<PAGE>
THIS PAPER DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901 (d)
OF REGULATION S-T
UNITED STATES
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 JUNE 30, 1996
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 NUMBER: 33-43948
CABLEVISION
INDUSTRIES
CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 59-1353813
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
75 ROCKEFELLER PLAZA, NEW YORK, NY 10019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
212-484-8000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS 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 REGISTRANT
WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
---------- --------
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE:
100 SHARES OF COMMON STOCK, NO PAR VALUE PER SHARE, WERE ISSUED AND OUTSTANDING
AS OF AUGUST 12, 1996
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION (H) (1) (a)
AND (b) OF FORM 10-Q AND IS FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
1
<PAGE>
CABLEVISION INDUSTRIES CORPORATION AND SUBSIDIARIES
INDEX TO FORM 10-Q
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet -
June 30, 1996 and December 31, 1995.................... 3
Consolidated Statement of Operations -
Three and Six Months Ended June 30, 1996 and 1995...... 4
Consolidated Statement of Changes in Stockholder's Deficit
Six Months Ended June 30, 1996......................... 5
Consolidated Statement of Cash Flows -
Six Months Ended June 30, 1996 and 1995................ 6
Notes to Consolidated Financial Statements.................. 7
Item 2. Management's Discussion and Analysis of
Results of Operations.................................. 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................... 13
Item 6. Exhibits and Reports on Form 8-K....................... 13
2
<PAGE>
CABLEVISION INDUSTRIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
Unaudited
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1996 1995
------------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents............................ $ 4,475 $ 7,649
Receivables, less allowances of $1,602 and $1,236.... 40,720 23,227
Income tax refunds receivable from Time Warner Inc... 17,725 --
Other current assets................................. 832 3,780
---------- ----------
Total current assets................................. 63,752 34,656
Investments and loans................................ 1,281 23,507
Property, plant and equipment, net................... 393,387 367,470
Cable television franchises, net..................... 720,133 285,860
Other intangibles, net............................... 273,848 248,546
---------- ----------
Total assets......................................... $1,452,401 $ 960,039
========== ==========
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES
Accounts payable..................................... $ 13,653 $ 12,599
Accrued expenses..................................... 68,182 68,100
Subscriber advance payments and deposits............. 11,118 14,842
Liability under employment arrangements.............. -- 93,185
---------- ----------
Total current liabilities............................ 92,953 188,726
Note payable to TWI Cable Inc........................ 1,500,000 --
Other long-term debt................................. 500,000 1,481,406
Deferred income taxes................................ 53,141 17,732
Other noncurrent liabilities......................... 946 --
STOCKHOLDER'S DEFICIT
Common stock, no par value, 200 shares
authorized, 100 issued and outstanding at
June 30, 1996; $1 par value, 80,000 shares
issued and outstanding at December 31, 1995,
stated at redemption value of $1.25............... -- 100
Additional paid-in capital........................... 125,805 32,565
Accumulated deficit.................................. (820,444) (760,490)
---------- ----------
Total stockholder's deficit.......................... (694,639) (727,825)
---------- ----------
Total liabilities and stockholder's deficit.......... $1,452,401 $ 960,039
========== ==========
</TABLE>
See accompanying notes.
3
<PAGE>
CABLEVISION INDUSTRIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands)
Unaudited
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------------- ----------------------
1996 1995 1996 1995
--------------- --------------- --------- -----------
<S> <C> <C> <C> <C>
Revenues.................................. $135,401 $106,428 $264,675 $210,062
Costs and expenses:
Operating.............................. 46,874 34,031 90,068 67,335
Selling, general and
administrative....................... 23,320 22,727 46,365 45,102
Depreciation and
amortization......................... 39,675 34,856 80,498 69,807
Long-term stock and
deferred compensation................ -- 2,500 -- 5,000
-------- -------- -------- --------
Total costs and expenses.. 109,869 94,114 216,931 187,244
-------- -------- -------- --------
Income from operations.................... 25,532 12,314 47,744 22,818
Interest expense, net..................... (37,259) (31,026) (75,250) (61,850)
Other income (expense).................... 276 (461) 156 19,285
-------- -------- -------- --------
Loss before income tax benefit
and extraordinary item................. (11,451) (19,173) (27,350) (19,747)
Income tax benefit........................ 2,919 545 8,233 733
-------- -------- -------- --------
Loss before
extraordinary item...................... (8,532) (18,628) (19,117) (19,014)
Extraordinary loss on
retirement of debt (less
applicable income tax
benefit of $6,493)..................... -- -- (9,658) --
-------- -------- -------- --------
Net loss.................................. $ (8,532) $(18,628) $(28,775) $(19,014)
======== ======== ======== ========
</TABLE>
See accompanying notes.
