Cablevision Systems Corporation Reports Fourth Quarter and Full Year 2

Cablevision Systems Corporation Reports Fourth Quarter and Full Year 2004 Results 2005 Outlook Provided

    Business Editors/TV/Cable Writers

    BETHPAGE, N.Y.--(BUSINESS WIRE)--Feb. 23, 2005--Cablevision Systems Corporation (NYSE:CVC)

--	4Q Cable Television Revenue up 14%; Adjusted Operating Cash Flow up 20%
--	Third Consecutive Quarter of Basic Subscriber Gains
--	2004 Cable Television Revenue up 16%; Adjusted Operating Cash Flow up 18%
--	2004 Record Revenue Generating Unit Growth of 1.1 Million New Additions
--	2004 Consolidated Revenue up 18%; Adjusted Operating Cash Flow up 15%

    Cablevision Systems Corporation (NYSE:CVC) today reported financial results for the fourth quarter and full year ended December 31, 2004.

    Consolidated Results

    Consolidated fourth quarter net revenues increased 11% to $1.4 billion compared to the prior year period, based on continued strong customer growth in Telecommunications Services as well as advertising and affiliate revenue growth at Rainbow Media's Core Networks. Consolidated fourth quarter operating loss totaled $279.1 million compared to an operating loss of $46.0 million in the prior year period. The higher operating loss results from higher DBS operating losses, as well as $354.9 million in non-cash impairment charges at Rainbow DBS to reduce the carrying value of certain assets. Consolidated adjusted operating cash flow for the quarter increased 5% to $261.4 million compared to adjusted operating cash flow of $250.1 million in the prior year period. The AOCF growth is driven by higher revenue, offset in part by higher DBS operating losses and $108.9 million of non-cash impairment charges at Rainbow DBS (see page 4 for a discussion of the impairment charges). Adjusted operating cash flow ("AOCF"), a non-GAAP financial measure, is defined as operating income (loss) before depreciation and amortization, excluding employee stock plan charges or credits and restructuring charges or credits. Please refer to page 4 for a discussion of our use of AOCF as a non-GAAP financial measure and page 6 for a reconciliation of AOCF to operating income and net loss.
    For the full year 2004, consolidated net revenue increased 18% to $4.9 billion, driven by the addition of 1.1 million revenue generating units during the year in Cable Television and revenue growth at Rainbow Media's Core Networks. Operating loss for 2004 totaled $59.4 million compared to operating income of $31.7 million in 2003, reflecting the Rainbow DBS impairment charges discussed above as well as higher Rainbow DBS operating losses. Full year AOCF rose 15% to $1.3 billion, reflecting the revenue growth, offset in part by higher Rainbow DBS operating losses and the $108.9 million Rainbow DBS impairment charge discussed above. Full year AOCF also includes $106.1 million of one-time payments and credits at Madison Square Garden recorded in the second quarter.
    Cablevision President and CEO James L. Dolan commented: "2004 was a remarkable year for Cablevision, highlighted by the extraordinary success we have had in executing our digital strategy. Cablevision is now at the forefront of our industry with leading penetration rates across all of our consumer services - video, digital video, high-speed data and voice. We have also continued to make significant progress in realizing key financial and operational goals, which has resulted in the company meeting or exceeding all of its key guidance objectives for 2004. Moving forward, Cablevision is well positioned to continue reaping the benefits of our operating successes and improved financial position."

    Telecommunications Services - Cable Television and Lightpath

    For Telecommunications Services, which includes Cable Television and Lightpath Business Services, fourth quarter 2004 net revenues rose 14% to $820.5 million; operating income increased 74% to $113.6 million; and AOCF increased 19% to $325.0 million, all as compared to the year-earlier period. Full year 2004 Telecommunications Services net revenues rose 15% to $3.1 billion compared to 2003. Operating income for the full year increased 76% to $423.1 million and AOCF increased 17% to $1.2 billion, both as compared to the prior year.

