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2/27/2006
Cablevision Systems Corporation Reports Fourth Quarter and Full Year 2005 Results
BETHPAGE, N.Y.--(BUSINESS WIRE)--Feb. 27, 2006--Cablevision Systems Corporation (NYSE:CVC - News) today reported financial results for the fourth quarter and full year ended December 31, 2005.
Fourth quarter consolidated net revenue grew 12.5% to just under $1.5 billion compared to the year-earlier period, reflecting strong revenue growth in Telecommunications Services and Madison Square Garden, offset in part by lower revenue from Rainbow's Other Programming businesses. Operating income for the quarter was $212.8 million compared to a fourth quarter operating loss of $50.2 million in 2004 and adjusted operating cash flow ("AOCF"*) increased 49.2% to $479.7 million. (Fourth quarter 2004 operating loss and AOCF include impairment charges of $166.3 million and $75.8 million, respectively, related to the VOOM HD Networks and certain Rainbow DBS assets.)
For the full year 2005, consolidated net revenue increased 9.0% to $5.2 billion, driven by the addition of over 1.3 million Revenue Generating Units during the year in Telecommunications Services combined with revenue growth at AMC, IFC and WE networks and Madison Square Garden, and offset in part by lower revenue in Rainbow's Other Programming businesses. Full year 2005 operating income increased to $502.4 million from $252.6 million in 2004 and AOCF increased 13.2% to $1.6 billion in 2005 from $1.4 billion in 2004. (The increase in operating income and AOCF was impacted by certain events in 2004, including receipts and credits of $106.1 million that favorably impacted Madison Square Garden and the impairment charges noted above.)
Highlights for the fourth quarter and full year 2005 include:
* Seventh consecutive quarter of basic video subscriber gains; 2.2% growth for the year
* Record annual Revenue Generating Unit growth of more than 1.3 million including the addition of over 450,000 new voice customers
* Telecommunications Services revenue growth of 15.8% and 15.5% and AOCF growth of 16.6% and 15.1% for the quarter and full year, respectively
* Average Monthly Revenue per Basic Video Customer ("RPS") exceeded $100 in the fourth quarter 2005
Cablevision President and CEO James L. Dolan commented: "In 2005, Cablevision enjoyed industry-leading success in our cable division, which propelled us to exceed the $5 billion revenue mark for the first time in the company's history. In addition, the company experienced double-digit AOCF growth for the full year. Cablevision continues to achieve industry-leading penetration rates in digital and analog video, voice, and data services and in 2005 we more than doubled our voice subscribers to more than 730,000 customers and achieved our seventh consecutive quarter of basic subscriber growth. This momentum helped Cablevision meet its financial objectives in 2005 and positions the company well to seize the opportunities that lie ahead."
* Adjusted operating cash flow ("AOCF"), a non-GAAP financial measure, is defined as operating income (loss) before depreciation and amortization (including impairments), excluding employee stock plan charges or credits and restructuring charges or credits. Please refer to page 5 for a discussion of our use of AOCF as a non-GAAP financial measure and page 7 for a reconciliation of AOCF to operating income (loss) and net income (loss).
Results from Continuing Operations
The operating results of FSN Ohio, FSN Florida and Rainbow DBS's distribution operations are included in discontinued operations and are not presented in the following table. The VOOM HD Networks are included in the Rainbow segment for all periods presented.
Segment results for the quarters ended December 31, 2005 and December 31, 2004 are as follows:
(Full year segment results are shown on page 9 and 10 of this earnings release)
---------------------------------------------------
Revenue, Net Operating AOCF
Income (Loss)
---------------------------------------------------
$ millions Q4 2005 Q4 2004 Q4 2005 Q4 2004 Q4 2005 Q4 2004
------- ------- ------- ------- ------- -------
Telecommunications $949.7 $820.5 $166.1 $113.6 $378.9 $325.0
Rainbow 212.4 221.4 21.6 (161.3) 43.1 (37.9)
MSG 338.2 298.2 70.5 41.3 85.7 54.8
Other (including
eliminations) (12.8) (17.7) (45.4) (43.8) (28.0) (20.3)
---------------------------------------------------
Total Company $1,487.5 $1,322.4 $212.8 $(50.2) $479.7 $321.6
---------------------------------------------------
Telecommunications Services - Cable Television and Lightpath
Telecommunications Services includes Cable Television - Cablevision's "Optimum" branded video, high-speed data, and voice residential and commercial services offered over its cable infrastructure -- and its "Optimum Lightpath" branded, fiber-delivered commercial data and voice services.
