Edgar Filing: CSC HOLDINGS LLC

form10q.htm

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 September 30, 2011

o	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	Registrant; State of Incorporation; Address and Telephone Number	IRS Employer Identification No.

1-14764	Cablevision Systems Corporation	11-3415180
	Delaware
	1111 Stewart Avenue
	Bethpage, New York 11714
	(516) 803-2300

1-9046	CSC Holdings, LLC	27-0726696
	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	o
CSC Holdings, LLC	Yes	x		No	o

Indicate by check mark whether the Registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files).
	Yes	x		No	o

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Indicate by check mark whether each Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Exchange Act Rule 12b-2).

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller Reporting Company

Cablevision Systems Corporation

Yes

CSC Holdings, LLC

Yes

Indicate by check mark whether the Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).

Cablevision Systems Corporation	Yes	o		No	x
CSC Holdings, LLC	Yes	o		No	x

Number of shares of common stock outstanding as of October 21, 2011:

Cablevision NY Group Class A Common Stock -	225,314,162
Cablevision NY Group Class B Common Stock -	54,137,673
CSC Holdings, LLC Interests of Member -	14,432,750

CSC Holdings, LLC meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format applicable to CSC Holdings, LLC.

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

FORM 10-Q

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			Page

PART I.		FINANCIAL INFORMATION

	Item 1.	Financial Statements of Cablevision Systems Corporation and Subsidiaries

		Condensed Consolidated Balance Sheets - September 30, 2011 and December 31, 2010 (unaudited)	3

		Condensed Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2011 and 2010 (unaudited)	5

		Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2011 and 2010 (unaudited)	6

		Financial Statements of CSC Holdings, LLC and Subsidiaries

		Condensed Consolidated Balance Sheets - September 30, 2011 and December 31, 2010 (unaudited)	7

		Condensed Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2011 and 2010 (unaudited)	9

		Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2011 and 2010 (unaudited)	10

		Combined Notes to Condensed Consolidated Financial Statements (unaudited)	11

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	39

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	74

	Item 4.	Controls and Procedures	76

PART II.		OTHER INFORMATION

	Item 1.	Legal Proceedings	77

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77

	Item 6.	Exhibits	78

	SIGNATURES		79

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PART I.

FINANCIAL INFORMATION

This Quarterly Report on Form 10-Q for the period ended September 30, 2011 is separately filed by Cablevision Systems Corporation ("Cablevision") and CSC Holdings, LLC ("CSC Holdings" and collectively with Cablevision and their subsidiaries, the "Company", "we", "us" or "our").

This Quarterly Report contains statements that constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. In this Quarterly Report there are statements concerning our future operating results and future financial performance. Words such as "expects", "anticipates", "believes", "estimates", "may", "will", "should", "could", "potential", "continue", "intends", "plans" and similar words and terms used in the discussion of future operating results and future financial performance identify forward-looking statements. 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:

the level of our revenues;

competition from existing competitors (such as telecommunications providers and direct broadcast satellite ("DBS") distributors) and new competitors (such as high-speed wireless providers) entering our franchise areas;

demand for our video, high-speed data and voice services, which are impacted by competition from other services and the other factors discussed herein;

the cost of programming and industry conditions;

changes in the laws or regulations under which we operate;

the outcome of litigation and other proceedings, including the matters described in Note 15 of the combined notes to our condensed consolidated financial statements;

general economic conditions in the areas in which we operate;

the state of the market for debt securities and bank loans;

demand for advertising in our newspapers along with subscriber and single copy outlet sales demand for our newspapers;

the level of our capital expenditures;

the level of our expenses;

future acquisitions and dispositions of assets;

market demand for new services;

demand for advertising inventory;

the tax-free treatment of Cablevision's distribution to its stockholders on February 9, 2010 of all of the outstanding common stock of The Madison Square Garden Company ("Madison Square Garden"), a company which owns the sports, entertainment and media businesses previously owned and operated by the Company's Madison Square Garden segment (the "MSG Distribution");

the tax-free treatment of Cablevision's distribution to its stockholders on June 30, 2011 of all of the outstanding common stock of AMC Networks Inc., formerly Rainbow Media Holdings, LLC, ("AMC Networks"), a company which consists principally of national programming networks, including AMC, WE tv, IFC and Sundance Channel, and other services previously owned and operated by the Company's Rainbow segment (the "AMC Networks Distribution");

whether any pending uncompleted transactions are completed on the terms and at the times set forth (if at all);

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other risks and uncertainties inherent in the cable television, newspaper publishing businesses, and our other businesses;

financial community and rating agency perceptions of our business, operations, financial condition and the industries in which we operate; and

the factors described in our filings with the Securities and Exchange Commission, including under the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein.

We disclaim any obligation to update or revise the forward-looking statements contained herein, except as otherwise required by applicable federal securities laws.

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Item 1.

Financial Statements

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

(See Note 1)

	September 30,		December 31,
	2011		2010
ASSETS
Current Assets:
Cash and cash equivalents	$	188,617	$	313,991
Restricted cash		1,149		1,149
Accounts receivable, trade (less allowance for doubtful accounts of $18,827 and $17,786)		298,409		295,149
Prepaid expenses and other current assets		167,859		127,058
Amounts due from affiliates		12,228		25,127
Deferred tax asset		162,827		103,645
Investment securities pledged as collateral		224,441		235,932
Assets distributed to stockholders in 2011		-		564,231
Total current assets		1,055,530		1,666,282
Property, plant and equipment, net of accumulated depreciation of $9,068,547 and $8,564,884		3,237,310		3,361,590
Investment securities pledged as collateral		224,441		235,932
Derivative contracts		37,005		-
Other assets		49,800		48,929
Deferred tax asset		-		99,287
Amortizable intangible assets, net of accumulated amortization of $100,541 and $60,028		266,192		292,144
Indefinite-lived cable television franchises		1,240,228		1,240,228
Other indefinite-lived intangible assets		66,895		66,895
Goodwill		441,356		442,067
Deferred financing and other costs, net of accumulated amortization of $84,437 and $72,642		121,387		140,064
Assets distributed to stockholders in 2011		-		1,273,674
	$	6,740,144	$	8,867,092

See accompanying combined notes to condensed consolidated financial statements.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

(See Note 1)