    Cable Television

    Cable Television, comprised of analog and digital video, high-speed data (HSD), voice and R&D/Technology, recorded fourth quarter net revenues of $773.5 million, up 14% compared to the prior year period. Operating income increased 70% to $115.0 million and AOCF rose 20% to $304.0 million, each compared to the year-earlier period. The increases in revenue, operating income, and AOCF reflect the addition of 333,273 revenue generating units for the quarter, reflecting growth in basic and digital video, high-speed data, and voice customer relationships.

    Highlights include:

    -- Revenue Generating Units up 333,273 or 6% for the quarter and
    1,133,622 or 23% for the year

    -- Basic video customers up 10,788 or 0.4% for the quarter and
    18,307 or 0.6% for the year; third consecutive quarterly
    increase in basic subscribers

    -- iO: Interactive Optimum digital video customers up 145,933 or
    11% for the quarter and 577,530 or 64% for the year

    -- Optimum Online HSD customers up 93,517 or 7% for the quarter
    and 295,519 or 28% for the year

    -- Optimum Voice customers up 83,497 or 44% for the quarter and
    244,038 for the year

    -- Cable television RPS of $87.17, up $3.28 for the quarter and
    $10.48 for the year

    -- Advertising revenue up 25% for the quarter and 10% for the
    year

    -- Full year AOCF margin of 39.2% compared to 38.2% for 2003

    Lightpath - Business Services

    For the fourth quarter, Lightpath reported $54.5 million in net revenues, a 20% increase compared to the prior year period. Operating loss decreased to $1.4 million in the fourth quarter of 2004 compared to an operating loss of $2.3 million in the prior year period. AOCF was $21.0 million, up 6% from the fourth quarter of 2003. The revenue and AOCF increases are primarily attributable to growth in data revenue from both Optimum Online for business and Lightpath.net and other data transport services over Lightpath's fiber infrastructure. Net revenue for Lightpath includes the impact of Optimum Voice call completion activity, which has no impact on AOCF.

    Rainbow Media's Core Networks

    Rainbow Media's Core Networks' (AMC, The Independent Film Channel ("IFC"), WE: Women's Entertainment and Consolidated Regional Sports) fourth quarter net revenues increased 28% to $214.0 million, operating income increased from $20.6 million to $74.1 million and AOCF increased 106% to $95.9 million, each compared to the year-earlier period. On a pro forma basis, which reflects the consolidation of Fox Sports Net Chicago and Fox Sports Net Bay Area in 2003, net revenues and AOCF for the quarter would have increased 6% and 90%, respectively.
    For the full year 2004, net revenues rose 49% to $909.7 million compared to full year 2003. Operating income for the full year increased 78% to $271.3 million, while AOCF increased 62% to $366.7 million, both compared to the prior year. Pro forma for the consolidation of Fox Sports Chicago and Bay Area, net revenues and AOCF would have increased 15% and 43%, respectively.

    AMC/IFC/WE

    Fourth quarter 2004 net revenues increased 13% to $137.0 million due to a 32% increase in advertising revenue as well as higher affiliate revenue driven by increases in viewing subscribers. Operating income increased from $12.4 million to $38.8 million and AOCF increased 63% to $55.5 million, each compared to the prior year period. The fourth quarter of 2003 included a $17.9 million write-down of certain film and programming contracts which, if excluded, would result in operating income growth of 28% and AOCF growth of 7% for the fourth quarter of 2004. The operating income and AOCF growth reflects these revenue increases, offset in part by higher marketing and programming costs during the period.

    Consolidated Regional Sports

    Consolidated Regional Sports is comprised of Fox Sports Net Florida, Fox Sports Net Ohio, Fox Sports Net Chicago and Fox Sports Net Bay Area (Chicago and Bay Area were consolidated effective December 12, 2003 and are 60% owned by Rainbow). Fourth quarter 2004 net revenues rose 67% to $77.0 million, operating income increased from $8.2 million to $35.2 million and AOCF increased from $12.4 million to $40.4 million, all as compared to the prior year period.
    Pro forma to reflect the consolidation of Fox Sports Net Chicago and Fox Sports Net Bay Area in 2003, net revenue decreased 6%, due primarily to lower advertising revenue. Operating income increased 188% and AOCF increased 145% on a pro forma basis, driven by lower rights expense and production costs.