Telecommunications Services net revenue for the fourth quarter 2005 rose 15.8% to $949.7 million, operating income increased 46.2% to $166.1 million, and AOCF increased 16.6% to $378.9 million, all as compared to the year-earlier period.
Full year 2005 net revenue rose 15.5% to $3.6 billion, operating income increased 31.1% to $554.7 million, and AOCF increased 15.1% to $1.4 billion, all as compared to the year-earlier period.
Cable Television
Cable Television fourth quarter 2005 net revenue increased 16.1% to $909.6 million, operating income increased 38.6% to $168.0 million and AOCF rose 16.6% to $361.7 million, each compared to the year-earlier period. The increases in revenue, operating income, and AOCF resulted principally from growth in video, high-speed data and voice customers which is reflected in the addition of more than 1.3 million Revenue Generating Units during 2005.
Highlights include:
* Basic video customers up 17,930 or 0.6% for the quarter and 63,993 or 2.2% for the year; the company's seventh consecutive quarter of basic video subscriber gains
* iO: Interactive Optimum digital video customers up 119,496 or 6.5% for the quarter and 479,566 or 32.3% for the year
* Optimum Online high-speed data customers up 93,900 or 5.9% for the quarter and 341,793 or 25.3% for the year
* Optimum Voice customers up 130,133 or 21.6% for the quarter and 458,653 or 168.2% for the year
* Revenue Generating Units up 361,045 or 5.1% for the quarter and 1,342,403 or 22.1% for the year
* Advertising revenue up 8.9% for the quarter and 3.8% for the year
* Cable Television Average RPS of $100.46, up $3.77 or 3.9% for the quarter and $12.13 or 13.7% for the year
* AOCF margin of 39.8% compared to 38.8% in Q3 2005 and 39.6% in Q4 2004
Lightpath
For the fourth quarter 2005, Lightpath net revenue increased 14.8% to $50.8 million, operating loss improved $5.7 million to $1.8 million and AOCF increased 16.3% to $17.2 million, each as compared to the prior year period. The positive changes in revenue, AOCF and operating loss are attributable primarily to growth in Ethernet data services over Lightpath's fiber infrastructure and to growth in traditional data services. The improvements in operating loss and AOCF also reflect the positive impact of certain 2005 settlement agreements totaling $2.3 million. Lightpath revenue also includes Optimum Voice call completion activity, which has no net impact on AOCF. Lightpath revenue growth excluding Optimum Voice call activity would have increased 8.2%.
Rainbow
Rainbow consists of our AMC, IFC and WE: Women's Entertainment national programming services as well as Other Programming which includes: FSN Chicago, FSN Bay Area, fuse, Mag Rack, Sportskool, News 12 Networks, IFC Entertainment, VOOM HD Networks, Metro Channels, Rainbow Network Communications, Rainbow Advertising Sales Corp. and other Rainbow developmental ventures.
Rainbow net revenue for the fourth quarter 2005 decreased 4.0% to $212.4 million, operating loss improved $182.9 million to an operating income of $21.6 million and AOCF deficit improved $81.0 million to a positive AOCF of $43.1 million, all compared to the year-earlier period. The decline in revenue principally relates to Rainbow's Other Programming businesses. The fourth quarter improvement in operating income and AOCF reflects the 2004 impairment charges of $166.3 million and $75.8 million, respectively, related to the VOOM HD Networks and certain Rainbow DBS assets.
Full year 2005 net revenue decreased 10.3% to $829.0 million mainly due to lower affiliate revenue at FSN Chicago. Operating loss improved $163.6 million to an operating income of $37.2 million and AOCF increased 65.3% to $157.9 million, compared to the year-earlier period. Full year 2004 operating results were also impacted by the impairment charges discussed above.
AMC/IFC/WE
Fourth quarter 2005 net revenue increased 4.0% to $142.5 million, operating income increased 36.5% to $53.0 million and AOCF increased 19.6% to $66.3 million, each compared to the prior year period.
The fourth quarter results reflect:
* Higher advertising revenue, offset in part by lower affiliate revenue
* Favorable impact from the timing of production and marketing expenditures compared to the prior year period
* Viewing subscriber increases of 7.8% at IFC, 1.9% at WE and 1.5% at AMC as compared to December 2004
Other Programming
Fourth quarter 2005 net revenue decreased 19.0% to $75.0 million, operating loss decreased 84.3% to $31.4 million, and AOCF deficit decreased 75.1% to $23.2 million, all as compared to the prior year period. The decrease in net revenue was primarily driven by lower affiliate revenue at FSN Chicago, resulting from the termination of certain contracts after losing professional sports content; from payments not being received in accordance with an existing affiliate agreement; and from the closure of two Metro Channels. This was offset in part by increased revenue at fuse and IFC Entertainment. The improvement in operating loss and AOCF deficit is primarily the result of the impact of the 2004 impairment charges and is offset in part by the net revenue losses described above.
