<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------- ----------------
Commission File Registrant; State of Incorporation; IRS Employer
Number Address and Telephone Number Identification No.
- - --------------- ----------------------------------- -----------------
1-14764 Cablevision Systems Corporation 11-3415180
Delaware
1111 Stewart Avenue
Bethpage, New York 11714
(516) 803-2300
1-9046 CSC Holdings, Inc. 11-2776686
Delaware
1111 Stewart Avenue
Bethpage, New York 11714
(516) 803-2300
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.
Cablevision Systems Corporation Yes X No
--- ---
CSC Holdings, Inc. Yes X No
--- ---
Number of shares of common stock outstanding as of May 5, 2000:
Cablevision Systems Corporation Class A Common Stock - 130,304,111
Cablevision Systems Corporation Class B Common Stock - 43,126,836
CSC Holdings, Inc. Common Stock - 1,000
===============================================================================
<PAGE>
TABLE OF CONTENTS
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations -
Three Months ended March 31, 2000 and 1999 (unaudited)......................................3
Condensed Consolidated Balance Sheets -
March 31, 2000 (unaudited) and December 31, 1999............................................4
Condensed Consolidated Statements of Cash Flows -
Three Months ended March 31, 2000 and 1999 (unaudited)......................................6
Notes to Condensed Consolidated Financial Statements (unaudited)............................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................................................10
Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................24
PART II - OTHER INFORMATION...................................................................................25
CSC HOLDINGS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations -
Three Months ended March 31, 2000 and 1999 (unaudited).....................................26
Condensed Consolidated Balance Sheets -
March 31, 2000 (unaudited) and December 31, 1999...........................................27
Condensed Consolidated Statements of Cash Flows -
Three Months ended March 31, 2000 and 1999 (unaudited).....................................29
Notes to Condensed Consolidated Financial Statements (unaudited)...........................30
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................................................34
Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................34
PART II - OTHER INFORMATION...................................................................................35
</TABLE>
-2-
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2000 and 1999
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Revenues ................................................................. $1,048,224 $ 933,708
---------- ----------
Operating expenses:
Technical and operating................................................. 440,028 401,881
Retail electronics cost of sales........................................ 112,453 98,092
Selling, general and
administrative...................................................... 202,660 335,329
Depreciation and amortization........................................... 233,352 205,453
------------ -----------
988,493 1,040,755
------------ ----------
Operating income (loss).......................................... 59,731 (107,047)
------------ -----------
Other income (expense):
Interest expense........................................................ (132,079) (109,292)
Interest income......................................................... 1,301 2,879
Equity in net loss of affiliates........................................ (2,316) (3,395)
Minority interests...................................................... (41,395) (17,619)
Miscellaneous, net...................................................... (737) (4,173)
------------ -------------
(175,226) (131,600)
------------ -----------
Net loss ................................................................. $ (115,495) $ (238,647)
=========== ==========
Basic and diluted net loss per common share................................ $ (0.67) $ (1.57)
============ ===========
Average number of common shares outstanding
(in thousands).......................................................... 173,351 151,625
============= ============
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
-3-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 2000 1999
---- ----
(Unaudited)
<S> <C> <C>
Cash and cash equivalents............................................................... $ 51,341 $ 62,665
Accounts receivable trade (less allowance for doubtful accounts of
$36,987 and $35,357)................................................................. 250,957 226,304
Notes and other receivables............................................................. 114,538 129,596
Inventory, prepaid expenses and other assets............................................ 232,758 219,487
Property, plant and equipment, net...................................................... 2,830,532 2,752,495
Investments in affiliates............................................................... 323,284 306,557
Advances to affiliates.................................................................. 51,620 46,685
Feature film inventory.................................................................. 330,843 335,826
Net assets held for sale................................................................ 272,290 269,349
Franchises, net of accumulated amortization of
$746,092 and $703,237................................................................ 608,922 651,777
Affiliation and other agreements, net of accumulated amortization of
$258,130 and $244,249................................................................ 159,369 173,250
Excess costs over fair value of net assets acquired and other intangible assets,
net of accumulated amortization of
$755,003 and $727,134................................................................ 1,898,541 1,816,030
Deferred financing, acquisition and other costs, net of
accumulated amortization of $59,630 and $51,063...................................... 150,087 140,287
------------ ------------
$7,275,082 $7,130,308
============ ============
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
-4-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(continued)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Accounts payable................................................................... $ 442,416 $ 411,804
Accrued liabilities................................................................ 896,125 1,048,623
Feature film and contract obligations.............................................. 356,608 371,126
Deferred revenue................................................................... 246,144 274,043
Bank debt.......................................................................... 2,610,134 2,254,487
Senior notes and debentures........................................................ 2,692,754 2,692,602
Subordinated notes and debentures.................................................. 1,048,546 1,048,513
Capital lease obligations and other debt........................................... 110,959 99,099
----------- -----------
Total liabilities.............................................................. 8,403,686 8,200,297
----------- -----------
Minority interests................................................................. 605,321 592,583
----------- -----------
Preferred stock of CSC Holdings, Inc............................................... 1,444,210 1,404,511
----------- -----------
Commitments and contingencies
Stockholders' deficiency:
Preferred Stock, $.01 par value, 10,000,000 shares
authorized, none issued.................................................... - -
Class A Common Stock, $.01 par value, 400,000,000 shares
authorized, 130,265,200 and 130,091,237 shares issued...................... 1,303 1,301
Class B Common Stock, $.01 par value, 160,000,000 shares
authorized, 43,126,836 shares issued....................................... 431 431
Paid-in capital................................................................ 736,427 731,986
Accumulated deficit............................................................ (3,915,797) (3,800,302)
---------- ----------
(3,177,636) (3,066,584)
Treasury stock, at cost (7,118 shares)......................................... (499) (499)
---------- ----------
Total stockholders' deficiency................................................. (3,178,135) (3,067,083)
---------- -----------
$7,275,082 $7,130,308
========== ==========
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
-5-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss .............................................................. $(115,495) $(238,647)
--------- ---------
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization...................................... 233,352 205,453
Equity in net loss of affiliates................................... 2,316 3,395
Minority interests................................................. 41,391 10,284
Gain on sale of investments........................................ - (10,861)
Write off of investment in affiliate............................... - 15,006
Amortization of deferred financing and debenture discount.......... 2,564 2,200
Loss (gain) on sale of equipment................................... (50) 1,159
Changes in assets and liabilities, net of effects
of acquisitions and dispositions................................ (168,752) 17,438
---------- ---------
Net cash provided by (used in) operating activities................ (4,674) 5,427
---------- ---------
Cash flows from investing activities:
Payments for acquisitions, net of cash acquired.......................... (106,183) (24,787)
Proceeds from sale of investments........................................ - 10,861
Capital expenditures..................................................... (203,348) (157,613)
Proceeds from sale of equipment.......................................... 84 155
Additions to intangible assets........................................... (94) (6,169)
Increase in investments in affiliates, net............................... (19,043) (24,075)
---------- ---------
Net cash used in investing activities.............................. (328,584) (201,628)
---------- ---------
Cash flows from financing activities:
Proceeds from bank debt.................................................. 891,800 515,877
Repayment of bank debt................................................... (556,153) (331,499)
Issuance of common stock................................................. 4,443 2,082
Purchase of treasury stock............................................... - (458)
Payments on capital lease obligations and other debt..................... (9,236) (3,186)
Additions to deferred financing and other costs.......................... (8,920) (1,867)
---------- ---------
Net cash provided by financing activities.......................... 321,934 180,949
---------- ---------
Net decrease in cash and cash equivalents.................................. (11,324) (15,252)
Cash and cash equivalents at beginning of year............................. 62,665 173,826
---------- ---------
Cash and cash equivalents at end of period................................. $ 51,341 $ 158,574
========== =========
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
-6-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
Note 1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Cablevision Systems Corporation and its majority owned subsidiaries (the
"Company") have been prepared in accordance with the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
Note 2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS
The financial statements as of and for the three month periods ended March 31,
2000 and 1999 presented in this Form 10-Q are unaudited; however, in the opinion
of management, such statements include all adjustments, consisting solely of
normal recurring adjustments, necessary for a fair presentation of the results
for the periods presented.