    Developing Programming/Other

    Developing Programming/Other consists of Mag Rack, fuse, Rainbow Network Communications, News 12 Networks, MetroChannels, Rainbow Advertising Sales Corp., IFC Entertainment and other Rainbow developmental ventures. Fourth quarter net revenues increased 2% to $53.2 million and the operating loss for the quarter declined to $20.2 million compared to an operating loss of $35.9 million in the year earlier period. The AOCF deficit for the quarter totaled $9.0 million compared to an AOCF deficit of $24.6 million for the prior year period. The lower AOCF deficit is primarily attributable to higher affiliate and advertising revenue at fuse and lower expense levels at several of the programming services.

    Madison Square Garden

    Madison Square Garden's businesses include: MSG Networks, Fox Sports Net New York, the New York Knicks, the New York Rangers, the New York Liberty, the MSG Arena complex and Radio City Music Hall. Madison Square Garden's fourth quarter net revenue was $298.2 million, a decrease of 8% from the year earlier period, primarily due to the loss of NHL hockey games during the period, partially offset by higher revenues at MSG Networks and higher Knicks ticket revenues. For the fourth quarter, operating income totaled $41.3 million compared to $11.4 million in the year earlier period and AOCF was $54.8 million compared to $28.1 million in the year earlier period. The higher operating income and AOCF is due to several factors, including the MSG Networks and Knicks revenue impacts, lower Knicks player compensation, the elimination of certain severance costs incurred in 2003 and lower expenses at Radio City resulting from changes in the mix of shows.

    Rainbow DBS - VOOM

    On January 20, 2005, Cablevision Systems Corporation and CSC Holdings Inc. (collectively, the "Company") entered into a definitive agreement for Rainbow DBS Company LLC to sell its Rainbow 1 direct broadcast satellite and certain other related assets to a subsidiary of EchoStar Communications Corp. for $200 million in cash. On February 10, 2005, the Company announced that it had signed a letter of intent under which VOOM HD, LLC, a new private company formed by certain holders of Cablevision Class B Common Stock, including Charles F. Dolan and Tom Dolan, will acquire from the Company the business, assets and liabilities of the Company's Rainbow DBS satellite business not included in the above mentioned agreement with EchoStar. The parties' obligations under the letter of intent are subject to the execution of a definitive agreement by February 28, 2005, and the transaction is contingent on the Board's approval of the definitive agreement. There can be no assurance that a definitive agreement will be entered into or that the transaction will be consummated.
    Fourth quarter 2004 revenue, operating loss, and AOCF deficit for Rainbow DBS were $5.3 million, $449.8 million, and $190.0 million, respectively. Full year 2004 revenue, operating loss, and AOCF deficit for Rainbow DBS were $14.9 million, $661.4 million and $367.1 million, respectively. The fourth quarter and full year operating loss reflect an impairment charge of $246.0 million, reflecting management's estimates of the excess of the carrying value over the fair value of long lived assets, which has been recorded in depreciation and amortization. In addition, fourth quarter and full year operating loss and AOCF include $108.9 million of technical and operating expense that reflects the write-down to net realizable value of certain assets consisting primarily of equipment inventory and licensed film rights.

    Theatres

    For the fourth quarter, Clearview Cinemas' net revenue totaled $21.1 million, a 7% decrease compared to $22.7 million in the prior year period. The operating loss for the fourth quarter was $1.8 million compared to an operating loss of $0.7 million in the prior year period, and AOCF was $1.1 million compared to $1.5 million in the prior year period. For the full year 2004, Clearview Cinemas' net revenue totaled $80.5 million, a 5% decrease compared to $84.4 million in the prior year. The full year 2004 operating loss was $6.5 million compared to an operating loss of $2.0 million in the prior year, and AOCF was $2.6 million compared to $5.9 million in the 2003 period.

