AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 11, 1999
REGISTRATION NO. 333-84449
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CSC HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 4841 11-2776686
State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
1111 STEWART AVENUE
BETHPAGE, NEW YORK 11714
(516) 803-2300
(Address, including zip code, and
telephone number,
including area code, of
the registrant's
principal executive
offices)
ROBERT S. LEMLE, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
1111 STEWART AVENUE
BETHPAGE, NEW YORK 11714
(516) 803-2300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPY TO:
JOHN P. MEAD, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFER TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement. If the
securities being registered on this form are being offered in connection with
the formation of a holding company and there is compliance with General
Instruction G, check the following box. |_| If this form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. |_|_________ If this form is a post-effective amendment filed pursuant
to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|______
------------------------------
================================================================================
<PAGE>
PROSPECTUS
CSC HOLDINGS, INC.
OFFER TO EXCHANGE
$500,000,000
8 1/8% SERIES B SENIOR NOTES DUE 2009
WHICH HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
FOR
ALL OUTSTANDING UNREGISTERED
8 1/8% SENIOR NOTES DUE 2009
We are offering to exchange $500,000,000 aggregate principal amount of the
outstanding, unregistered CSC Holdings 8 1/8 % Senior Notes due 2009 that you
now hold for new, substantially identical 8 1/8% Series B Senior Notes due 2009
that will be free of the transfer restrictions of the old notes. THIS OFFER WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON September 13, 1999, UNLESS WE EXTEND
THE DEADLINE. You must tender your old, unregistered notes by the deadline to
obtain new, registered notes and the liquidity benefits the new notes offer.
We agreed with the initial purchasers of the old notes to make this offer
and to register the issuance of the new notes after the initial sale of the old
notes. This offer applies to any and all old notes tendered by the deadline.
We will not list the new notes on any established exchange. The new notes
will have the same financial terms and covenants as the old notes, and are
subject to the same business and financial risks.
SEE "RISK FACTORS" BEGINNING ON PAGE 14 FOR A DISCUSSION OF THE FACTORS
THAT YOU SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER AND AN EXCHANGE
OF OLD NOTES FOR NEW NOTES.
Neither the SEC nor any state securities commission has approved or
disapproved of these securities or passed on the adequacy or accuracy of this
prospectus. It is illegal for anyone to tell you otherwise.
The date of this prospectus is August 11, 1999.
<PAGE>
TABLE OF CONTENTS
PAGE
----
Additional Information About CSC Holdings................................3
Summary..................................................................4
Risk Factors............................................................14
Forward-Looking Statements..............................................23
Use of Proceeds.........................................................23
CSC Holdings, Inc.......................................................24
Recent Developments.....................................................26
The Exchange Offer......................................................29
How to Tender Your Old Notes............................................34
Description of the New Notes............................................43
Material U.S. Federal Income Tax Considerations.........................60
Plan of Distribution....................................................60
Validity of the New Notes...............................................62
Experts.................................................................62
Available Information...................................................62
Where You Can Find More Information.....................................62
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<PAGE>
ADDITIONAL INFORMATION ABOUT CSC HOLDINGS
This document incorporates important business and financial information
about CSC Holdings from documents that are not included in or delivered with
this document. You can obtain documents incorporated by reference in this
document, other than some exhibits to those documents, by requesting them in
writing or by telephone from us at the following:
CSC HOLDINGS, INC.
1111 STEWART AVENUE
BETHPAGE, NEW YORK 11714
ATTENTION: SECRETARY
(516) 803-2300
YOU WILL NOT BE CHARGED FOR ANY OF THE DOCUMENTS THAT YOU REQUEST. IF YOU
WOULD LIKE TO REQUEST DOCUMENTS, PLEASE DO SO BY September 1, 1999 IN ORDER TO
RECEIVE THEM BEFORE THE EXCHANGE OFFER EXPIRES ON September 13, 1999.
See "Where You Can Find More Information" below to learn how you can obtain
this additional information.
WE ARE NOT MAKING THIS EXCHANGE OFFER TO, NOR WILL WE ACCEPT SURRENDERS FOR
EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH THE EXCHANGE
OFFER WOULD VIOLATE SECURITIES OR BLUE SKY LAWS.
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<PAGE>
SUMMARY
This brief summary highlights selected information contained in this
document and documents we have incorporated in this document by reference. It
does not contain all of the information that is important to you. We urge you to
read carefully the entire document, the documents incorporated in this document
by reference and the other documents to which this document refers, including
our consolidated financial statements and the notes to those financial
statements, which are incorporated in this document by reference.
CSC HOLDINGS, INC.
We are one of the largest operators of cable television systems in the
U.S., with about 2,591,000 subscribers in six states as of March 31, 1999, based
on the number of basic subscribers in systems that we currently majority own and
manage. Giving effect to the contribution of the contributed business
subsidiaries on April 5, 1999, described under "Recent Developments" below, we
would have served about 3,438,000 cable television subscribers as of March 31,
1999. We also have ownership interests in companies that produce and distribute
national and regional programming services and provide advertising sales
services for the cable television industry and in the Madison Square Garden
sports and entertainment business, also known as "MSG".
For financing purposes, we are structured as a Restricted Group and an
Unrestricted Group. Our Restricted Group includes:
o all of our cable operations, which are located primarily in and around
metropolitan New York City, including Long Island, in and around the
greater Cleveland, Ohio metropolitan area and in and around Boston,
Massachusetts and
o the commercial telephone operations of our subsidiary, Cablevision
Lightpath, Inc., on Long Island, New York.
Our Unrestricted Group includes:
o Rainbow Media, our 75%-owned subsidiary that conducts our programming
and entertainment activities and includes AMC, Bravo, a 60% general
partnership interest in Regional Programming Partners, a 50% general
partnership interest in National Sports Partners and a 50% general
partnership interest in National Advertising Partners,
o Rainbow Advertising, which sells advertising time on behalf of our
cable television systems, some of Rainbow Media's programming networks
and some unaffiliated cable television systems,
o CSC Technology, Inc., our subsidiary engaged in research and
development of new technology,
o Cablevision Electronics Investments, Inc., doing business as The Wiz,
o CSC At Home Holding Corporation, our subsidiary that holds warrants to
acquire about 10.2 million shares of common stock of At Home
Corporation,
o Cablevision Cinemas, LLC, doing business as Clearview Cinemas, and
o an interest in an entity that holds some licenses to conduct a
personal communications service business.
Our principal executive offices are located at 1111 Stewart Avenue,
Bethpage, New York 11714, and our main telephone number is (516) 803-2300.
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<PAGE>
RECENT DEVELOPMENTS
Under "Recent Developments" below, we describe some pending and recently
completed transactions, including the contribution made to us of some cable
television systems acquired by our parent company, Cablevision Systems
Corporation, which we sometimes refer to as "Cablevision", from
TeleCommunications, Inc., now part of AT&T Corp. (the "Contribution of the
Contributed Business Subsidiaries").
THE EXCHANGE OFFER
THE EXCHANGE OFFER We are offering to exchange $1,000 principal amount of
our 8 1/8% Series B Senior Notes due 2009 registered
under the Securities Act of 1933, which we refer to as
"new notes", for each $1,000 principal amount of our
outstanding 8 1/8% Senior Notes due 2009 issued on July
13, 1999 in a private offering, which we refer to as
"old notes". In order to exchange an old note, you must
follow the required procedures and we must accept the
old note for exchange. We will exchange all notes
validly offered for exchange, or "tendered", and not
validly withdrawn. As of the date of this document,
there is $500 million aggregate principal amount of old
notes outstanding.
EXPIRATION AND Our offer expires at 5:00 p.m., New York City time,
EXCHANGE DATES on September 13, 1999, unless we extend the deadline.
We will complete the exchange and issue the new notes as
soon as possible after that date.
ACCRUED INTEREST ON The new notes will bear interest from July 13, 1999,
THE NEW NOTES AND the date we issued issued the old notes. If you hold
THE OLD NOTES old notes and they are accepted for exchange:
o you will waive your right to receive any interest
on your old notes accrued from July 13, 1999 to
the date the new notes are issued
and
---
o you will receive the same interest payment on
January 15, 2000, which is the first interest
payment date with respect to the old notes and the
new notes, that you would have received had you
not accepted the exchange offer.
REGISTRATION RIGHTS You have the right to exchange old notes that you now
hold for new notes. We intend to satisfy this right by
this exchange offer. The new notes will have
substantially identical terms to the old notes, except
the new notes will be registered under the Securities
Act and will not have any registration rights. After the
exchange offer is complete, you will no longer be
entitled to any exchange or registration rights with
respect to your notes.
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<PAGE>
CONDITIONS The only condition to this offer is that the exchange
offer does not violate the securities laws. This offer
applies to any and all notes validly tendered by the
deadline.
RESALE WITHOUT FURTHER We believe that you may offer for resale, resell and
REGISTRATION otherwise transfer the new notes without complying with
the registration and prospectus delivery provisions of
the Securities Act if the following is true:
o you acquire the new notes issued in the exchange
offer in the ordinary course of your business,
o you are not an "affiliate", as defined under Rule
405 of the Securities Act, of CSC Holdings and
o you are not participating, and do not intend to
participate, and have no arrangement or
understanding with any person to participate, in
the distribution of the new notes issued to you in
the exchange offer.
By signing the letter of transmittal and exchanging your
notes as described below, you will be making
representations to this effect.
If you are a broker-dealer that acquired old notes as a
result of market-making or other trading activities, you
must deliver a prospectus in connection with any resale
of the new notes as described in this summary under
"--Restrictions on Sale by Broker-Dealers" below.
We base our belief on interpretations by the SEC staff
in no-action letters issued to other issuers in exchange
offers like ours. We cannot guarantee that the SEC would
make a similar decision about our exchange offer. If our
belief is wrong, you could incur liability under the
Securities Act. We will not protect you against any loss
incurred as a result of this liability under the
Securities Act.
LIABILITY UNDER THE You also may incur liability under the Securities Act
SECURITIES ACT if:
(1) any of the representations listed above are not
true and
(2) you transfer any new note issued to you in the
exchange offer without:
o delivering a prospectus meeting the
requirements of the Securities Act
or
--
o an exemption from the requirements of the
Securities Act to register your new notes.
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<PAGE>
We will not protect you against any loss incurred as a
result of this liability under the Securities Act.
RESTRICTIONS ON SALE If you are a broker-dealer that has received new notes
BY BROKER-DEALERS for your own account in exchange for old notes that were
acquired as a result of market-making or other trading
activities, you must acknowledge in a letter of
transmittal that you will deliver a prospectus meeting
the requirements of the Securities Act in connection
with any resale of the new notes. A broker-dealer may
use this prospectus for 90 days after the last exchange
date for an offer to resell, a resale or other
retransfer of the new notes issued to it in the exchange
offer.
PROCEDURES FOR If you hold old notes and want to accept the exchange
TENDERING OLD NOTES offer, you must either:
o complete, sign and date the accompanying letter of
transmittal, and deliver it, together with your
old notes and any other required documents, to the
exchange agent
or
--
o if you hold old notes registered in the name of a
broker-dealer, arrange for The Depository Trust
Company to give the exchange agent the required
information for a book-entry transfer.
You must mail or otherwise deliver this documentation or
information to The Bank of New York, as exchange agent,
or The Depository Trust Company at the address under
"How to Tender Your Old Notes--Exchange Agent" below.
SPECIAL PROCEDURES If you hold old notes registered in the name of a
FOR BENEFICIAL OWNERS broker-dealer, commercial bank, trust company or other
nominee and you wish to exchange your old notes in the
exchange offer, you should promptly contact the
registered holder of the old notes and instruct it to
tender on your behalf.
If you wish to tender on your own behalf, you must,
before completing and executing the letter of
transmittal for the exchange offer and delivering your
old notes, either arrange to have your old notes
registered in your name or obtain a properly completed
bond power from the registered holder. The transfer of
registered ownership may take a long time.
FAILURE TO EXCHANGE If you are eligible to participate in the exchange offer
WILL AFFECT and you do not tender your old notes, you will not have
YOU ADVERSELY any further registration or exchange rights and your old
notes will continue to be subject to transfer
restrictions. These transfer restrictions and the
availability of new notes could adversely affect the
trading market for your old notes.
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<PAGE>
GUARANTEED DELIVERY If you wish to exchange your old notes and:
PROCEDURES
o you cannot send the required documents to the
exchange agent by the expiration date of the
exchange offer
or
--
o you cannot complete the procedure for book-entry
transfer on time
or
--
o your old notes are not immediately available,
then you must follow the procedures described under "How
to Tender Your Old Notes--Guaranteed Delivery
Procedures" below.
WITHDRAWAL RIGHTS You may withdraw your tender at any time before
5:00 p.m., New York City time, on September 10, 1999,
unless we have already accepted your offer to exchange
your old notes.
ACCOUNTING We will not recognize a gain or loss for accounting
TREATMENT purposes as a result of the exchange.
FEDERAL INCOME TAX The exchange will not be a taxable event for U.S.
CONSEQUENCES federal income tax purposes. This means you will not
recognize any taxable gain or loss or any interest
income as a result of the exchange.
EXCHANGE AGENT The Bank of New York is the exchange agent for the
exchange offer. The Bank of New York is also the trustee
under the indenture governing the notes.
ABSENCE OF APPRAISAL As a holder of old notes, you are not entitled to
RIGHTS appraisal or dissenters' rights under Delaware law, the
indenture governing the old notes or the indenture that
will govern the new notes. See "The Exchange
Offer--Terms of the Exchange Offer--No Appraisal or
Dissenters' Rights" for more information.
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<PAGE>
THE NEW NOTES
The new notes have the same financial terms and covenants as the old notes.
In this document, we sometimes refer to the old notes and the new notes together
as the "notes". The terms of the new notes are as follows:
ISSUER CSC Holdings, Inc.
SECURITIES OFFERED $500,000,000 principal amount of 8 1/8% Series B Senior
Notes due 2009.
MATURITY July 15, 2009.
INTEREST RATE 8 1/8% per year.
INTEREST PAYMENT DATES Interest on the old notes began accruing on July 13,
1999, the date we issued the old notes. Interest is
payable on the old notes, and will be payable on the new
notes on January 15 and July 15 of each year.
As of the date of this document, no interest payments
have been made on the old notes. The first interest
payment date for the new notes will be January 15, 2000.
RANKING The new notes will be senior unsecured obligations of
CSC Holdings and will rank equally in right of payment
with all of our other existing and future unsubordinated
indebtedness. All of our secured indebtedness will have
a prior claim with respect to the assets securing that
indebtedness.
The liabilities, including trade payables,
of our subsidiaries will have a prior claim with respect
to the assets of those subsidiaries. In that regard,
some of our subsidiaries have guaranteed our
indebtedness under our principal bank credit agreement,
but these subsidiaries will not be guarantors of the new
notes.
As of March 31, 1999, after giving effect to the
Contribution of the Contributed Business Subsidiaries,
the sale of the old notes and the application of the net
proceeds from the sale of the old notes on July 13,
1999:
o we would have had $94 million in borrowings under
our credit agreement, $2,692 million of senior
unsecured indebtedness, $1,048 million of senior
subordinated indebtedness and obligations and $10
million of capitalized leases, other than
guarantees of subsidiary debt discussed below,
o subsidiaries in our Restricted Group would have
had $923 million of indebtedness and capitalized
leases, in addition to the guarantees of
borrowings under our credit agreement, and
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<PAGE>
o subsidiaries in our Unrestricted Group would have
had $782 million of indebtedness and capitalized
leases.
We have guaranteed all of the indebtedness of the
subsidiaries in our Restricted Group on a senior basis.
RESTRICTIONS The indenture for the notes, among other things,
restricts our ability and the ability of our Restricted
Subsidiaries to:
o incur additional indebtedness,
o make some dividend payments or payments to redeem
or retire capital,
o invest in unrestricted subsidiaries or affiliates,
o engage in some transactions with affiliates,
o incur liens and
o merge or consolidate with or transfer all or
substantially all of our assets.
These covenants are described in greater detail under
"Description of the New Notes" below. These covenants
are subject to important exceptions and qualifications,
which are also described under "Description of the New
Notes" below.
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<PAGE>
SELECTED FINANCIAL DATA
CSC HOLDINGS, INC.
The historical consolidated statement of operations data, except for the
deficiency of earnings available to cover fixed charges and the ratio of
earnings to fixed charges, and consolidated balance sheet data for each year
ended and as of December 31 in each year in the five-year period ended December
31, 1998, included in the following selected financial data, have been derived
from our consolidated financial statements, audited by KPMG LLP, independent
certified public accountants. The historical consolidated statement of
operations data for the periods ended March 31, 1999 and 1998 and balance sheet
data as of March 31, 1999, included in the following selected financial data,
have been derived from our financial statements that have not been audited, but
that, in the opinion of our management, reflect all adjustments necessary for
the fair presentation of that data for the interim periods. The results of
operations for the three-month period ended March 31, 1999 are not necessarily
indicative of the results of operations for the full year, although we expect
that we will incur a substantial loss for the year ending December 31, 1999.