The interim financial statements should be read in conjunction with the audited
financial statements and notes thereto included in the Company's and CSC
Holdings, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1999.
The results of operations for the interim periods are not necessarily indicative
of the results that might be expected for future interim periods or for the full
year ending December 31, 2000.
Note 3. RECLASSIFICATIONS
Certain reclassifications have been made to the 1999 financial statements to
conform to the 2000 presentation.
Note 4. LOSS PER COMMON SHARE
Basic and diluted net loss per common share is computed by dividing net loss by
the weighted average number of common shares outstanding. Potential dilutive
common shares were not included in the computation as their effect would be
antidilutive.
Note 5. CASH FLOWS
For purposes of the condensed consolidated statements of cash flows, the Company
considers short-term investments with a maturity at date of purchase of three
months or less to be cash equivalents. The Company paid cash interest expense of
approximately $140,580 and $84,893 for the three months ended March 31, 2000 and
1999, respectively. The Company's noncash financing activities for the three
months ended March 31, 2000 and 1999 included capital lease obligations of
$21,077 and 4,919, respectively, incurred when the Company entered into leases
for new equipment.
-7-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)
Note 6. ACQUISITION
In January 2000, Regional Programming Partners acquired the 70% interest in
SportsChannel Florida held by Front Row Communications for approximately
$130,100 (including the repayment of $20,000 in debt) increasing its ownership
to 100%. The acquisition was accounted for as a purchase with the operations of
the acquired business being consolidated with those of the Company as of the
acquisition date. The purchase price will be allocated to the specific assets
acquired when an independent appraisal is obtained.
Note 7. AT HOME
As of March 31, 2000 and 1999, deferred revenue derived from the receipt of At
Home warrants, net of amortization taken, amounted to approximately $146,419 and
$199,680, respectively. For the three months ended March 31, 2000 and 1999, the
Company recognized approximately $15,000 and $12,534, respectively, of this
deferred revenue.
Note 8. SEGMENT INFORMATION
The Company's reportable segments are strategic business units that are managed
separately. The Company evaluates segment performance based on several factors,
of which the primary financial measure is business segment adjusted operating
cash flow (defined as operating income or loss before depreciation and
amortization, incentive stock plan income or expense and the costs of Year 2000
remediation).
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
---- ----
<S> <C> <C>
REVENUES
Telecommunication Services................................. $ 567,068 $525,490
Rainbow Media.............................................. 361,482 298,595
Retail Electronics......................................... 136,656 123,017
All Other.................................................. 18,173 18,307
Intersegment Eliminations.................................. (35,155) (31,701)
---------- --------
Total............................................. $1,048,224 $933,708
========== ========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
---- ----
<S> <C> <C>
ADJUSTED OPERATING CASH FLOW
Telecommunication Services................................. $238,666 $218,358
Rainbow Media.............................................. 46,956 28,250
Retail Electronics......................................... (17,888) (11,305)
All Other.................................................. (13,215) (7,986)
-------- --------
Total............................................. $254,519 $227,317
======== ========
</TABLE>
-8-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)
A reconciliation of reportable segment amounts to the Company's consolidated
balances is as follows:
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
---- ----
<S> <C> <C>
REVENUE
Total revenue for reportable segments............................ $1,065,206 $947,102
Other revenue and intersegment eliminations...................... (16,982) (13,394)
---------- --------
Total consolidated revenue................................. $1,048,224 $933,708
========== ========
ADJUSTED OPERATING CASH FLOW TO NET LOSS
Total adjusted operating cash flow for reportable
segments................................................... $ 267,734 $ 235,303
Other adjusted operating cash flow deficit....................... (13,215) (7,986)
Items excluded from adjusted operating cash flow:
Depreciation and amortization.............................. (233,352) (205,453)
Incentive stock plan income (expense)...................... 41,124 (121,339)
Year 2000 remediation costs................................ (2,560) (7,572)
Interest expense........................................... (132,079) (109,292)
Interest income............................................ 1,301 2,879
Equity in net loss of affiliates........................... (2,316) (3,395)
Minority interests......................................... (41,395) (17,619)
Miscellaneous, net......................................... (737) (4,173)
----------- ---------
Net loss......................................... $ (115,495) $(238,647)
=========== =========
</TABLE>
Substantially all revenues and assets of the Company's reportable segments are
attributed to or located in the United States.
The Company does not have a single external customer which represents 10 percent
or more of its consolidated revenues.
Note 9. NET ASSETS HELD FOR SALE
The net assets attributable to the Company's cable television systems located in
and around the greater Cleveland, Ohio metropolitan area and in Kalamazoo,
Michigan are classified in the accompanying balance sheet as net assets held for
sale.
Note 10. RECENT DEVELOPMENTS
In April 2000, the Company entered into agreements with AT&T Corporation
("AT&T") for the sale of its cable systems in Boston and Eastern Massachusetts
in exchange for AT&T's cable systems in certain northern New York suburbs,
approximately $878,000 in AT&T stock and approximately $284,000 in cash, subject
to certain adjustments.
-9-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Quarterly Report contains or incorporates by reference statements that
constitute forward looking information within the meaning of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that such
forward looking statements are not guarantees of future performance or results
and involve risks and uncertainties and that actual results or developments may
differ materially from the forward looking statements as a result of various
factors. Factors that may cause such differences to occur include but are not
limited to:
(i) the level of growth in the Company's revenues;
(ii) subscriber demand, competition, the cost of programming and industry
conditions;
(iii) whether expenses of the Company continue to increase or increase at a
rate faster than expected;
(iv) whether any unconsummated transactions are consummated on the terms and
at the times set forth (if at all);
(v) new competitors entering the Company's franchise areas;
(vi) other risks and uncertainties inherent in the cable television business;
(vii) financial community and rating agency perceptions of the Company and its
business, operations, financial condition and the industry in which it
operates; and
(viii) the factors described in the Company's registration statement on Form
S-3, including the section entitled "Risk Factors" contained therein.
The information contained herein concerning Year 2000 issues ("Y2K") constitutes
forward looking information. The identification and remediation of Y2K issues is
a technological effort that has never been undertaken before and estimates of
the outcome, time and expense of this endeavor are, for that reason,
particularly hard to make with any certainty. As a result, the Company's
estimates may prove to be materially inaccurate.
The Company disclaims any obligation to update the forward-looking statements
contained or incorporated by reference herein.
RECENT TRANSACTIONS
2000 ACQUISITIONS. In January 2000, Regional Programming Partners ("RPP")
acquired the 70% interest in SportsChannel Florida from Front Row
Communications, Inc., increasing RPP's ownership to 100%.
1999 ACQUISITIONS. In April 1999, CSC Holdings, Inc. ("CSC Holdings") purchased
ITT Corporation's remaining minority interest in Madison Square Garden ("MSG").
In 1999, CSC Holdings acquired interests in the real property and assets related
to certain movie theaters.
-10-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS
The following table sets forth on an unaudited historical basis certain items
related to operations as a percentage of net revenues for the periods indicated.
STATEMENT OF OPERATIONS DATA
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
----------------------- ----------------------
Increase
% of Net % of Net (Decrease)
Amount Revenues Amount Revenues in Net Loss
------ -------- ------ -------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Revenues..................................... $1,048,224 100% $ 933,708 100% $ 114,516
Operating expenses:
Technical and operating................... 440,028 42 401,881 43 38,147
Retail electronics cost of sales.......... 112,453 11 98,092 11 14,361
Selling, general and administrative....... 202,660 19 335,329 36 (132,669)
Depreciation and
amortization........................... 233,352 22 205,453 22 27,899
---------- --------- ---------
Operating income (loss)...................... 59,731 6 (107,047) (12) 166,778
Other expense:
Interest expense, net..................... (130,778) (13) (106,413) (11) (24,365)
Equity in net loss of affiliates.......... (2,316) - (3,395) - 1,079
Minority interests........................ (41,395) (4) (17,619) (2) (23,776)
Miscellaneous, net........................ (737) - (4,173) (1) 3,436
----------- --------- ---------
Net loss..................................... $ (115,495) (11)% $(238,647) (26)% $ 123,152
========== ========= =========
</TABLE>
-11-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
COMPARISON OF THREE MONTHS ENDED MARCH 31, 2000 VERSUS THREE MONTHS ENDED
MARCH 31, 1999.