    2005 Outlook

    The company provides the following guidance for the full year 2005:

Cable Television ---------------- Basic video subscribers + 1.5% to 2.0% Revenue generating unit (RGU) net additions + 1.0 to 1.25 million Total revenue growth mid teens* Adjusted operating cash flow growth mid teens* Capital expenditures $600 to $650 million

Rainbow Media ------------- AMC/IFC/WE Total revenue growth mid to high single digit * Adjusted operating cash flow growth mid to high single digit *

* Percentage growth
    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, 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, 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. The company believes adjusted operating cash flow is an appropriate measure for evaluating the operating performance of its business segments and the company on a consolidated basis. Adjusted operating cash flow 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 adjusted operating cash flow measures as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. Adjusted operating cash flow 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 presented in accordance with generally accepted accounting principles ("GAAP"). Since adjusted operating cash flow 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 adjusted operating cash flow to operating income (loss), please see page 6 of this release.

    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 offering, Optimum Online high-speed Internet service, Optimum Voice digital voice-over-cable service, and its 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 is the controlling owner of 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 2004 earnings announcement will be Webcast live today at 10:00 a.m. EST

    Conference call dial-in number is (973) 935-8507

    Conference call replay number (973) 341-3080/ pin #5722951 until March 2, 2005

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, ------------------------ ------------------------ 2004 2003 2004 2003 ----------- ----------- ----------- -----------

Revenues, net $1,364,434 $1,227,284 $4,932,864 $4,177,148 =========== =========== =========== ===========

Adjusted operating cash flow (a) $261,410 $250,061 $1,317,406 $1,145,879 Stock plan expense (18,244) (21,186) (35,143) (42,806) Restructuring credits (charges) 2,035 698 (151) (10,725) ----------- ----------- ----------- ----------- Operating income before depreciation and amortization 245,201 229,573 1,282,112 1,092,348 Depreciation and amortization (a) 524,257 275,603 1,341,549 1,060,651 ----------- ----------- ----------- ----------- Operating income (loss)(a) (279,056) (46,030) (59,437) 31,697

Other income (expense): Interest expense, net (182,394) (181,826) (710,781) (603,136) Equity in net income (loss) of affiliates (5,642) (8,048) (12,991) 429,732 Gain (loss) on sale of cable assets and programming and affiliate interests, net 2,232 - 2,232 (13,644) Write-off of deferred financing costs - (388) (18,961) (388) Gain on investments, net 144,504 24,999 134,598 235,857 Loss on derivative contracts, net (131,256) (42,541) (165,305) (208,323) Loss on extinguishment of debt (6,076) - (78,571) - Minority interests (26,942) (9,834) (91,776) (138,168) Miscellaneous, net 383 5,931 294 3,624 ----------- ----------- ----------- ----------- Loss from continuing operations before income taxes (484,247) (257,737) (1,000,698) (262,749) Income tax (expense) benefit 174,260 61,166 333,696 (20,367) ----------- ----------- ----------- ----------- Loss from continuing operations (309,987) (196,571) (667,002) (283,116) Income (loss) from discontinued operations, net of taxes 4,161 (731) (1,654) (14,123) ----------- ----------- ----------- ----------- Loss before extraordinary item (305,826) (197,302) (668,656) (297,239) Extraordinary loss on investment, net of taxes - - (7,436) - ----------- ----------- ----------- ----------- Net loss $(305,826) $(197,302) $(676,092) $(297,239) =========== =========== =========== ===========

Basic and diluted net loss per share:

Loss from continuing operations $(1.08) $(0.69) $(2.32) $(0.99) =========== =========== =========== ===========

Income (loss) from discontinued operations $0.01 $- $(0.01) $(0.05) =========== =========== =========== ===========

Extraordinary loss $- $- $(0.03) $- =========== =========== =========== ===========

Net loss $(1.06) $(0.69) $(2.36) $(1.04) =========== =========== =========== ===========

Basic weighted average common shares (in thousands) 287,319 286,766 287,085 285,486 =========== =========== =========== ===========

