for specified periods, with an average
maturity of 16 months.
The Company believes that for Monmouth/Riverview, internally
generated funds together with funds available under its existing
credit agreement will be sufficient to meet its debt service
requirements including its amortization requirements and to fund its
capital expenditures through 1996.
Rainbow Programming
In July 1994, Rainbow Programming entered into a $105 million
credit facility with a group of banks. On January 27, 1995 Rainbow
entered into an amended and restated credit facility with Toronto-
Dominion (Texas), Inc., and Canadian Imperial Bank of Commerce, as co-
agents and a group of banks for $202 million of which $108 million was
drawn on such date to refinance the original facility. On July 12,
1995 Rainbow Programming consummated the purchase of National
Broadcasting Company's ("NBC") interests in SportsChannel (New York)
Associates and Rainbow News 12 Company for approximately $95.5
million, giving Rainbow Programming a 100% interest in SportsChannel
(New York) Associates and Rainbow News 12 Company. The purchase was
financed by an additional drawdown of $94 million under Rainbow
Programming's $202 million amended and restated credit facility and
by a $2.5 million equity contribution from the Company for the balance
of the purchase price and related fees. The proceeds of the initial
-5-
<PAGE>
$105 million loan plus $76 million of equity from the Company were
used to purchase Liberty Media Corporation's 50% interest in AMCC
giving Rainbow Programming a 75% ownership interest in AMCC. The
credit facility is payable in full at maturity on December 31, 1996
and bears interest at varying rates based upon the banks' Base Rate
or Eurodollar Rate, as defined in the credit agreement. Repayment of
the loan is anticipated to be made by Rainbow Programming from one or
a combination of the following: (i) internally generated funds; (ii)
refinancing the existing Rainbow Programming $202 million credit
facility; (iii) refinancing the existing $57 million credit agreement
of AMCC; (iv) the sale of equity interests in, or assets of, the
programming businesses; and (v) advances from the Restricted Group.
The loan is secured by a pledge of the Company's stock in Rainbow
Programming and is guaranteed by the subsidiaries of Rainbow
Programming as permitted.
Rainbow Programming's financing needs have been funded by the
Restricted Group's investments in and advances to Rainbow Programming,
by sales of equity interests in the programming businesses and, in the
case of one of the programming businesses, through separate external
debt financing. The Company expects that the future cash needs of
Rainbow Programming's current programming partnerships will
increasingly be met by internally generated funds, although certain
of such partnerships will at least in the near future rely to some
extent upon their partners (including Rainbow Programming) for certain
cash needs. The partners' contributions may be supplemented through
the sale of additional equity interests in, or through the incurrence
of indebtedness by, such programming businesses.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(b) Pro Forma Financial Information
The Registrant files herewith the pro forma financial
information that would be required pursuant to Article 11 of
Regulation S-X for the six months ended June 30, 1995.
Condensed Pro Forma Consolidated Financial Information
The following condensed pro forma consolidated balance sheet as
of June 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,
-6-
<PAGE>
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 six months ended June 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.