<TABLE>
<CAPTION>
Three Months Ended Year Ended
March 31, December 31,
------------------------------------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
==== ==== ==== ==== ==== ==== ====
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS
DATA(1):
Revenues............................... $824,984 $645,382 $2,912,419 $1,949,358 $1,315,142 $1,078,060 $837,169
Operating expenses:
Technical and operating............. 360,963 300,703 1,133,804 853,800 538,272 412,479 302,885
Cost of sales(2).................... 104,797 31,316 390,751 - - - -
Selling, general and administrative. 308,704(3) 189,181 820,015 514,574 313,476 266,209 195,942
Restructuring charge.............. - - - - - - 4,306(4)
Depreciation and amortization..... 157,781 135,049 577,635 499,809 388,982 319,929 271,343
--------- -------- ---------- ---------- ---------- --------- ---------
Operating profit (loss)................ (107,261) (10,867) (9,786) 81,175 74,412 79,443 62,693
Other income (expense):
Interest expense, net............... (98,238) (87,795) (369,072) (363,208) (265,015) (311,887) (261,781)
Provision for preferential payment
to related party.................. - (980) (980) (10,083) (5,600) (5,600) (5,600)
Write-off of deferred interest and
financing costs(5)................ - - (23,482) (24,547) (37,784) (5,517) (9,884)
Gain on redemption of subsidiary
preferred stock................... - - - 181,738(6) - - -
Loss on redemption of debentures(5). - - - - - - (7,088)
Equity in net loss of affiliates.... (3,395) (13,865) (37,368) (27,165) (82,028) (93,024) (82,864)
Gain on sale of programming interests
and cable assets, net............. - 137,268 171,127 372,053 - 35,989 -
Minority interests.................. 25,825 82 48,378 (60,694) (9,417) (8,637) (3,429)
Miscellaneous, net.................. (3,483) (8,209) (18,350) (12,606) (6,647) (8,225) (7,198)
--------- -------- ---------- ---------- ---------- --------- --------
Net income (loss)..................... (186,552) 15,634 (239,533) 136,663 (332,079) (317,458) (315,151)
Dividend requirements applicable
to preferred stock................ (42,843) (39,095) (161,872) (148,767) (127,780) (20,249) (6,385)
--------- -------- ---------- ---------- ---------- --------- ---------
Net loss applicable to common
stockholder....................... $(229,395) $(23,461) $(401,405) $(12,104) $(459,859) $(337,707) $(321,536)
========== ========= ========== ========= ========== ========== =========
Deficiency of earnings available to
cover fixed charges............... $(186,552) $ - $(239,533) $ - $(332,079) $(317,458) $(315,151)
========== ========= ========== ========= ========== ========== =========
Ratio of earnings to fixed charges.... - 1.16x - 1.36x - - -
========== ========= ========== ========= ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
As of
March 31, As of December 31,
------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
==== ==== ==== ==== ==== ====
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET
DATA(1):
Total assets....................... $5,935,369 $5,935,860 $5,614,788 $3,034,725 $2,502,305 $2,176,413
Total debt......................... 5,062,347 4,834,608 4,694,062 3,334,701 3,157,107 3,169,236
Redeemable preferred stock......... 1,291,847 1,256,339 1,123,808 1,005,265 257,751 -
Stockholder's deficiency........... (3,053,748) (2,824,353) (2,378,773) (2,374,285) (1,891,676) (1,818,535)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
As of
March 31, As of December 31,
------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
==== ==== ==== ==== ==== ====
(Dollars in thousands, except average monthly revenue data
<S> <C> <C> <C> <C> <C> <C>
STATISTICAL DATA(1):
Homes passed(7).................... 3,957,000 3,949,000 4,398,000 3,858,000 3,328,000 2,899,000
Basic service subscribers.......... 2,591,000 2,569,000 2,844,000 2,445,000 2,061,000 1,768,000
Basic penetration(8)............... 65.5% 65.0% 64.7% 63.4% 61.9% 61.0%
Number of premium television
units............................ 4,612,000 4,234,000 4,183,000 3,862,000 3,990,000 3,208,000
Average number of premium units
per basic subscriber............. 1.8 1.7 1.5 1.6 1.9 1.8
Average monthly revenue per
basic subscriber(9).............. $44.51 $42.74 $38.53 $36.71 $37.07 $36.33
FINANCIAL RATIO AND OTHER DATA:
Operating profit before
depreciation and amortization
to revenues...................... 6.1% 19.5% 29.8% 35.2% 37.0% 39.9%
Total debt to operating profit
before depreciation and
amortization..................... 25.1x(10) 8.5x 8.1x 7.2x 7.9x 9.5x
Operating profit before
depreciation and amortization
to interest expense.............. 0.5x 1.5x 1.6x 1.7x 1.3x 1.3x
- ----------------------------------
<FN>
(1) The consolidated statement of operations, balance sheet, statistical, financial ratio and other data reflect various
acquisitions of cable television systems and other businesses during the periods presented, but do not include the cable
television systems transferred to us by Cablevision on April 5, 1999. See "Business--Cable Television Operations" in our
Form 10-K and our financial statements in our March 31, 1999 Form 10-Q for a description of these acquisitions and the
April 5, 1999 transfer. Acquisitions 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.
Acquisitions are reflected in the consolidated statement of operations, balance sheet, statistical, financial ratio and
other data from the time of acquisition.
(2) Beginning with the acquisition of the assets associated with The Wiz consumer electronics store locations in February
1998, we record cost of sales related to these operations, which includes the cost of merchandise sold, including
associated freight costs, as well as store occupancy and buying costs.
(3) Approximately $78.9 million of the increase in selling, general and administrative expenses in the first quarter of 1999
compared to the first quarter of 1998 was due to a higher level of charges related to our incentive stock plan, primarily
attributable to an increase in the market price of Cablevision's Class A common stock.
(4) We recorded a one-time charge in the first quarter of 1994 to provide for employee severance and related costs resulting
from a restructuring of our operations.
(5) In October 1994, we entered into a new bank credit agreement and redeemed $200 million of our reset debentures. The
related deferred financing costs and unamortized discount relating to each were written off (the portions relating to
Cablevision of NYC and Cablevision of New Jersey amounting to $3.2 million were written off in 1995) and charges of
approximately $2.0 million in redemption fees, $4.5 million in deferred financing costs and $0.6 million in unamortized
discount were recorded in connection with the redemption of the reset debentures. In January 1995, Rainbow Media amended
its credit agreement to refinance its existing borrowings and to provide funds for the acquisition of the third-party
interests in SportsChannel New York and Rainbow News 12, resulting in an approximate $2.3 million write-off of deferred
financing costs. In April 1996, we wrote off approximately $24.0 million of deferred interest and financing costs in
connection with the refinancing of all indebtedness of V Cable and VC Holding, Inc. and the formation of Cablevision of
Ohio. In September 1996, we wrote off approximately $10.3 million of deferred financing costs in connection with the
refinancing of our credit agreement, and in the fourth quarter of 1996, an additional $3.1 million of deferred financing
costs relating to our MFR subsidiary were written off in connection with a reorganization and refinancing of Cablevision
MFR, Inc. In July 1997, we paid a premium of approximately $8.4 million to redeem our 10 3/4% Senior Subordinated
Debentures due 2004 and wrote off deferred financing costs of approximately $5.3 million in connection therewith. Also in
1997, we wrote off deferred financing costs of $4.1 million in connection with the repayment of Cablevision of Ohio's bank
debt and $6.5 million in connection with the amendment to and repayment of the term loans under the Madison Square Garden
credit facility. In 1998, we paid a premium of $14.9 million to redeem the senior notes assumed by our Cablevision Cinemas
subsidiary in the Clearview Cinemas acquisition and wrote off deferred financing costs of $4.7 million in connection with
the refinancing of our credit agreement.
(6) In July 1997, we redeemed the Series A preferred stock of A-R Cable and recognized a gain principally representing the
reversal of accrued preferred dividends in excess of amounts paid.
</FN>
</TABLE>
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(footnotes continued from previous page)
(7) Homes passed is based on 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 month of March or December, as the case may be, divided
by the average number of basic subscribers for that month.
(10) Operating profit before depreciation and amortization is annualized for
purposes of preparing interim financial ratios that include balance sheet
items.
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RISK FACTORS
You should consider carefully the risk factors described below, together
with the other matters described in this document or incorporated by reference,
before deciding to exchange your old notes for new notes. The risk factors below
apply to both the old notes and the new notes.
RISK FACTORS RELATING TO THE NOTES
WE HAVE SUBSTANTIAL INDEBTEDNESS AND WE ARE HIGHLY LEVERAGED AS A RESULT
We have incurred, and we will continue to incur in the future, substantial
amounts of indebtedness to finance operations, expand cable operations and
acquire other cable television systems, programming networks, sources of
programming and other businesses. We also have incurred, and we will continue to
incur, indebtedness in order to offer new services like high speed Internet
access, digital video service and residential telephone service to present and
potential customers. In addition, we have borrowed, and we will continue to
borrow, money from time to time to refinance existing indebtedness and redeem
our mandatorily redeemable preferred stock. At March 31, 1999, our consolidated
debt plus the amount of our two series of mandatorily redeemable preferred stock
totaled $6.4 billion. We urge you to read carefully our consolidated financial
statements contained in our Form 10-K and our March 31, 1999 Form 10-Q, which
provide more detailed information about our indebtedness and our mandatorily
redeemable preferred stock.
Because of our substantial indebtedness and mandatorily redeemable
preferred stock, we are highly leveraged. This means that interest on and
required repayments of our borrowings and dividends on and required redemption
amounts with respect to our mandatorily redeemable preferred stock are
significant in relation to our revenues and cash flow. This leverage exposes us
to significant risk in the event of downturns in our businesses, in our
industries or in the economy generally, because although our cash flows would
decrease in this scenario, our required payments in respect of indebtedness and
preferred stock will not.
THE NEW NOTES WILL BE EFFECTIVELY SUBORDINATED TO ALL EXISTING AND FUTURE
INDEBTEDNESS OF OUR SUBSIDIARIES
We are a holding company whose assets consist primarily of investments in
subsidiaries. Our principal subsidiaries own cable television systems, own
interests in programming networks and own or operate retail electronics stores
and motion picture theaters. Our ability to pay interest on and repay principal
of their indebtedness and to make dividend payments on, and redemptions of, our
preferred stock is dependent primarily on the earnings of our subsidiaries and
the distribution or other payment of these earnings to us in the form of
dividends, loans or advances.
Our subsidiaries are separate and distinct legal entities and have no
obligation, contingent or otherwise, to pay any amounts due on our public
indebtedness or preferred stock or to make any funds available to us to do so.
Rainbow Media and some of its subsidiaries are parties to credit agreements that
contain various financial and operating covenants that restrict the payment of
dividends or other distributions.
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In addition, our subsidiaries' creditors would be entitled to a claim on
the assets of these subsidiaries before any of our claims as a stockholder.
Therefore, in the event of a liquidation or reorganization of any subsidiary,
creditors of that subsidiary are likely to be paid in full before we receive any
distribution. To the extent that we are a creditor of the subsidiary, our claims
would be subordinated to any security interest in the assets of the subsidiary
and/or any indebtedness of the subsidiary senior to that held by us.
WE MAY SEPARATE RAINBOW MEDIA FROM CSC HOLDINGS AND IF WE DO SO, RAINBOW MEDIA'S
CASH FLOW WOULD NO LONGER BE AVAILABLE TO SUPPORT OUR PAYMENTS
Under our existing debt instruments, we are permitted under some
circumstances to restructure our holdings so that our subsidiary, Rainbow Media,
would become a separate subsidiary of Cablevision and would no longer be our
subsidiary. If we did this, Rainbow Media's cash flow and assets would no longer
be available to support payments due with respect to our securities, including
the notes. Therefore, you should not assume that Rainbow Media's cash flow and
assets will be available to support any of our securities, including the notes,
in the future.
SIGNIFICANT RESTRICTIVE COVENANTS IN OUR FINANCING AGREEMENTS LIMIT OUR
FLEXIBILITY
Our credit agreement and some of our debt instruments contain various
financial and operating covenants which, among other things, require the
maintenance of some financial ratios and restrict the relevant borrower's
ability to incur debt from other sources and to use funds for various purposes,
including investments in some subsidiaries. Violation of these covenants could
result in a default which would permit the parties who have lent money under our
credit agreement and other debt instruments to:
o restrict our ability to borrow undrawn funds under our credit agreement
and
o require the immediate repayment of the borrowings under our credit
agreement and other debt instruments.
THERE IS NO PUBLIC MARKET FOR THE NOTES
Before the offering of the notes, there has been no public market for the
notes. We do not intend to apply for the listing of the notes on any securities
exchange or for quotation of the notes on any automated quotation system. We
have been advised by the initial purchasers that they presently intend to make a
market in the new notes and the old notes, as permitted by applicable laws and
regulations. The initial purchasers are not obligated, however, to make a market
in the new notes. Any market making activity may be discontinued at any time
without notice at the sole discretion of each initial purchaser. This
market-making activity will be restricted by limitations imposed by the
Securities Act and the Exchange Act, and may be limited during our exchange
offer for the notes.
We cannot assure you as to the liquidity of the public market for the new
notes or that an active public market for the new notes will develop. If an
active public market does not develop, the market price and liquidity of the new
notes may be adversely affected. Please refer to "Plan of Distribution" below.
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Historically, the market for non-investment grade debt has been affected by
disruptions that have caused substantial volatility in the prices of securities
similar to the new notes. We cannot assure you that any market for the new notes
will not be affected by similar disruptions.
IF YOU DO NOT PARTICIPATE IN THE EXCHANGE OFFER, IT MAY BE HARDER FOR YOU TO
RESELL AND TRANSFER YOUR OLD NOTES
The old notes were not registered under the Securities Act or under the
securities laws of any state. Thus, you may not resell the old notes, offer them
for resale or otherwise transfer them unless they are subsequently registered or
resold under an exemption from the registration requirements of the Securities
Act and applicable state securities laws. If you do not exchange your old notes
for new notes by this exchange offer, or if you do not properly tender your old
notes in this exchange offer, you will not be able to resell, offer to resell or
otherwise transfer your old notes unless they are registered under the
Securities Act or unless you resell them, offer to resell or otherwise transfer
them under an exemption from the registration requirements of, or in a
transaction not subject to, the Securities Act. In addition, you will no longer
be able to obligate us to register your old notes under the Securities Act.
RISKS RELATING SPECIFICALLY TO CSC HOLDINGS
OUR FINANCIAL STATEMENTS REFLECT NET LOSSES AND A STOCKHOLDER'S DEFICIENCY
We have reported recent net losses applicable to our common stockholder as
follows:
FOR THE THREE MONTHS ENDED:
March 31, 1999......................................... $229.4 million
FOR THE YEAR ENDED:
December 31, 1998...................................... $401.4 million
December 31, 1997...................................... $ 12.1 million
December 31, 1996...................................... $459.9 million
Net losses are calculated by subtracting from gross revenues:
o operating expenses, including depreciation and amortization,
o interest expense,
o preferred stock dividends,
o other income and expenses and
o net profit or loss from affiliate operations.
The net losses described above primarily reflect our high interest expense,
preferred stock dividends and depreciation and amortization charges, which we
expect to continue. As a result of these net losses, at
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March 31, 1999, we had a stockholder's deficiency of $3.1 billion. We urge
you to read carefully our consolidated financial statements contained in our
Form 10-K and our March 31, 1999 Form 10-Q, which provide more detailed
information about these net losses.
We expect our net losses to continue and to remain substantial for the
foreseeable future because:
o interest expense, preferred stock dividends and depreciation and
amortization charges relating to our existing indebtedness and
preferred stock and completed acquisitions and capital expenditures
will remain high for the foreseeable future,
o we expect that future indebtedness incurred to fund pending and future
acquisitions and the development of our existing and new businesses,
including, but not limited to, capital expenditures and additional
investments in our cable television plant and programming operations,
will result in significant additional charges to gross revenues and
o we expect expenses and depreciation relating to each new service we
offer to be particularly high in relation to the amount of revenues the
new service will generate in its first years of operations, resulting
in significant net losses each time we begin offering a new service or
supporting a new business we acquire.
WE WILL NEED SIGNIFICANT ADDITIONAL BORROWINGS AND WE HAVE COMMITTED TO
SIGNIFICANT FUTURE CAPITAL EXPENDITURES AND OTHER CAPITAL COMMITMENTS.
Our business is very capital-intensive. Operating, maintaining and
upgrading our cable television plant require significant amounts of cash
payments to third parties. In addition, we have incurred significant expenses to
start up and operate new businesses, like high speed Internet access, digital
video service and residential telephone service, and to roll out the non-Long
Island based commercial telephone businesses. We expect these expenses to
continue or grow as we continue to introduce these and possibly other new
services to our cable television customers.
We also incur significant start-up costs in funding new cable programming
services before they have positive cash flow, typically during their start-up
and development. Our acquisition and development of other businesses, like
electronics retailing and movie theaters, also result in significant
expenditures. We also pay a significant amount of interest in respect of our
outstanding indebtedness, and significant amounts of cash will be required to
repay our existing indebtedness and redeem our mandatorily redeemable preferred
stock.
We will not be able to generate sufficient cash internally to finance these
projects, to repay our indebtedness at maturity and to redeem our mandatorily
redeemable preferred stock at the mandatory redemption date. Because we will be
unable to generate enough cash internally for these purposes, we will have to do
one of the following:
o raise additional capital, through debt or equity issuances or both,
or
--
o cancel or scale back current and future spending programs
or
--
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o sell assets.
However, you should not assume that we will be able to raise any required
additional capital if we are unable to pursue our current and future spending
programs and we may not be able to compete effectively as a result.
Unrestricted Group subsidiaries have substantial future capital commitments
in the form of long-term contracts that require substantial payments over a long
period of time. For example, rights agreements with sports teams under which we
carry games on our programming networks almost always involve multi-year
contracts that are difficult and expensive to terminate. The acquisition and
development activities of Unrestricted Group subsidiaries, like the acquisition
of entertainment businesses and the acquisition and development of entertainment
facilities, will also result in significant expenditures.
Accordingly, if we are forced to cancel or scale back current and future
spending programs as described above, our choice of which spending programs to
cancel or scale back may be limited.
A SIGNIFICANT AMOUNT OF OUR BOOK VALUE CONSISTS OF INTANGIBLE ASSETS
At March 31, 1999, we reported $5.9 billion of consolidated total assets,
of which $2.4 billion were intangible. Intangible assets include assets like
franchises from city and county governments to operate cable television systems,
affiliation agreements, amounts representing the cost of some acquired assets in
excess of their fair value and some deferred costs associated with past
financings, acquisitions and other transactions.
You should not assume that we would receive any cash from the voluntary or
involuntary sale of these intangible assets. We urge you to read carefully our
consolidated financial statements contained in our Form 10-K and our March 31,
1999 Form 10-Q, which provide more detailed information about these intangible
assets.
WE MAY NOT BE ABLE TO COMPLETE OUR PENDING TRANSACTIONS
We have announced and may continue to announce a number of transactions,
some of which are or may be significant to our business. Because of the
conditions required to be fulfilled before we can complete these transactions,
we cannot assure you that any of our announced transactions will be completed on
the terms or schedule we announce, or that any of them will be completed at all.