	September 30,			December 31,
	2011			2010
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts payable	$	469,025		$	435,816
Accrued liabilities		595,398			634,475
Amounts due to affiliates		33,421			31,517
Deferred revenue		60,501			52,732
Liabilities under derivative contracts		90,374			47,251
Credit facility debt		276,129			157,452
Collateralized indebtedness		194,741			161,358
Capital lease obligations		2,703			1,531
Notes payable		554			-
Senior notes		218,759			325,773
Liabilities distributed to stockholders in 2011		-			336,491
Total current liabilities		1,941,605			2,184,396
Deferred revenue		10,717			10,946
Liabilities under derivative contracts		-			179,327
Other liabilities		268,797			273,918
Deferred tax liability		122,432			-
Credit facility debt		4,668,025			5,599,058
Collateralized indebtedness		246,464			191,248
Capital lease obligations		31,015			29,706
Senior notes and debentures		4,976,973			5,242,420
Liabilities distributed to stockholders in 2011		-			1,436,808
Total liabilities		12,266,028			15,147,827
Commitments and contingencies
Redeemable noncontrolling interests		15,255			14,698
Stockholders' Deficiency:
Preferred Stock, $.01 par value, 50,000,000 shares authorized, none issued		-			-
CNYG Class A common stock, $.01 par value, 800,000,000 shares authorized, 281,798,876 and 279,582,204 shares issued and 225,315,392 and 241,055,283 shares outstanding		2,818			2,796
CNYG Class B common stock, $.01 par value, 320,000,000 shares authorized, 54,137,673 and 54,148,223 shares issued and outstanding		541			541
RMG Class A common stock, $.01 par value, 600,000,000 shares authorized, none issued		-			-
RMG Class B common stock, $.01 par value, 160,000,000 shares authorized, none issued		-			-
Paid-in capital		1,076,807			6,465
Accumulated deficit		(5,306,112	)		(5,494,829	)
		(4,225,946	)		(5,485,027	)
Treasury stock, at cost (56,483,484 and 38,526,921 CNYG Class A common shares)		(1,293,684	)		(788,566	)
Accumulated other comprehensive loss		(23,151	)		(23,325	)
Total stockholders' deficiency		(5,542,781	)		(6,296,918	)
Noncontrolling interest		1,642			1,485
Total deficiency		(5,541,139	)		(6,295,433	)
	$	6,740,144		$	8,867,092

See accompanying combined notes to condensed consolidated financial statements.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three and Nine Months Ended September 30, 2011 and 2010

(Dollars in thousands, except per share amounts)

(Unaudited)

(See Note 1)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Revenues, net (including revenues, net from affiliates of $1,142, $1,568, $3,315, and $2,822, respectively)	$	1,665,790		$	1,542,827		$	5,009,595		$	4,600,821
Operating expenses:
Technical and operating (excluding depreciation, amortization and impairments shown below and including charges from affiliates of $45,075, $43,261, $134,330, and $129,131, respectively)		766,135			668,543			2,250,439			1,976,323
Selling, general and administrative (net of charges to affiliates of $3,543, $5,436, $13,713, and $19,922, respectively)		370,680			346,877			1,127,089			1,056,039
Restructuring expense		27			11			292			172
Depreciation and amortization (including impairments)		256,545			218,955			749,333			652,145
		1,393,387			1,234,386			4,127,153			3,684,679
Operating income		272,403			308,441			882,442			916,142
Other income (expense):
Interest expense		(182,565	)		(176,629	)		(562,214	)		(529,373	)
Interest income		267			242			537			544
Gain (loss) on investments, net		(95,362	)		15,328			(22,978	)		26,256
Gain (loss) on equity derivative contracts, net		81,737			(7,060	)		38,856			(9,801	)
Gain (loss) on interest rate swap contracts, net		1,173			(24,921	)		(8,513	)		(81,801	)
Loss on extinguishment of debt and write-off of deferred financing costs		(3,027	)		-			(3,027	)		(110,049	)
Miscellaneous, net		275			362			730			947
		(197,502	)		(192,678	)		(556,609	)		(703,277	)
Income from continuing operations before income taxes		74,901			115,763			325,833			212,865
Income tax expense		(35,297	)		(47,016	)		(147,676	)		(78,869	)
Income from continuing operations		39,604			68,747			178,157			133,996
Income from discontinued operations, net of income taxes		-			43,616			53,623			113,636
Net income		39,604			112,363			231,780			247,632
Net income attributable to noncontrolling interests		(285	)		(302	)		(552	)		(547	)
Net income attributable to Cablevision Systems Corporation stockholders	$	39,319		$	112,061		$	231,228		$	247,085
Basic net income per share attributable to Cablevision Systems Corporation stockholders:
Income from continuing operations	$	0.14		$	0.23		$	0.64		$	0.45
Income from discontinued operations	$	-		$	0.15		$	0.19		$	0.39
Net income	$	0.14		$	0.38		$	0.83		$	0.84
Basic weighted average common shares (in thousands)		275,145			293,671			278,498			294,438
Diluted net income per share attributable to Cablevision Systems Corporation stockholders:
Income from continuing operations	$	0.14		$	0.23		$	0.62		$	0.44
Income from discontinued operations	$	-		$	0.14		$	0.19		$	0.38
Net income	$	0.14		$	0.37		$	0.81		$	0.82
Diluted weighted average common shares (in thousands)		284,113			302,143			287,137			302,958
Amounts attributable to Cablevision Systems Corporation stockholders:
Income from continuing operations, net of income taxes	$	39,319		$	68,445		$	177,605		$	133,449
Income from discontinued operations, net of income taxes		-			43,616			53,623			113,636
Net income	$	39,319		$	112,061		$	231,228		$	247,085
Cash dividends declared per share of common stock	$	0.15		$	0.125		$	0.425		$	0.35

See accompanying combined notes to condensed consolidated financial statements.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2011 and 2010

(Dollars in thousands)

(Unaudited)

(See Note 1)