(a) The fourth quarter and full year 2004 operating loss reflect an impairment charge of approximately $246.0 million, reflecting management's estimates of the excess of the carrying value over the fair value of long lived assets, which has been recorded in depreciation and amortization. In addition, fourth quarter and full year operating loss and AOCF include approximately $108.9 million of technical and operating expense that reflects the write-down to net realizable value of certain assets consisting primarily of equipment inventory and licensed film rights. These charges relate to the Board of Directors decision to suspend pursuit of the spin off of the Company's Rainbow Media Enterprises subsidiary, as disclosed in the Company's 8-K filing dated December 20, 2004. On January 20, 2005, the Company announced it had entered into a definitive agreement for the sale of certain assets of Rainbow DBS Company LLC to EchoStar Communications Corp., and on February 10, 2005, the Company announced it had executed a letter of intent with VOOM HD, LLC for the sale of the business and certain assets and liabilities of Rainbow DBS Company LLC. (Please refer to the Company's 8-K filings dated January 20, 2005 and February 10, 2005 for a discussion of these agreements). The Company has not yet executed a definitive agreement with VOOM HD LLC. The terms of any definitive agreement may result in changes to the impairment charges set forth above which would be reflected in our audited financial statements as of and for the year ended December 31, 2004, to be filed in our 2004 Form 10-K.

CABLEVISION SYSTEMS CORPORATION CONDENSED CONSOLIDATED OPERATIONS DATA AND RECONCILIATION (Cont'd) (Dollars in thousands, except per share data) (Unaudited)

ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO ADJUSTED OPERATING CASH FLOW

The following is a description of the adjustments to operating income (loss) included in this earnings release:

-- Depreciation and amortization. This adjustment eliminates depreciation, amortization and impairments of long-lived assets in all periods.

-- Stock plan income (expense). This adjustment eliminates the income or expense associated with vesting and marking to market of variable stock options, stock appreciation rights granted under our employee stock option plan, and charges related to the issuance of restricted shares.

-- Restructuring charges (credits). This adjustment eliminates the charges or credits recorded that are associated with costs related to the elimination of positions, facility realignment, and other related costs in all periods.

CABLEVISION SYSTEMS CORPORATION CAPITALIZATION AND LEVERAGE (Dollars in thousands) (Unaudited)

CAPITALIZATION

Actual December 31, 2004 ------------

Cash and Cash Equivalents $866,816 ============

Bank debt $2,489,887 Collateralized indebtedness 1,553,427 Senior notes and debentures 5,991,564 Senior subordinated notes and debentures 746,231 Notes payable 150,000 Capital lease obligations 71,563 ------------ Debt $11,002,672 ============

LEVERAGE

Debt $11,002,672 Less: collateralized indebtedness (1) and cash 2,420,243 ------------ Net debt $8,582,429 ============

Ratio ------------ Consolidated net debt/adjusted operating cash flow (2) 6.0x Restricted Group leverage (Bank Test) 5.1x CSC Holdings notes and debentures ratio (3) 5.1x Cablevision notes ratio (4) 6.3x Rainbow National Services notes ratio (5) 5.8x

(1) Collateralized indebtedness is excluded for the purpose of 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.

(2) Adjusted operating cash flow 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. AOCF for consolidated leverage purposes excludes the $108.9 million non-cash write-down recorded at Rainbow DBS.

(3) Reflects debt to cash flow ratio applicable under indentures pursuant to which the CSC Holdings notes and debentures were issued. The annualized AOCF (as defined) used in the Restricted Group bank leverage test and for the CSC Holdings indentures test was $1,253,324.

(4) Reflects debt to cash flow ratio under the Cablevision senior notes indentures.

(5) Reflects debt to cash flow ratio under the Rainbow National Services notes issued in August 2004. The annualized AOCF (as defined) used in the notes ratio was $242,894.

CABLEVISION SYSTEMS CORPORATION CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS (Dollars in thousands) (Unaudited)

NET REVENUES

Three Months Ended December 31, % ------------------------ 2004 2003 Change ----------- ----------- ------

Cable Television $773,478 $679,001 13.9% Lightpath - Business Services 54,527 45,638 19.5% Eliminations (a) (7,550) (1,679) - ----------- ----------- Total Telecommunications 820,455 722,960 13.5% ----------- ----------- AMC/IFC/WE 137,016 120,852 13.4% Consolidated Regional Sports 76,957 46,126 66.8% ----------- ----------- Subtotal Core Networks 213,973 166,978 28.1% Developing/Other 53,223 52,130 2.1% Eliminations (a) (8,334) (9,905) 15.9% ----------- ----------- Total Rainbow 258,862 209,203 23.7% ----------- ----------- MSG 298,190 322,606 (7.6)% Rainbow DBS 5,314 - - Theatres 21,133 22,747 (7.1)% Other (b) 2,945 - - Eliminations (c) (42,465) (50,232) 15.5% ----------- ----------- Total Cablevision $1,364,434 $1,227,284 11.2% =========== ===========