CONSOLIDATED RESULTS
REVENUES for the three months ended March 31, 2000 increased $114.5 million
(12%) as compared to revenues for the same period in the prior year.
Approximately $51.4 million (5%) of the increase was attributable to increased
revenues in Rainbow Media Holdings, Inc.'s ("Rainbow Media") programming
services. Approximately $23.6 million (3%) of the increase resulted from higher
revenue per subscriber and approximately $18.6 million (2%) was from increases
in other revenue sources, primarily higher retail electronics sales and revenue
derived from the developing telephone and modem businesses. Approximately $11.5
million (1%) of the increase was attributable to the acquisition of
SportsChannel Florida. The remaining increase of $9.4 million (1%) was
attributable to internal growth of 71,600 in the average number of subscribers
during the period.
TECHNICAL AND OPERATING EXPENSES for the three months ended March 31, 2000
increased $38.1 million (9%) compared to the same period in 1999. Approximately
$30.5 million (7%) of the increase was attributable to increased costs directly
associated with the growth in revenues and subscribers discussed above, as well
as to increases in programming costs for cable television services, with the
remaining $7.6 million (2%) increase attributable to the acquisition of
SportsChannel Florida. As a percentage of revenues, technical and operating
expenses decreased 1% during the 2000 period as compared to the 1999 period.
RETAIL ELECTRONICS COST OF SALES for the three months ended March 31, 2000
amounted to approximately $112.5 million (82% of retail electronics sales)
compared to approximately $98.1 million (80% of retail electronics sales) for
the three months ended March 31, 1999. Cost of sales includes the cost of
merchandise sold, including freight costs incurred and certain occupancy and
buying costs, for the Company's retail electronics segment.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $132.7 million (40%) for
the three months ended March 31, 2000 over the comparable period in 1999. A
$162.5 million (49%) decrease was due to adjustments related to an incentive
stock plan (reflecting a decrease in the market price of the Company's Class A
Common Stock) and a $5.0 million (2%) decrease was due to lower Year 2000
remediation costs. These decreases were partially offset by an increase of
approximately $32.1 million (10%) resulting from additional customer service,
sales and marketing and administrative costs and an increase of approximately
$2.7 million (1%) attributable to the SportsChannel Florida acquisition. As a
percentage of revenues, selling, general and administrative expenses decreased
17% in the 2000 period compared to the 1999 period. Excluding the effects of the
incentive stock plan and the Year 2000 remediation costs, as a percentage of
revenues such costs increased 1%.
OPERATING PROFIT BEFORE DEPRECIATION AND AMORTIZATION increased $194.7 million
(198%) to $293.1 million for the three months ended March 31, 2000 from $98.4
million for the comparable period in 1999. Approximately $162.5 million (165%)
of the increase resulted from the adjustment related to an incentive stock plan
and approximately $32.2 million (33%) resulted from the combined effect
-12-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
of the revenue and expense changes discussed above. On a pro forma basis, giving
effect to the acquisition of SportsChannel Florida as if it had occurred on
January 1, 1999 and excluding the Company's systems held for sale, the incentive
stock plan adjustments referred to above and the costs of Year 2000 remediation,
operating profit before depreciation and amortization would have increased 13.7%
in 2000. Operating profit before depreciation and amortization is presented here
to provide additional information about the Company's ability to meet future
debt service, capital expenditures and working capital requirements. Operating
profit before depreciation and amortization should be considered in addition to
and not as a substitute for net income (loss) and cash flows as indicators of
financial performance and liquidity as reported in accordance with generally
accepted accounting principles.
DEPRECIATION AND AMORTIZATION EXPENSE increased $27.9 million (14%) for the
three months ended March 31, 2000 as compared to the same period in 1999
primarily due to depreciation of new plant assets.
NET INTEREST EXPENSE increased $24.4 million (23%) for the three months ended
March 31, 2000 compared to the same period in 1999. The net increase is
primarily attributable to debt incurred to fund acquisitions and capital
expenditures and generally higher interest rates.
EQUITY IN NET LOSS OF AFFILIATES decreased to $2.3 million for the three months
ended March 31, 2000 from $3.4 million for the same 1999 period. Such amounts
consisted of the Company's share of the net losses of certain businesses in
which the Company has varying minority ownership interests.
MINORITY INTERESTS for the three months ended March 31, 2000 and 1999 include
CSC Holdings' preferred stock dividend requirements, Fox Sports Networks, LLC's
40% share of the net income (loss) of Regional Programming Partners and NBC
Cable Holding, Inc.'s 26% (25% in 1999) share of the net loss of Rainbow Media.
In 1999, minority interests also includes ITT Corporation's share of the net
loss of Madison Square Garden.
NET MISCELLANEOUS expense of $4.2 million for the three months ended March 31,
1999 consisted primarily of a charge of approximately $15.0 million resulting
from the write off of an investment held by Rainbow Media and a gain of $10.9
million resulting from the sale of certain marketable securities.
-13-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
BUSINESS SEGMENTS RESULTS
The Company classifies its business interests into three fundamental areas:
Telecommunication Services, consisting principally of its cable television,
telephone and modem services operations; Rainbow Media, consisting principally
of interests in cable television programming networks and MSG, which owns and
operates professional sports teams, regional cable television networks, live
productions and entertainment venues; and Retail Electronics, which represents
the operations of Cablevision Electronics' retail electronics stores. The
Company allocates certain costs to each segment based upon their proportionate
estimated usage of services.
TELECOMMUNICATION SERVICES
The table below sets forth, for the periods presented, certain unaudited
historical financial information and the percentage that those items bear to
revenues for the Company's telecommunication services segment.
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------------------------
2000 1999
------------------ --------------------
% of % of
Amount Revenues Amount Revenues
------ -------- ------ --------
(dollars in thousands)
<S> <C> <C> <C> <C>
Revenues $567,068 100% $525,490 100%
Technical and operating expenses 230,809 41 215,943 41
Selling, general and administrative expenses 81,248 14 150,307 28
Depreciation and amortization 158,989 28 150,758 29
--------- ---------
Operating profit $ 96,022 17% $ 8,482 2%
========= ==========
</TABLE>
REVENUES for the three months ended March 31, 2000 increased $41.6 million (8%)
as compared to revenues for the same period in the prior year. Approximately
$23.6 million (5%) of the increase resulted from higher revenue per subscriber
and approximately $13.1 million (2%) was attributable to revenues from the
Company's developing telephone and modem businesses and revenue recognized in
connection with the At Home transaction. Approximately $9.4 million (2%) of the
increase was attributable to internal growth of 71,600 in the average number of
subscribers during the period and approximately $5.1 million (1%) was
attributable to increases in advertising and other revenue sources, partially
offset by a decrease of approximately $9.6 million (2%) as a result of fewer
pay-per-view events.
TECHNICAL AND OPERATING EXPENSES for the three months ended March 31, 2000
increased $14.9 million (7%) over the same period in 1999. The increase was
attributable to increased costs directly associated with the growth in revenues
and subscribers discussed above, as well as to increases in programming costs
for cable television services. As a percentage of revenues, operating expenses
remained relatively constant during the 2000 period as compared to the 1999
period.
-14-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $69.1 million
(46%) for the three months ended March 31, 2000 as compared to the same period
in 1999. This decrease consisted of a decrease of approximately $75.9 million
(50%) directly attributable to adjustments relating to an incentive stock plan
partially offset by increases in various other costs aggregating $6.8 million
(4%). As a percentage of revenues, selling, general and administrative expenses
decreased 14% in the 2000 period compared to the 1999 period. Excluding the
effects of the incentive stock plan and the Year 2000 remediation costs, such
costs remained relatively constant as a percentage of revenues.
DEPRECIATION AND AMORTIZATION EXPENSE increased $8.2 million (5%) for the three
months ended March 31, 2000 over the comparable 1999 period. The increase
resulted primarily from depreciation on new plant assets.
RAINBOW MEDIA
The table below sets forth, for the periods presented, certain historical
financial information and the percentage that those items bear to revenues for
Rainbow Media.