	2011			2010
Cash flows from operating activities:
Income from continuing operations	$	178,157		$	133,996
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization (including impairments)		749,333			652,145
Loss (gain) on investments, net		22,978			(26,256	)
Loss (gain) on equity derivative contracts, net		(38,856	)		9,801
Loss on extinguishment of debt and write-off of deferred financing costs		3,027			110,049
Amortization of deferred financing costs and discounts on indebtedness		35,065			30,193
Share-based compensation expense related to equity classified awards		36,585			36,317
Deferred income taxes		119,675			66,168
Provision for doubtful accounts		43,872			46,167
Changes in other assets and liabilities		(135,126	)		(65,111	)
Net cash provided by operating activities		1,014,710			993,469
Cash flows from investing activities:
Capital expenditures		(574,478	)		(575,374	)
Proceeds (payments) related to sale of equipment, net of costs of disposal		(1,242	)		1,706
Payments for acquisitions, net		(7,776	)		-
Decrease in investment securities and other investments		30			100
Contributions to AMC Networks		-			(101,171	)
Additions to other intangible assets		(10,500	)		(1,294	)
Net cash used in investing activities		(593,966	)		(676,033	)
Cash flows from financing activities:
Proceeds from credit facility debt		605,000			400,000
Repayment of credit facility debt		(168,089	)		(483,658	)
Proceeds from issuance of senior notes		-			1,250,000
Repurchase of senior notes and debentures, including tender premiums and fees		(64,900	)		(1,078,212	)
Repayment of senior notes		(325,796	)		-
Proceeds from collateralized indebtedness		246,464			148,174
Repayment of collateralized indebtedness		(210,584	)		(148,174	)
Proceeds from stock option exercises		6,163			19,829
Dividend distributions to common stockholders		(120,918	)		(104,322	)
Principal payments on capital lease obligations		(2,567	)		(985	)
Deemed repurchases of restricted stock		(32,968	)		(17,623	)
Purchase of shares of CNYG Class A common stock, pursuant to a share repurchase program, held as treasury shares		(488,408	)		(157,081	)
Additions to deferred financing costs		(440	)		(40,247	)
Distributions to noncontrolling interests		(1,127	)		(635	)
Net cash used in financing activities		(558,170	)		(212,934	)
Net increase (decrease) in cash and cash equivalents from continuing operations		(137,426	)		104,502
Cash flows of discontinued operations:
Net cash provided by operating activities		131,158			216,007
Net cash used in investing activities		(4,086	)		(12,637	)
Net cash provided by (used in) financing activities		2,857			(158,831	)
Effect of change in cash related to discontinued operations		(117,877	)		(3,011	)
Net increase in cash and cash equivalents from discontinued operations		12,052			41,528
Cash and cash equivalents at beginning of year		313,991			215,204
Cash and cash equivalents at end of period	$	188,617		$	361,234

See accompanying combined notes to condensed consolidated financial statements.

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CSC HOLDINGS, LLC AND SUBSIDIARIES

(a wholly-owned subsidiary of Cablevision Systems Corporation)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

(See Note 1)

	September 30, 2011		December 31, 2010
ASSETS
Current Assets:
Cash and cash equivalents	$	185,312	$	266,914
Restricted cash		1,149		1,149
Accounts receivable, trade (less allowance for doubtful accounts of $18,827 and $17,786)		298,409		295,149
Prepaid expenses and other current assets		161,629		122,385
Amounts due from affiliates (primarily due from sole member)		519,458		515,698
Deferred tax asset		101,300		155,487
Investment securities pledged as collateral		224,441		235,932
Assets distributed to sole member in 2011		-		564,231
Total current assets		1,491,698		2,156,945
Property, plant and equipment, net of accumulated depreciation of $9,068,547 and $8,564,884		3,237,310		3,361,590
Investment securities pledged as collateral		224,441		235,932
Derivative contracts		37,005		-
Other assets		49,800		48,929
Amortizable intangible assets, net of accumulated amortization of $100,541 and $60,028		266,192		292,144
Indefinite-lived cable television franchises		1,240,228		1,240,228
Other indefinite-lived intangible assets		66,895		66,895
Goodwill		441,356		442,067
Deferred financing and other costs, net of accumulated amortization of $76,960 and $68,358		82,705		98,188
Assets distributed to sole member in 2011		-		1,229,374
	$	7,137,630	$	9,172,292

See accompanying combined notes to condensed consolidated financial statements.

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CSC HOLDINGS, LLC AND SUBSIDIARIES

(a wholly-owned subsidiary of Cablevision Systems Corporation)

CONDENSED CONSOLIDATED BALANCE SHEETS (Cont'd)

(Dollars in thousands)

(Unaudited)

(See Note 1)

	September 30, 2011			December 31, 2010
LIABILITIES AND TOTAL DEFICIENCY
Current Liabilities:
Accounts payable	$	469,025		$	435,816
Accrued liabilities		539,687			571,711
Amounts due to affiliates		31,065			31,200
Deferred revenue		60,501			52,732
Liabilities under derivative contracts		90,374			47,251
Credit facility debt		276,129			157,452
Collateralized indebtedness		194,741			161,358
Capital lease obligations		2,703			1,531
Note payable		554			-
Senior notes		191,934			325,773
Liabilities distributed to sole member in 2011		-			336,491
Total current liabilities		1,856,713			2,121,315
Deferred revenue		10,717			10,946
Liabilities under derivative contracts		-			179,327
Other liabilities		266,545			268,919
Deferred tax liability		543,776			368,647
Credit facility debt		4,668,025			5,599,058
Collateralized indebtedness		246,464			191,248
Capital lease obligations		31,015			29,706
Senior notes and debentures		2,837,164			3,076,732
Liabilities distributed to sole member in 2011		-			1,460,456
Total liabilities		10,460,419			13,306,354
Commitments and contingencies
Redeemable noncontrolling interests		15,255			14,698
Total Member Deficiency:
Accumulated deficit		(3,589,144	)		(3,375,506	)
Senior notes due from sole member		(753,717	)		(753,717	)
Other member's equity (14,432,750 membership units issued and outstanding)		1,026,326			2,303
		(3,316,535	)		(4,126,920	)
Accumulated other comprehensive loss		(23,151	)		(23,325	)
		(3,339,686	)		(4,150,245	)
Noncontrolling interest		1,642			1,485
Total member deficiency		(3,338,044	)		(4,148,760	)
	$	7,137,630		$	9,172,292

See accompanying combined notes to condensed consolidated financial statements.