NET REVENUES

Twelve Months Ended December 31, % ------------------------ 2004 2003 Change ----------- ----------- -------

Cable Television $2,944,009 $2,549,402 15.5% Lightpath - Business Services 203,908 178,321 14.3% Eliminations (a) (23,961) (12,425) (92.8)% ----------- ----------- Total Telecommunications 3,123,956 2,715,298 15.1% ----------- ----------- AMC/IFC/WE 522,975 441,901 18.3% Consolidated Regional Sports 386,676 167,250 131.2% ----------- ----------- Subtotal Core Networks 909,651 609,151 49.3% Developing/Other 214,671 184,738 16.2% Eliminations (a) (30,123) (29,043) (3.7)% ----------- ----------- Total Rainbow 1,094,199 764,846 43.1% ----------- ----------- MSG 778,754 771,986 0.9% Rainbow DBS 14,935 - - Theatres 80,472 84,447 (4.7)% Other (b) 6,293 - - Eliminations (c) (165,745) (159,429) (4.0)% ----------- ----------- Total Cablevision $4,932,864 $4,177,148 18.1% =========== ===========

(a) Represents intra-segment revenues.

(b) Includes net revenues of PVI Virtual Media which was consolidated in the second quarter of 2004 in accordance with FIN 46.

(c) 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) -------------------- Three Months Ended December 31, % -------------------- 2004 2003 Change ---------- --------- -------- Cable Television $114,976 $67,680 69.9% Lightpath - Business Services (1,375) (2,289) 39.9% ---------- --------- Total Telecommunications 113,601 65,391 73.7% ---------- --------- AMC/IFC/WE (b) 38,811 12,433 - Consolidated Regional Sports 35,248 8,168 - ---------- --------- Subtotal Core Networks 74,059 20,601 - Developing/Other (b) (20,196) (35,929) 43.8% ---------- --------- Total Rainbow 53,863 (15,328) - ---------- --------- MSG 41,344 11,362 - Rainbow DBS (449,845) (54,902) - Theatres (1,836) (722) (154.3)% Other (c) (36,183) (51,831) 30.2% ---------- --------- Total Cablevision $(279,056) $(46,030) - ========== =========

Adjusted Operating Cash Flow (a) ------------------- Three Months Ended December 31, % ------------------- 2004 2003 Change --------- --------- ------- Cable Television $303,987 $253,026 20.1% Lightpath - Business Services 21,019 19,804 6.1% --------- --------- Total Telecommunications 325,006 272,830 19.1% --------- --------- AMC/IFC/WE (b) 55,459 34,099 62.6% Consolidated Regional Sports 40,391 12,378 - --------- --------- Subtotal Core Networks 95,850 46,477 106.2% Developing/Other (b) (9,036) (24,572) 63.2% --------- --------- Total Rainbow 86,814 21,905 - --------- --------- MSG 54,840 28,083 95.3% Rainbow DBS (189,974) (47,664) - Theatres 1,078 1,481 (27.2)% Other (c) (16,354) (26,574) 38.5% --------- --------- Total Cablevision $261,410 $250,061 4.5% ========= =========

OPERATING INCOME (LOSS) AND ADJUSTED OPERATING CASH FLOW

Operating Income (Loss) ------------------- Twelve Months Ended December 31, % ------------------- 2004 2003 Change --------- --------- ------ Cable Television $432,031 $249,315 73.3% Lightpath - Business Services (8,940) (9,280) 3.7% --------- --------- Total Telecommunications 423,091 240,035 76.3% --------- --------- AMC/IFC/WE (b) 159,815 110,445 44.7% Consolidated Regional Sports 111,481 42,184 164.3% --------- --------- Subtotal Core Networks 271,296 152,629 77.7% Developing/Other (b) (73,518) (117,183) 37.3% --------- --------- Total Rainbow 197,778 35,446 - --------- --------- MSG 117,025 4,499 - Rainbow DBS (661,446) (89,668) - Theatres (6,518) (1,952) - Other (c) (129,367) (156,663) 17.4% --------- --------- Total Cablevision $(59,437) $31,697 - ========= =========