Our pending transactions are generally described in our Form 10-K, our March 31,
1999 Form 10-Q and under "Recent Developments" below. We urge you to read
carefully the description of our pending transactions contained therein,
particularly the conditions required to be fulfilled in order to complete these
transactions.
WE ARE CONTROLLED BY THE DOLAN FAMILY
The Dolan family is able to prevent or cause a change of control of
Cablevision and also is able to prevent or cause a change of control of CSC
Holdings.
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We are a wholly owned subsidiary of Cablevision. Cablevision has two
classes of common stock:
o Class A common stock, which is entitled to one vote per share and is
entitled collectively to elect 25% of Cablevision's board of directors,
and
---
o Class B common stock, which is generally entitled to ten votes per
share and is entitled collectively to elect the remaining 75% of
Cablevision's board of directors.
As of April 30, 1999, Charles F. Dolan, chairman of Cablevision's board of
directors, beneficially owned 0.9% of the Class A common stock, 53.6% of the
Class B common stock and 43.0% of the total voting power of both classes of
common stock. In addition, as of April 30, 1999, trusts established by Dolan for
his family members, as to which he disclaims beneficial ownership, beneficially
owned 3.3% of the Class A common stock, 46.4% of the Class B common stock and
37.7% of the total voting power of both classes of common stock.
As a result of Dolan's stock ownership and the stock ownership of his
family members, Dolan has the power to elect all the directors of Cablevision
subject to election by holders of the Class B common stock. In addition, Dolan
family members may control stockholder decisions on matters in which holders of
Cablevision common stock vote together as a class. These matters include the
amendment of some provisions of Cablevision's certificate of incorporation and
the approval of fundamental corporate transactions, including mergers.
In addition, because the affirmative vote or consent of the holders of at
least 66 2/3% of the outstanding shares of the Class B common stock, voting
separately as a class, is required to approve:
o the authorization or issuance of any additional shares of Class B
common stock and
o any amendment, alteration or repeal of any of the provisions of
Cablevision's certificate of incorporation that adversely affects the
powers, preferences or rights of the Class B common stock,
Dolan family members also have the power to prevent any issuance or amendment.
The voting rights of the Class B common stock beneficially owned by the Dolan
family members will not be modified as a result of any transfer of legal or
beneficial ownership of the Class B common stock.
REGULATORY RISKS ARE INHERENT AND SUBSTANTIAL IN OUR BUSINESSES
GENERAL. The FCC and state and local governments extensively regulate the
rates we may charge our customers for video services. They also regulate us in
other ways that affect the daily conduct of our video delivery and video
programming business, our telephone business and possibly in the future, our
high speed Internet access business. Any action by the FCC, the states of New
York, New Jersey,
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Connecticut, Massachusetts or Ohio or concerted action by local regulators, the
likelihood or extent of which we cannot predict, could have a material financial
effect on us.
For example, in 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act"), which was a
significant change in the regulatory framework under which cable television
systems operate. In 1993 and 1994, the FCC ordered reductions in cable
television rates based on the 1992 Cable Act. In 1995, a Federal appeals court
upheld the material aspects of the FCC's rate regulation scheme. Congress
subsequently enacted the Telecommunications Act of 1996, which relaxes the
regulation of higher tier cable television rates. This higher tier rate
regulation relaxation went into effect on March 31, 1999. The regulation by
local governments of basic cable rates will continue in most communities in
which we operate.
RECENT FCC AND CONGRESSIONAL ISSUES MAY AFFECT OUR BUSINESSES. The FCC has
established a national limit of 30% on the number of households that any cable
company can serve. Because of court proceedings, this 30% national limit has
never been implemented and the FCC is considering revising this limit and
changing the definition of what type and degree of ownership should be
considered in determining whether a cable company has exceeded whatever limit
the FCC sets. The outcome of these proceedings could affect us because of AT&T's
investment in Cablevision through its recent acquisition of Tele-Communications,
Inc. ("TCI"). This issue recently has been given greater visibility at the FCC
and in Congress as a result of AT&T's proposed acquisition of MediaOne Group.
Some parties, including America Online and some local telephone companies,
have proposed statutory and regulatory requirements that would force cable
systems to provide carriage to third-party Internet access providers. The FCC
thus far has rejected these requests, but legislation has been introduced that
would effectively require that this access be provided. We cannot predict at
this time whether or to what extent this legislation might be successful or
whether the FCC might reevaluate its initial conclusion not to impose this
regulation. One federal district court in Oregon, a state in which we do not
operate, has recently upheld a local franchising authority's requirement that
the cable system in that community provide access to all third-party Internet
access providers, but that decision is currently on appeal. If the federal
district court's opinion is upheld, some local franchising authorities where we
operate might attempt to impose a similar requirement on us.
OUR CURRENT FRANCHISES ARE GENERALLY NON-EXCLUSIVE, AND OUR FRANCHISORS
NEED NOT RENEW OUR FRANCHISES. Our cable television systems are operated
primarily under non-exclusive franchise agreements with local government
franchising authorities, in some cases with the approval of state cable
television authorities. Consequently, our business is dependent on our ability
to obtain and renew our franchises. Although we have never lost a franchise as a
result of a failure to obtain a renewal, our franchises are subject to
non-renewal or termination under some circumstances.
In some cases, franchises have not been renewed at expiration, and we
operate under either temporary operating agreements or without a license while
negotiating renewal terms with the franchising authorities. In the case of one
of our franchises in Ohio with 11,000 subscribers as of
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March 31, 1999, we are operating without a license while we appeal the denial of
the franchise renewal in federal court in accordance with the provisions of the
Cable Communications Policy Act of 1984.
WE ARE EXPOSED TO A SIGNIFICANT AND CREDIBLE RISK OF COMPETITION
GENERAL. Cable operators compete with a variety of television programming
distribution systems, including:
o broadcast television stations,
o direct broadcasting satellite systems,
o multichannel multipoint distribution services,
o satellite master antenna systems and
o private home dish earth stations.
For example, two direct broadcasting satellite systems are now operational in
the U.S. Companies with substantial resources like Hughes Electronics Corp. have
invested in some of these systems. Cable systems also compete with the entities
that make videotaped movies and programs available for home rental.
The Telecommunications Act of 1996 gives telephone companies and other
video providers the option of providing video programming to subscribers through
"open video systems", a wired video delivery system similar to a cable
television system that may not require a local cable franchise. RCN, an open
video system operator that teams with electric utilities, is currently operating
systems in Boston and parts of New York City that compete with us. Additional
video competition to cable systems is possible from new wireless local
multipoint distribution services authorized by the FCC, for which spectrum was
recently auctioned by the FCC.
The 1992 Cable Act prohibits a cable programmer that is owned by or
affiliated with a cable operator, like Rainbow Media, from:
o unreasonably discriminating among or between cable operators and other
multichannel video distribution systems with respect to the price,
terms and conditions of sale or distribution of the programmer's
service and
o unreasonably refusing to sell service to any multichannel video
programming distributor.
COMPETITION FROM TELEPHONE COMPANIES. The Cable Communications Policy Act
of 1984 barred co-ownership of telephone companies and cable television systems
operating in the same service areas. The Telecommunications Act of 1996 repealed
this restriction and permits a telephone company to provide video programming
directly to subscribers in its telephone service territory, subject to some
regulatory requirements, but generally prohibits a telephone company from
acquiring an in-region cable operator, except in some small markets under some
circumstances. Telephone companies like Ameritech
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Corp. in Ohio and Southern New England Telephone Co. in Connecticut have
obtained or applied for local franchises to construct and operate cable
television systems in several communities in which we currently hold cable
franchises, and in some locations have begun offering service in competition
with us.
OUR SYSTEMS AND THE SYSTEMS OF THIRD PARTIES ON WHOM WE RELY MAY NOT
ACHIEVE YEAR 2000 READINESS
Y2K readiness refers to the ability of some computerized systems and
technologies to recognize and/or correctly process dates beyond December 31,
1999 and leap year calculations. As a result of Y2K readiness issues, the
potential exists for computer system failure or miscalculations by computer
programs, which could disrupt our operations. Our plan to identify and address
Y2K issues is described in our Form 10-K and our March 31, 1999 Form 10-Q.
Many of the information technology, or "IT", and non-IT systems that are
necessary for the continued operation of our businesses are dependent on
components that may not be Y2K compliant. Although our Y2K compliance program is
designed to identify and remediate these systems in order to avoid interruption
of our operations, we cannot assure you that we will be able to identify all
noncompliant systems or successfully remediate all those that are identified.
Failure of IT or non-IT systems that are necessary for the operation of our
businesses, including, without limitation, our billing systems, addressable
controller and converter systems, purchasing, finance and inventory systems,
marketing databases and point of sale systems, could have a material adverse
effect on us.
We are dependent on third-party products and services, like utility
services and programming uplinks, for the operation of our businesses. Although
as part of the inventory and assessment phase of our Y2K program we have
contacted third-party product and service providers to ascertain whether Y2K
compliance issues may exist, we have in many cases not received assurances from
these suppliers. Moreover, in most cases we do not have the ability to verify
any assurances we do receive from third-party suppliers. If critical IT or
non-IT systems used by these third-party suppliers fail as a result of a Y2K
compliance issue, and as a result of this failure the ability of this supplier
to continue to provide this product or service to us is interrupted, our ability
to continue to provide services to our customers may be interrupted. Any
interruption could have a material adverse effect on us. We intend to implement
contingency plans to address those risks, although no plans have yet been
identified, and we cannot assure you that any plan would resolve these problems
in a satisfactory manner.
In addition to the risks associated with the failure of IT systems due to
Y2K problems, the failure of non-IT systems would pose significant risks to us.
For example, we and our subsidiaries operate facilities for both employees and
the public. Failure of non-IT systems at these facilities could result in health
and safety risks that could lead to the closure or unavailability of these
facilities. This could result in lost revenues to us and the risk of actions
against us if the businesses of others are disrupted. Also, the failure of these
non-IT systems could result in injury to individuals which could expose us to
actions by or on behalf of these individuals.
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FORWARD-LOOKING STATEMENTS
This document contains or incorporates by reference statements that
constitute forward-looking information within the meaning of the Private
Securities Litigation Reform Act of 1995. We caution you that these
forward-looking statements are not guarantees of future performance or results
and involve risks and uncertainties. Actual results or developments may differ
materially from the forward-looking statements as a result of various factors.
Factors that may cause these differences to occur include, but are not limited
to:
o the level of our revenues,
o subscriber demand, competition, the cost of programming and industry
conditions,
o the regulatory environment in which we operate,
o the level of our capital expenditures,
o pending and future acquisitions and dispositions of assets,
o whether any pending uncompleted transactions are completed on the terms
and at the times set forth, if at all,
o new competitors entering our franchise areas,
o the identification and remediation of Year 2000 issues and the related
risks and uncertainties and
o other risks and uncertainties inherent in the cable television business
and our other businesses.
We undertake no obligation to update or revise any forward-looking
statements because of new information, future events or otherwise. In light of
these risks, uncertainties and assumptions, the forward-looking events discussed
in this document might not occur. See "Risk Factors" and our March 31, 1999 Form
10-Q delivered herewith and incorporated by reference herein for more
information on the uncertainty of forward-looking statements.
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the new notes as
described in this document. We will receive in exchange old notes in like
principal amount. The old notes surrendered in exchange for the new notes will
be retired and canceled and cannot be reissued. Therefore, the issuance of the
new notes will not result in any change in our indebtedness.
We used the cash proceeds from the issuance of the old notes to repay
borrowings under our credit agreement and for general corporate purposes. The
borrowings under our credit agreement bear interest at floating rates, and
mature in installments over the 2001-2007 time periods. The average effective
annual interest rate on all borrowings under our credit agreement as of April
30, 1999 was 6.1%. For more information about our credit agreement, see
"Management's Discussion and Analysis--Liquidity and Capital Resources" in our
Form 10-K and our March 31, 1999 Form 10-Q delivered herewith.
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CSC HOLDINGS, INC.
We are one of the largest operators of cable television systems in the
U.S., with about 2,591,000 subscribers in six states as of March 31, 1999, based
on the number of basic subscribers in systems that we currently majority own and
manage. We also have ownership interests in companies that produce and
distribute national and regional programming services and provide advertising
sales services for the cable television industry and in the Madison Square
Garden sports and entertainment business, also known as "MSG".
For financing purposes, we are structured as a Restricted Group and an
Unrestricted Group. Our Restricted Group includes:
o all of our cable operations, which are located primarily in and around
metropolitan New York City, including Long Island, in and around the
greater Cleveland, Ohio metropolitan area and in and around Boston,
Massachusetts and
o the commercial telephone operations of our subsidiary, Cablevision
Lightpath, Inc., on Long Island, New York.
Our Unrestricted Group includes:
o Rainbow Media, our 75%-owned subsidiary that conducts our programming
and entertainment activities and includes AMC, Bravo, a 60% general
partnership interest in Regional Programming Partners, a 50% general
partnership interest in National Sports Partners and a 50% general
partnership interest in National Advertising Partners,
o Rainbow Advertising, which sells advertising time on behalf of our
cable television systems, some of Rainbow Media's programming networks
and some unaffiliated cable television systems,
o CSC Technology, Inc., our subsidiary engaged in research and
development of new technology,
o Cablevision Electronics Investments, Inc., doing business as The Wiz,
o CSC At Home Holding Corporation, our subsidiary that holds warrants to
acquire about 10.2 million shares of common stock of At Home
Corporation,
o Cablevision Cinemas, LLC, doing business as Clearview Cinemas, and
o an interest in an entity that holds some licenses to conduct a personal
communications service business.
Our Restricted Group and some members of our Unrestricted Group are
individually and separately financed. The indebtedness of each entity in our
Unrestricted Group is non-recourse to us, except that, in some cases, we have
pledged our capital stock in these entities to the relevant lenders. Rainbow
Media's recent cash requirements have been financed by sales of equity interests
in its programming businesses and through separate external debt financing of
Rainbow Media, AMC and MSG, which are, as to the assets of Rainbow Media and
these subsidiaries, senior to the notes and our other indebtedness. Please read
the information under "Management's Discussion and Analysis--Liquidity and
Capital Resources" in our Form 10-K and our March 31, 1999 Form 10-Q for a
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discussion of the restrictions on investments by the Restricted Group and other
matters. See "Where You Can Find More Information" below to learn how you can
obtain this information.
STRATEGY
Our strategy has been to concentrate our cable television systems in and
around three major metropolitan areas, New York City, Boston and Cleveland, with
a view to:
o being a significant cable provider in each of these markets,
o maximizing our revenue per subscriber by marketing premium services,
o developing and promoting niche programming and entertainment services
and
o remaining an industry leader in upgrading the technological
capabilities of our systems.
We believe that our cable television systems on Long Island, New York
comprise the largest contiguous group of cable television systems under common
ownership in the U.S. as measured by number of subscribers. By developing
systems in and around major metropolitan areas, including expansion through
acquisitions in areas in which we have existing systems, we have been able to
realize economies of scale in the operation and management of our systems and to
capitalize on opportunities to create and market programming of regional
interest.
Through the current and planned upgrade of our cable plant, including the
utilization of fiber optic cable and associated electronics, we are seeking to
significantly increase our analog channel capacity and add new digital channel
capacity that will facilitate the startup of adjunct businesses like:
o information services,
o interactive services, including Internet access,
o near video on demand,
o video on demand,
o residential telephone and
o commercial telephone.
To successfully roll out these adjunct new businesses significantly beyond the
initial development phases, we will need additional capital. For more
information regarding the capital we need for our future expenditures, see "Risk
Factors--Risks Relating Specifically to CSC Holdings--We Will Need
Significant Additional Borrowings and We Have Committed to Significant Future
Capital Expenditures and Other Capital Commitments".
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RECENT DEVELOPMENTS
TCI NY/NJ TRANSACTIONS AND RAINBOW MEDIA SEPARATION
On March 4, 1998, Cablevision completed transactions ("TCI NY/NJ
Transactions") with TCI under which Cablevision acquired cable television
systems owned and operated by TCI and located in New Jersey, on Long Island and
in New York's Rockland, Orange and Westchester counties (the "Contributed
Business Subsidiaries") and assumed related liabilities.
On April 5, 1999, Cablevision contributed the Contributed Business
Subsidiaries to CSC Holdings in a transaction accounted for in a manner similar
to a pooling of interests, whereby the assets and liabilities of the Contributed
Business Subsidiaries were recorded at historical book value. The Contributed
Business Subsidiaries served an aggregate of about 847,000 subscribers as of
March 31, 1999. The total assets and liabilities of the Contributed Business
Subsidiaries at March 31, 1999 amounted to $1.1 billion and $635 million,
respectively. For the three months ended March 31, 1999, the Contributed
Business Subsidiaries had net revenues of $117 million and a net loss of $9
million.
After the completion of the contribution of the Contributed Business
Subsidiaries, under our existing debt instruments we are permitted to establish
Rainbow Media as a separate subsidiary of Cablevision. If we effect this
transaction, Rainbow Media and its subsidiaries would be subsidiaries of
Cablevision and would no longer be our subsidiaries. We have not made a final
decision as to whether we will separate Rainbow Media. Any full or partial
separation of Rainbow Media also depends on compliance with our debt covenants
and on the receipt of regulatory and other approvals.
The following charts summarize the corporate organization structure of
Cablevision and CSC Holdings immediately after the combination of the
Contributed Business Subsidiaries with CSC Holdings and immediately after a
Rainbow Media separation. We have not decided yet whether the Rainbow Media
separation will be effected.
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[GRAPHIC OMITTED]
- -----------
* CSC Holdings and its Restricted Subsidiaries together constitute the
Restricted Group
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<PAGE>
PROPOSED AT&T CT TRANSACTIONS
On January 27, 1998, we entered into a non-binding letter of intent with
Cablevision and TCI, which is now part of AT&T Corp., for either Cablevision or
us to acquire AT&T's cable television systems (the "AT&T Connecticut Systems")
in and around Hartford, Vernon, Branford and Lakeville, Connecticut (the
"Proposed AT&T CT Transactions"). No definitive documentation has been executed
with respect to the Proposed AT&T CT Transactions and we cannot assure you that
the necessary documentation will be executed or that these transactions will be
completed on the proposed terms or at all.