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CSC HOLDINGS, LLC AND SUBSIDIARIES

(a wholly-owned subsidiary of Cablevision Systems Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three and Nine Months Ended September 30, 2011 and 2010

(Dollars in thousands)

(Unaudited)

(See Note 1)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Revenues, net (including revenues, net from affiliates of $1,142, $1,568, $3,315, and $2,822, respectively)	$	1,665,790		$	1,542,827		$	5,009,595		$	4,600,821
Operating expenses:
Technical and operating (excluding depreciation, amortization and impairments shown below and including charges from affiliates of $45,075, $43,261, $134,330, and $129,131, respectively)		766,135			668,543			2,250,439			1,976,323
Selling, general and administrative (net of charges to affiliates of $3,543, $5,436, $13,713, and $19,922, respectively)		370,680			346,877			1,127,089			1,056,039
Restructuring expense		27			11			292			172
Depreciation and amortization (including impairments)		256,545			218,955			749,333			652,145
		1,393,387			1,234,386			4,127,153			3,684,679
Operating income		272,403			308,441			882,442			916,142
Other income (expense):
Interest expense		(136,683	)		(130,775	)		(424,635	)		(395,113	)
Interest income		15,035			14,974			44,834			46,122
Gain (loss) on investments, net		(95,362	)		15,328			(22,978	)		26,256
Gain (loss) on equity derivative contracts, net		81,737			(7,060	)		38,856			(9,801	)
Gain (loss) on interest rate swap contracts, net		1,173			(24,921	)		(8,513	)		(81,801	)
Loss on extinguishment of debt and write-off of deferred financing costs		(3,027	)		-			(3,027	)		-
Miscellaneous, net		275			375			730			960
		(136,852	)		(132,079	)		(374,733	)		(413,377	)
Income from continuing operations before income taxes		135,551			176,362			507,709			502,765
Income tax expense		(62,123	)		(71,640	)		(231,237	)		(193,692	)
Income from continuing operations		73,428			104,722			276,472			309,073
Income from discontinued operations, net of income taxes		-			43,616			53,623			113,636
Net income		73,428			148,338			330,095			422,709
Net income attributable to noncontrolling interests		(285	)		(302	)		(552	)		(547	)
Net income attributable to CSC Holdings, LLC's sole member	$	73,143		$	148,036		$	329,543		$	422,162
Amounts attributable to CSC Holdings, LLC's sole member:
Income from continuing operations, net of income taxes	$	73,143		$	104,420		$	275,920		$	308,526
Income from discontinued operations, net of income taxes		-			43,616			53,623			113,636
Net income	$	73,143		$	148,036		$	329,543		$	422,162

See accompanying combined notes to condensed consolidated financial statements.

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CSC HOLDINGS, LLC AND SUBSIDIARIES

(a wholly-owned subsidiary of Cablevision Systems Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2011 and 2010

(Dollars in thousands)

(Unaudited)

(See Note 1)

	2011			2010
Cash flows from operating activities:
Income from continuing operations	$	276,472		$	309,073
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization (including impairments)		749,333			652,145
Loss (gain) on investments, net		22,978			(26,256	)
Loss (gain) on equity derivative contracts, net		(38,856	)		9,801
Loss on extinguishment of debt and write-off of deferred financing costs		3,027			-
Amortization of deferred financing costs and discounts on indebtedness		30,925			26,123
Accretion of discount on Cablevision senior notes held by Newsday Holdings LLC		-			(3,131	)
Share-based compensation expense related to equity classified awards		36,585			36,317
Deferred income taxes		192,736			173,296
Provision for doubtful accounts		43,872			46,167
Excess tax benefit on share-based awards		(7,901	)		-
Changes in other assets and liabilities		(150,185	)		(56,561	)
Net cash provided by operating activities		1,158,986			1,166,974
Cash flows from investing activities:
Capital expenditures		(574,478	)		(575,374	)
Proceeds (payments) related to sale of equipment, net of costs of disposal		(1,242	)		1,706
Payments for acquisitions, net		(7,776	)		-
Decrease in investment securities and other investments		30			100
Contributions to AMC Networks		-			(101,171	)
Additions to other intangible assets		(10,500	)		(1,294	)
Net cash used in investing activities		(593,966	)		(676,033	)
Cash flows from financing activities:
Proceeds from credit facility debt		605,000			400,000
Repayment of credit facility debt		(168,089	)		(483,658	)
Repurchase of senior notes		(64,900	)		-
Repayment of senior notes		(325,796	)		-
Proceeds from collateralized indebtedness		246,464			148,174
Repayment of collateralized indebtedness		(210,584	)		(148,174	)
Dividend payments to sole member, net		(744,536	)		(339,317	)
Excess tax benefit on share-based awards		7,901			-
Principal payments on capital lease obligations		(2,567	)		(985	)
Additions to deferred financing costs		(440	)		(13,660	)
Distributions to noncontrolling interests		(1,127	)		(635	)
Net cash used in financing activities		(658,674	)		(438,255	)
Net increase (decrease) in cash and cash equivalents from continuing operations		(93,654	)		52,686
Cash flows of discontinued operations:
Net cash provided by operating activities		131,158			216,007
Net cash used in investing activities		(4,086	)		(12,637	)
Net cash provided by (used in) financing activities		2,857			(158,831	)
Effect of change in cash related to discontinued operations		(117,877	)		(3,011	)
Net increase in cash and cash equivalents from discontinued operations		12,052			41,528
Cash and cash equivalents at beginning of year		266,914			174,212
Cash and cash equivalents at end of period	$	185,312		$	268,426

See accompanying combined notes to condensed consolidated financial statements.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

NOTE 1.

BUSINESS

Cablevision Systems Corporation ("Cablevision"), its wholly-owned subsidiary CSC Holdings, LLC ("CSC Holdings," and collectively with Cablevision, the "Company") and their subsidiaries own and operate cable television systems and own companies that provide regional news, other programming and advertising sales services for the cable television industry, provide telephone service, operate motion picture theaters and operate a newspaper publishing business. The Company classifies its operations into two reportable segments: (1) Telecommunications Services, consisting principally of its video, high-speed data, Voice over Internet Protocol and its commercial data and voice services operations; and (2) Other, consisting principally of (i) Newsday, which includes the Newsday daily newspaper, amNew York, Star Community Publishing Group, and online websites including newsday.com and exploreLI.com, (ii) a motion picture theater business ("Clearview Cinemas"), (iii) the News 12 Networks, which provide regional news programming services, (iv) the MSG Varsity network, a network dedicated entirely to showcasing high school sports and activities, (v) a cable television advertising company, Cablevision Media Sales Corporation ("Cablevision Media Sales"), previously known as Rainbow Advertising Sales Corporation, and (vi) certain other businesses and unallocated corporate costs.

On February 9, 2010, Cablevision distributed to its stockholders all of the outstanding common stock of The Madison Square Garden Company ("Madison Square Garden"), a company which owns the sports, entertainment and media businesses previously owned and operated by the Company's Madison Square Garden segment (the "MSG Distribution"). As a result of the MSG Distribution on February 9, 2010, the Company no longer consolidates the financial results of Madison Square Garden for the purpose of its own financial reporting and the historical financial results of Madison Square Garden have been reflected in the Company's condensed consolidated financial statements as discontinued operations for all periods presented through the MSG Distribution date.