Madison Square Garden
Madison Square Garden's primary businesses include: MSG Network, FSN New York, the New York Knicks, the New York Rangers, the New York Liberty, MSG Entertainment, the MSG Arena complex and Radio City Music Hall.
Madison Square Garden's fourth quarter 2005 net revenue increased 13.4% to $338.2 million compared to the fourth quarter of 2004. Operating income increased 70.5% to $70.5 million and AOCF increased 56.2% to $85.7 million in the fourth quarter, both as compared to the year-earlier period. MSG's fourth quarter 2005 results were primarily impacted by:
* An increase in revenue and expense relating to the impact of the 2005/2006 hockey season as compared to the NHL lock-out the prior year
* Lower net charges for team personnel transactions, offset in part by an NBA luxury tax provision for 2005/2006
* Lower New York Mets rights expense
For the full year 2005, net revenue increased 3.3% to $804.4 million, operating income decreased 54.5% to $53.3 million and AOCF decreased 29.2% to $120.4 million, all as compared to the year-earlier period. The 2004 period included receipts and credits of $106.1 million, relating to the termination of the New York Mets rights agreement and NBA expansion revenue.
Total Company (Results from Continuing Operations)
Consolidated results exclude FSN Ohio, FSN Florida, and Rainbow DBS's distribution operations, which are reflected in discontinued operations for all periods presented.
Consolidated fourth quarter 2005 results compared to the prior year period are as follows:
* Consolidated net revenue grew 12.5% to $1.5 billion compared to the year-earlier period, reflecting strong revenue growth in Telecommunications Services and Madison Square Garden, offset in part by lower revenue in Rainbow's Other Programming businesses.
* Operating income for the quarter was $212.8 million compared to an operating loss of $50.2 million and AOCF increased 49.2% to $479.7 million as compared to fourth quarter 2004. The fourth quarter 2004 operating loss and AOCF include impairment charges of $166.3 million and $75.8 million, respectively, related to the VOOM HD Networks and certain Rainbow DBS assets. Excluding these items, the company's fourth quarter operating income and AOCF would have increased 83.1% and 20.7%, respectively. The increases in operating income and AOCF principally relate to the revenue growth discussed above.
Full year 2005 results compared to the prior year are as follows:
* 2005 consolidated net revenue increased 9.0% to $5.2 billion, driven by the addition of over 1.3 million Revenue Generating Units during the year in Cable Television combined with revenue growth at AMC, IFC and WE networks and Madison Square Garden, offset in part by lower revenue in Rainbow's Other Programming businesses.
* Full year 2005 operating income increased to $502.4 million from $252.6 million in 2004 and AOCF increased 13.2% to $1.6 billion as compared to 2004. The increase in operating income and AOCF was impacted by certain events in 2004, including receipts and credits of $106.1 million that favorably impacted Madison Square Garden and the impairment charges noted above in the total company quarterly results discussion. Excluding these items, the company's full year operating income and AOCF would have increased 60.6% and 15.7%, respectively. The increases in operating income and AOCF principally relate to the revenue growth discussed above.
2006 Outlook
The company provides the following guidance for the full year 2006:
Cable Television
----------------
Basic video subscriber growth +2.0% to 2.5%
Revenue Generating Unit (RGU) net additions +1.0 to 1.25 million
Total revenue growth mid teens(a)
Adjusted operating cash flow growth (b) mid teens(a)
Capital expenditures $650 to $700 million
AMC/IFC/WE
----------
Total revenue growth high single digit(a)
Adjusted operating cash flow growth (b) high single digit(a)
(a) Percentage growth
(b) The company's definition of AOCF excludes charges or credits
related to our employee stock plan, including those related to the
vesting of restricted shares, variable stock options and stock
appreciation rights; therefore, the 2006 outlook above excludes
any potential impact of FASB Statement No. 123R, which the company
will adopt effective January 1, 2006.