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------------------------
2000 1999
----------------------- --------------------------
% of % of
Amount Revenues Amount Revenues
------ -------- ------ --------
(dollars in thousands)
<S> <C> <C> <C> <C>
Revenues $361,482 100% $298,595 100%
Technical and operating expenses 228,638 63 202,461 68
Selling, general and administrative expenses 62,941 17 133,183 45
Depreciation and amortization 47,988 13 39,516 13
------ ----------
Operating profit (loss) $21,915 6% $ (76,565) (26)%
======= =========
</TABLE>
REVENUES for the three months ended March 31, 2000 increased $62.9 million (21%)
as compared to revenues for the same period in the prior year. Approximately
$25.4 million (8%) of the increase was attributable to growth in programming
network subscribers and rate increases; approximately $18.1 million (6%)
resulted from increases in advertising revenue; and approximately $11.5 million
(4%) was attributable to the acquisition of SportsChannel Florida. The remaining
$7.9 million (3%) increase resulted from additional regular season Knicks games
as well as a greater number of concerts at Madison Square Garden and Radio City,
partially offset by fewer sporting and other events in the first quarter of 2000
as compared to the same 1999 period.
TECHNICAL AND OPERATING EXPENSES for the three months ended March 31, 2000
increased $26.2 million (13%) over the comparable 1999 period. Approximately
$18.6 million (9%) of the increase was due to cost increases directly associated
with the growth in revenues discussed above. The remaining $7.6 million (4%)
increase was attributable to the acquisition of
-15-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
SportsChannel Florida. As a percentage of revenues, technical and operating
expenses decreased 5% during the 2000 period as compared to the 1999 period.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $70.2 million (53%) for
the three months ended March 31, 2000 as compared to the same period in 1999.
The decrease resulted from a decrease of approximately $85.3 million (64%)
attributable to an incentive stock plan and a decrease of approximately $2.9
million (2%) in Year 2000 remediation costs, partially offset by increases in
sales, marketing, advertising and other general cost increases of $15.3 million
(11%) and an increase of $2.7 million (2%) resulting from the acquisition of
SportsChannel Florida. As a percentage of revenues, selling, general and
administrative expenses decreased 28% during the 2000 period as compared to the
1999 period. Excluding the effects of the incentive stock plan and the Year 2000
remediation costs, such costs as a percentage of revenues increased 1%.
DEPRECIATION AND AMORTIZATION EXPENSE increased $8.5 million (21%) for the three
months ended March 31, 2000 over the comparable period in 1999. Approximately
$1.6 million (4%) was attributable to the acquisition of SportsChannel Florida
with the remaining increase of $6.9 million (17%) primarily due to depreciation
on fixed asset additions.
RETAIL ELECTRONICS
The table below sets forth, for the periods presented, certain historical
financial information and the percentage that those items bear to revenues for
the Company's retail electronics segment, Cablevision Electronics Investments,
Inc. ("Cablevision Electronics").
<TABLE>
<CAPTION>
Three Months Ended March, 31
---------------------------- ------ ---------------------------
2000 1999
---------------------------- ---------------------------
% of % of
Amount Revenues Amount Revenues
------ -------- ------ --------
(dollars in thousands)
<S> <C> <C> <C> <C>
Revenues $136,656 100% $123,017 100%
Cost of sales 112,453 82 98,092 80
Selling, general and administrative expenses 41,521 30 37,471 30
Depreciation and amortization 3,761 3 1,452 1
--------- ---------
Operating loss $ (21,079) (15)% $ (13,998) (11)%
========= =========
</TABLE>
REVENUES for the three months ended March 31, 2000 amounted to approximately
$136.7 million compared to revenues of approximately $123.0 million for the
three months ended March 31, 1999. Comparable store sales accounted for $8.6
million (7%) of the increase while new and relocated stores contributed $5.0
million (4%) to the increase.
COST OF SALES for the three months ended March 31, 2000 amounted to
approximately $112.5 million (82% of revenues). For the three months ended March
31, 1999, costs of sales amounted to $98.1 million (80% of revenues). Such costs
include the cost of merchandise sold, including freight costs incurred as well
as certain occupancy and buying costs. The increase
-16-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
in cost of sales, as a percentage of revenues, is primarily attributable to
changes in the sales mix and inventory provisions.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES amounted to approximately $41.5
million (30% of revenues) for the three months ended March 31, 2000 and $37.5
million (30% of revenues) for the three months ended March 31, 1999. Selling,
general and administrative expenses consist of retail store expenses (excluding
certain store occupancy costs), the salaries and commissions of store personnel,
the costs of advertising, operating the distribution center and corporate
support functions other than buying.
DEPRECIATION AND AMORTIZATION EXPENSE amounted to approximately $3.8 million (3%
of revenues) for the three months ended March 31, 2000 and $1.5 million (1% of
revenues) for the three months ended March 31, 1999. Depreciation and
amortization expense includes the depreciation of all property and equipment in
service and, for the 1999 period, the amortization of intangible assets which
resulted from the Wiz acquisition.
LIQUIDITY AND CAPITAL RESOURCES
Cablevision Systems Corporation does not have any operations independent of its
subsidiaries. In addition, Cablevision Systems Corporation has no borrowings and
does not have any securities outstanding other than its Class A Common Stock and
Class B Common Stock, on which it does not intend to pay any dividends in the
foreseeable future. Accordingly, Cablevision Systems Corporation does not have
cash needs independent of the needs of its subsidiaries.
Cablevision Systems Corporation is structured as a restricted group and an
unrestricted group of subsidiaries.
The Restricted Group includes all of CSC Holdings' cable operations in and
around the greater New York City metropolitan area, in and around the greater
Cleveland, Ohio metropolitan area, in and around the Boston, Massachusetts
metropolitan area, and in Kalamazoo, Michigan and the commercial telephone
operations of the Company's subsidiary, Cablevision Lightpath, Inc., on Long
Island, New York. At March 31, 2000, the Restricted Group encompassed
approximately 3,504,126 cable television subscribers, including approximately
716,735 subscribers in its Ohio, Massachusetts and Michigan systems.
The Unrestricted Group includes principally Rainbow Media, including Madison
Square Garden, and other companies engaged in certain developmental activities
("New Media") including high-speed cable modem service, residential telephone
service, developing (non-Long Island) commercial telephone service, research and
development expenses and deferred revenue amortization related to the At Home
transaction. The Unrestricted Group also includes Cablevision Electronics, which
operates 41 The WIZ consumer electronics store locations, and CCG Holdings, Inc.
which owns the Company's motion picture theater assets.
-17-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
The following table presents selected historical results of operations and other
financial information related to the captioned groups or entities as of and for
the three months ended March 31, 2000.
<TABLE>
<CAPTION>
Interest Capital
Revenues AOCF* Expense Expenditures
-------- ----- ------- ------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Restricted Group**....................... $ 541,643 $ 241,899 $110,937 $169,899
New Media***............................. 25,425 (3,233) 1 20,782
Rainbow Media (including MSG and AMC).... 361,482 46,956 18,701 7,437
Retail Electronics....................... 136,656 (17,888) 2,880 4,693
Other (including eliminations)........... (16,982) (13,215) (440) 537
---------- --------- -------- --------
Total................................ $1,048,224 $ 254,519 $132,079 $203,348
========== ========= ======== ========
</TABLE>
- - --------------------------
* Defined as operating income (loss) before depreciation and amortization
and excluding incentive stock plan income of $41,124 and the costs of
Year 2000 remediation of $2,560.
** Includes systems held for sale.
*** Consists of developmental operations, including those related to systems
held for sale.