In consideration for the AT&T Connecticut Systems, which have been valued
by the parties solely for the purposes of the non-binding letter of intent at
$380 million, in the Proposed AT&T CT Transactions we would:
o transfer to AT&T our cable television systems serving Kalamazoo,
Michigan, which served about 49,000 subscribers as of December 31, 1998
and have been valued by the parties solely for the purposes of the
non-binding letter of intent at $75 million,
o transfer to AT&T other cable television systems to be identified by
AT&T and purchased with about $25 million of funds provided by
Cablevision,
o issue shares of Cablevision's Class A common stock based on a $28.90
per share valuation and
o assume some indebtedness relating to the AT&T Connecticut Systems,
which is anticipated to total about $110 million.
If the proposed AT&T CT Transactions are completed, we anticipate that the
AT&T Connecticut Systems will be contributed by Cablevision to, and held by
subsidiaries of, CSC Holdings.
The closing of the Proposed AT&T CT Transactions will be conditioned, among
other things, on the expiration or termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other regulatory and
other customary approvals. We cannot assure you that definitive agreements will
be completed, that the Hart-Scott-Rodino Act waiting period will expire or be
terminated in a timely fashion, that other approvals will be obtained in a
timely manner or at all or that governmental agencies or others will not take
legal action to prevent the consummation of the Proposed AT&T CT Transactions.
PROPOSED JOINT VENTURE TO BUILD NEW JERSEY SPORTS ARENA AND RETAIL AND SHOPPING
COMPLEX
In May 1999, CSC Holdings and the New Jersey Devils professional hockey
team entered into a non-binding letter of intent to form a joint venture to
develop a hockey arena and an adjacent entertainment and shopping complex in
Hoboken, New Jersey.
No definitive documentation has been executed with respect to the proposed
New Jersey arena and entertainment and shopping complex and we cannot assure you
that the necessary documentation
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<PAGE>
will be executed or that this transaction will be completed. We also have not
determined whether CSC Holdings and its subsidiaries will be involved in the
transaction if the transaction is completed.
THE EXCHANGE OFFER
WHY WE ARE OFFERING TO EXCHANGE YOUR OLD NOTES FOR NEW NOTES
We originally sold the outstanding 8 1/8% Senior Notes due 2009 on July 13,
1999 in a transaction exempt from the registration requirements of the
Securities Act. Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation, Goldman,
Sachs & Co., Morgan Stanley & Co. Incorporated and Salomon Smith Barney Inc., as
the initial purchasers, then resold the notes to qualified institutional buyers
under Rule 144A and to persons in offshore transactions under Regulation S under
the Securities Act. As of the date of this document, $500 million aggregate
principal amount of old notes is outstanding.
As a condition to the initial sale of the old notes, we entered into a
registration rights agreement with the initial purchasers under which we agreed
that we would, at our own cost:
(1) file an exchange offer registration statement under the Securities Act
with the SEC by September 10, 1999
and
---
(2) use our reasonable best efforts to:
o cause the exchange offer registration statement to be declared
effective under the Securities Act by January 9, 2000
and
---
o keep the exchange offer open for no less than 30 days
and
---
o complete the exchange 30-40 days after notice of the exchange is
mailed to holders of old notes.
We agreed to issue and exchange the new notes for all old notes
tendered and not withdrawn before the exchange offer expires.
THE SUMMARY IN THIS DOCUMENT OF THE REGISTRATION RIGHTS AGREEMENT IS NOT
COMPLETE AND IS SUBJECT TO, AND IS QUALIFIED IN ITS ENTIRETY BY, ALL THE
PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT. WE URGE YOU TO READ THE ENTIRE
REGISTRATION RIGHTS AGREEMENT CAREFULLY.
We filed a copy of the registration rights agreement as an exhibit to the
registration statement of which this document is a part. We intend to satisfy
some of our obligations under the registration rights agreement with the
registration statement.
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<PAGE>
TERMS OF THE EXCHANGE OFFER
TIMING OF THE EXCHANGE OFFER. We are offering the new notes in exchange for
your old notes. We will keep the exchange offer open for at least 30 days, or
longer if required by applicable law, after the date notice of the exchange
offer is mailed to the holders of the old notes.
YOU MAY TENDER YOUR OLD NOTES ONLY IN MULTIPLES OF $1,000. On the terms and
subject to the conditions in this document and in the accompanying letter of
transmittal, we will accept any and all old notes validly tendered and not
withdrawn before 5:00 p.m., New York City time, on Septembear 13, 1999. We will
issue $1,000 principal amount of new notes in exchange for each $1,000 principal
amount of outstanding old notes accepted in the exchange offer. You may tender
some or all of your old notes under the exchange offer. However, you may tender
old notes only in multiples of $1,000.
FORM AND TERMS OF THE NEW NOTES. The form and terms of the new notes will
be the same as the form and terms of the old notes except that:
o the new notes will have a different CUSIP number from the old notes,
o the new notes will be registered under the Securities Act and will not
have legends restricting their transfer,
o the new notes will not contain terms providing for payment of
liquidated damages under circumstances relating to the timing of the
exchange offer, as described under "--Liquidated Damages" below, and
o holders of the new notes will not be entitled to any registration
rights under the registration rights agreement because these rights
will terminate when the exchange offer is completed.
The new notes will evidence the same debt as the old notes and will be
issued under, and be entitled to the benefits of, the indenture governing the
old notes. We will treat both series of notes as a single class of debt
securities under the indenture.
WHO WILL RECEIVE THIS DOCUMENT. We will mail this document and the letter
of transmittal to all registered holders of the old notes as of August 10, 1999.
NO APPRAISAL OR DISSENTERS' RIGHTS. In connection with the exchange offer,
you do not have any appraisal or dissenters' rights under the General
Corporation Law of the State of Delaware or the indenture governing the old
notes. We intend to conduct the exchange offer in accordance with the
registration rights agreement and the applicable requirements of the Exchange
Act and the rules and regulations of the SEC related to exchange offers.
ACCEPTANCE OF TENDERED OLD NOTES. We will be deemed to have accepted
validly tendered old notes when, as and if we have given oral or written notice
of acceptance to The Bank of New York, as the exchange agent for the exchange
offer. The exchange agent will act as agent for the tendering holders for the
purpose of receiving the new notes from us.
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<PAGE>
If we do not accept your old notes tendered for exchange because you:
o invalidly tendered your old notes
or
--
o some other events specified in this document have occurred
or
--
o you submitted your old notes for a greater principal amount than you
wanted to exchange,
we will return the certificates for the unaccepted old notes, without expense,
to you. If you tender old notes by book-entry transfer in the exchange agent
account at The Depository Trust Company in accordance with the book-entry
transfer procedures described below, any non-exchanged old notes will be
credited to an account maintained with The Depository Trust Company as soon as
possible after the expiration date of the exchange offer.
EXPIRATION DATE
The exchange offer will expire at 5:00 p.m., New York City time, on
September 13, 1999, unless we extend the exchange offer in our sole discretion.
If we extend the exchange offer, the expiration date is the latest date and time
to which we extend the exchange offer.
WE CAN AMEND OR EXTEND THE EXCHANGE OFFER
We can extend the exchange offer. To do so we must:
o notify the exchange agent of any extension either orally or in writing
and
---
o make an announcement of the extension before 9:00 a.m., New York City
time, on the next business day after the previous date the exchange
offer was scheduled to expire.
We also reserve the right to:
o delay accepting any old notes
or
--
o terminate the exchange offer and refuse to accept any old notes not
previously accepted if any of the conditions described below under "How
to Tender Your Old Notes--Conditions" shall have occurred and we have
not waived them.
If we delay, extend or terminate the exchange offer we must give oral or written
notice to the exchange agent.
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<PAGE>
We may also amend the terms of the exchange offer in any way we determine
is advantageous to holders of the old notes. If this change is material, we will
promptly disclose that amendment in a manner reasonably calculated to inform
holders of the old notes.
We do not have to publish, advertise, or otherwise communicate any public
announcement of any delay, extension, amendment or termination that we may
choose to make, other than by making a timely release to the Dow Jones News
Service.
INTEREST ON THE NEW NOTES
Interest is payable on the old notes, and will be payable on the new notes,
on January 15 and July 15 of each year. The new notes will accrue interest on
the same terms as the old notes, at the rate of 8 1/8% per year from July 13,
1999, the date we issued the old notes. If you hold old notes and they are
accepted for exchange, you will waive your right to receive any payment in
respect of interest on your old notes accrued from July 13, 1999 to the date the
new notes are issued. Thus, if you exchange your old notes for new notes you
will receive the same interest payment on January 15, 2000, which is the first
interest payment date with respect to the old notes and the new notes, that you
would have received had you not accepted the exchange offer.
RESALE OF THE NEW NOTES
We believe that you will be allowed to resell the new notes to the public
without registration under the Securities Act, and without delivering a
prospectus that satisfies the requirements of the Securities Act if you can
make the representations set forth in the letter of transmittal, described in
"How To Tender Your Old Notes--Representations on Tendering Old Notes". If you
intend to participate in a distribution of the new notes, however, you must
comply with the registration requirements of the Securities Act and deliver a
prospectus, unless an exemption from registration is otherwise available. In
addition, you cannot be an "affiliate" of CSC Holdings as defined in Rule 405
under the Securities Act. You must represent to us in the letter of transmittal
accompanying this document that you meet these conditions exempting you from the
registration requirements.
We base our view on interpretations by the staff of the SEC in no-action
letters issued to other issuers in exchange offers like ours. We have not,
however, asked the SEC to consider this particular exchange offer in the context
of a no-action letter. Therefore, you cannot be sure that the SEC will treat
this exchange offer in the same way it has treated other exchange offers in the
past. If our belief is wrong, you could incur liability under the Securities
Act. We will not protect you against any loss incurred as a result of this
liability under the Securities Act.
A broker-dealer that has bought old notes for market-making or other
trading activities must deliver a prospectus in order to resell any new notes it
has received for its own account in the exchange. A broker-dealer may use this
prospectus to resell any of its new notes. We agreed in the registration rights
agreement to make this prospectus, and any amendment or supplement to this
prospectus, available to any broker-dealer that requests copies until 90 days
after the last exchange date. See "Plan of Distribution" below for more
information regarding broker-dealers.
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<PAGE>
SHELF REGISTRATION STATEMENT
We will file a shelf registration statement with the SEC if:
(1) applicable law or SEC policy does not permit the exchange offer
or
--
(2) the exchange offer is not completed by January 9, 2000.
The shelf registration statement will register the old notes for public
resale. We will use our best efforts to cause the shelf registration statement
to become effective and to keep the shelf registration statement effective until
July 13, 2001.
LIQUIDATED DAMAGES
We will have to pay higher annual interest rates on the notes if:
o we do not file the exchange offer registration statement
by September 10, 1999
or
--
o the exchange offer is not completed by January 9, 2000
or
--
o the shelf registration statement is not declared effective by
January 9, 2000.
The interest rates will increase as follows:
MAXIMUM
INTEREST RATE
EVENT INTEREST RATE INCREASE INCREASE
The exchange offer registration o 1/4% per year each day for 1% per year
statement is not filed by the first 30 days after
September 10, 1999 September 10, 1999 that the
exchange offer registration
statement is not filed.
o An additional 1/4% per year
each day at the beginning of
each subsequent 30-day period
that the exchange offer
registration statement is not
filed.
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<PAGE>
MAXIMUM
INTEREST RATE
EVENT INTEREST RATE INCREASE INCREASE
The exchange offer is not o 1/4% per year each day for the 1% per year
completed by January 9, 2000 first 180 days after January 9,
2000 that the exchange offer
is not completed.
o An additional 1/4% per year
each day at the beginning of
each subsequent 90-day period
that the exchange offer is not
completed.
The shelf registration statement o 1/4% per year each day for the 1% per year
is not declared effective by first 180 days after January 9,
January 9, 2000 2000 that the shelf
registration statement is not
declared effective.
o An additional 1/4% per year
each day at the beginning of
each subsequent 90-day period
that the shelf registration
statement is not declared
effective.
The interest rate will be reduced to the original rate once we:
o file the exchange offer registration statement
or
--
o complete the exchange offer
or
--
o the shelf registration statement is declared effective.
HOW TO TENDER YOUR OLD NOTES
PROCEDURES FOR TENDERING
To tender your old notes in the exchange offer, you must do the
following:
o properly complete, sign and date the letter of transmittal, or a
facsimile of the letter of transmittal,
o if the letter of transmittal so requires, have the signatures on the
letter of transmittal or facsimile of the letter of transmittal
guaranteed and
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<PAGE>
o mail or otherwise deliver the letter of transmittal, or facsimile,
together with your old notes and any other required documents, to the
exchange agent before 5:00 p.m., New York City time, on the expiration
date of the exchange offer.
In order for the tender to be effective, the exchange agent must receive
the old notes, a completed letter of transmittal and all other required
documents before 5:00 p.m., New York City time, on the expiration date.
You may also deliver your old notes by using the book-entry transfer
procedures described below. DTC authorizes its participants that hold old notes
on behalf of beneficial owners of old notes through DTC to tender their old
notes as if they were holders. To effect a tender of old notes, DTC participants
should:
o complete and sign the letter of transmittal, or a manually signed
facsimile of the letter,
o have the signature on the letter of transmittal or facsimile of the
letter of transmittal guaranteed if the instructions to the letter of
transmittal so require,
o mail or deliver the letter of transmittal, or the manually signed
facsimile, to the exchange agent according to the procedures described
above and
o transmit their acceptance to DTC through its automated tender offer
program for which the transaction will be eligible and follow the
procedures for book-entry transfer described below under "--Book-Entry
Transfer".
YOU MUST FOLLOW ALL PROCEDURES TO EFFECT A VALID TENDER. DELIVERY OF
DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE EXCHANGE AGENT.
By tendering, you will make the representations described under the heading
"--Representations on Tendering Old Notes". In addition, each participating
broker-dealer must acknowledge that it will deliver a prospectus in connection
with any resale of the new notes. See "Plan of Distribution".
Your tender and our acceptance of the tender will constitute the agreement
between you and us set forth in this document and in the letter of transmittal.
YOU HAVE THE SOLE RISK OF THE METHOD YOU CHOOSE TO HAVE THE OLD NOTES AND
THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS DELIVERED TO THE
EXCHANGE AGENT.
As an alternative to delivery by mail, holders may wish to consider
overnight or hand delivery service. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT
TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. No
letter of transmittal, old notes or book-entry confirmation should be sent to
us. Holders may request their respective brokers, dealers, commercial banks,
trust companies or nominees to effect the above transactions on their behalf.
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<PAGE>
BENEFICIAL OWNERS
If you hold old notes and your old notes are registered in the name of a
broker-dealer, commercial bank, trust company or other nominee and you wish to
tender your old notes, you should contact the registered holder promptly and
instruct it to tender on your behalf. See "Instructions to Registered Holder
and/or Book-Entry Transfer Facility Participant from Beneficial Owner" included
with the letter of transmittal.
If you hold old notes that are registered as described above and you want
to tender on your own behalf, you must, before completing and executing the
letter of transmittal and delivering your old notes, either make appropriate
arrangements to register ownership of the old notes in your name or obtain a
properly completed bond power from the registered holder. The transfer of
registered ownership may take a long time.
SIGNATURES ON LETTER OF TRANSMITTAL
Generally, an eligible guarantor institution must guarantee signatures on a
letter of transmittal or a notice of withdrawal unless the old notes are
tendered:
o by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the letter
of transmittal or
o for the account of an eligible guarantor institution.
An "eligible guarantor institution" is:
o a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.,
o a commercial bank or trust company having an office or correspondent in
the U.S. or
o an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act which is a member of one of the recognized
signature guarantee programs identified in the letter of transmittal.
If a person other than the registered holder of any old notes listed in the
letter of transmittal signed the letter of transmittal, the old notes must be
endorsed or accompanied by a properly completed bond power. The bond power must
authorize this person to tender the old notes on behalf of the registered holder
and must be signed by the registered holder as the registered holder's name
appears on the old notes.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign the letter of transmittal or any old notes or bond powers, these
persons should so indicate when signing, and unless waived by us, submit with
the letter of transmittal evidence satisfactory to us of their authority to so
act.
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<PAGE>
BOOK-ENTRY TRANSFER
Within two business days after the date of this prospectus the exchange
agent will establish a new account or utilize an existing account with respect
to the old notes at the book-entry transfer facility, The Depository Trust
Company, for the purpose of facilitating the exchange offer. Subject to the
establishment of the accounts, any financial institution that is a participant
in DTC's system may make book-entry delivery of old notes by causing DTC to
transfer the old notes into the exchange agent's account with respect to the old
notes in accordance with DTC's procedures. Although delivery of the old notes
may be effected through book-entry transfer into the exchange agent's account at
DTC, the exchange agent must receive an appropriate letter of transmittal
properly completed and duly executed with any required signature guarantee or an
agent's message and all other required documents at its address listed below
under "--Exchange Agent" on or before the expiration date of the exchange offer,
or, if the guaranteed delivery procedures described below are complied with,
within the time period provided under those procedures.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT
The term "agent's message" means a message transmitted by DTC to, and
received by, the exchange agent, which states that DTC has received an express
acknowledgment from the participant in DTC tendering the old notes stating:
o the aggregate principal amount of old notes which have been tendered by
the participant,
o that the participant has received, and agrees to be bound by, the terms
of the letter of transmittal and
o that we may enforce this agreement against the participant.
Delivery of an agent's message will also constitute an acknowledgment from
the tendering DTC participant that the representations contained in the letter
of transmittal and described below in this document are true and correct.
ACCEPTANCE OF TENDERED NOTES
We will determine, in our sole discretion, all questions as to the
validity, form, acceptance, withdrawal and eligibility, including time of
receipt, of tendered old notes. We reserve the absolute right:
o to reject any and all old notes not properly tendered,
o to reject any old notes if our acceptance would, in the opinion of our
counsel, be unlawful and
o to waive any irregularities or conditions of tender as to particular
old notes.
Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and
binding on all parties.
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<PAGE>
Unless waived, you must cure any defects or irregularities in connection
with tenders of old notes within a period of time that we will determine.
Neither we, nor the exchange agent, nor any other person will be liable for
failure to give notice of any defect or irregularity with respect to any tender
of old notes. We will not deem a tender of an old note to have been made until
the defects or irregularities mentioned above have been cured or waived.
The exchange agent will return to the tendering holders any old notes
received by the exchange agent that are not properly tendered and as to which
the defects or irregularities have not been cured or waived, unless otherwise
provided in the letter of transmittal, as soon as practicable after the exchange
offer expires.
REPRESENTATIONS ON TENDERING OLD NOTES
By surrendering old notes in the exchange offer, you will be telling us
that, among other things:
o you are acquiring the new notes issued in the exchange offer in the
ordinary course of your business,
o you are not an "affiliate", as defined in Rule 405 under the Securities
Act, of CSC Holdings,
o you are not participating, do not intend to participate, and have
no arrangement or understanding with any person to participate, in the
distribution of the new notes issued to you in the exchange offer,
o you have full power and authority to tender, sell, assign and transfer
the old notes tendered,
o we will acquire good, marketable and unencumbered title to the old
notes being tendered, free and clear of all security interests, liens,
restrictions, charges, encumbrances, conditional sale agreements or
other obligations relating to their sale or transfer, and not subject
to any adverse claim when the old notes are accepted by us and
o you acknowledge and agree that if you are a broker-dealer registered
under the Exchange Act or you are participating in the exchange offer
for the purposes of distributing the new notes, you must comply with
the registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale of the new notes, and you
cannot rely on the position of the SEC's staff in their no-action
letters.
If you are a broker-dealer and you will receive new notes for your own
account in exchange for old notes that were acquired as a result of
market-making activities or other trading activities, you will be required to
acknowledge in the letter of transmittal that you will deliver a prospectus in
connection with any resale of the new notes.
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GUARANTEED DELIVERY PROCEDURES
If you wish to tender your old notes and:
o you cannot deliver your old notes, the letter of transmittal or any
other required documents to the exchange agent before the expiration
date,
o you cannot complete the procedures for book-entry transfer before the
expiration date or
o your old notes are not immediately available in order for you to meet
the expiration date deadline,
then you may participate in the exchange offer if:
(1) the tender is made through an eligible institution,
(2) before the expiration date, the exchange agent receives from the
eligible guarantor institution a properly completed and duly executed
notice of guaranteed delivery, substantially in the form provided by
us, by facsimile transmission, mail or hand delivery, containing:
o the name and address of the holder of the old notes, the
certificate number or numbers of the old notes and the principal
amount of old notes tendered,
o a statement that the tender is being made thereby and
o a guarantee that, within five business days after the expiration
date, the eligible guarantor institution will deposit the letter
of transmittal or facsimiles of the letter of transmittal,
together with the certificate or certificates representing the old
notes in proper form for transfer or an agent's message and a
confirmation of book-entry transfer of the old notes into the
exchange agent's account at DTC, and any other documents required
by the letter of transmittal will be deposited by the eligible
guarantor institution with the exchange agent and
(3) the exchange agent receives, within five business days
after the expiration date:
o a properly completed and executed letter of transmittal or
facsimile or an agent's message in the case of a book-entry
transfer,
o the certificate or certificates representing all tendered old
notes in proper form for transfer or a confirmation of book-entry
transfer of the old notes into the exchange agent's account at the
book-entry transfer facility and
o all other documents required by the letter of transmittal.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this document, you may withdraw your tender
of old notes at any time before 5:00 p.m., New York City time, on the date the
exchange offer expires.
To withdraw a tender of old notes in the exchange offer, the exchange agent
must receive a letter or facsimile notice of withdrawal at its address set forth
below under "--Exchange Agent" before 5:00 p.m., New York City time, on the
expiration date. Any notice of withdrawal must:
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o specify the name of the person who deposited the old notes to be
withdrawn,
o identify the old notes to be withdrawn, including the certificate
number or numbers and aggregate principal amount of old notes to be
withdrawn, or, in the case of old notes transferred by book-entry
transfer, the name and number of the account at DTC to be credited and
otherwise comply with the procedures of the transfer agent,
o be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the old notes were tendered,
including any required signature guarantees, or be accompanied by
documents of transfer sufficient to have the trustee under the
indenture governing the old notes register the transfer of the old
notes into the name of the person withdrawing the tender and
o specify the name in which the old notes being withdrawn are to be
registered, if different from that of the person who deposited the
notes.
We will determine in our sole discretion all questions as to the validity,
form and eligibility, including time of receipt, of notices of withdrawal. Our
determination will be final and binding on all parties. Any old notes withdrawn
in this manner will be deemed not to have been validly tendered for purposes of
the exchange offer. We will not issue new notes unless the old notes withdrawn
in this manner are validly retendered. We will return to you any old notes that
you have tendered but that we have not accepted for exchange without cost as
soon as practicable after withdrawal, rejection of tender or termination of the
exchange offer. You may retender properly withdrawn old notes by following one
of the procedures described above under "--Procedures for Tendering" at any time
before the expiration date.
CONDITIONS
Despite any other term of the exchange offer, we will not be required to
accept for exchange, or exchange new notes for, any old notes and we may
terminate the exchange offer as provided in this document before the old notes
are accepted, if:
o any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the exchange offer
which, in our reasonable judgment, might materially impair our ability
to proceed with the exchange offer
or
--
o any law, statute, rule or regulation is proposed, adopted or enacted,
or the staff of the SEC interprets any existing law, statute, rule or
regulation in a manner which, in our reasonable judgment, might
materially impair our ability to proceed with the exchange offer
or
--
o we deem it advisable to terminate the exchange offer.
The conditions listed above are for our sole benefit and we may assert
these rights regardless of the circumstances giving rise to any of these
conditions. We may waive these conditions in our reasonable discretion in whole
or in part at any time and from time to time. If we fail at any time to
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exercise any of the above rights, the failure will not be deemed a waiver of
those rights, and those rights will be deemed ongoing rights which may be
asserted at any time and from time to time.
If we determine in our reasonable discretion that we may terminate the
exchange offer, we may:
o refuse to accept any old notes and return all tendered old notes to the
tendering holders
or
--
o extend the exchange offer and retain all old notes tendered before the
exchange offer expires, subject, however, to the rights of holders to
withdraw these old notes
or
--
o waive unsatisfied conditions with respect to the exchange offer and
accept all properly tendered old notes that have not been withdrawn. If
this waiver constitutes a material change to the exchange offer, we
will disclose this change by means of a prospectus supplement that will
be distributed to the registered holders of the old notes. If the
exchange offer would otherwise expire, we will extend the exchange
offer for 5-10 business days, depending on how significant the waiver
is and the manner of disclosure to registered holders.
EXCHANGE AGENT
We have appointed The Bank of New York as the exchange agent for the
exchange offer. You should direct any questions, requests for assistance and
requests for additional copies of this document or of the letter of transmittal
to The Bank of New York, as follows:
BY MAIL, HAND OR OVERNIGHT COURIER:
The Bank of New York
Corporate Trust Services Window
101 Barclay Street
New York, New York 10286
Attention: Diane Amoroso,
Reorganization Section
BY FACSIMILE:
(212) 815-6339
CONFIRM BY TELEPHONE:
(212) 815-3738
The Bank of New York is also the trustee under the indenture governing the
notes.
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FEES AND EXPENSES
We will pay the expenses of this exchange offer. We are making the
principal solicitation for tenders of old notes by mail. Our officers and
regular employees, however, may make additional solicitation by telegraph,
facsimile, e-mail, telephone or in person. We have not retained any
dealer-manager in connection with the exchange offer and will not make any
payments to brokers, dealers or others soliciting acceptances of the exchange
offer. We will, however, pay the exchange agent reasonable and customary fees
for its services and will reimburse it for its reasonable out-of-pocket expenses
in connection with providing the services. We may also reimburse brokerage
houses and other custodians, nominees and fiduciaries for their out-of-pocket
expenses incurred in forwarding copies of this document, letters of transmittal
and related documents to beneficial holders of the old notes.
We will pay any transfer taxes applicable to the exchange of old notes. If,
however, a transfer tax is imposed for any reason other than the exchange, then
the person surrendering the notes will pay the amount of any transfer taxes. If
you do not submit satisfactory evidence of payment of taxes or of an exemption
with the letter of transmittal, we will bill you directly for the amount of
those transfer taxes.
ACCOUNTING TREATMENT
We will record the new notes at the same carrying value as the old notes as
reflected in our accounting records on the date of exchange. Therefore, we will
not recognize a gain or loss for accounting purposes. We will amortize the
expenses of the exchange offer and the unamortized expenses related to the
issuance of the old notes over the term of the notes.
VOLUNTARY PARTICIPATION
YOU DO NOT HAVE TO PARTICIPATE IN THE EXCHANGE OFFER. You should carefully
consider whether to accept the terms and conditions of this offer. We urge you
to consult your own financial and tax advisors in deciding what action to take
with respect to the exchange offer. See "Risk Factors--Risk Factors Relating to
the Notes--If You Do Not Participate in the Exchange Offer, It May Be Harder for
You to Resell and Transfer Your Old Notes" for more information about the risks
of not participating in the exchange offer.
CONSEQUENCES OF FAILURE TO EXCHANGE
If you are eligible to participate in the exchange offer but do not tender
your old notes, you will not have any further registration rights and your old
notes will continue to be subject to transfer restrictions. Accordingly, you may
resell your old notes that are not exchanged only:
o to us, on redemption of notes or otherwise,
o so long as the old notes are eligible for resale under Rule 144A under
the Securities Act, to a person whom you reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A
purchasing for its own account or for the account of a qualified
institutional buyer in a transaction meeting the requirements of Rule
144A,
o in accordance with Rule 144 under the Securities Act or another
exemption from the registration requirements of the Securities Act,
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o outside the U.S. to a foreign person in accordance with the
requirements of Regulation S under the Securities Act or
o under an effective registration statement under the Securities Act, in
each case in accordance with all other applicable securities laws.
REGULATORY APPROVALS
We do not have to comply with any federal or state regulatory requirements
and we do not have to obtain any approvals in connection with the exchange
offer.
DESCRIPTION OF THE NEW NOTES
We issued the old notes, and will issue the new notes, under the indenture,
dated as of July 1, 1999, between us and The Bank of New York, as trustee. The
following description of the material provisions of the indenture is only a
summary. It does not set out the indenture in its entirety. WE URGE YOU TO READ
THE INDENTURE BECAUSE IT, AND NOT THIS DESCRIPTION, DEFINES YOUR RIGHTS AS A
HOLDER OF THE NOTES.
In this section, the term "we" refers to CSC Holdings, Inc. and not to any
of the subsidiaries. The definitions of some capitalized terms used in the
following summary are set forth below under "--Certain Definitions".
We will consider the old notes and the new notes collectively to be a
single class for all purposes under the indenture, including waivers,
amendments, redemptions and offers to purchase.
GENERAL
The new notes will mature on July 15, 2009, will be limited to $500,00,000
aggregate principal amount and will be our unsecured obligations. The new notes
will bear interest at the rate of 8 1/8% per year from July 13, 1999 or from the
most recent interest payment date to which interest has been paid. Interest is
payable semi-annually on January 15 and July 15 of each year, commencing January
15, 2000, to the person in whose name the note is registered at the close of
business on the January 1 and July 1, as the case may be, next preceding the
interest payment date.
Principal of and interest on the new notes will be payable, and the new
notes will be exchangeable and transferable, at our office or agency in The City
of New York, which initially will be the corporate trust office of the trustee
at 101 Barclay Street, 21st Floor, New York, New York 10286. The new notes will
be issued only in fully registered form without coupons, in denominations of
$1,000 or any integral multiple thereof. No service charge will be made for any
registration of transfer or exchange of the new notes, except for any tax or
other governmental charge that may be imposed in connection therewith.
The indenture does not contain any provisions that limit our ability to
incur indebtedness or that give holders of the new notes protection in the event
of a highly leveraged or similar transaction, other than as described below
under "--Certain Covenants--Limitation on Indebtedness".
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OPTIONAL REDEMPTION
The new notes are not subject to redemption at our option before maturity.
SINKING FUND
The new notes will not be entitled to the benefits of a sinking fund.
RANKING
The old notes are, and the new notes will be, senior unsecured obligations
and will rank equally in right of payment with all of our other existing and
future unsubordinated indebtedness. All of our secured indebtedness will have a
prior claim with respect to the assets securing this indebtedness. The
liabilities, including trade payables, of our subsidiaries will have a prior
claim with respect to the assets of those subsidiaries. In that regard, some of
the subsidiaries in our Restricted Group have guaranteed our indebtedness under
our credit agreement, but these subsidiaries will not be guarantors of the new
notes.
As of March 31, 1999, after giving effect to the Contribution of the
Contributed Business Subsidiaries and the sale of the old notes and the
application of the estimated net proceeds from the sale of the old notes:
o we would have had $94 million in borrowings under our credit agreement,
$2,692 million of senior unsecured indebtedness, $1,048 million of
senior subordinated indebtedness and obligations and $10 million of
capitalized leases, other than guarantees of subsidiary debt discussed
below,
o subsidiaries in our Restricted Group would have had $923 million of
indebtedness and capitalized leases, in addition to the guarantees of
borrowings under our credit agreement, and
o subsidiaries in our Unrestricted Group would have had $782 million of
indebtedness and capitalized leases.
We have guaranteed all of the indebtedness of subsidiaries in our
Restricted Group on a senior basis.
CERTAIN DEFINITIONS
The following definitions apply to the indenture relating to the old notes
and the new notes. You should read the indenture for the full definition of all
these terms.
"Acquired Indebtedness" means Indebtedness of a person
o existing at the time the person is merged with or into CSC Holdings or
a subsidiary or becomes a subsidiary or
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o assumed in connection with the acquisition of assets from the person.
"Affiliate" means, with respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct the management and policies of the person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Annualized Operating Cash Flow" means, for any period of three complete
consecutive calendar months, an amount equal to Operating Cash Flow for the
period multiplied by four.
"Average Life" means, at any date of determination with respect to any debt
security, the quotient obtained by dividing
(a) the sum of the products of (1) the number of years from the date of
determination to the dates of each successive scheduled principal
payment of the debt security and (2) the amount of the principal
payment BY
(b) the sum of all the principal payments.
"Capitalized Lease Obligation" means any obligation of a person to pay rent
or other amounts under a lease with respect to any property, whether real,
personal or mixed, acquired or leased by the person and used in its business
that is required to be accounted for as a liability on the balance sheet of the
person in accordance with GAAP, and the amount of the Capitalized Lease
Obligation will be the amount so required to be accounted for as a liability.
"Cash Flow Ratio" means, as at any date, the ratio of
(a) the sum of the aggregate outstanding principal amount of all
Indebtedness of CSC Holdings and the Restricted Subsidiaries determined
on a consolidated basis but excluding all Interest Swap Obligations
entered into by CSC Holdings or any Restricted Subsidiary and one of
the lenders under our credit agreement outstanding on the date PLUS
(but without duplication of Indebtedness supported by letters of
credit) the aggregate undrawn face amount of all letters of credit
outstanding on the date to
(b) Annualized Operating Cash Flow determined as at the last day of the
most recent month for which financial information is available.
"Consolidated Net Tangible Assets" of any person means, as of any date:
(a) all amounts that would be shown as assets on a consolidated balance
sheet of the person and its Restricted Subsidiaries prepared in
accordance with GAAP, LESS
(b) the amount thereof constituting goodwill and other intangible assets as
calculated in accordance with GAAP.
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"Cumulative Cash Flow Credit" means the sum of:
o cumulative Operating Cash Flow during the period commencing on July 1,
1988 and ending on the last day of the most recent month preceding the
date of the proposed Restricted Payment for which financial information
is available or, if cumulative Operating Cash Flow for the period is
negative, minus the amount by which cumulative Operating Cash Flow is
less than zero PLUS
o the aggregate net proceeds received by CSC Holdings from the issuance
or sale, other than to a Restricted Subsidiary, of its capital stock,
other than Disqualified Stock, on or after January 1, 1992, PLUS
o the aggregate net proceeds received by CSC Holdings from the issuance
or sale, other than to a Restricted Subsidiary, of its capital stock,
other than Disqualified Stock, on or after January 1, 1992, on the
conversion of, or exchange for, indebtedness of CSC Holdings or any
Restricted Subsidiary or from the exercise of any options, warrants or
other rights to acquire capital stock of CSC Holdings.
For purposes of this definition, the net proceeds in property other than
cash received by CSC Holdings as contemplated by the second two bullet points
above will be valued at the fair market value of the property, as determined by
our board of directors, whose good faith determination will be conclusive, at
the date of receipt by CSC Holdings.
"Cumulative Interest Expense" means, for the period commencing on July 1,
1988 and ending on the last day of the most recent month preceding the proposed
Restricted Payment for which financial information is available, the aggregate
of the interest expense of CSC Holdings and its Restricted Subsidiaries for the
period, determined on a consolidated basis in accordance with GAAP, including
interest expense attributable to Capitalized Lease Obligations.
"Debt" with respect to any person means, without duplication, any
liability, whether or not contingent:
o in respect of borrowed money or evidenced by bonds, notes, debentures
or similar instruments or letters of credit, or reimbursement
agreements with respect thereto, but excluding reimbursement
obligations under any surety bond,
o representing the balance deferred and unpaid of the purchase price of
any property, including under Capitalized Lease Obligations, except any
balance that constitutes a trade payable,
o under Interest Swap Agreements, as defined in our credit agreement,
entered into under our credit agreement,
o under any other agreement related to the fixing of interest rates on
any Indebtedness, like an interest swap, or collar agreement, if and to
the extent any of the foregoing would appear as a liability on a
balance sheet of the person prepared on a consolidated basis
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in accordance with GAAP, or
o guarantees of items of other persons which would be included within
this definition for other persons, whether or not the guarantee would
appear on the balance sheet.