Non-GAAP Financial Measures
We define adjusted operating cash flow ("AOCF"), which is a non-GAAP financial measure, as operating income (loss) before depreciation and amortization (including impairments), excluding charges or credits related to our employee stock plan, including those related to the vesting of restricted shares, variable stock options and stock appreciation rights, and restructuring charges or credits. We believe that the exclusion of such amounts allows investors to better track the performance of the various operating units of our business without regard to the distortive effects of a fluctuating stock price (in the case of variable stock options and stock appreciation rights expense) or, in the case of restricted shares and stock options, the settlement of an obligation that will not be made in cash.
We present AOCF as a measure of our ability to service our debt and make continuing investments, including in our capital infrastructure. We believe AOCF is an appropriate measure for evaluating the operating performance of our business segments and the company on a consolidated basis. AOCF and similar measures with other titles are common performance measures used by investors, analysts and peers to compare performance in our industry. Internally, we use revenue and AOCF measures as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. AOCF should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with generally accepted accounting principles ("GAAP"). Since AOCF is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with other titles used by other companies. For a reconciliation of AOCF to operating income (loss), please see page 7 of this release.
We define Free Cash Flow, which is a non-GAAP financial measure, as net cash from operating activities less capital expenditures, both of which are reported in our Statement of Cash Flows. We believe the most comparable GAAP financial measure of our liquidity is net cash from operating activities. We believe that Free Cash Flow is useful as an indicator of our overall liquidity, as the amount of Free Cash Flow generated in any period is representative of cash that is available for debt service and other discretionary and non-discretionary items. It is also one of several indicators of our ability to make investments and return capital to our shareholders. We also believe that Free Cash Flow is one of several benchmarks used by analysts and investors who follow our industry for comparison of our liquidity with other companies in our industry, although our measure of Free Cash Flow may not be directly comparable to similar measures reported by other companies.
COMPANY DESCRIPTION
Cablevision Systems Corporation is one of the nation's leading entertainment and telecommunications companies. Its cable television operations serve more than 3 million households in the New York metropolitan area. The company's advanced telecommunications offerings include its iO: Interactive Optimum digital television, Optimum Online high-speed Internet, Optimum Voice digital voice-over-cable, and its Optimum Lightpath integrated business communications services. Cablevision's Rainbow Media Holdings LLC operates several successful programming businesses, including AMC, IFC, WE and other national and regional networks. In addition to its telecommunications and programming businesses, Cablevision owns Madison Square Garden and its sports teams, the New York Knicks, Rangers and Liberty. The company also operates New York's famed Radio City Music Hall, and owns and operates Clearview Cinemas. Additional information about Cablevision Systems Corporation is available on the Web at www.cablevision.com.
This earnings release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any 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 those in the forward-looking statements as a result of various factors, including financial community and rating agency perceptions of the company and its business, operations, financial condition and the industry in which it operates and the factors described in the company's filings with the Securities and Exchange Commission, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein. The company disclaims any obligation to update the forward-looking statements contained herein.
Cablevision's Web site: www.cablevision.com
The 4Q and Full Year 2005 earnings announcement will be Webcast live today at 11:00 a.m. EST
Conference call dial-in number is (973) 935-8507
Conference call replay number (973) 341-3080/ pin #7056754 until March 6, 2006
CABLEVISION SYSTEMS CORPORATION
CONDENSED CONSOLIDATED OPERATIONS DATA AND RECONCILIATION
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- -----------------------
2005 (a) 2004 (a) 2005 (a) 2004 (a)
----------- ----------- ----------- -----------
Revenues, net $1,487,545 $1,322,400 $5,175,911 $4,750,037
----------- ----------- ----------- -----------
Adjusted operating
cash flow $ 479,699 $ 321,584 $1,613,008 $1,424,958
Stock plan benefit
(expense) 9,189 (17,983) (26,699) (34,314)
Restructuring credits
(charges) 2,630 2,035 433 (151)
----------- ----------- ----------- -----------
Operating income before
depreciation and