<TABLE>
<CAPTION>
Restricted Unrestricted
Group Group Total
----- ----- -----
(dollars in thousands)
----------------------
<S> <C> <C> <C>
DEBT AND REDEEMABLE PREFERRED STOCK
Senior debt........................................... $1,666,948 $ - $1,666,948
Senior notes and debentures........................... 2,692,754 - 2,692,754
Subordinated notes and debentures..................... 1,048,546 - 1,048,546
---------- ---------- ----------
5,408,248 - 5,408,248
---------- ---------- ----------
Redeemable preferred stock of CSC Holdings............ 1,444,210 - 1,444,210
---------- ---------- ----------
RAINBOW MEDIA
Rainbow Media senior debt......................... - 233,998 233,998
AMC senior debt................................... - 338,872 338,872
MSG senior debt................................... 380,000 380,000
---------- ---------- ----------
-
Total Rainbow Media debt..................... 952,870 952,870
---------- ---------- ----------
-
Retail Electronics debt............................... - 75,569 75,569
Other debt............................................ 25,706 25,706
---------- ---------- ----------
-
Total debt and redeemable preferred stock.... $6,852,458 $1,054,145 $7,906,603
========== ========== ==========
</TABLE>
-18-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
RESTRICTED GROUP
The Restricted Group's plant upgrade, combined with additional amounts required
for the start up and operation of new businesses such as high speed internet
access, digital video services, the expansion of residential telephone services
and the roll out of non-Long Island based commercial telephone business, as well
as additional investments or acquisitions, will require significant additional
funding. The Company expects to obtain the requisite funds through internally
generated funds, amounts available under the CSC Holdings' credit facility,
proceeds from asset sales and/or additional capital market issuances.
In April 2000, the Company announced the sale of its cable systems in Boston and
Eastern Massachusetts to AT&T Corporation ("AT&T") in exchange for cable systems
in certain northern New York suburbs, approximately $878 million in AT&T stock
and approximately $284 million in cash, subject to certain adjustments. In
December 1999, the Company announced the sale of its Ohio system to Adelphia
Communications Corporation for $990 million in cash and $540 million in Adelphia
class A common stock, subject to certain adjustments. In March 2000, the Company
entered into a definitive agreement with Charter Communications, Inc. for the
sale of its Kalamazoo, Michigan system in exchange for $172.5 million in Charter
Communications, Inc. common stock. The Company expects to apply the cash
proceeds received, which may include cash proceeds from the monetization of
stock, toward the reduction of outstanding debt. The consummation of each of
these transactions is subject to the receipt of franchise transfer and other
required approvals.
As of April 28, 2000, the Restricted Group had in total $2.2 billion in reducing
revolving credit facilities, consisting of a $1.2 billion facility available to
Cablevision MFR, Inc. and certain of the Company's New Jersey subsidiaries and a
$1.0 billion facility available to CSC Holdings, Inc. and other Restricted Group
subsidiaries. Both facilities mature in March 2007 and begin to reduce in June
2001. As of April 28, 2000, the Restricted Group had total drawings under these
credit facilities of $1,691 million and letters of credit of $39 million.
Unrestricted and undrawn funds available to the Restricted Group amounted to
approximately $470 million as of April 28, 2000.
<TABLE>
<CAPTION>
-----------------------------------------------------------
As of April 28, 2000
(in thousands)
------------------- ------------------- -------------------
CSC Holdings MFR Total
------------ --- -----
<S> <C> <C> <C>
Total facility.................... $1,000,000 $1,200,000 $2,200,000
Outstanding debt.................. 748,000 943,000 1,691,000
Outstanding letters of credit..... 38,994 - 38,994
------------ -------------- -------------
Availability................. $ 213,006 $ 257,000 $ 470,006
=========== =========== ===========
</TABLE>
-19-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
The Credit Agreement contains certain financial covenants that may limit the
Restricted Group's ability to utilize all of the undrawn funds available
thereunder, including covenants requiring the Restricted Group to maintain
certain financial ratios and restricting the permitted uses of borrowed funds.
As of April 28, 2000, CSC Holdings had entered into interest exchange (swap)
agreements with several of its banks covering a notional principal amount of
$300 million. Swaps in the aggregate amount of $250 million require CSC Holdings
to pay a floating rate of interest and mature in 2001 and 2002. The remainder of
the swaps require payment of a fixed rate of interest by CSC Holdings and mature
in August 2000. The weighted average effective interest rate on all Restricted
Group bank debt outstanding, including the swap agreements, as of April 28,
2000, was approximately 7.2%.
RAINBOW MEDIA AND AMERICAN MOVIE CLASSICS
As of April 28, 2000, Rainbow Media had a $300 million non-amortizing revolving
credit facility maturing on December 31, 2000 of which $79.5 million was
restricted to provide for repayment of a like amount of intercompany borrowings
from Regional Programming Partners ("RPP") as described below. On January 4,
2000, Rainbow Media repaid $100.5 million of its $180 million loan from RPP with
borrowings under its credit facility. Direct borrowings as of April 28, 2000,
amounted to $198.5 million, leaving a balance of $22 million available to
Rainbow Media under the credit facility as of that date.
In May 1999, American Movie Classics, a wholly-owned subsidiary of Rainbow
Media, entered into a new $425 million credit facility consisting of a $200
million reducing revolving credit facility and a $225 million amortizing term
loan, both of which mature on March 31, 2006. The amount of the available
commitment under the revolver will not begin to be reduced until June 2004. As
of April 28, 2000, American Movie Classics had outstanding borrowings of $326.5
million, leaving unrestricted funds available of $98.5 million.
Both the Rainbow Media and American Movie Classics credit facilities contain
certain financial covenants that may limit the ability to utilize all of the
undrawn funds available, including covenants requiring that certain financial
ratios be maintained.
The Company believes that for Rainbow Media and its wholly-owned subsidiaries,
which includes American Movie Classics, internally generated funds, together
with funds available under their existing credit agreements will be sufficient
for the next twelve months to meet their projected funding requirements
(excluding the repayment of Rainbow Media's credit facility). Repayment of
Rainbow Media's credit facility at maturity may be met by refinancing the
facility or through funds provided by other sources, including, without
limitation, the Company. There can be no assurance that Rainbow Media will be
able to obtain refinancing or funds from other sources on acceptable terms or at
all.
-20-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
RPP
In June 1998, RPP, a partnership which is 60% owned by Rainbow Media and 40%
owned by Fox Sports Networks, LLC ("Fox"), made an intercompany loan to Rainbow
Media of $180 million, of which $79.5 million was outstanding as of April 28,
2000. RPP funded this loan from cash on hand. The intercompany loan is a four
year demand note maturing March 31, 2002 which requires quarterly interest
payments at LIBOR plus 7/8% per annum, is subordinated to Rainbow Media's bank
debt and requires that Rainbow Media maintain sufficient availability under its
revolving credit to permit the repayment in full to RPP if RPP requires the
funds for its own operating needs. On January 4, 2000, Rainbow Media repaid
$100.5 million of the $180 million intercompany loan with borrowings under its
credit facility.
In January 2000, RPP acquired the 70% interest in SportsChannel Florida held by
Front Row Communications for approximately $130.1 million (including the
repayment of $20 million in debt) increasing its ownership to 100%. The
acquisition was funded with cash on hand and from the repayment by Rainbow Media
of $100.5 million of intercompany loans.
The Company believes that RPP's cash on hand of $13.9 million as of April 28,
2000, combined with the remaining intercompany loan receivable of $79.5 million
will be sufficient to meet its projected funding requirements for the next
twelve months.
MSG
MSG has a $500 million revolving credit facility maturing on December 31, 2004
(the "MSG Credit Facility"). As of April 28, 2000, outstanding debt under the
MSG Credit Facility was $380 million. In addition, MSG had outstanding letters
of credit of $3.1 million resulting in unrestricted and undrawn funds available
amounting to $116.9 million. The MSG Credit Facility contains certain financial
covenants that may limit its ability to utilize all of the undrawn funds
available thereunder, including covenants requiring MSG to maintain certain
financial ratios. The Company believes that for MSG, internally generated funds,
together with funds available under its existing credit agreement will be
sufficient to meet its projected funding requirements for the next twelve
months.
Garden Programming, LLC, an unrestricted subsidiary of MSG, has a $20 million
term loan maturing on July 11, 2002. Garden Programming, LLC has in turn made a
$40 million loan to an unrelated entity, maturing on November 1, 2011.