4
<PAGE>
CABLEVISION INDUSTRIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIT
(Dollars in Thousands)
Unaudited
<TABLE>
<CAPTION>
Additional Total
Common Paid-in Accumulated Stockholder's
Stock Capital Deficit Deficit
------ ---------- ----------- -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1995... $100 $32,565 $(760,490) $(727,825)
Capital contributions........ -- 93,140 -- 93,140
Change in capital structure
resulting from merger
with Time Warner......... (100) 100 -- --
Distributions................ -- -- (31,179) (31,179)
Net loss..................... -- -- (28,775) (28,775)
---- ------- --------- ---------
Balance, June 30, 1996....... $ -- $ 125,805 $ (820,444) $(694,639)
==== ========= ========== =========
</TABLE>
See accompanying notes.
5
<PAGE>
CABLEVISION INDUSTRIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
Unaudited
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1996 1995
----------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss.......................................................... $ (28,775) $ (19,014)
Adjustments to reconcile net loss to
net cash (used in) provided by
operating activities:
Extraordinary loss on retirement of debt....................... 9,658 --
Depreciation and amortization.................................. 80,498 69,807
Equity in loss of investee..................................... 590 848
Changes in operating assets and liabilities,
net of effect of acquisitions:
Accounts receivable, net...................................... (40,863) (138)
Other current assets.......................................... 3,755 997
Accounts payable and accrued expenses......................... 414 (6,308)
Subscriber advance payments and deposits...................... (6,508) 3,352
Liability under employment arrangements....................... (88,853) (3,366)
----------- ---------
Net cash (used in) provided by
operating activities............................................. (70,084) 46,178
----------- ---------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment....................... (31,375) (41,316)
Acquisition of cable television systems, net of cash acquired.... (188,532) --
Net (increase) decrease in investments and loans................. 365 (9,173)
----------- ---------
Net cash used in investing activities............................ (219,542) (50,489)
----------- ---------
FINANCING ACTIVITIES:
New borrowings................................................... 1,525,000 111,830
Repayment of debt................................................ (1,237,784) (104,707)
Distributions.................................................... (764) --
----------- ---------
Net cash provided by financing activities........................ 286,452 7,123
----------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS............... (3,174) 2,812
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR..................... 7,649 3,698
----------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD......................... $ 4,475 $ 6,510
=========== =========
Supplemental disclosures of cash flow information:
Cash paid during the period:
Interest (net of amount capitalized).............................. $ 77,601 $ 66,663
Income taxes...................................................... 383 273
</TABLE>
See accompanying notes.
6
<PAGE>
CABLEVISION INDUSTRIES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
Unaudited
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Cablevision
Industries Corporation and its subsidiaries and partnerships ("CVI") and have
been prepared in accordance with the rules and regulations of the Securities and
Exchange Commission (the "SEC"). Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
All significant intercompany accounts and transactions have been eliminated in
the consolidated financial statements. Certain reclassifications have been made
to the 1995 financial statements to conform with the 1996 presentation.
The accompanying financial statements are unaudited but in the opinion of
management, interim consolidated financial statements reflect all adjustments,
consisting of normal recurring accruals, necessary to present fairly the
financial position, the results of operations and the cash flows for the periods
presented. Results for the interim period are not necessarily indicative of
results to be expected for the full year. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto contained in CVI's Form 10-K for the year
ended December 31, 1995.