Adjusted Operating Cash Flow (a) ----------------------- Twelve Months Ended December 31, % ----------------------- 2004 2003 Change ----------- ----------- ------- Cable Television $1,153,566 $974,323 18.4% Lightpath - Business Services 73,224 71,835 1.9% ----------- ----------- Total Telecommunications 1,226,790 1,046,158 17.3% ----------- ----------- AMC/IFC/WE (b) 234,058 170,808 37.0% Consolidated Regional Sports 132,612 55,115 140.6% ----------- ----------- Subtotal Core Networks 366,670 225,923 62.3% Developing/Other (b) (34,499) (76,709) 55.0% ----------- ----------- Total Rainbow 332,171 149,214 122.6% ----------- ----------- MSG 170,057 67,626 151.5% Rainbow DBS (367,126) (82,254) - Theatres 2,566 5,866 (56.3)% Other (c) (47,052) (40,731) (15.5)% ----------- ----------- Total Cablevision $1,317,406 $1,145,879 15.0% =========== ===========

(a) Adjusted operating cash flow excludes restructuring charges (credits) of $(2.0) million and $0.2 million in the three and twelve months ended December 31, 2004 and $(0.7) million and $10.7 million in the three and twelve months ended December 31, 2003. It also excludes stock plan expense of $18.2 million and $35.1 million in the three and twelve months ended December 31, 2004 and $21.2 million and $42.8 million in the three and twelve months ended December 31, 2003. Adjusted operating cash flow includes long-term incentive plan expenses of $5.5 million and $31.8 million in the three and twelve months ended December 31, 2004, and $6.8 million and $36.0 million in the three and twelve months ended December 31, 2003. The long-term incentive plan expenses are cash awards, some of which are performance based, to senior executives of the company that vest over varying periods.

(b) Operating income (loss) for AMC/IFC/WE and Developing/Other has been reclassified to reflect the push down from Rainbow Media Holdings of certain amortization expense of acquired intangibles and depreciation expense relating to the fair value step up of fixed assets.

(c) Other includes certain senior management retirement costs, management bonuses and costs associated with the Rainbow DBS spin off plan and the cost of Sarbanes-Oxley compliance. Other operating income (loss) also includes certain long-term incentive plan expenses.

SUMMARY OF OPERATING STATISTICS (Unaudited)

December 31, September 30, December 31, 2004 2004 2003 ------------ ------------- -------------- CABLE TELEVISION ---------------- Homes Passed 4,443,229 4,427,561 4,400,894 ============ ============= ============== Basic Video Customers 2,963,001 2,952,213 2,944,694 Digital Video Customers 1,483,024 1,337,091 905,494 High-Speed Data Customers(a) 1,352,541 1,259,024 1,057,022 Voice Customers 272,688 189,191 28,650 Residential Telephone Customers 9,412 9,874 11,184 ------------ ------------- -------------- Total Revenue Generating Units 6,080,666 5,747,393 4,947,044 ============ ============= ============== Basic Video Penetration 66.7% 66.7% 66.9% Customer Relationships(b) 3,078,172 3,063,036 3,041,851 Monthly Churn 1.9% 2.1% 2.1% ----------------------------------------- ------------- --------------

iO - Digital Video ------------------

Customers 1,483,024 1,337,091 905,494 Penetration of Basic Video Customers 50.1% 45.3% 30.8% Monthly Churn 2.5% 3.1% 3.2% ----------------------------------------- ------------- --------------

Optimum Online - High-Speed Data --------------------------------

Customers (a) 1,352,541 1,259,024 1,057,022 Penetration of Homes Passed 30.4% 28.4% 24.0% Monthly Churn 2.2% 2.6% 2.2% ----------------------------------------- ------------- --------------

Optimum Voice - Voice ---------------------

Customers 272,688 189,191 28,650 Penetration of Homes Passed 6.1% 4.3% 0.7% ---------------------------- ------------ ------------- --------------