-7-
<PAGE>
Condensed Pro Forma Consolidated Balance Sheet
June 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 equivalents............. $ 23,487 $ 5,967(1) $ 236(4) $ 22,690
(3,000)(2) (4,000)(5)
Accounts receivable, trade............ 71,406 2,165(1) 331(4) 73,902
Notes and other receivables........... 17,872 601(1) 502(4) 18,975
Prepaid expenses and other current
assets................................ 13,256 470(1) 464(4) 14,190
Property, plant and equipment, net.... 916,312 35,863(1) 103,604(4) 1,055,779
Investments in and advances to
affiliates............................ 182,080 (17,462)(1) 324(4) 164,942
Feature film inventory................ 151,113 151,113
Intangible assets, net................ 795,631 114,188(2) 133,610(6) 1,042,204
(1,225)(3)
Deferred financing, interest
expense and other costs, net ......... 83,711 1,000(2) (33,617)(5) 51,094
----------- --------- --------- -----------
$ 2,254,868 $ 138,567 $ 201,454 $ 2,594,889
=========== ========= ========= ===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Accounts payable................ $ 117,203 $ 9,286(1) $ 9,381(4) $ 135,870
Accrued expenses................ 213,562 9,186(1) 10,690(4) 233,438
Accounts payable to affiliates.. 27,577 665(1) 28,242
Feature film rights payable..... 131,026 131,026
Bank debt....................... 1,499,762 80,773(2) 1,580,535
Senior debt..................... 880,888 215,000(4) 595,888
(500,000)(5)
Subordinated debentures......... 623,571 623,571
Subordinated notes payable...... 141,268 141,268
Obligation to related party..... 190,212 190,212
Capital lease obligations and other debt 10,241 2,048(1) 12,289
----------- --------- --------- -----------
3,835,310 101,958 (264,929) 3,672,339
----------- --------- --------- -----------
Deficit investment in affiliates 436,321 436,321
----------- --------- --------- -----------
Stockholders' deficiency:
Preferred stock................ 2 5(5) 7
Common stock................... 238 6(2) 244
Par value in excess of capital
contributed (71,888) 37,828(2) 499,995(5) 464,710
(1,225)(3)
Accumulated deficit............ (1,941,878) (33,617)(5) (1,975,495)
(2,013,526) 36,609 466,383 (1,510,534)
Less, treasury stock, at cost
(50,000 shares) (3,237) (3,237)
----------- --------- --------- -----------
(2,016,763) 36,609 466,383 (1,513,771)
----------- --------- --------- -----------
$ 2,254,868 $ 138,567 $ 201,454 $ 2,594,889
----------- --------- --------- -----------
</TABLE>
* See Note A of Notes to Condensed Pro Forma Consolidated Financial Statements.
-8-
<PAGE>
Consolidated 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
amortization................ 271,343 142 (7) 12,488 (13) 8,428 (19) 41,861 (22) 379,478
10,827 (12) 27,273 (14) 11,038 (20) (3,922)(26)
---------- ------- -------- -------- -------- ----------
774,476 42,477 62,059 61,242 88,389 1,028,643
---------- ------- -------- -------- -------- ----------
Operating profit (loss)........ 62,693 8,474 (14,773) (2,003) (16,429) 37,962
Other income (expense)
Interest expense............... (263,299) (1,510)(7) (4,657)(13) (8,955)(19) (24,195)(22) (266,443)
(7,615)(9) (11,093)(15) 1,552 (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 preferential..... (5,600) (5,600)
payment to related party....
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 extraordinary item.... (315,151) (8,994) (31,388) (9,497) 20,255 (344,775)
Extraordinary item:
Loss on redemption of debt....... (40,457)(23) (40,457)
---------- ------- -------- -------- -------- ----------
Net loss.......................... (315,151) (8,994) (31,388) (9,497) (20,202) (385,232)
Preferred stock dividend
requirement.................... (6,385) (43,403)(24) (49,788)
---------- -------- ----------
Net loss applicable to
common shareholders............ $(321,536) $(8,994) $ (31,388) $(9,497) $(63,605) $ (435,020)
========== ======= ======== ======== ======== ==========
Loss per common
share before extraordinary item.. $(13.72) $(16.42)
Extraordinary item................ - (1.68)
---------- ----------
Net loss per common share......... $(13.72) $(18.10)
========== ==========
Average number of
common shares
outstanding (in
thousands)................. 23,444 593 (19) 24,037
========== ======== ==========
</TABLE>
* See Note B of Notes to Condensed Pro Forma Consolidated Financial Statements.