Effective January 1, 1996, CVI adopted Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" ("FAS 121") which established standards for
the recognition and measurement of impairment losses on long-lived assets and
certain intangible assets. The adoption of FAS 121 did not have a material
effect on CVI's financial statements.
2. MERGERS AND ACQUISITIONS
On January 4, 1996, CVI merged with a wholly owned subsidiary ("TW Acquisition
Corp.") of Time Warner Inc. ("Time Warner"), with CVI being the survivor of such
merger (the "CVI Merger"). As a result of the CVI Merger, CVI became a
direct, wholly owned subsidiary of Time Warner. Concurrent with the CVI Merger,
Cablevision Management Corporation of Philadelphia ("CMP") merged with a wholly
owned subsidiary of Time Warner and became a direct, wholly owned subsidiary of
Time Warner (the "CMP Merger") and immediately merged into CVI. Immediately
following the CVI Merger, Cablevision Industries of Middle Florida, Inc.
("CIMF") merged into CVI (the "CIMF Merger") and CVI and certain of its
subsidiaries purchased the entire equity interests or all of the assets
(collectively, the "Gerry Purchase") of each of Cablevision Industries of
Tennessee L.P. ("CITLP"), Cablevision Industries Limited Partnership ("CILP"),
Cablevision Industries of Saratoga Associates ("CISA"), Cablevision of
Fairhaven/Acushnet ("CFA") and Cablevision Industries of Florida, Inc. ("CIF")
and, together with CIMF, CMP, CITLP, CILP, CISA and CFA, the "Gerry Companies,"
and together with CVI, the "Cablevision Companies." The CMP Merger, the CIMF
Merger and the Gerry Purchase are referred to herein as the "Gerry Acquisition."
The CVI Merger did not result in the "push down" of Time Warner's accounting
basis due to CVI's public debt which remains outstanding (Note 4). Therefore,
CVI's accounting basis of net assets did not change as a result of the CVI
Merger. As a result of the Gerry Acquisition, CVI has acquired cable
television systems serving approximately 247,000 subscribers in exchange for
2,467,294 shares of Time Warner common stock and the
7
<PAGE>
assumption or incurrence of approximately $431,000 of debt. CVI has accounted
for the Gerry Acquisition under the purchase method of accounting for business
combinations and has, accordingly, preliminarily allocated the estimated total
acquisition cost of $304,000 to the underlying net assets in proportion to their
respective fair values as follows: cable television franchises - $459,000;
goodwill - $33,000; other current and noncurrent assets - $103,000, long-term
debt-$220,000; deferred income taxes - $33,000; and other current liabilities -
$38,000.
The accompanying consolidated statement of operations includes the operating
results of the Gerry Companies from the acquisition date. On a pro forma basis,
giving effect to the Gerry Acquisition as if this transaction had occurred at
January 1, 1995, CVI would have approximately reported for the three and six
months ended June 30, 1995, respectively: revenues of $128,000 and $253,000,
income from operations of $17,000 and $29,000, interest expense of $41,000 and
$77,000, depreciation and amortization expense of $46,000 and $92,000, and net
losses of $23,000 and $21,000.
The CVI Merger and the Gerry Acquisition are referred to herein as the "Time
Warner Transactions". As a result of the Gerry Acquisition, the ownership of
the Gerry Companies has been consolidated within CVI. Effective January 4, 1996,
CVI's cable systems are managed by Time Warner Entertainment Company, L.P.
("TWE"-Note 3).
In the fourth quarter of 1995, CVI recorded a non-recurring charge of $25,749 to
reduce the carrying value of certain non-operating assets, ("Distributed
Assets") to their aggregate net realizable value of $30,415. The Distributed
Assets, which included property, plant and equipment and investments with net
realizable values of $22,740 and $7,675, respectively, were distributed to the
CVI majority stockholder in January 1996 in contemplation of the Time Warner
Transactions. In addition, CVI made a cash distribution of $764 to the CVI
minority stockholders in January 1996 representing their pro rata share of the
net realizable value of the Distributed Assets.