RETAIL ELECTRONICS
Cablevision Electronics has a $130 million stand alone credit facility. Under
the terms of the credit facility, the total amount of borrowings available to
Cablevision Electronics is subject to an availability calculation based on a
percentage of eligible inventory. On April 28, 2000, usage under the credit
facility was $77.6 million with $2.1 million available thereunder, based on the
level of inventory as of that date. As of April 28, 2000, CSC Holdings' total
cash investment in
-21-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
Cablevision Electronics, including equity and intercompany loans, totaled $206.3
million. Cablevision Electronics has also received other financial support from
CSC Holdings of approximately $56.5 million through April 28, 2000 in the form
of letters of credit, guarantees and intercompany receivables. The Company
believes that Cablevision Electronics will require additional financial support
from CSC Holdings in respect of planned increases in inventory purchases,
capital expenditures and other operating requirements and that funds available
under Cablevision Electronics' credit agreement, together with this additional
financial support, will be sufficient to meet its projected funding requirements
for the next twelve months.
CCG HOLDINGS
CCG Holdings, Inc., which owns the Company's motion picture theater assets,
currently has a $15 million revolving credit bank facility maturing on June 30,
2003. As of April 28, 2000, $10.6 million was outstanding under this bank
facility. The Company believes that for CCG Holdings, Inc., internally generated
funds, together with funds available under the existing credit agreement will be
sufficient to meet its projected funding requirements for the next twelve
months.
OPERATING ACTIVITIES
Net cash used in operating activities amounted to $4.7 million for the three
months ended March 31, 2000 compared to net cash provided by operating
activities of $5.4 million for the three months ended March 31, 1999. The 2000
cash used in operating activities consisted primarily of a net decrease in cash
resulting from changes in assets and liabilities of $168.8 million, partially
offset by $164.1 million of income before depreciation, amortization and other
non-cash items.
The 1999 cash provided by operating activities of $5.4 million consisted
primarily of a net increase in cash resulting from changes in assets and
liabilities of $17.4 million, partially offset by approximately $12.0 million of
net loss before depreciation, amortization and other non-cash items.
INVESTING ACTIVITIES
Net cash used in investing activities for the three months ended March 31, 2000
was $328.6 million compared to $201.6 million for the three months ended March
31, 1999. The 2000 investing activities consisted of $203.3 million of capital
expenditures, $106.2 million of payments for acquisitions, and other items of
$19.1 million.
Net cash used in investing activities for the three months ended March 31, 1999
of $201.6 million consisted of $157.6 million of capital expenditures, $24.8
million of payments for acquisitions and other items of $19.2 million.
-22-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
FINANCING ACTIVITIES
Net cash provided by financing activities amounted to $321.9 million for the
three months ended March 31, 2000 compared to $180.9 million for the three
months ended March 31, 1999. In 2000, the Company's financing activities
consisted primarily of additional bank borrowings of $335.6 million, partially
offset by other cash payments aggregating $13.7 million.
Net cash provided by financing activities of $180.9 million for the three months
ended March 31, 1999 consisted primarily of additional bank borrowings of $184.4
million, partially offset by other cash payments aggregating $3.5 million.
YEAR 2000
The Year 2000 issue ("Y2K") refers to the inability of certain computerized
systems and technologies to recognize and/or correctly process dates beyond
December 31, 1999.
For the three months ended March 31, 2000 and 1999, the Company recorded
approximately $2.6 million and $7.6 million, respectively, of expenses relating
to Y2K remediation.
ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED
Statement of Financial Accounting Standards No. 133, "ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES" ("SFAS 133"), requires that all derivative
financial instruments, such as interest rate swap contracts, be recognized in
the financial statements and measured at fair value regardless of the purpose or
intent for holding them. Changes in the fair value of derivative financial
instruments are either recognized periodically in income or stockholders' equity
(as a component of comprehensive income), depending on whether the derivative is
being used to hedge changes in fair value or cash flows. SFAS 133, as amended,
is effective for fiscal years beginning after June 15, 2000. The Company does
not expect that the adoption of SFAS 133 will have a material effect on the
Company's financial condition or results of operations.
FASB Interpretation No. 44, "ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING
STOCK COMPENSATION" ("FIN No. 44") provides guidance for applying APB Opinion
No. 25, "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES." With certain exceptions,
FIN No. 44 applies prospectively to new awards, exchanges of awards in a
business combination, modifications to outstanding awards and changes in
grantee status on or after July 1, 2000. The Company does not believe that
the adoption of FIN No. 44 will have a significant effect on its financial
condition or results of operations.
In December 1999, the SEC issued Staff Accounting Bulletin No. 101, "REVENUE
RECOGNITION IN FINANCIAL STATEMENTS" ("SAB No. 101") which summarizes certain
of the SEC staff's views in applying generally accepted accounting principles
to revenue recognition in financial statements. The company will be required
to adopt the accounting provisions of SAB No. 101 during the second quarter.
The Company does not believe that the implementation of SAB No. 101 will have
a significant effect on its financial condition or results of operations.
-23-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risks from changes in interest rates and
certain equity security prices. The Company's exposure to interest rate
movements results from its use of floating and fixed rate debt to fund its
working capital, capital expenditures, and other operational and investment
requirements. To manage interest rate risk, the Company has from time to time
entered into interest rate swap contracts to adjust the proportion of total debt
that is subject to variable and fixed interest rates. Such contracts fix the
borrowing rates on floating rate debt to hedge against the risk of rising rates
and/or convert fixed rate borrowings to variable rate to hedge against the risk
of higher borrowing costs in a declining interest rate environment. The Company
does not enter into interest rate derivative contracts for speculative or
trading purposes. The Company's exposure to changes in equity security prices
stems from its investment in At Home Corporation common stock warrants. The
value of these warrants fluctuates based on changes in the stock price of the
underlying security.
FAIR VALUE OF DEBT: Based on the level of interest rates prevailing at March 31,
2000, the fair value of the Company's fixed-rate debt and redeemable preferred
stock exceeded its carrying cost of $5,186 million by approximately $62 million.
The fair value of these financial instruments is estimated based on reference to
quoted market prices for these or comparable securities. The Company's floating
rate borrowings bear interest at current market rates and thus approximate fair
value. The effect of a hypothetical 100 basis point decrease in interest rates
prevailing at March 31, 2000 would increase the estimated fair value of debt and
redeemable preferred stock instruments by approximately $248 million. This
estimate is based on the assumption of an immediate and parallel shift in
interest rates across all maturities.
INTEREST RATE HEDGE CONTRACTS: As of March 31, 2000, the Company had outstanding
interest rate swap contracts to pay fixed rates of interest (generally at 8.0%
through August 2000) and to receive variable rates of interest (based upon LIBOR
with the latest maturity in 2002) covering a total notional principal amount of
$300 million. As of March 31, 2000, the fair market liability of all interest
rate hedge contracts was approximately $4 million. Assuming an immediate and
parallel shift in interest rates across the yield curve, a 100 basis point
increase in interest rates from March 31, 2000 prevailing levels would increase
the fair market value liability of all hedge contracts by $0.8 million to a
liability of $4.8 million.
EQUITY PRICE RISK: As of March 31, 2000, the fair market value of the Company's
warrants to acquire At Home Corporation's common stock was $663.8 million, which
exceeded its carrying value of $248.1 million. The potential change in the fair
value of this investment, assuming a 10% change in price, would be approximately
$67.4 million.
-24-
<PAGE>
CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
Part II. Other Information
Item 1. Legal Proceedings
The Company is party to various lawsuits, some involving substantial
amounts. Management does not believe that such lawsuits will have a
material adverse impact on the financial position of the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
The index to exhibits is on page 37.
(b) The Company has not filed any Current Reports on Form
8-K with the Commission during the quarter for which
this report is filed.