-9-
<PAGE>
Consolidated Pro Forma Consolidated Statement of Operations
For the Six Months Ended June 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.......................................... $ 509,135 $ 30,671 (27) $ 37,892 (30) $ 577,698
---------- -------- -------- ---------
Operating expenses:
Technical............................................ 193,243 14,334 (27) 16,596 (30) 224,173
Selling, general and administrative.................. 131,611 9,510 (27) 11,004 (30) 151,035
(1,090)(28)
Depreciation and amortization........................ 159,537 4,421 (27) 19,560 (30) 187,419
5,519 (28) (1,618)(34)
---------- -------- -------- ---------
484,391 32,694 45,542 562,627
---------- -------- -------- ---------
Operating profit (loss)............................... 24,744 (2,023) (7,650) 15,071
Other income (expense)
Interest expense..................................... (155,318) (5,397)(27) (12,642)(30) (137,566)
1,753 (29) 30,477 (31)
3,561 (33)
Interest income...................................... 790 162 (27) 38 (30) 990
Share of affiliates' net income (loss)............... (52,692) 2,840 (30) (49,852)
Write off of deferred financing costs................ (2,888) (2,888)
Provision for preferential payment to related party.. (2,800) (2,800)
Minority interest.................................... (4,276) (4,276)
Miscellaneous, net................................... (2,999) (89)(27) (237)(30) (3,325)
---------- -------- -------- ---------
Net loss.............................................. (195,439) (5,594) 16,387 (184,646)
Preferred stock dividend requirement.................. (4,918) (21,075)(32) (25,993)
---------- -------- -------- ---------
Net loss applicable to common shareholders............ $(200,357) $(5,594) $ (4,688) $(210,639)
========== ======== ======== =========
Net loss per common share............................. $(8.45) $(8.67)
========== =========
Average number of common shares outstanding
(in thousands)..................................... 23,710 593 (27) 24,303
========== ======== =========
</TABLE>
* See Note C of Notes to Condensed Pro Forma Consolidated Financial Statements.
NOTE A--NOTES TO CONDENSED PRO FORMA BALANCE SHEET AS OF JUNE 30, 1995
CABLEVISION OF BOSTON ACQUISITION
(1) As a result of the 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
$80,773,000 to be used to refinance Cablevision of Boston's bank debt and
accrued interest thereon of $61,106,000 and repay amounts owed to Mr .
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<PAGE>
Dolan aggregating $19,667,000 for management fees, loans, accrued interest
thereon and preferred equity and (d) the excess ($114,188,000) 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 ($1,225,000) (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.
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
$33,617,000 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 ($133,610,000) 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
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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.
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(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 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 acquisition of Cablevision of Boston (and related
issuance of approximately 593,000 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 (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 $11,296,000 for the
period, offset by the elimination of amortization of previous intangibles
of $258,000 and the elimination from selling, general and administrative
expenses of management fees payable by Cablevision of Boston to Cablevision
Systems Services Corporation ($2,092,000).
(21) Represents interest expense of $7,188,000 attributable to $80,773,000 of
bank debt (8.9% interest rate) reduced by pre-
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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 of $37,939,000 for the
period, offset by the elimination of pre-acquisition depreciation and
amortization of $41,861,000.
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NOTE C -- NOTES TO CONDENSED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR
THE SIX MONTHS ENDED JUNE 30, 1995
CABLEVISION OF BOSTON ACQUISITION
(27) As a result of the acquisition of Cablevision of Boston (and related
issuance of approximately 593,000 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 six months ended June 30, 1995.
(28) Represents the amortization, based on an average 10-year life, of the
excess cost over fair value of assets acquired of $5,648,000 for the
period, offset by the elimination of amortization of previous intangibles
of $129,000 and the elimination from selling, general and administrative
expenses of management fees payable by Cablevision of Boston to Cablevision
Systems Services Corporation ($1,090,000).
(29) Represents interest expense of $3,565,000 attributable to $80,773,000 of
bank debt (8.9% interest rate) reduced by pre-acquisition interest expense
of $5,318,000 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 six months ended June 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 $23,672,000, at an average
interest rate of 10.6%, 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 $6,805,000 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
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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 six months ended June 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 of $17,942,000 for the
period, offset by the elimination of pre-acquisition depreciation and
amortization of $19,560,000.
(c) Exhibits
(99) Press release, dated October 16, 1995.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABLEVISION SYSTEMS CORPORATION
By: /s/ Barry J. O'Leary
_____________________________________
Barry J. O'Leary
Senior Vice President, Finance
and Treasurer
Dated: October 16, 1995
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EXHIBIT 99
NEWS FROM
[LOGO] CABLEVISION
================================================================================
CABLEVISION SYSTEMS CORPORATION NAMES JAMES L. DOLAN
CHIEF EXECUTIVE OFFICER
Charles Dolan to Remain Chairman of the Board
Woodbury, NY, October 16, 1995 -- Cablevision Systems Corporation (AMEX:CVC)
today named James L. Dolan Chief Executive Officer of the company, the nation's
sixth largest operator of cable television systems. The announcement was made by
Cablevision founder Charles F. Dolan, who will remain Chairman of the Board.