3. INVESTMENTS AND LOANS
As of June 30, 1996 and December 31, 1995, investments and loans consisted of
the following:
June 30, December 31,
1996 1995
-------- ------------
Loans to affiliates $ -- $ 4,439
Investment in CVI-KKR Joint Venture -- 591
Other investments and loans 1,281 18,477
------ -------
$1.281 $23,507
====== =======
All loans to affiliates were repaid on January 3, 1996 in connection with the
Time Warner Transactions. In addition, an agreement reached on December 31, 1995
with an existing partner to purchase the remaining partnership ownership
interest for a purchase price of $21,422, was satisfied by forgiving $15,372 of
loans made to the partner. The remaining balance of $6,050 was paid on January
3, 1996.
In September 1992, CVI finalized various agreements with Kohlberg, Kravis,
Roberts & Co. ("KKR") under which a joint venture ("CVI-KKR Joint Venture") was
formed to acquire certain cable television systems. CVI made a $6,259 equity
investment in the CVI-KKR Joint Venture, representing its share of the capital
required for an acquisition. CVI's investment in, and the results of operations
of, the CVI-KKR Joint Venture is accounted for under the equity method of
accounting. Since the January 4, 1996 consummation of the Time Warner
Transactions, the CVI-KKR Joint Venture is now managed by KKR.
8
<PAGE>
CVI earned management fees prior to the Time Warner Transactions, for services
provided to cable television systems owned or controlled by the majority
stockholder of CVI and to a cable television system owned by the CVI-KKR Joint
Venture. These management fees were included in revenues and amounted to
approximately $2,784 for the six months ended June 30, 1995. After the Time
Warner Transactions were consummated, all such management fee arrangements were
terminated. At June 30, 1996 other investments and loans were comprised of
investments in other cable television and programming entities.
Prior to the Time Warner Transactions, other investments and loans included the
deferral of accrued management fees, accrued interest on loans to affiliates,
and other advances to affiliates, as well as investments in unrelated cable
programming entities.
4. DEBT
As of June 30, 1996 and December 31, 1995, debt consisted of:
June 30, December 31,
1996 1995
---------- ------------
CVI:
9.25% senior debentures $ 200,000 $ 200,000
10.75% senior notes 300,000 300,000
Line of credit (8.5% interest rate) -- 3,000
Revolving note (LIBOR + 7/8%) 1,500,000 --
Subsidiaries:
9.86% senior notes -- 66,000
10.36% senior notes -- 100,000
Bank credit facilities -- 798,348
7.53% secured note -- 14,058
---------- ----------
$2,000,000 $1,481,406
========== ==========
In connection with the consummation of the Time Warner Transactions on January
4, 1996, TWI Cable Inc. ("TWI Cable"), a wholly owned subsidiary of Time Warner,
borrowed $1,525,000 under its five-year revolving credit agreement entered into
on June 30, 1995 (as amended, the "New Credit Agreement") and loaned such
proceeds to CVI under a revolving note with the same terms set forth in the New
Credit Agreement as more fully explained below. CVI used approximately
$1,200,000 of such proceeds to repay or redeem all of its outstanding
indebtedness with the exception of the 9.25% senior debentures and 10.75% senior
notes, including $220,000 of indebtedness that was assumed in the Gerry
Acquisition, plus redemption premiums thereon of $16,000 (the "CVI Debt
Refinancing"). The New Credit Agreement permits aggregate borrowings by TWI
Cable of $4,000,000, subject to certain limitations and adjustments, a portion
of which will be used by TWI Cable to fund the ongoing working capital, capital
expenditures and other corporate needs of CVI. Borrowings under the New Credit
Agreement bear interest at rates generally equal to LIBOR plus an initial margin
of 87.5 basis points, which margin will vary based on the credit rating or
financial leverage of the borrower. CVI has guaranteed the obligations of TWI
Cable under the New Credit Agreement. In May 1996, CVI repaid $25,000 of
principal to TWI Cable, thereupon reducing the outstanding principal to
$1,500,000. Interest expense for the six months ended June 30, 1996 totaled
$47,000.