amortization 491,518 305,636 1,586,742 1,390,493
Depreciation and
amortization
(including impairments) 278,736 355,789 1,084,304 1,137,940
----------- ----------- ----------- -----------
Operating income (loss) 212,782 (50,153) 502,438 252,553
Other income (expense):
Interest expense, net (188,445) (183,043) (747,511) (712,440)
Equity in net income
(loss) of affiliates 1,394 (5,642) 3,286 (12,991)
Write-off of deferred
financing costs - - - (18,961)
Gain (loss) on sale of
affiliate interests (499) 2,232 64,968(b) 2,232
Gain (loss) on
investments, net (40,958) 144,504 (138,312) 134,598
Gain (loss) on derivative
contracts, net 43,730 (131,256) 119,180 (165,305)
Loss on extinguishment
of debt - (6,076) - (78,571)
Minority interests (2,404) (19,704) (5,034) (65,568)
Miscellaneous, net 532 87 651 46
----------- ----------- ----------- -----------
Income (loss) from
continuing operations
before income taxes 26,132 (249,051) (200,334) (664,407)
Income tax benefit 23,219 77,832 79,401 194,808
----------- ----------- ----------- -----------
Income (loss) from
continuing operations 49,351 (171,219) (120,933) (469,599)
Income (loss) from
discontinued operations,
net of taxes (b) 4,743 (134,607) 215,233 (199,057)
----------- ----------- ----------- -----------
Income (loss) before
extraordinary item 54,094 (305,826) 94,300 (668,656)
Extraordinary loss on
investment, net of taxes - - - (7,436)
----------- ----------- ----------- -----------
Net income (loss) $ 54,094 $ (305,826) $ 94,300 $ (676,092)
=========== =========== =========== ===========
Basic net income (loss)
per share:
Income (loss) from
continuing
operations $ 0.18 $ (0.60) $ (0.43) $ (1.64)
=========== =========== =========== ===========
Income (loss) from
discontinued
operations $ 0.02 $ (0.47) $ 0.76 $ (0.69)
=========== =========== =========== ===========
Extraordinary loss $ - $ - $ - $ (0.03)
=========== =========== =========== ===========
Net income (loss) $ 0.19 $ (1.06) $ 0.33 $ (2.36)
=========== =========== =========== ===========
Weighted average
common shares
(in thousands) 281,797 287,319 281,936 287,085
=========== =========== =========== ===========
Diluted net income
(loss) per share:
Income (loss) from
continuing
operations $ 0.17 $ (0.60) $ (0.43) $ (1.64)
=========== =========== =========== ===========
Income (loss) from
discontinued
operations $ 0.02 $ (0.47) $ 0.76 $ (0.69)
=========== =========== =========== ===========
Extraordinary loss $ - $ - $ - $ (0.03)
=========== =========== =========== ===========
Net income (loss) $ 0.19 $ (1.06) $ 0.33 $ (2.36)
=========== =========== =========== ===========
Diluted weighted average
common shares
(in thousands) 285,982 287,319 281,936 287,085
=========== =========== =========== ===========
(a) Reflects the net operating results of FSN Ohio, FSN Florida
(including the gain related to the Regional Programming Partners
restructuring) and Rainbow DBS (distribution operations) as
discontinued operations.
(b) The company recorded a pre-tax gain in continuing operations of
$66.6 million and an after-tax gain in discontinued operations of
$266.8 million related to the Regional Programming Partners
restructuring.
CABLEVISION SYSTEMS CORPORATION
CONDENSED CONSOLIDATED OPERATIONS DATA AND RECONCILIATION (Cont'd)
(Dollars in thousands, except per share data)
(Unaudited)
ADJUSTMENTS TO RECONCILE ADJUSTED OPERATING CASH FLOW TO OPERATING
INCOME (LOSS)
The following is a description of the adjustments to operating
income included in this earnings release:
-- Depreciation and amortization (including impairments). This
adjustment eliminates depreciation, amortization (including
impairments) of long-lived assets in all periods.
-- Stock plan benefit (expense). This adjustment eliminates the
benefit or expense associated with vesting and marking to
market of variable stock options and stock appreciation rights
granted under our employee stock option plan, and charges
related to the issuance of restricted shares.
-- Restructuring credits (charges). This adjustment eliminates
the charges or credits associated with costs related to the
elimination of positions, facility realignment, and other
related restructuring activities in all periods.
Twelve Months Ended
December 31,
-------------------
2005 (a) 2004 (a)
--------- ---------
CONSOLIDATED FREE CASH FLOW CALCULATION (b)
-------------------------------------------
Net cash provided by operating activities $926,011 $723,498
Less: capital expenditures (769,292) (697,514)
--------- ---------
Consolidated free cash flow $156,719 $ 25,984
========= =========
(a) Excludes the net operating results and capital expenditures of FSN
Ohio, FSN Florida and Rainbow DBS (distribution operations), which are
reported in discontinued operations. Discontinued operations provided
$108.0 million in cash (which includes the proceeds from the sale of
the Rainbow 1 satellite) in the twelve months ended December 31, 2005
and used $194.7 million in cash for the twelve months ended December
31, 2004, neither of which impact net cash provided by operating
activities set forth in the table above.
(b) See non-GAAP financial measures on page 5 of this release for a
definition and discussion of Free Cash Flow.