On June 30, 2011, Cablevision distributed to its stockholders all of the outstanding common stock of AMC Networks Inc., formerly Rainbow Media Holdings LLC, ("AMC Networks"), a company which consists principally of national programming networks, including AMC, WE tv, IFC and Sundance Channel, previously owned and operated by the Company's Rainbow segment (the "AMC Networks Distribution"). The AMC Networks Distribution took the form of a distribution by Cablevision of one share of AMC Networks Class A Common Stock for every four shares of Cablevision NY Group ("CNYG") Class A Common Stock held of record on June 16, 2011 (the "AMC Networks Distribution Record Date") and one share of AMC Networks Class B Common Stock for every four shares of CNYG Class B Common Stock held of record on the AMC Networks Distribution Record Date. As a result of the AMC Networks Distribution, the Company no longer consolidates the financial results of AMC Networks for the purpose of its own financial reporting and the historical financial results of AMC Networks have been reflected in the Company's condensed consolidated financial statements as discontinued operations for all periods presented through the AMC Networks Distribution date.

Assets and liabilities related to the AMC Networks Distribution on the Company's condensed consolidated balance sheet as of December 31, 2010 and related footnotes have been reclassified as assets distributed to stockholders/member in 2011 and liabilities distributed to stockholders/member in 2011. All assets and liabilities distributed to stockholders/member in 2011 are excluded from the footnotes unless otherwise noted.

Accounts payable to and advances to AMC Networks that were previously eliminated in consolidation are now presented as amounts due to affiliates or amounts due from affiliates on the Company's condensed consolidated balance sheets.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

NOTE 2.

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Cablevision and CSC Holdings have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all the information and notes required for complete annual financial statements.

The interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010.

The financial statements as of September 30, 2011 and for the three and nine months ended September 30, 2011 and 2010 presented in this Form 10-Q are unaudited; however, in the opinion of management, such financial statements include all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented.

The accompanying condensed consolidated financial statements of Cablevision include the accounts of Cablevision and its majority-owned subsidiaries and the accompanying condensed consolidated financial statements of CSC Holdings include the accounts of CSC Holdings and its majority-owned subsidiaries. Cablevision has no business operations independent of its CSC Holdings subsidiary, whose operating results and financial position are consolidated into Cablevision. The condensed consolidated balance sheets and statements of operations of Cablevision are essentially identical to the condensed consolidated balance sheets and statements of operations for CSC Holdings, with the following significant exceptions: Cablevision has $2,166,634 of senior notes outstanding at September 30, 2011 (excluding the $753,717 aggregate principal amount of Cablevision notes held by its subsidiary Newsday Holdings LLC) that were issued to third party investors, cash, deferred financing costs and accrued interest related to its senior notes, deferred taxes and accrued dividends on its balance sheet and CSC Holdings and its subsidiaries have certain intercompany receivables from Cablevision. Differences between Cablevision's results of operations from those of CSC Holdings primarily include incremental interest expense, interest income, loss on extinguishment of debt, write-off of deferred financing costs, and income tax expense. CSC Holdings' results of operations include incremental interest income from the Cablevision senior notes held by Newsday Holdings LLC and the accretion of the discount on the 8% senior notes due 2012 issued by Cablevision to CSC Holdings that were redeemed during the second quarter of 2010 (which were replaced with the $753,717 aggregate principal amount of Cablevision notes discussed above), all of which eliminate in Cablevision's results of operations.

The combined notes to the condensed consolidated financial statements relate to the Company, which, except as noted, are essentially identical for Cablevision and CSC Holdings. All significant intercompany transactions and balances between Cablevision and CSC Holdings and their respective consolidated subsidiaries are eliminated in both sets of consolidated financial statements. Intercompany transactions between Cablevision and CSC Holdings do not eliminate in the CSC Holdings consolidated financial statements, but do eliminate in the Cablevision consolidated financial statements.

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, 2011.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

Recently Adopted Accounting Pronouncements

In December 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2010-28, Intangibles - Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. ASU No. 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The Company adopted ASU No. 2010-28 effective January 1, 2011.

The FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurement, that outlines certain new disclosures and clarifies some existing disclosure requirements about fair value measurement as set forth in Accounting Standards Codification Topic 820-10. ASU No. 2010-06 became effective and was adopted by the Company on January 1, 2011.

In October 2009, the FASB issued ASU No. 2009-13, Multiple-Deliverable Revenue Arrangements, which provides amendments that (a) update the criteria for separating consideration in multiple-deliverable arrangements, (b) establish a selling price hierarchy for determining the selling price of a deliverable, and (c) replace the term "fair value" in the revenue allocation guidance with the term "selling price" to clarify that the allocation of revenue is based on entity-specific assumptions. ASU No. 2009-13 eliminates the residual method of allocating arrangement consideration to deliverables, requires the use of the relative selling price method and requires that a vendor determine its best estimate of selling price in a manner consistent with that used to determine the price to sell the deliverable on a standalone basis. ASU No. 2009-13 requires a vendor to significantly expand the disclosures related to multiple-deliverable revenue arrangements with the objective to provide information about the significant judgments made and changes to those judgments and how the application of the relative selling-price method affects the timing or amount of revenue recognition. ASU No. 2009-13 was adopted on a prospective basis to revenue arrangements entered into or materially modified on or after January 1, 2011.

Recently Issued But Not Yet Adopted Accounting Pronouncements

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The main provisions of ASU No. 2011-05 provide that an entity that reports items of other comprehensive income has the option to present comprehensive income as (i) a single statement that presents the components of net income and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive income or (ii) in a two-statement approach, whereby an entity must present the components of net income and total net income in the first statement and that statement is immediately followed by a financial statement that presents the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income. The option in current GAAP that permits the presentation of other comprehensive income in the statement of changes in equity has been eliminated. ASU No. 2011-05 is to be applied retrospectively. ASU No. 2011-05 will become effective for the Company on January 1, 2012. The Company has not yet determined which presentation method it will adopt.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

NOTE 3.

DIVIDENDS

During the nine months ended September 30, 2011, the Board of Directors of Cablevision declared the following cash dividends to stockholders of record on both its CNYG Class A common stock and CNYG Class B common stock:

Declaration Date	Dividend per Share		Record Date	Payment Date

February 15, 2011	$	0.125	February 28, 2011	March 21, 2011
May 4, 2011	$	0.15	May 16, 2011	June 6, 2011
August 5, 2011	$	0.15	August 19, 2011	September 9, 2011

Cablevision paid dividends aggregating $120,918 during the nine months ended September 30, 2011, primarily from the proceeds of distributions made to Cablevision from CSC Holdings. In addition, as of September 30, 2011, up to approximately $8,111 will be paid when, and if, restrictions lapse on restricted shares outstanding.