"Debt" does not include:
o Disqualified Stock,
o any liability for federal, state, local or other taxes owed or owing by
the person or
o any accounts payable or other liability to trade creditors arising in
the ordinary course of business, including guarantees thereof or
instruments evidencing these liabilities.
"Disqualified Stock" means, with respect to the notes, any capital stock of
CSC Holdings or any Restricted Subsidiary which, by its terms, or by the terms
of any security into which it is convertible or for which it is exchangeable, or
on the happening of any event, matures or is mandatorily redeemable, under a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or before the maturity date of the
notes.
"Generally Accepted Accounting Principles"or "GAAP" means generally
accepted accounting principles in the U.S., consistently applied, which were in
effect as of August 21, 1997.
"Indebtedness" with respect to any person means the Debt of the person,
provided that, for purposes of the definition of "Indebtedness", including the
term "Debt" to the extent incorporated in the definition, and for purposes of
the definition of "Event of Default", the term "guarantee" will not be
interpreted to extend to a guarantee under which recourse is limited to the
capital stock of an entity that is not a Restricted Subsidiary.
"Interest Swap Obligations" means, with respect to any person, the
obligations of the person under any arrangement with any other person whereby,
directly or indirectly, the person is entitled to receive from time to time
periodic payments calculated by applying either a floating or a fixed rate of
interest on a stated notional amount in exchange for periodic payments made by
the person calculated by applying a fixed or a floating rate of interest on the
same notional amount.
"Investment" means any advance, loan, account receivable, other than an
account receivable arising in the ordinary course of business, or other
extension of credit (excluding, however, accrued and unpaid interest in respect
of any advance, loan or other extension of credit) or any capital contribution
to (by means of transfers of property to others, payments for property or
services for the account or use of others, or otherwise), any purchase or
ownership of any stock, bonds, notes, debentures or other securities, including,
without limitation, any interests in any partnership or joint venture, of, or
any bank accounts with or guarantee of any Indebtedness or other obligations of,
any Unrestricted Subsidiary or Affiliate that is not a subsidiary of CSC
Holdings, provided that
o the term "Investment" will not include any transaction that would
otherwise constitute an Investment of CSC Holdings or a subsidiary of
CSC Holdings to the extent that the consideration provided by CSC
Holdings or the subsidiary in connection therewith consists of capital
stock of CSC Holdings, other than Disqualified Stock, and
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o the term "guarantee" will not be interpreted to extend to a guarantee
under which recourse is limited to the capital stock of an entity that
is not a Restricted Subsidiary.
"Lien" means any lien, security interest, charge or encumbrance of any
kind, including any conditional sale or other title retention agreement, any
lease in the nature of a security interest and any agreement to give any
security interest. A person will be deemed to own subject to a Lien any property
which the person has acquired or holds subject to the interest of a vendor or
lessor under a conditional sale agreement, capital lease or other title
retention agreement.
"Mandatorily Redeemable Preferred Stock" means CSC Holdings' Series H
Redeemable Exchangeable Preferred Stock, Series M Redeemable Exchangeable
Preferred Stock and any series of preferred stock of CSC Holdings issued in
exchange for, or the proceeds of which are used to repurchase, redeem, defease
or otherwise acquire, all or any portion of the Series H Redeemable Exchangeable
Preferred Stock, Series M Redeemable Exchangeable Preferred Stock or any other
Mandatorily Redeemable Preferred Stock.
"Operating Cash Flow" means, for any period, the sum of the following for
CSC Holdings and the Restricted Subsidiaries for the period, determined on a
consolidated basis in accordance with GAAP, except for the amortization of
deferred installation income which will be excluded from the calculation of
Operating Cash Flow for all purposes of the indenture:
o aggregate operating revenues
minus
-----
o aggregate operating expenses, including technical, programming, sales,
selling, general and administrative expenses and salaries and other
compensation, net of amounts allocated to Affiliates, paid to any
general partner, director, officer or employee of CSC Holdings or any
Restricted Subsidiary, but excluding interest, depreciation and
amortization and the amount of non-cash compensation in respect of CSC
Holdings' employee incentive stock programs for the period (not to
exceed in the aggregate for any calendar year 7% of the Operating Cash
Flow for the previous calendar year) and, to the extent otherwise
included in operating expenses, any losses resulting from a write-off
or write-down of Investments by CSC Holdings or any Restricted
Subsidiary in Affiliates.
For purposes of determining Operating Cash Flow, all management fees will be
excluded until actually paid to CSC Holdings or any Restricted Subsidiary in
cash.
"Permitted Liens" means the following types of Liens:
o Liens existing on the issuance date of the old notes,
o Liens on shares of the capital stock of an entity that is not a
Restricted Subsidiary, which Liens solely secure a guarantee by CSC
Holdings or a Restricted Subsidiary, or both, of Indebtedness of the
entity,
o Liens on Receivables and Related Assets, and proceeds thereof, securing
only Indebtedness otherwise permitted to be incurred by a
Securitization Subsidiary,
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o Liens on shares of the capital stock of a subsidiary of CSC Holdings
securing Indebtedness under our credit agreement or any renewal of or
replacement of our credit agreement,
o Liens granted in favor of CSC Holdings or any Restricted Subsidiary,
o Liens securing the notes,
o Liens securing Acquired Indebtedness created before, and not in
connection with or in contemplation of, incurrence of the Indebtedness
by CSC Holdings or a Restricted Subsidiary; provided that the Lien does
not extend to any property or assets of CSC Holdings or any Restricted
Subsidiary other than the assets acquired in connection with the
incurrence of Acquired Indebtedness,
o Liens securing Interest Swap Obligations or "margin stock", as defined
in Regulations G and U of the Board of Governors of the Federal Reserve
System,
o statutory Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other like liens arising in the
ordinary course of business of CSC Holdings or any Restricted
Subsidiary and with respect to amounts not yet delinquent or being
contested in good faith by appropriate proceedings,
o Liens for taxes, assessments, government charges or claims not yet due
or that are being contested in good faith by appropriate proceedings,
o zoning restrictions, easements, rights-of-way, restrictions and other
similar charges or encumbrances or minor defects in title not
interfering in any material respect with the business of CSC Holdings
or any of its Restricted Subsidiaries,
o Liens arising by reason of any judgment, decree or order of any court,
arbitral tribunal or similar entity so long as any appropriate legal
proceedings that may have been initiated for the review of the
judgment, decree or order have not been finally terminated or the
period within which the proceedings may be initiated has not expired,
o Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, employment insurance and other
types of social security or similar legislation,
o Liens securing the performance of bids, tenders, leases, contracts,
franchises, public or statutory obligations, surety, stay or appeal
bonds, or other similar obligations arising in the ordinary course of
business,
o Leases under which CSC Holdings or any Restricted Subsidiary is the
lessee or the lessor,
o purchase money mortgages or other purchase money liens, including
without limitation any Capital Lease Obligations, on
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any fixed or capital assets acquired after the issuance date of these
securities, or purchase money mortgages, including without limitation
Capitalized Lease Obligations, on any like assets hereafter acquired or
existing at the time of acquisition of these assets, whether or not
assumed, so long as (1) the mortgage or lien does not extend to or
cover any other asset of CSC Holdings or any Restricted Subsidiary and
(2) the mortgage or lien secures the obligation to pay the purchase
price of the asset, interest thereon and other charges incurred in
connection therewith, or the obligation under the Capitalized Lease
Obligation, only,
o Liens securing reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating
to the letters of credit and products and proceeds thereof,
o Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of CSC
Holdings or any of its Restricted Subsidiaries, including rights of
offset and set-off,
o Liens to secure other Indebtedness; provided, however, that the
principal amount of any Indebtedness secured by the Liens, together
with the principal amount of any Indebtedness refinancing any
Indebtedness incurred under this clause as permitted by the immediately
following clause, and successive refinancings thereof, may not exceed
15% of CSC Holdings' consolidated Net Tangible Assets as of the last
day of CSC Holdings' most recently completed fiscal year for which
financial information is available, and
o any extension, renewal or replacement, in whole or in part, of any Lien
described in the immediately preceding clauses; provided that any
extension, renewal or replacement is no more restrictive in any
material respect than the Lien so extended, renewed or replaced and
does not extend to any additional property or assets.
"Receivables and Related Assets" means:
o accounts receivable, instruments, chattel paper, obligations, general
intangibles, equipment and other similar assets, including interests in
merchandise or goods, the sale or lease of which gives rise to the
foregoing, related contractual rights, guarantees, insurance proceeds,
collections and other related assets,
o equipment,
o inventory, and
o proceeds of all of the above.
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"Refinancing Indebtedness" means, with respect to the notes, Indebtedness
of CSC Holdings incurred to redeem, repurchase, defease or otherwise acquire or
retire for value other Indebtedness that is subordinate in right of payment to
the notes, so long as any new Indebtedness
(1) is made subordinate to these securities at least to the same extent as
the Indebtedness being refinanced and
(2) does not
(a) have an Average Life less than the Average Life of the
Indebtedness being refinanced,
(b) have a final scheduled maturity earlier than the final scheduled
maturity of the Indebtedness being refinanced or
(c) permit redemption at the option of the holder earlier than the
earlier of (A) the final scheduled maturity of the Indebtedness
being refinanced or (B) any date of redemption at the option of
the holder of the Indebtedness being refinanced.
"Restricted Payment" means, with respect to the notes:
o any Stock Payment by CSC Holdings or a Restricted Subsidiary,
o any direct or indirect payment to redeem, purchase, defease or
otherwise acquire or retire for value, or permit any Restricted
Subsidiary to redeem, purchase, defease or otherwise acquire or retire
for value, before any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, any Indebtedness of CSC Holdings that
is subordinate in right of payment to the notes; provided, however,
that, with respect to the notes, any direct or indirect payment to
redeem, purchase, defease or otherwise acquire or retire for value, or
permit any Restricted Subsidiary to redeem, repurchase, defease or
otherwise acquire or retire for value, before any scheduled maturity,
scheduled repayment or scheduled sinking fund payment, any Indebtedness
that is subordinate in right of payment to these securities will not be
a Restricted Payment if either:
(1) after giving effect thereto, the ratio of the Senior Indebtedness
of CSC Holdings and the Restricted Subsidiaries to Annualized
Operating Cash Flow determined as of the last day of the most
recent month for which financial information is available is less
than or equal to 5 to 1 or
(2) the subordinate indebtedness is redeemed, purchased, defeased or
otherwise acquired or retired in exchange for, or out of, (a) the
proceeds of a sale, within one year before or 180 days after the
redemption, purchase, defeasance, acquisition or retirement, of
Refinancing Indebtedness or capital stock of CSC Holdings or
warrants, rights or options to acquire capital stock of CSC
Holdings or (b) any source of funds other than the incurrence of
Indebtedness, or
o any direct or indirect payment to redeem, purchase, defease or
otherwise acquire or retire for value any Qualified Stock at its
mandatory redemption date or other maturity date if and to the extent
that Indebtedness is incurred to finance the redemption, purchase,
defeasance or other acquisition or retirement; provided, however, that
the redemption, purchase,
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defeasance or other acquisition or retirement of Mandatorily Redeemable
Preferred Stock at its mandatory redemption or other maturity date will
not be a Restricted Payment if and to the extent any Indebtedness
incurred to finance all or a portion of the purchase redemption price
does not have a final scheduled maturity date, or permit redemption at
the option of the holder thereof, earlier than the original scheduled
maturity of the notes.
Notwithstanding the foregoing, Restricted Payments will not include:
o payments by any Restricted Subsidiary to CSC Holdings or any other
Restricted Subsidiary or
o any Investment or designation of a Restricted Subsidiary as an
Unrestricted Subsidiary permitted under the "Limitation on Investments
in Unrestricted Subsidiaries and Affiliates" covenant.
"Restricted Subsidiary" means any subsidiary of CSC Holdings, whether
existing on the date of the indenture or created subsequent thereto, designated
from time to time by CSC Holdings as a "Restricted Subsidiary"; provided,
however, that no subsidiary that is not a Securitization Subsidiary can be or
remain so designated unless (1) at least 67% of each of the total equity
interest and the voting control of the subsidiary is owned, directly or
indirectly, by CSC Holdings or another Restricted Subsidiary and (2) the
subsidiary is not restricted, under the terms of any loan agreement, note,
indenture or other evidence of indebtedness, from
o paying dividends or making any distribution on the subsidiary's capital
stock or other equity securities or paying any Indebtedness owed to CSC
Holdings or to any Restricted Subsidiary,
o making any loans or advances to CSC Holdings or any Restricted
Subsidiary or
o transferring any of its properties or assets to CSC Holdings or any
Restricted Subsidiary
It being understood that a financial covenant any of the components of which are
directly impacted by the taking of the action, e.g. the payment of a dividend,
itself, like a minimum net worth test, would be deemed to be a restriction on
the foregoing actions, while a financial covenant none of the components of
which is directly impacted by the taking of the action, e.g., the payment of a
dividend, itself, like a debt to cash flow test, would not be deemed to be a
restriction on the foregoing actions and provided further that CSC Holdings may,
from time to time, redesignate any Restricted Subsidiary as an Unrestricted
Subsidiary in accordance with the provisions of the "Limitation on Investments
in Unrestricted Subsidiaries and Affiliates" covenant.
"Securitization Subsidiary" means a Restricted Subsidiary that is
established for the limited purpose of acquiring and financing Receivables and
Related Assets and engaging in activities ancillary thereto; provided that:
o no portion of the Indebtedness of a Securitization Subsidiary is
guaranteed by or is recourse to CSC Holdings or any other Restricted
Subsidiary, other than recourse for
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customary representations, warranties, covenants and indemnities, none
of which relates to the collectibility of the Receivables and Related
Assets, and
o none of CSC Holdings or any other Restricted Subsidiary has any
obligation to maintain or preserve the Securitization Subsidiary's
financial condition.
"Senior Indebtedness" means, with respect to the notes and any person, all
principal of, premium, if any, and interest, including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating to
the person whether or not a claim for post filing interest is allowed in the
proceedings, with respect to all Indebtedness of the person; provided that
Senior Indebtedness will not include:
o any Indebtedness of the person that, by its terms or the terms of the
instrument creating or evidencing the indebtedness, is expressly
subordinate in right of payment to the notes,
o any guarantee of Indebtedness of any subsidiary of the person if
recourse against the guarantee is limited to the capital stock or other
equity interests of the subsidiary,
o any obligation of the person to any subsidiary of the person or, in the
case of a Restricted Subsidiary, to CSC Holdings or any other
subsidiary of CSC Holdings, or
o any Indebtedness of the person, and any accrued and unpaid interest in
respect thereof, which is subordinate or junior in any respect to any
other Indebtedness or other obligation of the person.
"Stock Payment" means, with respect to any person, the payment or
declaration of any dividend, either in cash or in property, except dividends
payable in common stock or common shares of capital stock of the person, or the
making by the person of any other distribution, on account of any shares of
any class of its capital stock, now or hereafter outstanding, or the redemption,
purchase, retirement or other acquisition or retirement for value by the person,
directly or indirectly, of any shares of any class of its capital stock, now or
hereafter outstanding, other than the redemptions, purchase, defeasance or other
acquisition or retirement for value of any Disqualified Stock at its mandatory
redemption date or other maturity date.
"Unrestricted Subsidiary" means any subsidiary of CSC Holdings which is not
a Restricted Subsidiary.
CERTAIN COVENANTS
The indenture contains, among others, the following covenants:
Limitation on Indebtedness. The indenture provides that CSC Holdings will
not, and will 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 CSC Holdings and its Restricted Subsidiaries, unless, after giving
effect thereto, the Cash Flow Ratio is less than or equal to 9 to 1.
At March 31, 1999, after giving effect to the Contribution of the
Contributed Business Subsidiaries, the Cash Flow Ratio was 5.7 to 1.
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Limitation on Restricted Payments. The indenture provides that CSC Holdings
will not, and will not permit any Restricted Subsidiary to, make any Restricted
Payment if (1) at the time of the proposed Restricted Payment, a Default or
Event of Default has occurred and is continuing or will occur as a consequence
of the Restricted Payment or (2) immediately after giving effect to the
Restricted Payment, the aggregate of all Restricted Payments that have been made
on or after July 1, 1988 would exceed the sum of:
(a) $25,000,000, plus
(b) an amount equal to the difference between (i) the Cumulative Cash Flow
Credit and (ii) 1.2 multiplied by Cumulative Interest Expense.
For purposes of this "Limitation on Restricted Payments" covenant, the
amount of any Restricted Payment, if other than cash, will be based on fair
market value as determined by our board of directors, whose good faith
determination will be conclusive.
The provisions above do not prevent: (1) the payment of any dividend within
60 days after the date of declaration thereof, if at the date of declaration the
payment complied with the above provisions, and (2) the retirement, redemption,
purchase, defeasance or other acquisition of any shares of CSC Holdings' capital
stock or warrants, rights or options to acquire capital stock of CSC Holdings,
in exchange for, or out of the proceeds of a sale, within one year before or 180
days after the retirement, redemption, purchase, defeasance or other
acquisition, of, other shares of CSC Holdings' capital stock or warrants, rights
or options to acquire capital stock of CSC Holdings.
For purposes of determining the aggregate permissible amount of Restricted
Payments in accordance with clause (2) of the first paragraph of this covenant,
all amounts expended under clause (1) of this paragraph will be included and all
amounts expended or received under clause (2) of this paragraph will be
excluded; provided, however, that amounts paid under clause (1) of this
paragraph will be included only to the extent that the amounts were not
previously included in calculating Restricted Payments.
For the purposes of the provisions above, the net proceeds from the
issuance of shares of CSC Holdings' capital stock on conversion of Indebtedness
will be deemed to be an amount equal to the accreted value of the Indebtedness
on the date of the conversion and the additional consideration, if any, CSC
Holdings receives on the conversion, minus any cash payment on account of
fractional shares, the consideration, if in property other than cash, to be
determined by our board of directors, whose good faith determination will be
conclusive. If CSC Holdings makes a Restricted Payment which, at the time of the
making of the Restricted Payment, would be in CSC Holdings' good faith
determination permitted under the requirements of this covenant, the Restricted
Payment will be deemed to have been made in compliance with this covenant
notwithstanding any subsequent adjustments made in good faith to CSC Holdings'
financial statements affecting Cumulative Cash Flow Credit or Cumulative
Interest Expense for any period.