CABLEVISION SYSTEMS CORPORATION
CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS
(Dollars in thousands)
(Unaudited)
REVENUES, NET
-------------
Three Months Ended
December 31,
-----------------------
%
2005 (a) 2004 (a) Change
----------- ----------- --------
Cable Television (b) $ 909,582 $ 783,761 16.1%
Lightpath (b) 50,782 44,244 14.8%
Eliminations (c) (10,644) (7,550) (41.0)%
----------- -----------
Total Telecommunications 949,720 820,455 15.8%
----------- -----------
AMC/IFC/WE 142,513 137,016 4.0%
Other Programming (d) 74,957 92,540 (19.0)%
Eliminations (c) (5,036) (8,200) 38.6%
----------- -----------
Total Rainbow 212,434 221,356 (4.0)%
----------- -----------
MSG 338,159 298,190 13.4%
Other (e) 22,886 24,078 (5.0)%
Eliminations (f) (35,654) (41,679) 14.5%
----------- -----------
Total Cablevision $1,487,545 $1,322,400 12.5%
=========== ===========
Twelve Months Ended
December 31,
-----------------------
%
2005 (a) 2004 (a) Change
----------- ----------- --------
Cable Television (b) $3,450,895 $2,980,257 15.8%
Lightpath (b) 195,486 167,660 16.6%
Eliminations (c) (39,616) (23,961) (65.3)%
----------- -----------
Total Telecommunications 3,606,765 3,123,956 15.5%
----------- -----------
AMC/IFC/WE 557,050 522,975 6.5%
Other Programming (d) 296,539 429,155 (30.9)%
Eliminations (c) (24,595) (28,236) 12.9%
----------- -----------
Total Rainbow 828,994 923,894 (10.3)%
----------- -----------
MSG 804,395 778,754 3.3%
Other (e) 85,385 86,765 (1.6)%
Eliminations (f) (149,628) (163,332) 8.4%
----------- -----------
Total Cablevision $5,175,911 $4,750,037 9.0%
=========== ===========
(a) Excludes the net revenues of FSN Ohio, FSN Florida and Rainbow DBS
(distribution operations) which are reported in discontinued
operations.
(b) Optimum Online for business has been reclassified from Lightpath
to Cable Television for all periods presented.
(c) Represents intra-segment revenues.
(d) Includes FSN Chicago, FSN Bay Area, fuse, Mag Rack, Sportskool,
News 12 Networks, IFC Entertainment, VOOM HD Networks, Metro
Channels (through May 2005), Rainbow Network Communications,
Rainbow Advertising Sales Corp. and other Rainbow developmental
ventures.
(e) Represents net revenues of Clearview Cinemas and PVI Virtual
Media, which was consolidated in the second quarter of 2004 in
accordance with FIN 46. In May 2005, Cablevision exchanged its 60%
interest in PVI Latin America for the 40% interest in the rest of
PVI that it did not already own.
(f) Represents inter-segment revenues.
CABLEVISION SYSTEMS CORPORATION
CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS (Cont'd)
(Dollars in thousands)
(Unaudited)
OPERATING INCOME (LOSS) AND ADJUSTED OPERATING CASH FLOW
--------------------------------------------------------
Operating Income
(Loss) (a)
------------------------
Three Months Ended
December 31,
------------------------ %
2005 2004 Change
------------ ---------- --------
Cable Television (b) $167,968 $121,166 38.6%
Lightpath (b) (1,837) (7,565) 75.7%
------------ ----------
Total Telecommunications 166,131 113,601 46.2%
------------ ----------
AMC/IFC/WE 52,969 38,811 36.5%
Other Programming (c) (31,417) (200,118) 84.3%
------------ ----------
Total Rainbow 21,552 (161,307) 113.4%
------------ ----------
MSG 70,481 41,344 70.5%
Other (d) (45,382) (43,791) (3.6)%
------------ ----------
Total Cablevision $212,782 $(50,153) -
============ ==========
Adjusted Operating
Cash Flow (a)
---------------------
Three Months Ended
December 31,
--------------------- %
2005 2004 Change
--------- --------- --------
Cable Television (b) $361,672 $310,177 16.6%
Lightpath (b) 17,244 14,829 16.3%
--------- ---------
Total Telecommunications 378,916 325,006 16.6%
--------- ---------
AMC/IFC/WE 66,313 55,459 19.6%
Other Programming (c) (23,245) (93,357) 75.1%
--------- ---------
Total Rainbow 43,068 (37,898) -
--------- ---------
MSG 85,652 54,840 56.2%
Other (d) (27,937) (20,364) (37.2)%
--------- ---------