Optimum Telephone - Residential -------------------------------

Customers 9,412 9,874 11,184 ----------------------------------------- ------------- --------------

Cable Television Revenues for the three months ended (dollars in millions, except per customer data) ---------------------------------

Video (c) $545 $542 $507 Advertising 30 24 30 Other (d) 9 4 4 ----------- ------------ -------------- Total Video Revenues 584 570 541 High-Speed Data 159 150 129 Voice and Other 30 23 10 ----------- ------------ -------------- Total Cable Television Revenue $773 $743 $680 =========== ============ ============== Average Monthly Cable Television Revenue per Basic Video Customer $87.17 $83.89 $76.69 ---------------------------- ----------- ------------ --------------

LIGHTPATH - Business Services -----------------------------

Buildings on-net 1,662 1,634 1,653 Access Lines 154,001 151,210 142,688 Fiber Miles 126,690 121,995 119,405 Route Miles 2,439 2,390 2,320

(a) Includes 36,138 business modem customers as of December 31, 2004; 33,535 as of September 30, 2004; and 25,699 as of December 31, 2003.

(b) Number of customers who receive at least one of the Company's services. Does not include customers who subscribe only to business modem service totaling 17,563 as of December 31, 2004; 12,536 as of September 30, 2004; and 8,804 as of December 31, 2003.

(c) Video revenue includes analog, digital, PPV, VOD and SVOD revenue.

(d) Includes installation revenue, guide revenue, and other product offerings.

CABLEVISION SYSTEMS CORPORATION SUMMARY OF OPERATING STATISTICS (Cont'd) (Dollars in thousands) (Unaudited)

Three Months Ended December 31, -------------------- 2004 2003 --------- --------- CAPITAL EXPENDITURES --------------------

Consumer premise equipment $81,131 $86,840 Scalable infrastructure 13,093 19,442 Line extensions 11,412 7,450 Upgrade/rebuild 4,156 29,812 Support 13,921 11,714 --------- --------- Total Cable Television 123,713 155,258 Commercial (Lightpath) 14,293 21,818 --------- --------- Total Telecommunications 138,006 177,076 Rainbow 11,369 4,988 MSG 5,626 3,039 Rainbow DBS 54,458 36,768 Other (Corporate and Theatres) 11,535 4,563 --------- --------- Total Cablevision $220,994 $226,434 ========= =========

Twelve Months Ended December 31, -------------------- 2004 2003 --------- --------- CAPITAL EXPENDITURES --------------------

Consumer premise equipment $428,476 $448,456 Scalable infrastructure 56,893 60,628 Line extensions 30,393 23,303 Upgrade/rebuild 11,671 139,074 Support 46,405 43,721 --------- --------- Total Cable Television 573,838 715,182 Commercial (Lightpath) 47,642 60,259 --------- --------- Total Telecommunications 621,480 775,441 Rainbow 23,956 15,760 MSG 12,153 6,578 Rainbow DBS 98,478 78,398 Other (Corporate and Theatres) 19,568 12,194 --------- --------- Total Cablevision $775,635 $888,371 ========= ========= ------------------------------------- ---------------- ---------------

Viewing Basic Subscribers Subscribers --------------- --------------- December 31, December 31, --------------- --------------- 2004 2003 2004 2003 ------- ------- ------- ------- SUBSCRIBERS (in thousands) -----------

AMC 76,100 74,000 84,000 81,000 WE 49,900 46,700 71,600 68,400 IFC 34,600 29,700 74,900 69,900 fuse 33,100 29,600 66,800 62,300 Consolidated Regional Sports (Florida, Ohio, Bay Area & Chicago) 16,000 15,300 17,300 16,600 Non-Consolidated Fox Sports Networks (New England) 3,800 3,700 4,300 4,200

--30--SW/ny*

CONTACT: Cablevision Systems Corporation Charles Schueler, 516-803-1013 or John Bier, 516-803-2270

KEYWORD: NEW YORK INDUSTRY KEYWORD: SPORTS TELEVISION/RADIO CABLE TELECOMMUNICATIONS EARNINGS SOURCE: Cablevision Systems Corporation

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