[November 03, 2015]

Cablevision Systems Corporation Reports Third Quarter 2015 Results

Cablevision Systems Corporation (NYSE:CVC) today reported financial results for the third quarter ended September 30, 2015.

Third quarter consolidated net revenues decreased 0.8% to $1.613 billion, consolidated adjusted operating cash flow ("AOCF")² decreased 11.5% to $417.3 million and consolidated operating income decreased 27.5% to $183.1 million, all compared with the prior year period. Third quarter 2015 results included unfavorable items totaling $33.8 million, as discussed later in this release. Excluding these items, consolidated net revenues, AOCF and operating income would have decreased 0.6%, 4.4% and 14.1%, respectively, compared to the prior year period.

Cablevision CEO James L. Dolan said, "The third quarter was highlighted by the announcement of Cablevision's sale to Altice for $34.90 per share - an acquisition that will deliver significant value for our shareholders. In the meantime, together with Altice we are moving full speed ahead to obtain the necessary regulatory approvals, while we remain focused on delivering superior products and outstanding service to our customers."

Cable
Cable includes our Optimum-branded digital cable television, high-speed Internet and voice services as well as Optimum WiFi, the nation's most robust WiFi network.

Cable had its strongest third quarter performance in customer relationships, video and high-speed data since 2012. The Company continued to optimize the density and quality of its WiFi network through the deployment of smart routers and outside access points in high usage areas, ending the third quarter with more than 1.4 million Optimum WiFi access points. Our continued investment in the reliability and performance of our networks has enabled a more innovative product set with flexible service offerings, and enhanced our ability to monitor network performance. In addition, our service initiatives have resulted in an improved customer experience and have led to a decrease in the number of trouble call truck rolls by 25 percent on a year-over-year basis.

Cable net revenues for the third quarter 2015 decreased 0.8% to $1.447 billion, primarily due to fewer video and voice customers compared to the prior year period and lower advertising revenue, partially offset by an increase in high-speed data customers, rate initiatives and continued disciplined pricing strategies. AOCF decreased 10.0% to $423.8 million and operating income decreased 20.4% to $226.9 million, both compared with the prior year period. Third quarter AOCF reflects the revenue decline as well as higher programming, legal, product development and marketing costs, partially offset by lower employee and customer service-related costs, as compared to the prior year period.

In addition, third quarter 2015 results included a $12.8 million reserve for the probable settlement of a class action legal matter (of which $3.3 million is reflected as a reduction in revenue), and an inventory valuation adjustment of $11.3 million. If these items were excluded, net revenues, AOCF and operating income would have decreased 0.5%, 4.8% and 11.9%, respectively, compared to the prior year period.

The following table illustrates the change in the Cable customer base during the third quarter of 2015:

(a) Total customers are defined as the number of households/businesses that receive at least one of the Company's services.

Lightpath
Lightpath is a premier provider of integrated business communications solutions to large and mid-sized commercial organizations across the New York metropolitan area.

For the third quarter 2015, Lightpath net revenues increased 3.8% to $91.2 million, AOCF increased 7.4% to $41.9 million and operating income increased 5.7% to $17.9 million, each as compared with the prior year period. Third quarter results primarily reflect an increase in revenue from Ethernet services.

Other
Other principally consists of Newsday, News 12 Networks, Cablevision Media Sales Corporation and certain other businesses and unallocated corporate costs.

Third quarter net revenues decreased 5.6% to $83.6 million, primarily due to lower advertising revenue at Newsday. The AOCF deficit increased 27.4% to $48.3 million and operating loss increased 24.7% to $61.7 million, all compared with the prior year period. Third quarter AOCF reflects lower revenue and higher corporate costs, partially offset by a decrease in expenses at Newsday due to lower operating costs.

In addition, third quarter 2015 results included merger-related costs of $9.7 million. If these costs were excluded, the AOCF deficit and operating loss would have increased 1.8% and 5.1%, respectively, compared to the prior year period.

Other Matters
On September 16, 2015, Cablevision and Altice N.V. entered into a definitive agreement pursuant to which Altice has agreed to acquire Cablevision for $34.90 in cash for each share of Cablevision Class A and Class B common stock.

Due to the pending acquisition by Altice, Cablevision will not hold a third quarter earnings conference call and will discontinue conference calls to discuss its quarterly and annual results during the pendency of the acquisition.

Due to the pending acquisition by Altice and the terms of the merger agreement, Cablevision has suspended its stock repurchase program and does not anticipate declaring or paying any dividends during the pendency of the acquisition.

Assuming timely satisfaction of the necessary closing conditions, the closing of the acquisition by Altice is expected to occur in the first half of 2016.

For additional information, please refer to our SEC filings at www.cablevision.com.

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 share-based compensation expense and restructuring charges or credits. Because it is based upon operating income (loss), AOCF also excludes interest expense (including cash interest expense) and other non-operating income and expense items. We believe that the exclusion of share-based compensation expense allows investors to better track the performance of the various operating units of our business without regard to expense associated with awards that are not expected to be made in cash, in the case of restricted shares, restricted stock units and stock options, and the distortive effects of fluctuating stock prices in the case of liability classified awards.

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 similar titles are common performance measures used by investors, analysts and peers to compare performance in our industry. Internally, we use net revenues 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 U.S. 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 similar titles used by other companies. For a reconciliation of AOCF to operating income (loss), please see page 7 of this release.

We define Consolidated Free Cash Flow from Continuing Operations ("Free Cash Flow"), which is a non-GAAP financial measure, as net cash from operating activities (continuing operations) plus any excess tax benefit related to share-based awards less capital expenditures (continuing operations), all of which are reported in our Consolidated Statement of Cash Flows. Net cash from operating activities excludes net cash from operating activities of our discontinued operations. 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 repayment and other discretionary and non-discretionary cash uses. It is also one of several indicators of our ability to make investments and/or 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.

ABOUT CABLEVISION

Cablevision Systems Corporation (NYSE: CVC) is a leading media and telecommunications Company, serving millions of households and businesses throughout the greater New York area. Providing quality products that keep customers connected, Cablevision offers Optimum-branded digital cable television, high-speed Internet and voice services as well as Optimum WiFi, the nation's most robust WiFi network. Cablevision's Lightpath subsidiary is a premier provider of integrated business communications solutions for larger companies. Through its local media and programming properties - News 12 Networks and Newsday Media Group - Cablevision also delivers news and information created specifically for the communities it serves. Additional information about Cablevision is available at www.cablevision.com.

This earnings release may contain 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, including the risks and uncertainties associated with the expected timing and likelihood of the consummation of the pending acquisition by Altice, including regarding the timing, receipt and terms and conditions of any required governmental approvals or that the pending acquisition with Altice will not be consummated at all, and the risks that the proposed acquisition by Altice and its announcement could have an adverse effect on the ability of Cablevision to retain and hire key personnel and maintain relationships with its suppliers and customers and on its operating results and businesses generally, 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 industries 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 any forward-looking statements contained herein.

Due to the pending acquisition by Altice, Cablevision will not hold a third quarter earnings conference call and will discontinue conference calls to discuss its quarterly and annual results during the pendency of the acquisition.

Detailed financial and operating information related to the Company's third quarter results are available in Cablevision's Form 10-Q for the quarter ended September 30, 2015, filed today with the Securities and Exchange Commission.

For additional information, please visit Cablevision's Investor Relations website at www.cablevision.com.

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