Total Cablevision $479,699 $321,584 49.2%
========= =========
OPERATING INCOME (LOSS) AND ADJUSTED OPERATING CASH FLOW
--------------------------------------------------------
Operating Income
(Loss) (a)
------------------------
Twelve Months Ended
December 31,
------------------------ %
2005 2004 Change
----------- ----------- --------
Cable Television (b) $575,810 $454,357 26.7%
Lightpath (b) (21,092) (31,266) 32.5%
----------- -----------
Total Telecommunications 554,718 423,091 31.1%
----------- -----------
AMC/IFC/WE 185,703 159,815 16.2%
Other Programming (c) (148,522) (286,268) 48.1%
----------- -----------
Total Rainbow 37,181 (126,453) 129.4%
----------- -----------
MSG 53,250 117,025 (54.5)%
Other (d) (142,711) (161,110) 11.4%
----------- -----------
Total Cablevision $502,438 $252,553 98.9%
=========== ===========
Adjusted Operating
Cash Flow (a)
------------------------
Twelve Months Ended
December 31,
------------------------ %
2005 2004 Change
----------- ------------ -------
Cable Television (b) $1,348,671 $1,175,892 14.7%
Lightpath (b) 63,528 50,898 24.8%
----------- ------------
Total Telecommunications 1,412,199 1,226,790 15.1%
----------- ------------
AMC/IFC/WE 247,871 234,058 5.9%
Other Programming (c) (90,008) (138,536) 35.0%
----------- ------------
Total Rainbow 157,863 95,522 65.3%
----------- ------------
MSG 120,440 170,057 (29.2)%
Other (d) (77,494) (67,411) (15.0)%
----------- ------------
Total Cablevision $1,613,008 $1,424,958 13.2%
=========== ============
(a) Excludes the operating income (loss) and AOCF of FSN Ohio, FSN
Florida and Rainbow DBS (distribution operations) which are
reported in discontinued operations.
(b) Optimum Online for business has been reclassified from Lightpath
to Cable Television for all periods presented.
(c) Includes FSN Chicago, FSN Bay Area, fuse, Mag Rack, Sportskool,
News 12 Networks, IFC Entertainment, VOOM HD Networks, Metro
Channels (through May 2005), Rainbow Network Communications,
Rainbow Advertising Sales Corp. and other Rainbow developmental
ventures.
(d) Includes operating results of Clearview Cinemas, PVI Virtual Media
and certain corporate general and administrative costs.
CABLEVISION SYSTEMS CORPORATION
SUMMARY OF OPERATING STATISTICS
(Unaudited)
December September December
31, 30, 31,
CABLE TELEVISION 2005 2005 2004
----------------- ---------- ---------- ---------
Revenue Generating Units
Basic Video Customers 3,026,994 3,009,064 2,963,001
iO Digital Video Customers 1,962,590 1,843,094 1,483,024
Optimum Online High-Speed Data
Customers 1,694,334 1,600,434 1,352,541
Optimum Voice Customers 731,341 601,208 272,688
Residential Telephone Customers 7,810 8,224 9,412
---------- ---------- ----------
Total Revenue Generating Units 7,423,069 7,062,024 6,080,666
========== ========== ==========
Customer Relationships (a) 3,175,335 3,153,652 3,095,735
----------------------------------------------------------------------
Homes Passed 4,484,000 4,474,000 4,443,000
Penetration
Basic Video to Homes Passed 67.5% 67.3% 66.7%
iO Digital to Basic Penetration 64.8% 61.3% 50.1%
Optimum Online to Homes Passed 37.8% 35.8% 30.4%
Optimum Voice to Homes Passed 16.3% 13.4% 6.1%
----------------------------------------------------------------------
Monthly Churn
Basic Video 1.8% 2.1% 1.9%
iO Digital Video 2.2% 2.6% 2.5%
Optimum Online High-Speed Data 2.0% 2.4% 2.2%
----------------------------------------------------------------------
Revenue for the three months ended
(dollars in millions)
Video (b) $593 $587 $545
High-Speed Data (c) 205 196 170
Voice 62 50 22
Advertising 28 26 30
Other (d) 22 13 17
---------- ---------- ----------
Total Cable Television Revenue (e) $910 $872 $784
========== ========== ==========
Average Monthly Revenue per Basic
Video Customer ("RPS") (c) (e) $100.46 $96.69 $88.33
(a) Number of customers who receive at least one of the company's
services, including business modem only customers. Prior year has
been adjusted for comparative analysis.