As of March 31, 1999, we are permitted to make Restricted Payments of about
$940 million. In accordance with the provisions set forth above, Cablevision's
Contribution of the Contributed Business Subsidiaries, which served about
847,000 subscribers as of March 31, 1999, to CSC Holdings on April 5, 1999,
described above under "Recent Developments", increased the amount of Restricted
Payments that we are permitted to make by the fair market value of the
Contributed Business Subsidiaries.
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Limitation on Investments in Unrestricted Subsidiaries and Affiliates. The
indenture provides that CSC Holdings will not, and will not permit any
Restricted Subsidiary to, directly or indirectly,
(1) make any Investment or
(2) allow any Restricted Subsidiary to become an Unrestricted Subsidiary,
in each case unless (a) no Default or Event of Default has occurred and
is continuing or will occur as a consequence of the Investment or the
redesignation of a Restricted Subsidiary and (b) after giving effect
thereto, the Cash Flow Ratio is less than or equal to 9 to 1.
The preceding provisions of this covenant will not prohibit any renewal or
reclassification of any Investment existing on the date hereof or trade credit
extended on usual and customary terms in the ordinary course of business.
Transactions with Affiliates. The indenture provides that CSC Holdings will
not, and will 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 CSC Holdings
that is not a subsidiary of CSC Holdings, having a value, or for consideration
having a value, in excess of $10,000,000 individually or in the aggregate unless
our board of directors makes a good faith determination that the terms of the
transaction are, taken as a whole, no less favorable to CSC Holdings or the
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 will not apply to Restricted Payments permitted under
"--Limitation on Restricted Payments".
Limitation on Liens. The indenture provides that CSC Holdings will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, create,
incur, assume or suffer to exist any Lien of any kind, except for Permitted
Liens, on or with respect to any of its property or assets, whether owned at the
date of the indenture or thereafter acquired, or any income, profits or proceeds
therefrom, or assign or otherwise convey any right to receive income thereon,
unless:
o in the case of any Lien securing Indebtedness that is subordinated in
right of payment to the notes, the notes are secured by a Lien on the
property, assets or proceeds that is senior in priority to the Lien and
o in the case of any other Lien, the notes are equally and ratably
secured.
CONSOLIDATION, MERGER AND SALE OF ASSETS
CSC Holdings may not consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to, any person, unless:
o the person formed by or surviving any consolidation or merger, if other
than CSC Holdings, or to which the sale, assignment, transfer, lease,
conveyance or disposition is made is a corporation organized and
existing under the laws of the U.S., any state thereof or the District
of Columbia, and assumes by a supplemental indenture all of the
obligations of CSC Holdings under the notes and the indenture,
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o immediately before and immediately after the transaction, and after
giving effect thereto, no Default or Event of Default has occurred and
is continuing, and
o immediately after the transaction, and after giving effect thereto, the
person formed by or surviving any consolidation or merger, or to which
the sale, assignment, transfer, lease or conveyance or disposition is
made, has a Cash Flow Ratio not in excess of 9 to 1.
EVENTS OF DEFAULT
The following are Events of Default under the indenture:
(1) default for 30 days in payment of interest on the notes,
(2) default in payment of principal of the notes at maturity, on
acceleration or otherwise,
(3) failure to comply with any other covenant or agreement of CSC Holdings,
continued for 60 days, or, with respect to some covenants or
agreements, 30 days, after written notice as provided in the indenture,
(4) default or defaults under any mortgage, indenture or instrument that
secures or evidences any Indebtedness for money borrowed or guaranteed
by CSC Holdings or a Restricted Subsidiary in an aggregate amount of
$10,000,000 or more, but excluding any Indebtedness for the deferred
purchase price of property or services owed to the person providing the
property or services as to which CSC Holdings or the Restricted
Subsidiary is contesting its obligation to pay in good faith and by
proper proceedings and for which CSC Holdings or the Restricted
Subsidiary has established appropriate reserves, which result from the
failure to pay the Indebtedness at final maturity or which has resulted
in the acceleration of the Indebtedness,
(5) the entry of a final judgment or final judgments for the payment of
money by a court or courts of competent jurisdiction against CSC
Holdings or any Restricted Subsidiary in an aggregate amount exceeding
$10,000,000, which remain undischarged and unbonded for a period,
during which execution has not been effectively stayed, of 60 days or
as to which an enforcement proceeding has been commenced by any
creditor, and
(6) some events of bankruptcy, insolvency or reorganization.
If an Event of Default, other than as specified in (6) above, occurs and is
continuing, either the trustee or the holders of not less than 25% in aggregate
principal amount of the outstanding notes issued under the indenture, by written
notice to CSC Holdings, and to the Trustee if the notice is given by the
holders, may declare all the unpaid principal of and interest on the notes to be
due and payable as provided in the indenture. On a declaration of acceleration,
the principal and accrued interest will be due and payable ten days after
receipt by CSC Holdings of the written notice. No action on the part of the
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trustee or any holder of the notes is required for the acceleration if an Event
of Default specified in (6) above has occurred and is continuing.
The holders of at least a majority in principal amount of the notes issued
under the indenture may rescind an acceleration and its consequences if
o all existing Events of Default, other than the nonpayment of principal
of or interest on the notes which have become due solely because of the
acceleration, have been cured or waived and
o the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction.
A declaration of acceleration because of an Event of Default specified in
clause (4) of the preceding paragraph would be automatically annulled if the
Indebtedness referred to therein were discharged, or the holders thereof
rescinded their declaration of acceleration referred to therein, within 30 days
after the acceleration of the notes and no other Event of Default had occurred
and not been cured or waived during the period. The holders of a majority in
principal amount of the notes issued under the indenture also have the right to
waive some past defaults under the indenture.
No holder of any note issued under the indenture has any right to institute
any proceeding with respect to the notes, the indenture or for any remedy
thereunder, unless
o the holder has previously given to the trustee written notice of a
continuing Event of Default under the indenture,
o the holders of at least 25% in principal amount of the outstanding
notes issued under the indenture have made written request and offered
reasonable indemnity to the trustee to institute the proceeding as the
trustee under the indenture, and
o the trustee has not received from the holders of a majority in
principal amount of the outstanding notes issued under the indenture a
direction inconsistent with the request and the trustee has failed to
institute the proceeding within 60 days after receipt of the notice.
These limitations do not apply, however, to a suit instituted by a holder of a
note for the enforcement of payment of the principal of or interest on the note
on or after the respective due dates expressed in the note.
During the existence of an Event of Default, the trustee is required to
exercise the rights and powers vested in it under the indenture and use the same
degree of care and skill in its exercise thereof as a prudent person would
exercise under the circumstances in the conduct of the person's own affairs.
Subject to the provisions of the indenture relating to the duties of the
trustee, in case an Event of Default has occurred and is continuing, the trustee
is not under any obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders unless the holders
have offered to the trustee reasonable security or indemnity.
Subject to the provisions for the indemnification of the trustee, the
holders of a majority in principal amount of the notes issued under the
indenture have the right to direct the time, method and
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place of conducting any proceeding for any remedy available to the trustee, or
exercising any trust or power conferred on the trustee under the indenture.
CSC Holdings is required to furnish to the trustee an annual statement as
to the performance by CSC Holdings of its obligations under the indenture and as
to any default in the performance.
DEFEASANCE
CSC Holdings at any time may terminate all of its obligations with respect
to the notes ("defeasance"), except for some obligations, including those
regarding the Defeasance Trust, as defined below, and obligations to register
the transfer or exchange of the notes, to replace mutilated, destroyed, lost or
stolen notes and to maintain agencies in respect of the notes. CSC Holdings may
also at any time terminate its obligations under the covenants set forth in the
indenture, which are described under "Certain Covenants" above, and any omission
to comply with the obligations will not constitute a Default or an Event of
Default with respect to the notes ("covenant defeasance").
In order to exercise either defeasance or covenant defeasance,
o CSC Holdings must irrevocably deposit in trust, for the benefit of the
holders, with the trustee money or U.S. government obligations, or a
combination thereof, in amounts as will be sufficient to pay the
principal of and premium, if any, and interest on the notes being
defeased to redemption or maturity (the "Defeasance Trust"),
o CSC Holdings must deliver opinions of counsel to the effect that the
holders will not recognize income, gain or loss for federal income tax
purposes as a result of the defeasance or covenant defeasance and will
be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if the
defeasance or covenant defeasance had not occurred, in the case of
defeasance, the opinion must refer to and be based on a ruling of the
Internal Revenue Service or a change in applicable federal income tax
laws, and
o CSC Holdings must comply with some other conditions.
SATISFACTION AND DISCHARGE OF THE INDENTURE AND THE NOTES
The indenture will cease to be of further effect, except as to surviving
rights of registration of transfer or exchange of securities, as expressly
provided for in the indenture, as to all outstanding notes when either
o all notes theretofore authenticated and delivered, except lost, stolen
or destroyed notes which have been replaced or paid, have been
delivered to the trustee for cancellation and CSC Holdings has paid all
sums payable by it under the indenture or
o all notes not theretofore delivered to the trustee for cancellation (a)
have become due and payable, or (b) will become due and payable within
one year, and CSC Holdings has irrevocably deposited or caused to be
deposited with the trustee funds in an amount sufficient to pay the
entire indebtedness on the notes not theretofore delivered to the
trustee for cancellation, for principal and interest to the date of
deposit, if the notes are
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then due and payable, or to the maturity date, and CSC Holdings has paid all
other sums payable by it under the indenture.
MODIFICATION AND WAIVER
Modifications and amendments of the indenture or the notes issued
thereunder may be made by CSC Holdings and the trustee with the consent of the
holders of not less than a majority in aggregate principal amount of the notes
issued thereunder; provided, however, that no modification or amendment may,
without the consent of the holder of each outstanding note issued thereunder,
o change the stated maturity of the principal of, or any installment of
interest on, any notes issued thereunder,
o reduce the principal amount of or interest on the notes issued
thereunder,
o change the coin or currency in which any note or the interest on any
note is payable,
o impair the right to institute suit for the enforcement of any payment
on or with respect to the notes issued thereunder after the stated
maturity,
o reduce the percentage in principal amount of outstanding notes and
registered notes necessary to waive compliance with some provisions of
the indenture or to waive some defaults, or
o modify any of the provisions relating to supplemental
indentures requiring the consent of holders or relating to the waiver
of past defaults, except to increase the percentage of outstanding
securities required for the actions or to provide that some other
provisions of the indenture cannot be modified or waived without the
consent of the holder of each note affected by the provisions.
The holders of a majority in aggregate principal amount of the notes issued
under the indenture may waive compliance with some restrictive covenants and
provisions of the indenture.
REGARDING THE TRUSTEE
The Bank of New York is the trustee under the indenture and the indentures
relating to our existing senior indebtedness and senior subordinated
indebtedness. The Bank of New York is a party to some credit agreements with us
and our subsidiaries, including our credit agreement. The Bank of New York may
also maintain other banking arrangements with us in the ordinary course of
business.
BOOK-ENTRY DELIVERY AND FORM
The certificates representing the new notes will be issued in fully
registered form, without coupons. The new notes will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York ("DTC"), and
registered in the name of Cede & Co., as DTC's nominee, in the form of a global
certificate.
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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
The exchange of old notes for new notes will not be treated as a taxable
transaction for U.S. Federal income tax purposes because the terms of the new
notes will not be considered to differ materially in kind or in extent from the
terms of the old notes. Rather, the new notes you receive will be treated as a
continuation of your investment in the old notes. As a result, you will not have
any material U.S. Federal income tax consequences if you exchange your old notes
for new notes.
IF YOU ARE THINKING ABOUT EXCHANGING YOUR OLD NOTES FOR NEW NOTES, YOU SHOULD
CONSULT YOUR OWN TAX ADVISORS CONCERNING THE TAX CONSEQUENCES ARISING UNDER
STATE, LOCAL OR FOREIGN LAWS OF THE EXCHANGE.
PLAN OF DISTRIBUTION
If you want to participate in the exchange offer, you must represent, among
other things, that:
o you are acquiring the new notes issued in the exchange offer in the
ordinary course of your business,
o you are not an "affiliate", as defined in Rule 405 under the Securities
Act, of CSC Holdings and
o you are not participating, do not intend to participate and have
no arrangement or understanding with any person to participate, in a
distribution of the new notes issued in the exchange offer.
If you are unable to make the above representations, you are a "restricted
holder". A restricted holder will not be able to participate in the exchange
offer, and may only sell its old notes under a registration statement containing
the selling securityholder information required by Item 507 of Regulation S-K of
the Securities Act, or under an exemption from the registration requirements of
the Securities Act.
If you are a broker-dealer who holds old notes that were acquired for your
own account as a result of market-marking activities or other trading
activities, you may exchange old notes by the exchange offer. As a
broker-dealer, you may be deemed to be an "underwriter" within the meaning of
the Securities Act and, consequently, must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of the new
notes you receive in the exchange offer.
Each participating broker-dealer is required to acknowledge in the letter
of transmittal that it acquired the old notes as a result of market-making
activities or other trading activities and that it will deliver a prospectus in
connection with the resale of the new notes. We have agreed that, for a period
of up to 90 days after the last exchange date, we will use our best efforts to
o keep the exchange offer registration statement continuously effective,
supplemented and amended as required by the registration rights
agreement to the extent necessary to ensure that it is available for
resale of old notes acquired by broker-dealers for their own accounts
as a result of market-making activities or other trading activities,
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o ensure that the exchange offer registration statement conforms with the
requirements of the registration rights agreement, the Securities Act
and the policies, rules and regulations of the SEC as announced from
time to time and
o make this prospectus available to participating broker-dealers for use
in connection with any resale.
During this period of time, delivery of this prospectus, as it may be amended or
supplemented, will satisfy the prospectus delivery requirements of a
participating broker-dealer engaged in market making or other trading
activities.
Based on interpretations by the staff of the SEC, we believe that new notes
issued by the exchange offer may be offered for resale, resold and otherwise
transferred by their holder, other than a participating broker-dealer, without
compliance with the registration and prospectus delivery requirements of the
Securities Act.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by participating broker-dealers for their own
account under the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market
o in negotiated transactions,
o through the writing of options on the new notes or
o a combination of methods of resale.
The new notes may be sold from time to time:
o at market prices prevailing at the time of resale,
o at prices related to prevailing market prices or
o at negotiated prices.
Any resale may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from any participating broker-dealer and/or the purchasers of any new notes.
Any participating broker-dealer that resells new notes received by it for
its own account under the exchange offer and any broker or dealer that
participates in a distribution of the new notes may be deemed to be an
"underwriter" within the meaning of the Securities Act. Any profit on any resale
of new notes and any commissions or concessions received by these persons may be
deemed to be underwriting compensation under the Securities Act. The letter of
transmittal states that by acknowledging that it will deliver and by delivering
a prospectus, a participating broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
We have agreed to pay all expenses incidental to the exchange offer other
than commissions and concessions of any brokers or dealers and will indemnify
holders of the notes, including any broker-dealers, against some liabilities,
including liabilities under the Securities Act, as set forth in the registration
rights agreement.
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VALIDITY OF THE NEW NOTES
The validity of the new notes will be passed on for us by Sullivan &
Cromwell, New York, New York.
EXPERTS
The consolidated financial statements and schedule of CSC Holdings and its
subsidiaries as of December 31, 1998 and 1997 and for each of the years in the
three-year period ended December 31, 1998 that are incorporated in this
registration statement by reference have been incorporated herein in reliance on
the report of KPMG LLP, independent certified public accountants, incorporated
by reference herein, in reliance upon said firm as experts in accounting and
auditing.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Exchange Act and in
accordance therewith file reports and other information with the SEC. You can
inspect and copy the reports and other information that we file with the SEC at
the public reference facilities of the SEC at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices: Seven World Trade Center, Suite 1300, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661,
and copies of this material can be obtained from the Public Reference Section of
the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
Further information on the operation of the SEC's Public Reference Room in
Washington, D.C. can be obtained by calling the SEC at 1-800-SEC-0330.
The SEC also maintains a Web site that contains reports, proxy statements
and other information about issuers, like CSC Holdings, who file electronically
with the SEC. The address of that site is http://www.sec.gov. These reports and
other information also may be inspected at the offices of the American Stock
Exchange, 86 Trinity Place, New York, New York 10006.
WHERE YOU CAN FIND MORE INFORMATION
We hereby incorporate by reference into this document the following
documents or information filed with the SEC:
CSC HOLDINGS COMMISSION FILINGS PERIOD COVERED OR DATE FILED
------------------------------- ----------------------------
(FILE NO. 001-09046)
Annual Report on Form 10-K, as amended Fiscal year ended December 31, 1998
by our Form 10-K/A (collectively, our
"Form 10-K")
Quarterly Report on Form 10-Q (our Fiscal quarter ended March 31, 1999
"March 31, 1999 Form 10-Q")
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We also incorporate by reference into this document all documents we file
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after
the date of this offering made hereby.
We are delivering a copy of our Form 10-K and our March 31, 1999 Form 10-Q,
without exhibits thereto, with this document.
Any statement contained herein or in any document incorporated or deemed to
be incorporated by reference in this document will be deemed to be modified or
superseded for the purpose of this document to the extent that a subsequent
statement contained herein or in any subsequently filed document that also is or
is deemed to be incorporated by reference herein modifies or supersedes the
statement. Any statement so modified or superseded will not be deemed, except as
so modified or superseded, to constitute a part of this document.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT
WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. NEITHER THE MAKING OF THE EXCHANGE OFFER PURSUANT
TO THIS DOCUMENT NOR THE ACCEPTANCE OF OLD NOTES FOR TENDER OR EXCHANGE PURSUANT
THERETO SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF CSC HOLDINGS, INC. SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
EACH BROKER-DEALER WHO HOLDS OLD NOTES ACQUIRED FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES AND WHO RECEIVES NEW NOTES
FOR ITS OWN ACCOUNT IN EXCHANGE FOR OLD NOTES PURSUANT TO THE EXCHANGE OFFER
MUST DELIVER A COPY OF THIS PROSPECTUS IN CONNECTION WITH ANY RESALE OF NEW
NOTES.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Bethpage, the State of
New York, on this 11th day of August, 1999.