In addition to the CVI Debt Refinancing, $211,000 was used to consummate the
Gerry Acquisition and $62,000 was used to pay for one-time costs related to the
CVI Merger and transaction costs related to the Gerry Acquisition (See Note 5).
9
<PAGE>
In connection with the Time Warner transactions on January 4, 1996, CVI realized
an extraordinary loss, net of applicable tax benefit, of $9,658 for the early
extinguishment of debt.
In conjunction with certain provisions in its pre-existing bank credit
agreements, CVI entered into various interest rate exchange agreements (the
"Swaps") pursuant to which the interest rate on $365,000 was fixed at a weighted
average swap rate of 6.22% plus the applicable margin over the Eurodollar rate
option under the respective bank credit agreements. These Swaps were all
terminated during the six months ended June 30, 1996 at a total cost of $1,508.
Based on the level of interest rates prevailing at June 30, 1996, the fair value
of CVI's fixed-rate debt exceeded its carrying value by $41,000. Based on the
level of interest rates prevailing at December 31, 1995, the fair value of CVI's
fixed-rate debt exceeded its carrying value by $59,000 and it would have cost
$3,000 to terminate its interest rate swap contracts, which combined was the
equivalent of an unrealized loss of $62,000. Unrealized gains or losses on debt
or interest rate swap contracts are not recognized for financial reporting
purposes unless the debt is retired or the contracts are terminated prior to
their maturity.
The fair value of CVI's debt is estimated based on the quoted market prices for
the same or similar issues or on the current rates offered to CVI for debt of
the same remaining maturities.
5. EMPLOYMENT ARRANGEMENTS
In anticipation of the CVI Merger, CVI entered into retention agreements (the
"Agreements") with certain executive officers and key employees (collectively
"Executives") during 1995 whereby CVI agreed to make retention payments to the
Executives. The Agreements superseded any prior agreements between CVI and the
Executives relating to the payment of deferred compensation or other forms of
additional compensation, whether payable in the form of cash or equity interest
in CVI or its subsidiaries. CVI also adopted a Severance Pay Plan (the
"Severance Plan") whereby eligible employees would receive a payment based upon
a specified formula. The Agreements and Severance Plans were fully accrued for
in 1995.
As a result of the Agreements and Severance Plan, CVI paid out approximately
$93,000 during the six months ended June 30, 1996.
6. RELATED PARTIES
Included in CVI's operating expense after the Merger are charges for programming
and promotional services provided by Home Box Office and other affiliates of
Time Warner. These charges are based on customary rates. For the six months
ended June 30, 1996, these charges totaled $11,000. In addition, CVI has
entered into a management service arrangement with TWE, pursuant to which TWE is
responsible for the management and operation of CVI's cable systems. The
management fees to be paid to TWE by CVI are based on an allocation of the
corporate expenses of TWE's cable division in proportion to the respective
number of subscribers of all cable systems to be managed by TWE's cable
division. For the six months ended June 30, 1996, these fees totaled $11,814.
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS
(Dollars in Thousands)
COMPARATIVE SECOND QUARTER AND YEAR TO DATE OPERATING RESULTS
Overview
- --------
CVI had revenues of $135,401 and $264,675, and a net loss of $8,532 and $28,775
for the three and six months ended June 30, 1996, respectively, compared to
revenues of $106,428 and $210,062, and a net loss of $18,628 and $19,014 for the
three and six months ended June 30, 1995, respectively. Operating income before
depreciation and amortization ("EBITDA") for the three and six months ended June
30, 1996 increased to $65,207 and $128,242, respectively, compared to EBITDA of
$47,170 and $92,625 for the same periods in 1995.
Industry analysts generally consider EBITDA to be an important measure of
comparative operating performance for the cable industry, and when used in
comparison to debt levels or the coverage of interest expense, as a measure of
liquidity. However, EBITDA should be considered in addition to, not as a
substitute for, operating income, net income, cash flows and other measures of
financial performance and liquidity reported in accordance with generally
accepted accounting principles.