(b) Includes analog, digital, PPV, VOD and SVOD revenue.
(c) Optimum Online for business has been reclassified from Lightpath
to Cable Television for all periods presented.
(d) Includes installation revenue, NY Interconnect, home shopping and
other product offerings.
(e) RPS is calculated by dividing average monthly GAAP revenue for the
quarter by the average number of basic video subscribers for the
quarter.
December September December
31, 30, 31,
RAINBOW 2005 2005 2004
-------- --------- ---------- ---------
Viewing Subscribers
(in thousands)
AMC 77,200 77,200 76,100
WE 50,900 50,600 49,900
IFC 37,300 36,700 34,600
fuse 35,500 35,100 33,100
Consolidated Regional Sports (Bay Area &
Chicago) 5,600 6,000 7,300
Non-Consolidated Regional Sports (New
England) 3,800 3,800 3,800
CABLEVISION SYSTEMS CORPORATION
CAPITALIZATION AND LEVERAGE
(Dollars in thousands)
(Unaudited)
CAPITALIZATION
---------------
December 31, 2005
-----------------
Cash and Cash Equivalents $ 397,496
===========
Bank debt $1,851,500
Collateralized indebtedness 1,170,126
Senior notes and debentures 5,992,760
Senior subordinated notes and debentures 746,621
Capital lease obligations and notes payable 75,692
-----------
Debt $9,836,699
===========
LEVERAGE
--------
Debt $9,836,699
Less: collateralized indebtedness (a) and cash (1,567,622)
-----------
Net debt $8,269,077
===========
Ratio
-----------
Consolidated net debt to AOCF ratio (b) 4.9
Restricted Group leverage ratio (Bank Test) 4.0
CSC Holdings notes and debentures leverage ratio (c) 4.0
Cablevision senior notes leverage ratio 5.1
Rainbow National Services notes ratio (d) 4.8
(a) Collateralized indebtedness is excluded from the leverage
calculation because it is viewed as a forward sale of the stock of
unaffiliated companies and the company's only obligation at
maturity is to deliver the stock or its cash equivalent.
(b) AOCF is annualized based on the quarterly results, except with
respect to Madison Square Garden, which is based on a trailing 12
months due to its seasonal nature.
(c) Reflects the debt to cash flow ratio applicable under the CSC
Holdings senior and senior subordinated notes indentures (which
excludes Cablevision's $1.5 billion of senior notes). The
annualized AOCF (as defined) used in the Restricted Group bank
leverage ratio and for the CSC Holdings notes and debentures
leverage ratio is $1.4 billion.
(d) Reflects the debt to cash flow ratio under the Rainbow National
Services notes indentures. The annualized AOCF (as defined) used
in the notes ratio is $293.1 million.
CABLEVISION SYSTEMS CORPORATION
CAPITAL EXPENDITURES
(Dollars in thousands)
(Unaudited)
Three Months Ended
December 31,
-------------------
2005 (a) 2004 (a)
--------- ---------
CAPITAL EXPENDITURES
---------------------
Consumer premise equipment $103,922 $ 81,861
Scalable infrastructure 40,974 13,093
Line extensions 12,626 12,870
Upgrade/rebuild 3,082 4,156
Support 28,957 13,933
--------- ---------
Total Cable Television (b) 189,561 125,913
Lightpath (b) 9,671 12,093
--------- ---------
Total Telecommunications 199,232 138,006
Rainbow 9,426 23,615
MSG 9,595 5,626
Other (Corporate and Theatres) 10,981 11,535
--------- ---------
Total Cablevision $229,234 $178,782
========= =========
Twelve Months Ended
December 31,
-------------------
2005 (a) 2004 (a)
--------- ---------
CAPITAL EXPENDITURES
---------------------
Consumer premise equipment $450,165 $430,814
Scalable infrastructure 97,982 56,893
Line extensions 36,528 33,277
Upgrade/rebuild 7,632 11,671
Support 73,958 46,464
--------- ---------
Total Cable Television (b) 666,265 579,119
Lightpath (b) 29,062 42,361
--------- ---------
Total Telecommunications 695,327 621,480
Rainbow 29,063 44,313
MSG 20,993 12,153
Other (Corporate and Theatres) 23,909 19,568
--------- ---------
Total Cablevision $769,292 $697,514
========= =========
(a) Excludes the capital expenditures of FSN Ohio, FSN Florida and
Rainbow DBS (distribution operations) which are reported as
discontinued operations.
(b) Optimum Online for business has been reclassified from Lightpath
to Cable Television for all periods presented.
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