During the nine months ended September 30, 2011, CSC Holdings made distributions to Cablevision aggregating $744,536. These distributions were funded from cash on hand, cash from operations and borrowings under its revolving credit facility. The proceeds were used to fund:

Cablevision's dividends paid;

Cablevision's interest payments on certain of its senior notes;

Cablevision's payments for the acquisition of treasury shares related to statutory minimum tax withholding obligations upon the vesting of certain restricted shares; and

the repurchase of CNYG Class A common stock under Cablevision's share repurchase program.

NOTE 4.

TRANSACTIONS

Acquisition of Bresnan Cable

On December 14, 2010, BBHI Holdings LLC ("Holdings Sub"), BBHI Acquisition LLC ("Acquisition Sub") and CSC Holdings, each of which is a wholly-owned subsidiary of Cablevision, consummated the merger contemplated by the Agreement and Plan of Merger by and among Holdings Sub, Acquisition Sub, CSC Holdings, Bresnan Broadband Holdings, LLC ("Bresnan Cable") and Providence Equity Bresnan Cable LLC dated June 13, 2010 (the "Merger Agreement"). Acquisition Sub merged with and into Bresnan Cable, with Bresnan Cable being the surviving entity, and becoming a direct wholly-owned subsidiary of Holdings Sub and an indirect wholly-owned subsidiary of Cablevision and CSC Holdings.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

The unaudited pro forma revenues, income from continuing operations, net income, income per share from continuing operations and net income per share for the three and nine months ended September 30, 2010, as if the Bresnan Cable acquisition had occurred on January 1, 2009, are as follows:

	Three Months Ended September 30, 2010				Nine Months Ended September 30, 2010
	Cablevision		CSC Holdings		Cablevision		CSC Holdings
Revenues	$	1,653,886	$	1,653,886	$	4,930,835	$	4,930,835
Income from continuing operations	$	66,544	$	102,519	$	130,781	$	305,858
Net income	$	110,160	$	146,135	$	244,417	$	419,494
Basic income per share from continuing operations	$	0.23			$	0.44
Basic net income per share	$	0.38			$	0.83
Diluted income per share from continuing operations	$	0.22			$	0.43
Diluted net income per share	$	0.36			$	0.81

NOTE 5.

NET INCOME PER SHARE ATTRIBUTABLE TO STOCKHOLDERS

Cablevision

Basic net income per common share attributable to Cablevision stockholders is computed by dividing net income attributable to Cablevision stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share attributable to Cablevision stockholders reflects the dilutive effects of stock options (including those held by AMC Networks and Madison Square Garden employees) and restricted stock (including shares held by AMC Networks and Madison Square Garden employees).

A reconciliation of the denominator of the basic and diluted net income per share attributable to Cablevision stockholders calculation for the three and nine months ended September 30, 2011 and 2010 is as follows:

	Three Months		Nine Months		Three Months		Nine Months
	Ended September 30, 2011				Ended September 30, 2010
	(in thousands)
Basic weighted average shares outstanding		275,145		278,498		293,671		294,438
Effect of dilution:
Stock options		3,485		3,385		3,031		3,170
Restricted stock awards		5,483		5,254		5,441		5,350
Diluted weighted average shares outstanding		284,113		287,137		302,143		302,958

Anti-dilutive shares (options whose exercise price exceeds the average market price of Cablevision's common stock during the period) totaling approximately 100,000 and 41,145 shares (which include Company options held by AMC Networks and Madison Square Garden employees), have been excluded from diluted weighted average shares outstanding for the three and nine months ended September 30, 2011, respectively. For the three and nine months ended September 30, 2010, anti-dilutive shares of 39,000 and 278,000 (which include Company options held by AMC Networks and Madison Square Garden employees), have been excluded from diluted weighted average shares outstanding, respectively. In addition, 308,900 and 913,400 and 242,401 and 689,232 restricted shares issued pursuant to the Company's employee stock plan have been excluded from the diluted weighted average shares outstanding for the three and nine months ended September 30, 2011 and 2010, respectively, as the performance criteria on these awards have not yet been satisfied.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

CSC Holdings

Net income per membership unit for CSC Holdings is not presented since CSC Holdings is a limited liability company and a wholly-owned subsidiary of Cablevision.

NOTE 6.

COMPREHENSIVE INCOME

The following table presents comprehensive income for the three and nine months ended September 30, 2011 and 2010:

	Three Months Ended September 30,
	2011						2010
	Cablevision			CSC Holdings			Cablevision			CSC Holdings
Net income	$	39,604		$	73,428		$	112,363		$	148,338
Other comprehensive income:
Amortization of gains and losses included in net periodic benefit cost, net of income taxes		219			219			807			807
Comprehensive income		39,823			73,647			113,170			149,145
Comprehensive income attributable to noncontrolling interests		(285	)		(285	)		(302	)		(302	)
Comprehensive income attributable to Cablevision stockholders and CSC Holdings' member	$	39,538		$	73,362		$	112,868		$	148,843

	Nine Months Ended September 30,
	2011						2010
	Cablevision			CSC Holdings			Cablevision			CSC Holdings
Net income	$	231,780		$	330,095		$	247,632		$	422,709
Other comprehensive income:
Amortization of gains and losses included in net periodic benefit cost, net of income taxes		676			676			2,551			2,551
Loss related to employee benefit plans, net of income taxes(a)		(502	)		(502	)		-			-
Comprehensive income		231,954			330,269			250,183			425,260
Comprehensive income attributable to noncontrolling interests		(552	)		(552	)		(547	)		(547	)
Comprehensive income attributable to Cablevision stockholders and CSC Holdings' member	$	231,402		$	329,717		$	249,636		$	424,713

_________________

(a)	In connection with the AMC Networks Distribution, the Company recorded a net increase of $502 to accumulated other comprehensive loss, net of taxes, as a result of the remeasurement of certain benefit plan obligations related to AMC Networks employees.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

NOTE 7.

GROSS VERSUS NET REVENUE RECOGNITION

In the normal course of business, the Company is assessed non-income related taxes by governmental authorities, including franchising authorities, and collects such taxes from its customers. The Company's policy is that, in instances where the tax is being assessed directly on the Company, amounts paid to the governmental authorities and amounts received from the customers are recorded on a gross basis. That is, amounts paid to the governmental authorities are recorded as technical and operating expenses and amounts received from the customer are recorded as revenues. For the three and nine months ended September 30, 2011 and 2010, the amount of franchise fees included as a component of net revenue aggregated $36,756 and $110,716 and $33,742 and $100,647, respectively.