On a proforma basis, giving effect to the Gerry Acquisition as if this
transaction occurred as of January 1, 1995, CVI would have reported
approximately the following operating results for the three and six months ended
June 30, 1995, respectively: revenues of $128,000 and $253,000, income from
operations of $17,000 and $29,000 EBITDA of $63,000 and $121,000 depreciation
and amortization expense of $46,000 and $92,000, and net losses of $23,000 and
$21,000.
Income From Operations
- ----------------------
Income from operations increased to $25,532 and $47,744 for the three and six
months ended June 30, 1996, compared to $12,314 and $22,818 for the three and
six months ended June 30, 1995, respectively. Current year revenue and
operating results benefitted from the Gerry Acquisition on January 4, 1996.
Excluding the Gerry Acquisition, revenue increased primarily due to increases in
regulated cable rates phased in during February 1996 as permitted under Time
Warner Cable's "social contract" with the Federal Communications Commission, and
basic subscriber growth of approximately 5%. Excluding the positive impact from
the Gerry Acquisition, income from operations increased as a result of the
revenue gain, lower programming expenses resulting from the transition to Time
Warner's programming contracts and lower corporate related expenses reflecting
the reduction of corporate expenses in connection with the closing of CVI
corporate and regional facilities and the subsequent termination of related
personnel as a direct result of the integration of the operations of CVI into
Time Warner's existing operating structure.
Interest Expense
- ----------------
Interest expense, net increased to $37,259 and $75,250, for the three and six
months ended June 30, 1996 compared to $31,026 and $61,850 in the same periods
in 1995 due to increased borrowing levels reflecting the assumption or
incurrence of approximately $431,000 of debt relating to the Gerry Acquisition,
which has been partially offset by interest savings achieved through the CVI
Debt Refinancing (See Note 4).
Other Income (Expense)
- ----------------------
Other income (expense) increased to $276 and $156 of income for the three and
six months ended June 30, 1996, compared to $461 of expense and $19,285 of
income for the same periods in 1995. The reduction in
11
<PAGE>
other income during the six months ended June 30, 1996 is primarily attributable
to a realized gain of $20,133 on a sale of marketable securities during the
first quarter of 1995.
Extraordinary Loss on Retirement of Debt
- ----------------------------------------
An extraordinary loss on retirement of debt of $9,658 (net of applicable tax
benefit) was recorded during the first quarter of 1996. This extraordinary loss
related to redemption premiums incurred as a result of the CVI Debt Refinancing.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
There were no material legal proceedings instituted during the six months
ended June 30, 1996. There were also no material developments in any of the
other existing legal proceedings which were previously reported in CVI's Annual
Report filed with the SEC on Form 10-K for the fiscal year ended December 31,
1995.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABLEVISION INDUSTRIES CORPORATION
Date: August 12, 1996 By: /s/ RICHARD M. PETTY
--------------- ---------------------
Richard M. Petty
Vice President and Controller
(Principal Accounting Officer)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 4475
<RECEIVABLES> 42322
<ALLOWANCES> 1602
<INVENTORY> 0
<CURRENT-ASSETS> 63752
<PP&E> 1041310
<DEPRECIATION> 647923
<TOTAL-ASSETS> 1452401
<CURRENT-LIABILITIES> 92953
<BONDS> 2000000
0
0
<COMMON> 0
<OTHER-SE> (694639)
<TOTAL-LIABILITY-AND-EQUITY> 1452401
<SALES> 264675
<TOTAL-REVENUES> 264675
<CGS> 90068
<TOTAL-COSTS> 90068
<OTHER-EXPENSES> 80498<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 75250
<INCOME-PRETAX> (27350)
<INCOME-TAX> (8233)
<INCOME-CONTINUING> (19117)
<DISCONTINUED> 0
<EXTRAORDINARY> (9658)
<CHANGES> 0
<NET-INCOME> (28775)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> Depreciation and amortization
</FN>
</TABLE>