-25-
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CSC HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2000 and 1999
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Revenues ................................................................. $1,048,224 $ 933,708
---------- ---------
Operating expenses:
Technical and operating................................................. 440,028 401,881
Retail electronics cost of sales........................................ 112,453 98,092
Selling, general and
administrative...................................................... 202,660 335,329
Depreciation and amortization........................................... 233,352 205,453
---------- ----------
988,493 1,040,755
---------- ----------
Operating income (loss).......................................... 59,731 (107,047)
---------- ----------
Other income (expense):
Interest expense........................................................ (132,079) (109,292)
Interest income......................................................... 1,301 2,879
Equity in net loss of affiliates........................................ (2,316) (3,395)
Minority interests...................................................... (1,692) 25,224
Miscellaneous, net...................................................... (737) (4,173)
---------- ----------
(135,523) (88,757)
---------- ----------
Net loss ................................................................. (75,792) (195,804)
Dividend requirements applicable to preferred stock........................ (39,703) (42,843)
---------- ----------
Net loss applicable to common shareholder.................................. $(115,495) $(238,647)
========== ==========
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
-26-
<PAGE>
CSC HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 2000 1999
---- ----
(Unaudited)
<S> <C> <C>
Cash and cash equivalents............................................................... $ 51,341 $ 62,665
Accounts receivable trade (less allowance for doubtful accounts of
$36,987 and $35,357).................................................................... 250,957 226,304
Notes and other receivables............................................................. 114,538 129,596
Inventory, prepaid expenses and other assets............................................ 232,758 219,487
Property, plant and equipment, net...................................................... 2,830,532 2,752,495
Investments in affiliates............................................................... 323,284 306,557
Advances to affiliates.................................................................. 51,620 46,685
Feature film inventory.................................................................. 330,843 335,826
Net assets held for sale................................................................ 272,290 269,349
Franchises, net of accumulated amortization of
$746,092 and $703,237................................................................ 608,922 651,777
Affiliation and other agreements, net of accumulated amortization of
$258,130 and $244,249................................................................ 159,369 173,250
Excess costs over fair value of net assets acquired and other intangible assets,
net of accumulated amortization of
$755,003 and $727,134................................................................ 1,898,541 1,816,030
Deferred financing, acquisition and other costs, net of
accumulated amortization of $59,630 and $51,063...................................... 150,087 140,287
---------- ----------
$7,275,082 $7,130,308
========== ==========
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
-27-
<PAGE>
CSC HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(continued)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Accounts payable................................................................. $ 458,189 $ 423,158
Accrued liabilities.............................................................. 896,125 1,048,599
Feature film and contract obligations............................................ 356,608 371,126
Deferred revenue................................................................. 246,144 274,043
Bank debt........................................................................ 2,610,134 2,254,487
Senior notes and debentures...................................................... 2,692,754 2,692,602
Subordinated notes and debentures................................................ 1,048,546 1,048,513
Capital lease obligations and other debt......................................... 110,959 99,099
---------- -----------
Total liabilities............................................................ 8,419,459 8,211,627
---------- -----------
Minority interests............................................................... 605,321 592,583
---------- -----------
Series H Redeemable Exchangeable Preferred Stock................................. 421,792 409,757
---------- -----------
Series M Redeemable Exchangeable Preferred Stock................................. 1,022,418 994,754
---------- -----------
Commitments and contingencies
Stockholder's deficiency:
Series A Cumulative Convertible Preferred Stock,
200,000 shares authorized, none issued................................... - -
Series B Cumulative Convertible Preferred Stock,
200,000 shares authorized, none issued................................... - -
8% Series D Cumulative Preferred Stock, $.01 par value,
112,500 shares authorized, none issued ($100 per
share liquidation preference)............................................ - -
Common Stock, $.01 par value, 10,000,000 shares authorized,
1,000 shares issued...................................................... - -
Paid-in capital.............................................................. 763,948 763,948
Accumulated deficit.......................................................... (3,957,856) (3,842,361)
---------- -----------
Total stockholder's deficiency............................................... (3,193,908) (3,078,413)
---------- -----------
$7,275,082 $ 7,130,308
========== ===========
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
-28-
<PAGE>
CSC HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss .............................................................. $ (75,792) $ (195,804)
---------- ----------
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization...................................... 233,352 205,453
Equity in net loss of affiliates................................... 2,316 3,395
Minority interests................................................. 1,692 (25,224)
Gain on sale of investments........................................ - (10,861)
Write off of investment in affiliate............................... - 15,006
Amortization of deferred financing and debenture discount.......... 2,564 2,200
Loss (gain) on sale of equipment................................... (50) 1,159
Changes in assets and liabilities, net of effects
of acquisitions and dispositions................................ (164,309) 17,970
---------- ----------
Net cash provided by (used in) operating activities................ (227) 13,294
---------- ----------
Cash flows from investing activities:
Payment for acquisitions, net of cash acquired........................... (106,183) (24,787)
Proceeds from sale of investments........................................ - 10,861
Capital expenditures..................................................... (203,348) (157,613)
Proceeds from sale of equipment.......................................... 84 155
Additions to intangible assets........................................... (94) (5,077)
Increase in investments in affiliates, net............................... (19,043) (24,075)
---------- ----------
Net cash used in investing activities.............................. (328,584) (200,536)
---------- ----------
Cash flows from financing activities:
Proceeds from bank debt.................................................. 891,800 515,877
Repayment of bank debt................................................... (556,153) (331,499)
Preferred stock dividends................................................ (4) (7,335)
Payments on capital lease obligations and other debt..................... (9,236) (3,186)
Additions to deferred financing and other costs.......................... (8,920) (1,867)
---------- ----------
Net cash provided by financing activities.......................... 317,487 171,990
---------- ----------
Net decrease in cash and cash equivalents.................................. (11,324) (15,252)
Cash and cash equivalents at beginning of year............................. 62,665 173,826
---------- ----------
Cash and cash equivalents at end of period................................. $ 51,341 $ 158,574
========== ==========
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
-29-
<PAGE>
CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
Note 1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of CSC
Holdings, Inc. and its majority owned subsidiaries (the "Company") have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted.
In April 1999, Cablevision Systems Corporation contributed certain cable
television systems acquired from Tele-Communications, Inc. ("TCI Systems") on
March 4, 1998 to the Company. This transaction was accounted for in a manner
similar to a pooling of interests, whereby the assets and liabilities of the TCI
Systems were recorded at historical book value (net assets of $509,574). Prior
period consolidated financial statements of the Company have been restated to
include the financial position and results of operations of the TCI Systems from
March 4, 1998.
Note 2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS
The financial statements as of and for the three month periods ended March 31,
2000 and 1999 presented in this Form 10-Q are unaudited; however, in the opinion
of management, such statements include all adjustments, consisting solely of
normal recurring adjustments, necessary for a fair presentation of the results
for the periods presented.
The interim financial statements should be read in conjunction with the audited
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1999.
The results of operations for the interim periods are not necessarily indicative
of the results that might be expected for future interim periods or for the full
year ending December 31, 2000.
Note 3. RECLASSIFICATIONS
Certain reclassifications have been made to the 1999 financial statements to
conform to the 2000 presentation.
Note 4. LOSS PER COMMON SHARE
Net loss per common share for the three months ended March 31, 2000 and 1999 is
not presented since the Company is a wholly owned subsidiary of Cablevision
Systems Corporation.
-30-
<PAGE>
CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)
Note 5. CASH FLOWS
For purposes of the condensed consolidated statements of cash flows, the Company
considers short-term investments with a maturity at date of purchase of three
months or less to be cash equivalents. The Company paid cash interest expense of
approximately $140,580 and $84,893 for the three months ended March 31, 2000 and
1999, respectively. The Company's noncash financing activities for the three
months ended March 31, 2000 and 1999 included capital lease obligations of
$21,077 and $4,919, respectively, incurred when the Company entered into leases
for new equipment and preferred stock dividend requirements of $39,699 and
$35,508, respectively.
Note 6. ACQUISITION
In January 2000, Regional Programming Partners acquired the 70% interest in
SportsChannel Florida held by Front Row Communications for approximately
$130,100 (including the repayment of $20,000 in debt) increasing its ownership
to 100%. The acquisition was accounted for as a purchase with the operations of
the acquired business being consolidated with those of the Company as of the
acquisition date. The purchase price will be allocated to the specific assets
acquired when an independent appraisal is obtained.
Note 7. AT HOME
As of March 31, 2000 and 1999, deferred revenue derived from the receipt of At
Home warrants, net of amortization taken, amounted to approximately $146,419 and
$199,680, respectively. For the three months ended March 31, 2000 and 1999, the
Company recognized approximately $15,000 and $12,534, respectively, of this
deferred revenue.