NOTE 8.

CASH FLOWS

The Company considers the balance of its investment in funds that substantially hold securities that mature within three months or less from the date the fund purchases these securities to be cash equivalents. The carrying amount of cash and cash equivalents either approximates fair value due to the short-term maturity of these instruments or are at fair value.

During the nine months ended September 30, 2011 and 2010, the Company's non-cash investing and financing activities and other supplemental data were as follows:

	Nine Months Ended September 30,
	2011		2010
Non-Cash Investing and Financing Activities of Cablevision and CSC Holdings:
Cablevision and CSC Holdings:
Continuing Operations:
Settlement of collateralized indebtedness with related equity derivative contracts	$	52,720	$	23,226
Capital lease obligations		5,081		450
Intangible asset obligations		7,617		-
Satisfaction and discharge of debt with AMC Networks debt		1,250,000		-
Distribution of AMC Networks (Cablevision)		1,103,553		-
Distribution of AMC Networks (CSC Holdings)		1,177,782		-
Distribution of Madison Square Garden		-		1,116,416
Gain on redemption of Cablevision notes held by Newsday Holdings LLC recognized in equity (CSC Holdings)		-		87,090
Non-Cash Investing and Financing Activities of Cablevision:
Dividends payable on unvested restricted share awards		3,332		3,135
Supplemental Data:
Continuing Operations:
Cash interest paid (Cablevision)		533,999		490,772
Cash interest paid (CSC Holdings)		406,221		372,248
Income taxes paid, net (Cablevision and CSC Holdings)		28,036		14,427
Discontinued Operations:
Cash interest paid (Cablevision and CSC Holdings)		51,629		70,138
Income taxes paid, net (Cablevision and CSC Holdings)		5,573		3,866

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

NOTE 9.

DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES DISTRIBUTED TO STOCKHOLDERS

On June 30, 2011 and February 9, 2010, the Company completed the AMC Networks Distribution and the MSG Distribution, respectively (see Note 1). As a result, the operating results of the Company's Rainbow segment through the date of the AMC Networks Distribution and the operating results of the Company's Madison Square Garden segment through the date of the MSG Distribution, as well as transaction costs, have been classified in the condensed consolidated statements of operations as discontinued operations for all periods presented. No gain or loss was recognized in connection with the AMC Networks Distribution or the MSG Distribution. Operating results of discontinued operations for the three months ended September 30, 2010 and the nine months ended September 30, 2011 and 2010 are summarized below:

	AMC Networks
	Three Months Ended September 30,			Nine Months Ended September 30,
	2010			2011			2010
Revenues, net of eliminations	$	264,724		$	551,480		$	761,311
Income before income taxes	$	74,801		$	115,015		$	201,681
Income tax expense(a)		(31,185	)		(61,392	)		(83,923	)
Income from discontinued operations, net of income taxes	$	43,616		$	53,623		$	117,758

January 1, 2010 through February 9, 2010
	Madison Square Garden
Revenues, net of eliminations	$	131,695
Income before income taxes	$	7,090
Income tax expense(b)		(11,212	)
Loss from discontinued operations, net of income taxes	$	(4,122	)

_________________

(a)	Income tax expense for the nine months ended September 30, 2011 includes $6,406 and $3,969, respectively, resulting from the non-deductibility of certain transaction costs and the recognition of a deferred tax gain associated with the AMC Networks Distribution.

(b)	Income tax expense includes $7,368 resulting from the non-deductibility of certain transaction costs associated with the MSG Distribution.

AMC Networks' results of operations reported on a stand-alone basis will differ from results presented above due to certain reclassifications and adjustments made for purposes of discontinued operations reporting.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

The assets and liabilities of AMC Networks have been classified in the condensed consolidated balance sheets as of December 31, 2010 as assets and liabilities distributed to stockholders/member in 2011 and consist of the following:

	Cablevision		CSC Holdings
Cash and cash equivalents	$	79,960	$	79,960
Accounts receivable, prepaid expenses and other current assets		292,488		292,488
Program rights, net		783,830		783,830
Property and equipment, net and other long-term assets		164,065		164,065
Deferred tax asset		49,607		5,307
Intangible assets		467,955		467,955
Total assets distributed in 2011	$	1,837,905	$	1,793,605
Accounts payable and accrued expenses	$	140,944	$	140,944
Other current liabilities		29,227		29,227
Program rights obligations		454,955		454,955
Credit facility debt		475,000		475,000
Senior notes		299,552		299,552
Senior subordinated notes		324,071		324,071
Deferred tax liability		-		23,648
Other long-term liabilities		49,550		49,550
Total liabilities distributed in 2011		1,773,299		1,796,947
Net assets (liabilities) distributed in 2011	$	64,606	$	(3,342	)

The following table summarizes the net impact of the AMC Networks Distribution on June 30, 2011 to Cablevision's stockholders' deficiency and CSC Holdings' member's deficiency:

	Cablevision			CSC Holdings
Increase in other member's equity	$	-		$	1,178,284
Increase in paid-in capital		1,104,055			-
Increase in accumulated other comprehensive loss		(502	)		(502	)
Net liabilities distributed to stockholders/member in 2011	$	1,103,553		$	1,177,782

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

NOTE 10.

DEBT

Repurchase of Senior Notes

In September 2011, CSC Holdings repurchased $52,683 aggregate principal amount of its outstanding 6-3/4% senior notes due 2012 and $10,000 aggregate principal amount of its outstanding 8-1/2% senior notes due 2014 with cash on hand. In connection with these repurchases, the Company recognized a loss on extinguishment of debt of approximately $2,217, representing the payments in excess of the principal amount thereof and the write-off of the unamortized deferred financing costs and discounts associated with these notes of approximately $810.

Credit Facility Debt

In connection with the AMC Networks Distribution (see Note 1), AMC Networks issued senior notes and senior secured term loans under its new senior secured credit facility to the Company as partial consideration for the transfer of certain businesses to AMC Networks. The Company exchanged the AMC Networks senior notes and senior secured term loans in satisfaction and discharge of $1,250,000 outstanding indebtedness under its restricted group revolving loan and extended revolving loan facilities.