CSC HOLDINGS, INC.
By: /s/ William J. Bell
-----------------------------------
Name: William J. Bell
Title: Vice Chairman
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints William J. Bell and Robert S. Lemle, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him in his name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and file the same, with all exhibits
thereto and other documents in connection therewith, with the Commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated on August 11, 1999.
SIGNATURE TITLE
*
- ------------------------
James L. Dolan President, Chief Executive Officer and Director
(Principal Executive Officer)
*
- ------------------------
William J. Bell Vice Chairman and Director
(Principal Financial Officer)
*
- ------------------------
Andrew B. Rosengard Executive Vice President, Finance and Controller
(Principal Accounting Officer)
*
- ------------------------
Charles F. Dolan Chairman of the Board of Directors
I-1
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*
- ------------------------
Marc A. Lustgarten Vice Chairman and Director
*
- ------------------------
Robert S. Lemle Executive Vice President, General Counsel,
Secretary and Director
*
- ------------------------
Sheila A. Mahony Executive Vice President, Communications,
Government and Public Affairs and Director
*
- ------------------------
Thomas C. Dolan Senior Vice President,
Chief Information Officer and Director
*
- ------------------------
John Tatta Director
*
- ------------------------
Patrick F. Dolan Director
*
- ------------------------
Charles D. Ferris Director
*
- ------------------------
Richard H. Hochman Director
*
- ------------------------
Victor Oristano Director
*
- ------------------------
Vincent Tese Director
*
- ------------------------
William Fitzgerald Director
*
- ------------------------
Leo J. Hindery, Jr. Director
*By /s/ William J. Bell
------------------------------------
William J. Bell, as Attorney-In-Fact
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation--a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
rights to which those seeking indemnification may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
The first paragraph of Article Ninth of CSC Holdings's Amended and Restated
Certificate of Incorporation provides:
The corporation shall, to the fullest extent permitted by Section 145
of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, or by any successor thereto, indemnify any and
all persons whom it shall have power to indemnify under said section from
and against any and all of the expenses, liabilities or other matters
referred to in or covered by said section. Such right to indemnification
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of such a person. The indemnification provided for
herein shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any By-Law, agreement, vote
of stockholders or disinterested directors or otherwise.
Article VIII of the By-Laws of CSC Holdings provides:
A. The corporation shall indemnify each person who was or is made a
party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the
legal representative, is or was a director or officer of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or
alleged action in any other capacity while serving as a director, officer,
employee or agent, to the maximum extent authorized by the Delaware General
II-1
<PAGE>
Corporation Law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment
permits the corporation to provide broader indemnification rights than said
law permitted the corporation to provide before such amendment), against
all expense, liability and loss (including attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred by such person in connection with such
proceeding. Such indemnification shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators. The right to
indemnification conferred in this Article shall be a contract right and
shall include the right to be paid by the corporation the expenses incurred
in defending any such proceeding in advance of its final disposition,
provided that, if the Delaware General Corporation Law so requires, the
payment of such expenses incurred by a director or officer in advance of
the final disposition of a proceeding shall be made only on receipt by the
corporation of an undertaking by or on behalf of such person to repay all
amounts so advanced if it shall ultimately be determined that such person
is not entitled to be indemnified by the corporation as authorized in this
Article or otherwise.
B. The right to indemnification and advancement of expenses conferred
on any person by this Article shall not limit the corporation from
providing any other indemnification permitted by law nor shall it be deemed
exclusive of any other right which any such person may have or hereafter
acquire under any statute, provision of the Certificate of Incorporation,
by-law, agreement, vote of stockholders or disinterested directors or
otherwise.
C. The corporation may purchase and maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
CSC Holdings has entered into indemnification agreements with some of its
officers and directors indemnifying such officers and directors from and against
some expenses, liabilities or other matters referred to in or covered by Section
145 of the Delaware General Corporation Law. CSC Holdings has also entered into
an agreement with Charles F. Dolan ("Mr. Dolan"), the Chairman of CSC Holdings,
pursuant to which Mr. Dolan has agreed to guarantee CSC Holdings's obligation to
indemnify its officers and directors to the fullest extent permitted by Delaware
law. In addition, subject to some limitations, Mr. Dolan has agreed to indemnify
such officers and directors against any loss or expense such person may incur in
connection with any transaction involving Mr. Dolan or entities affiliated with
Mr. Dolan to the extent indemnification is not provided by CSC Holdings. Any
payment required to be made by Mr. Dolan pursuant to such agreement will be
reduced by any proceeds of insurance or reimbursement under any other form of
indemnification reimbursement available to such officer or director. CSC
Holdings maintains directors' and officers' liability insurance.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (1) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (2) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3) for
payments of unlawful dividends or unlawful stock repurchases or redemptions, or
II-2
<PAGE>
(4) for any transaction from which the director derived an improper personal
benefit. The second paragraph of Article Ninth of CSC Holdings's Certificate of
Incorporation provides for such limitation of liability.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS
EXHIBITS DESCRIPTION
- -------- -----------
1.1 Purchase Agreement, dated July 8, 1999, between the Registrant and
Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation,
Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated and Salomon
Smith Barney Inc.**
3.1 Certificate of Incorporation of the Registrant.**
3.2 Bylaws of the Registrant (incorporated herein by reference to
Exhibit 3.20 to the Registrant's Registration Statement on Form S-4,
File No. 33-62717).
4.1 Registration Rights Agreement, dated July 13, 1999, between the
Registrant and Bear, Stearns & Co. Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated
and Salomon Smith Barney Inc.**
4.2 Indenture dated as of July 1, 1999, between the Company and The Bank
of New York, as trustee.**
4.3 Form of New Note (included in Exhibit 4.2).
5.1 Opinion of Sullivan & Cromwell regarding the validity of the 8 1/8%
Senior Notes being registered.*
8.1 Opinion of Sullivan & Cromwell regarding tax matters.*
12.1 Computation of Earnings to Fixed Charges.*
23.1 Consent of KPMG LLP.*
23.2 Consent of Sullivan & Cromwell (included in the opinions filed as
Exhibit 5.1 and Exhibit 8.1 hereto).
24.1 Power of Attorney.**
25.1 Statement of Eligibility of the Trustee.*
99.1 Form of Letter of Transmittal.**
II-3
<PAGE>
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement.**
- -------------------------------------
* Filed herewith.
** Previously filed.
(B) FINANCIAL STATEMENT SCHEDULES
All other schedules for which provisions is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
or are inapplicable and therefore have been omitted, or the required information
has been incorporated by reference herein or disclosed in the financial
statements which form a part of this Proxy Statement/Prospectus.
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(2) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes
that such reoffering prospectus will contain the information called for
by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(3) That every prospectus: (i) that is filed pursuant to paragraph (2)
immediately preceding, or (ii) that purports to meet the requirements
of Section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of
an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(4) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual
II-4
<PAGE>
report, to security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements of
Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934;
and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus
is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim
financial information.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, pursuant to the provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by any such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question of whether or not such indemnification is against public
policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.
(6) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of
this form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other equally
prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through
the date of responding to the request.
II-5
<PAGE>
INDEX TO EXHIBITS
Certain of the following documents are filed herewith. Certain other of the
following documents have been previously filed with the Securities and Exchange
Commission and, pursuant to Rule 12b-32, are incorporated herein by reference.
EXHIBITS DESCRIPTION
- -------- -----------
1.1 Purchase Agreement, dated July 8, 1999, between the Registrant and
Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation,
Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated and Salomon
Smith Barney Inc.**
3.1 Certificate of Incorporation of the Registrant.**
3.2 Bylaws of the Registrant (incorporated herein by reference to
Exhibit 3.20 to the Registrant's Registration Statement on Form S-4,
File No. 33-62717).
4.1 Registration Rights Agreement, dated July 13, 1999, between the
Registrant and Bear, Stearns & Co. Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated
and Salomon Smith Barney Inc.**
4.2 Indenture dated as of July 1, 1999, between the Company and The Bank
of New York, as trustee.**
4.3 Form of New Note (included in Exhibit 4.2).
5.1 Opinion of Sullivan & Cromwell regarding the validity of the 8 1/8%
Senior Notes being registered.*
8.1 Opinion of Sullivan & Cromwell regarding tax matters.*
12.1 Computation of Earnings to Fixed Charges.*
23.1 Consent of KPMG LLP.*
23.2 Consent of Sullivan & Cromwell (included in the opinions filed as
Exhibit 5.1 and Exhibit 8.1 hereto).
24.1 Power of Attorney (included in the signature page attached
hereto).**
25.1 Statement of Eligibility of the Trustee.*
99.1 Form of Letter of Transmittal.**
II-6
<PAGE>
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement.**
- -------------------------------------
* Filed herewith.
** Previously filed.
II-7
<TABLE>
<S> <C>
SULLIVAN & CROMWELL
NEW YORK TELEPHONE: (212) 558-4000
TELEX: 62694 (INTERNATIONAL) 127816 (DOMESTIC) 125 Broad Street, New York 10004-2498
CABLE ADDRESS: LADYCOURT, NEW YORK __________
FACSIMILE: (212) 558-3588 (125 Broad Street)
1701 PENNSYLVANIA AVE, N.W., WASHINGTON, D.C. 20006-5805
1888 CENTURY PARK EAST, LOS ANGELES 90067-1725
8, PLACE VENDOME, 75001 PARIS
ST. OLAVE'S HOUSE, 9a IRONMONGER LANE, LONDON EC2V 8EY
101 COLLINS STREET, MELBOURNE 3000
2-1, MARUNOUCHI 1-CHOME, CHIYODA-KU, TOKYO 100
NINE QUEEN'S ROAD, CENTRAL, HONG KONG
OBERLINDAU 54-56, 60323 FRANKFURT AM MAIN
</TABLE>
August 11, 1999
CSC Holdings, Inc.,
1111 Stewart Avenue,
Bethpage, New York 11714.
Dear Sirs:
In connection with the registration under the Securities Act of 1933
(the "Act") of $500,000,000 principal amount of 8 1/8% Series B Senior Notes due
2009 (the "Securities") of CSC Holdings, Inc., a Delaware corporation (the
"Company"), we, as your counsel, have examined such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our opinion,
when the Registration Statement has become effective under the Act and the
Securities have been duly executed and authenticated in accordance with the
Indenture relating to the Securities and issued and delivered as contemplated in
the Registration Statement, the Securities will constitute valid and legally
binding obligations of the Company, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
The foregoing opinion is limited to the Federal laws of the United
States, the laws of the State of New York and the General Corporation Law of the
State of Delaware, and we are expressing no opinion as to the effect of the laws
of any other jurisdiction.
<PAGE>
CSC Holdings, Inc. -2-
We have relied as to certain matters on information obtained from
public officials, officers of the Company and other sources believed by us to be
responsible, and we have assumed that the Indenture has been duly authorized,
executed and delivered by the Trustee thereunder, an assumption which we have
not independently verified.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Validity of
the New Notes" in the Prospectus. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
SULLIVAN & CROMWELL
<TABLE>
<S> <C>
SULLIVAN & CROMWELL
NEW YORK TELEPHONE: (212) 558-4000
TELEX: 62694 (INTERNATIONAL) 127816 (DOMESTIC) 125 Broad Street, New York 10004-2498
CABLE ADDRESS: LADYCOURT, NEW YORK __________
FACSIMILE: (212) 558-3588 (125 Broad Street)
1701 PENNSYLVANIA AVE, N.W., WASHINGTON, D.C. 20006-5805
1888 CENTURY PARK EAST, LOS ANGELES 90067-1725
8, PLACE VENDOME, 75001 PARIS
ST. OLAVE'S HOUSE, 9a IRONMONGER LANE, LONDON EC2V 8EY
101 COLLINS STREET, MELBOURNE 3000
2-1, MARUNOUCHI 1-CHOME, CHIYODA-KU, TOKYO 100
NINE QUEEN'S ROAD, CENTRAL, HONG KONG
OBERLINDAU 54-56, 60323 FRANKFURT AM MAIN
</TABLE>
August 11, 1999
CSC Holdings, Inc.,
1111 Stewart Avenue,
Bethpage, New York,
11714.
Re: Form S-4 Registration Statement
Ladies and Gentlemen:
We have acted as your counsel in connection with the Registration
Statement on Form S-4 filed on August 11, 1999 with the Securities and Exchange
Commission (the "Registration Statement") and hereby confirm to you that, in our
opinion, the discussion under the heading "Material U.S. Federal Income Tax
Considerations" in the Registration Statement accurately describes the United
States federal income tax considerations associated with the exchange of the old
notes for the new notes pursuant to the exchange offer described in the
Registration Statement.
We hereby consent to the filing with the Securities and Exchange
Commission of this letter as an exhibit to the Registration Statement and all
amendments thereto. In giving such consent, we do not thereby admit that we are
in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
SULLIVAN & CROMWELL
(EXHIBIT 12.1)
<TABLE>
<CAPTION>
CSC HOLDINGS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
DEFICIENCY OF EARNINGS AVAILABLE TO COVER FIXED CHARGES
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
--------- ------------------------
1999 1998 1998 1997 1996 1995 1994
==== ==== ==== ==== ==== ==== ====
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income/(Loss) from
continuing operations $(186,552) $ 15,634 $(239,533) $ 136,663 $(332,079) $(317,458) $(315,151)
--------- --------- --------- --------- --------- --------- ---------
Add:
Fixed charges per (B) below 124,579 98,651 422,897 381,202 278,437 322,054 269,627
Amortization of previously
capitalized interest -- -- -- -- -- -- --
Deduct:
Interest capitalized during
period -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Earnings for computation
purposes (A) $ (61,973) $ 114,285 $ 183,364 $ 517,865 $ (53,642) $ 4,596 $ (45,524)
========= ========= ========= ========= ========= ========= =========
Fixed Charges:
Interest on indebtedness,
expensed or capitalized,
including amortization of
debt expense 101,100 94,512 393,008 368,700 268,177 313,850 263,299
--------- --------- --------- --------- --------- --------- ---------
Portion of rents (D) representative
of the interest factor 23,479 4,139 29,889 12,502 10,260 8,204 6,328
--------- --------- --------- --------- --------- --------- ---------
Fixed Charges for computation
purposes (B) $ 124,579 $ 98,651 $ 422,897 $ 381,202 $ 278,437 $ 322,054 $ 269,627
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to fixed charges
(A)/(B) -- 1.16 -- 1.36 -- -- --
========= ========= ========= ========= ========= ========= =========
Deficiency of earnings available
to cover fixed charges $(186,552) $ -- $(239,533) -- $(332,079) $(317,458) $(315,151)
========= ========= ========= ========= ========= ========= =========
</TABLE>
(Exhibit 23.1)
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
The Board of Directors
CSC Holdings, Inc.:
We consent to the incorporation by reference in the registration statement on
Amendment No. 1 to Form S-4 of CSC Holdings, Inc. that covers the exchange of 8
1/8% Series B Senior Notes due 2009 for 8 1/8% Senior Notes due 2009 of our
report dated March 12, 1999, relating to the consolidated financial statements
and schedule of CSC Holdings, Inc. and subsidiaries as of December 31, 1998 and
1997 and for each of the years in the three-year period ended December 31, 1998,
which report appears in the December 31, 1998 combined annual report on Form
10-K of CSC Holdings, Inc. and Cablevision Systems Corporation, and to the
references to our firm under the heading "Selected Financial Data" and "Experts"
in the registration statement.
/s/KPMG LLP
KPMG LLP
Melville, New York
August 11, 1999
(EXHIBIT 25.1)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------
CSC HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware 11-2776686
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1111 Stewart Avenue 11714
Bethpage, New York (Zip code)
(Address of principal executive offices)
---------------
8-1/8% Series B Senior Notes due 2009
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 11th day of August, 1999.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
-------------------------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
<PAGE>
- --------------------------------------------------------------------------------
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin.................. $4,508,742
Interest-bearing balances........... 4,425,071
Securities:
Held-to-maturity securities......... 836,304
Available-for-sale securities....... 4,047,851
Federal funds sold and Securities
purchased under agreements to resell 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income...............39,349,679
LESS: Allowance for loan and
lease losses............603,025
LESS: Allocated transfer risk
reserve..................15,906
Loans and leases, net of unearned
income, allowance, and reserve..... 38,730,748
Trading Assets........................ 1,571,372
Premises and fixed assets (including
capitalized leases)................. 685,674
Other real estate owned............... 10,331
Investments in unconsolidated
subsidiaries and associated
companies........................... 182,449
Customers' liability to this bank on
acceptances outstanding............. 1,184,822
Intangible assets..................... 1,129,636
Other assets.......................... 2,632,309
-----------
Total assets.......................... $61,688,578
===========
LIABILITIES
Deposits:
In domestic offices................. $25,731,036
Noninterest-bearing.......10,252,589
Interest-bearing..........15,478,447
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 18,756,302
Noninterest-bearing..........111,386
Interest-bearing..........18,644,916
Federal funds purchased and
Securities sold under agreements to
repurchase.......................... 3,276,362
Demand notes issued to the
U.S.Treasury........................ 230,671
Trading liabilities................... 1,554,493
Other borrowed money:
With remaining maturity of one year
or less............................ 1,154,502
With remaining maturity of more
than one year through three years.. 465
-4-
<PAGE>
With remaining maturity of more
than three years................... 31,080
Bank's liability on acceptances
executed and outstanding............ 1,185,364
Subordinated notes and debentures..... 1,308,000
Other liabilities..................... 2,743,590
-----------
Total liabilities..................... 55,971,865
===========
EQUITY CAPITAL
Common stock.......................... 1,135,284
Surplus............................... 764,443
Undivided profits and capital reserves 3,807,697
Net unrealized holding gains (losses)
on available-for-sale securities.... 44,106
Cumulative foreign currency
translation adjustments............. ( 34,817)
Total equity capital.................. 5,716,713
-----------
Total liabilities and equity capital.. $61,688,578
===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
--x
Thomas A. Reyni |
Alan R. Griffith | Directors
Gerald L. Hassell |
--x
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