James Dolan has most recently served as CEO of Rainbow Programming Holdings,
Inc., a wholly-owned subsidiary of Cablevision that manages the operations of
cable program networks including American Movie Classics (AMC), Bravo, the
SportsChannel Regional Network, and News 12. He is a member of Cablevision's
Board of Directors as well as its Executive Committee. Prior to his role at
Rainbow, James Dolan held various senior management positions within the
company.
Cablevision Chairman Charles Dolan said, "I am very enthusiastic that Jim, with
his knowledge and expertise in a broad range of cable's current businesses, has
agreed to take the helm at Cablevision. My pride in Jim's appointment is added
to my confidence in the depth and breadth of talent throughout our senior
management. Today, I am more convinced than ever of Cablevision's bright future
in the rapidly evolving world of telecommunications."
Commencing on his appointment, James Dolan said, "The future holds both great
opportunities and great challenges for communications companies. Cablevision is
positioned well for that future. Our goal will be to provide our customers with
the greatest possible choice, by creating quality programming and services,
delivered through state-of-the-art technology."
Effective immediately, James Dolan will assume responsibility for all of
Cablevision's business units, including Rainbow Programming, Cablevision's Cable
Operations Group and the company's telephone subsidiary, Cablevision Lightpath,
Inc.
(more)
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Cablevision - Page 2
James Dolan also observed, "For decades, my father has managed this company
with a mix of entrepreneurial spirit and creative insight. Our close
relationship and our constant communication with each other guarantee that we
share a vision for Cablevision's future. As CEO, it will be my top priority to
continue making that shared vision a reality for the company."
In 1992, James Dolan was named CEO of Rainbow, having been elected to the
Cablevision Board of Directors a year earlier. In that position, Mr. Dolan has
overseen Rainbow's Programming, Advertising and Technical Services Divisions.
Under his leadership, Rainbow has grown steadily, and today stands at the
forefront of creating and delivering high quality niche programming to
television viewers. Rainbow's most recent developments include the launches of
three cutting-edge entertainment services -- MuchMusic, NewSport and The
Independent Film Channel. This year, Rainbow's News 12 Long Island provided the
inspiration for News 12 Connecticut and News 12 New Jersey.
James Dolan has held positions of ever-increasing responsibility since joining
Cablevision nearly two decades ago. He rose through the ranks of local cable
system management and local advertising sales, before taking a leadership role
at Cablevision's regional cable advertising sales firm, Rainbow Advertising
Sales Company. His foresight helped Cablevision to develop Rainbow Advertising
Sales as the first cable advertising sales division in the industry, and has
propelled that unit to the front ranks of its business. Following his successful
leadership in this role, he was named CEO of Rainbow. He is Cablevision's
representative on the Board of the National Cable Television Association and
serves on its Regulatory Policy Board. Mr. Dolan also serves on the Board of
Governors of the National Hockey League.
The father of five children, James Dolan is a dedicated yachtsman and an avid
musician. He serves on the Capital Campaign Committee of Friends Academy, and
resides in Oyster Bay, New York.
Cablevision Systems Corporation is the nation's sixth largest operator of cable
television systems, serving 2.6 million customers in 19 states, with major
operations in Boston, Cleveland, and the New York Metropolitan area, where
Cablevision has 1.4 million customers. Rainbow Programming Holdings, Inc., a
subsidiary of Cablevision Systems, manages the operations of Rainbow Advertising
Sales as well as Rainbow Network Communications, AMC, Bravo, The Independent
Film Channel, MuchMusic, Prime Network, NewSport, the SportsChannel Regional
Network and News 12 Long Island, Connecticut and New Jersey.
# # #
CONTACT: Charles Schueler
(516) 496-1399