Note 8. SEGMENT INFORMATION
The Company's reportable segments are strategic business units that are managed
separately. The Company evaluates segment performance based on several factors,
of which the primary financial measure is business segment adjusted operating
cash flow (defined as operating income or loss before depreciation and
amortization, incentive stock plan income or expense and the costs of Year 2000
remediation).
-31-
<PAGE>
CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
REVENUES 2000 1999
---- ----
<S> <C> <C>
Telecommunication Services................................. $ 567,068 $525,490
Rainbow Media.............................................. 361,482 298,595
Retail Electronics......................................... 136,656 123,017
All Other.................................................. 18,173 18,307
Intersegment Elimination................................... (35,155) (31,701)
---------- --------
Total............................................. $1,048,224 $933,708
========== ========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
ADJUSTED OPERATING CASH FLOW 2000 1999
---- ----
<S> <C> <C>
Telecommunication Services................................. $238,666 $218,358
Rainbow Media.............................................. 46,956 28,250
Retail Electronics......................................... (17,888) (11,305)
All Other.................................................. (13,215) (7,986)
-------- --------
Total............................................. $254,519 $227,317
======== ========
</TABLE>
A reconciliation of reportable segment amounts to the Company's consolidated
balances is as follows:
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
---- ----
<S> <C> <C>
REVENUE
Total revenue for reportable segments............................ $1,065,206 $ 947,102
Other revenue and intersegment eliminations...................... (16,982) (13,394)
---------- ---------
Total consolidated revenue................................. $1,048,224 $ 933,708
========== =========
ADJUSTED OPERATING CASH FLOW TO NET LOSS
Total adjusted operating cash flow for reportable
segments................................................... $ 267,734 $ 235,303
Other adjusted operating cash flow deficit....................... (13,215) (7,986)
Items excluded from adjusted operating cash flow
Depreciation and amortization.............................. (233,352) (205,453)
Incentive stock plan income (expense)...................... 41,124 (121,339)
Year 2000 remediation costs................................ (2,560) (7,572)
Interest expense........................................... (132,079) (109,292)
Interest income............................................ 1,301 2,879
Equity in net loss of affiliates........................... (2,316) (3,395)
Minority interests......................................... (1,692) 25,224
Miscellaneous, net......................................... (737) (4,173)
---------- ---------
Net loss......................................... $ (75,792) $(195,804)
========== =========
</TABLE>
Substantially all revenues and assets of the Company's reportable segments are
attributed to or located in the United States.
The Company does not have a single external customer which represents 10 percent
or more of its consolidated revenues.
-32-
<PAGE>
CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)
Note 9. NET ASSETS HELD FOR SALE
The net assets attributable to the Company's cable television systems located in
and around the greater Cleveland, Ohio metropolitan area and in Kalamazoo,
Michigan are classified in the accompanying balance sheet as net assets held for
sale.
Note 10. RECENT DEVELOPMENTS
In April 2000, the Company entered into agreements with AT&T Corporation
("AT&T") for the sale of its cable systems in Boston and Eastern Massachusetts
in exchange for AT&T's cable systems in certain northern New York suburbs,
approximately $878,000 in AT&T stock and approximately $284,000 in cash, subject
to certain adjustments.
-33-
<PAGE>
CSC HOLDINGS, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
In April 1999, Cablevision Systems Corporation contributed certain cable
television systems acquired from Tele-Communications, Inc. (the "TCI Systems")
on March 4, 1998 to the Company. This transaction was accounted for in a manner
similar to a pooling of interests, whereby the assets and liabilities of the TCI
Systems were recorded at historical book value. Prior period consolidated
financial statements of the Company have been restated to include the financial
position and results of operations of the TCI Systems from March 4, 1998. As a
result, the results of operations of CSC Holdings, Inc. are identical to the
results of operations of Cablevision Systems Corporation, except for dividends
attributable to the preferred stock of CSC Holdings, Inc. which have been
reported in minority interests in the consolidated financial statements of
Cablevision Systems Corporation. Refer to Cablevision Systems Corporation's
Management's Discussion and Analysis of Financial Condition and Results of
Operations on pages 10 through 23 of this Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Refer to Cablevision Systems Corporation's Quantitative and Qualitative
Disclosures About Market Risk on page 24 of this Form 10-Q.
-34-
<PAGE>
CSC HOLDINGS, INC. AND SUBSIDIARIES
Part II. Other Information
Item 1. Legal Proceedings
The Company is party to various lawsuits, some involving
substantial amounts. Management does not believe that such
lawsuits will have a material adverse impact on the financial
position of the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
The index to exhibits is on page 37.
(b) The Company has not filed any Current Reports on Form
8-K with the Commission during the quarter for which
this report is filed.
-35-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
CABLEVISION SYSTEMS CORPORATION
CSC HOLDINGS, INC.
Date: May 15, 2000 /s/William J. Bell
----------------- ----------------------------------------
By: William J. Bell, as Vice Chairman,
Director and Principal Financial
Officer of Cablevision Systems
Corporation and CSC Holdings, Inc.
Date: May 15, 2000 /s/Andrew B. Rosengard
----------------- ----------------------------------------
By: Andrew B. Rosengard, as
Executive Vice President, Finance
and Controller and Principal
Accounting Officer of Cablevision
Systems Corporation and CSC
Holdings, Inc.
-36-
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION NO.
--- ----------- ---
<S> <C> <C>
27 Financial Data Schedule - Cablevision Systems Corporation and Subsidiaries
27.1 Financial Data Schedule - CSC Holdings, Inc. and Subsidiaries
</TABLE>
-37-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK>0001053112
<NAME>CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 51,341
<SECURITIES> 0
<RECEIVABLES> 287,944
<ALLOWANCES> (36,987)
<INVENTORY> 330,843
<CURRENT-ASSETS> 0
<PP&E> 4,970,278
<DEPRECIATION> (2,139,746)
<TOTAL-ASSETS> 7,275,082
<CURRENT-LIABILITIES> 0
<BONDS> 6,462,393
0
0
<COMMON> 1,734
<OTHER-SE> (3,179,869)
<TOTAL-LIABILITY-AND-EQUITY> 7,275,082
<SALES> 0
<TOTAL-REVENUES> 1,055,656
<CGS> 112,453
<TOTAL-COSTS> 440,028
<OTHER-EXPENSES> 233,352
<LOSS-PROVISION> (7,432)
<INTEREST-EXPENSE> 132,079
<INCOME-PRETAX> (115,495)
<INCOME-TAX> 0
<INCOME-CONTINUING> (115,495)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (115,495)
<EPS-BASIC> (0.67)
<EPS-DILUTED> 0<F1>
<FN>
<F1>NOT PRESENTED AS THE RESULTANT COMPUTATION WOULD BE A DECREASE IN NET LOSS PER
SHARE AND THEREFORE NOT MEANINGFUL.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK>0000784681
<NAME>CSC HOLDINGS, INC. AND SUBSIDIARIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 51,341
<SECURITIES> 0
<RECEIVABLES> 287,944
<ALLOWANCES> (36,987)
<INVENTORY> 330,843
<CURRENT-ASSETS> 0
<PP&E> 4,970,278
<DEPRECIATION> (2,139,746)
<TOTAL-ASSETS> 7,275,082
<CURRENT-LIABILITIES> 0
<BONDS> 6,462,393
1,444,210
0
<COMMON> 0
<OTHER-SE> (3,193,908)
<TOTAL-LIABILITY-AND-EQUITY> 7,275,082
<SALES> 0
<TOTAL-REVENUES> 1,055,656
<CGS> 112,453
<TOTAL-COSTS> 440,028
<OTHER-EXPENSES> 233,352
<LOSS-PROVISION> (7,432)
<INTEREST-EXPENSE> 132,079
<INCOME-PRETAX> (75,792)
<INCOME-TAX> 0
<INCOME-CONTINUING> (75,592)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (75,792)
<EPS-BASIC> 0
<EPS-DILUTED> 0<F1>
<FN>
<F1>NOT PRESENTED AS THE RESULTANT COMPUTATION WOULD BE A DECREASE IN NET LOSS PER
SHARE AND THEREFORE NOT MEANINGFUL.
</FN>
</TABLE>