Senior Notes

On April 1, 2011, CSC Holdings' 7-5/8% senior notes matured. CSC Holdings repaid the principal amount of the notes of $325,796, plus accrued interest, with $275,000 of borrowings under its revolving credit facility and cash-on-hand.

NOTE 11.

DERIVATIVE CONTRACTS AND COLLATERALIZED INDEBTEDNESS

To manage interest rate risk, the Company has entered into interest rate swap contracts to adjust the proportion of total debt that is subject to variable interest rates. Such contracts effectively fix the borrowing rates on floating rate debt to limit the exposure against the risk of rising rates. The Company does not enter into interest rate swap contracts for speculative or trading purposes and it has only entered into transactions with counterparties that are rated investment grade. The Company monitors the financial institutions that are counterparties to its interest rate swap contracts and it diversifies its swap contracts among various counterparties to mitigate exposure to any single financial institution.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

As of September 30, 2011, CSC Holdings was party to several interest rate swap contracts with an aggregate notional amount of $2,600,000 that effectively fixed borrowing rates on a portion of the Company's floating rate debt. These contracts are not designated as hedges for accounting purposes. As a result of the CSC Holdings interest rate swap transactions, the interest rate paid on approximately 82% of the Company's outstanding debt (excluding capital leases and collateralized indebtedness) is effectively fixed (57% being fixed rate obligations and 25% is effectively fixed through utilization of these interest rate swap contracts) as of September 30, 2011. The table below summarizes certain terms of these interest rate swap contracts as of September 30, 2011:

Maturity Date	Notional Amount		Weighted Average Fixed Rate Paid by the Company			Weighted Average Effective Floating Rate Received by the Company at September 30, 2011*

June 2012	$	2,600,000		4.86	%		0.34	%

_________________

*	Represents the weighted average effective floating rate received by the Company under its interest rate swap contracts at September 30, 2011 and does not represent the rates to be received by the Company on future payments.

The Company has also entered into various transactions to limit the exposure against equity price risk on its shares of Comcast Corporation common stock. The Company had monetized all of its stock holdings in Comcast Corporation through the execution of prepaid forward contracts, collateralized by an equivalent amount of the respective underlying stock. At maturity, the contracts provide for the option to deliver cash or shares of Comcast stock with a value determined by reference to the applicable stock price at maturity. These contracts, at maturity, are expected to offset declines in the fair value of these securities below the hedge price per share while allowing the Company to retain upside appreciation from the hedge price per share to the relevant cap price.

The following represents the location of the assets and liabilities associated with the Company's derivative instruments within the condensed consolidated balance sheets at September 30, 2011 and December 31, 2010:

		Asset Derivatives				Liability Derivatives
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	Fair Value at September 30, 2011		Fair Value at December 31, 2010		Fair Value at September 30, 2011		Fair Value at December 31, 2010
Interest rate swap contracts	Current derivative contracts	$	-	$	-	$	85,645	$	-
Interest rate swap contracts	Long-term derivative contracts		-		-		-		167,278
Prepaid forward contracts	Current derivative contracts		-		-		4,729		47,251
Prepaid forward contracts	Long-term derivative contracts		37,005		-		-		12,049
Total derivative contracts		$	37,005	$	-	$	90,374	$	226,578

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

The following represents the impact and location of the Company's derivative instruments within the condensed consolidated statements of operations for the three and nine months ended September 30, 2011 and 2010:

		Amount of Gain (Loss) Recognized					Amount of Gain (Loss) Recognized
Derivatives Not Designated as Hedging	Location of Gain (Loss)	Three Months Ended September 30,					Nine Months Ended September 30,
Instruments	Recognized	2011		2010			2011			2010

Prepaid forward contracts	Gain (loss) on equity derivative contracts, net	$	81,737	$	(7,060	)	$	38,856		$	(9,801	)

Interest rate swap contracts	Gain (loss) on interest rate swap contracts, net		1,173		(24,921	)		(8,513	)		(81,801	)
Total derivative contracts		$	82,910	$	(31,981	)	$	30,343		$	(91,602	)

Settlements of Collateralized Indebtedness

The following table summarizes the settlement of the Company's collateralized indebtedness relating to Comcast Corporation shares that were settled by delivering cash equal to the collateralized loan value, net of the value of the related equity derivative contracts for the nine months ended September 30, 2011. The cash was obtained from the proceeds of new monetization contracts covering an equivalent number of Comcast shares. The terms of the new contracts allow the Company to retain upside participation in Comcast shares up to each respective contract's upside appreciation limit with downside exposure limited to the respective hedge price.

Number of shares		10,738,809
Collateralized indebtedness settled	$	(157,864	)
Derivative contracts settled		(52,720	)
		(210,584	)
Proceeds from new monetization contracts		246,464
Net cash receipt	$	35,880

NOTE 12.

FAIR VALUE MEASUREMENT

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels:

Level I - Quoted prices for identical instruments in active markets.

Level II - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level III - Instruments whose significant value drivers are unobservable.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

(Dollars in thousands, except per share amounts)

(Unaudited)

The following table presents for each of these hierarchy levels, the Company's financial assets and financial liabilities that are measured at fair value on a recurring basis at September 30, 2011 and December 31, 2010:

At September 30, 2011:
	Level I		Level II		Level III		Total
Assets:
Money market funds	$	144,683	$	-	$	-	$	144,683
Investment securities		103		-		-		103
Investment securities pledged as collateral		448,882		-		-		448,882
Derivative contracts:
Prepaid forward contracts		-		37,005		-		37,005
Liabilities:
Liabilities under derivative contracts:
Prepaid forward contracts		-		4,729		-		4,729
Interest rate swap contracts		-		85,645		-		85,645

At December 31, 2010:
	Level I		Level II		Level III		Total
Assets:
Money market funds	$	259,463	$	-	$	-	$	259,463
Investment securities		101		-		-		101
Investment securities pledged as collateral		471,864		-		-		471,864
Liabilities:
Liabilities under derivative contracts:
Prepaid forward contracts		-		59,300		-		59,300
Interest rate swap contracts		-		167,278		-		167,278

The Company's cash equivalents, investment securities and investment securities pledged as collateral are classified within Level I of the fair value hierarchy because they are valued using quoted market prices.

The Company's derivative contracts and liabilities under derivative contracts are valued using market-based inputs to valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility. When appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads and credit considerations. Such adjustments are generally based on available market evidence. Since model inputs can generally be verified and do not involve significant management judgment, the Company has concluded that these instruments should be classified within Level II of the fair value hierarchy.

The Company considers the impact of credit risk when measuring the fair value of its derivative asset and/or liability positions, as applicable.