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Article by DailyStocks_admin    (03-07-12 04:33 AM)

Description

Cablevision Sys. Director RAND V ARASKOG bought 25000 shares on 3-01-2012 at $ 14.26

BUSINESS OVERVIEW

Business

This combined Annual Report on Form 10-K is separately filed by Cablevision Systems Corporation ("Cablevision") and CSC Holdings, LLC, formerly CSC Holdings, Inc. ("CSC Holdings" and collectively with Cablevision, the "Company" or the "Registrants").

Cablevision Systems Corporation

Cablevision is a Delaware corporation which was organized in 1997. Cablevision owns all of the outstanding membership interests in CSC Holdings and its liabilities include approximately $2.2 billion of senior notes which amount does not include approximately $754 million of its senior notes held by Newsday Holdings LLC, its 97.2% owned subsidiary. The $754 million of notes are eliminated in Cablevision's consolidated financial statements and are shown as notes due from Cablevision in total member's deficiency of CSC Holdings. Cablevision has no operations independent of its CSC Holdings subsidiary.

CSC Holdings

CSC Holdings is one of the largest cable operators in the United States based on the number of video subscribers. As of December 31, 2011, we served approximately 3.25 million video customers in and around the New York metropolitan area and in Montana, Wyoming, Colorado and Utah. We believe that our cable television systems in the New York metropolitan area comprise the largest metropolitan cluster of cable television systems under common ownership in the United States (measured by number of video subscribers). We also provide high-speed data and Voice over Internet Protocol ("VoIP") services using our cable television broadband network. Through Cablevision Lightpath, Inc. ("Optimum Lightpath"), our wholly-owned subsidiary, we provide telephone services and high-speed Internet access to the business market. In addition, we own approximately 97.2% of Newsday LLC which operates a newspaper publishing business. We also own regional news and high school sports programming services, a motion picture theatre business and a cable television advertising sales business.

We classify our operations into two reportable segments: Telecommunications Services and Other. Our Telecommunications Services segment includes our cable television business, including our video, high-speed data, and VoIP operations and the operations of the commercial data and voice services provided by Optimum Lightpath. It also includes the operations of our cable television systems in Montana, Wyoming, Colorado and Utah, which were acquired in December 2010. Our Other segment includes the operations 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) our motion picture theatre business ("Clearview Cinemas"), (iii) the News 12 Networks, our regional news programming services, (iv) the MSG Varsity network, our network dedicated entirely to showcasing high school sports and activities, (v) our 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. Refer to Note 19 to our consolidated financial statements included in this Annual Report on Form 10-K for financial information about our segments.

AMC Networks Inc. Distribution

On June 30, 2011, Cablevision distributed to its stockholders all of the outstanding common stock of AMC Networks Inc. ("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 and one share of AMC Networks Class B Common Stock for every four shares of CNYG Class B Common Stock. As a result of the AMC Networks Distribution, we no longer consolidate the financial results of AMC Networks for the purpose of our own financial reporting and the historical financial results of AMC Networks have been reflected in our consolidated financial statements as discontinued operations for all periods presented through the AMC Networks Distribution date.

Acquisition of Bresnan Cable

On December 14, 2010, the Company, through two wholly-owned subsidiaries, consummated the acquisition of Bresnan Broadband Holdings, LLC ("Bresnan Cable"). The purchase price was approximately $1.36 billion. The acquisition was financed using an equity contribution to the acquisition subsidiaries by CSC Holdings of $395 million, which CSC Holdings borrowed under its revolving loan facility, and debt incurred by the acquisition subsidiaries consisting of an undrawn $75 million revolving loan facility, a $765 million term loan facility and $250 million 8.0% senior notes due 2018.

MSG Distribution

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 certain media businesses previously owned and operated by the Company's Madison Square Garden segment (the "MSG Distribution"). The MSG Distribution took the form of a distribution by Cablevision of one share of Madison Square Garden Class A Common Stock for every four shares of CNYG Class A Common Stock and one share of Madison Square Garden Class B Common Stock for every four shares of CNYG Class B Common Stock. As a result of the MSG Distribution, we no longer consolidate the financial results of Madison Square Garden for the purpose of our own financial reporting and the historical financial results of Madison Square Garden have been reflected in our consolidated financial statements as discontinued operations for all periods presented through the MSG Distribution date.

Telecommunications Services

General

Cable television is a service that delivers multiple channels of video programming to subscribers who pay a monthly fee for the services they receive. Video signals are received over-the-air, by fiber optic transport or via satellite delivery by antennas, microwave relay stations and satellite earth stations and are modulated, amplified and distributed over a network of coaxial and fiber optic cable to the subscribers' television sets. Cable television systems typically are constructed and operated pursuant to non-exclusive franchises awarded by local and state governmental authorities for specified periods of time.

Our cable television systems offer varying packages of video service. In our New York metropolitan service area, the video service is marketed under the Optimum and iO brand names. Our cable television systems in Montana, Wyoming, Colorado and Utah (the "Optimum West service area") use the Optimum brand name to market our video product offerings. Our video services may include, among other programming, local broadcast network affiliates and independent television stations, certain other news, information and entertainment channels such as CNN, AMC, CNBC, ESPN, MTV, and regional sports networks such as MSG Network, and certain premium services such as HBO, Showtime, The Movie Channel, Starz!/Encore and Cinemax. We also offer digital video service, which enables customers to receive video on demand and subscription video on demand services, as well as additional viewing channels.

Our cable television revenues are derived principally from monthly fees paid by subscribers. In addition to recurring subscriber revenues, we derive revenues from the sales of pay-per-view movies and events, video on demand and subscription video on demand program services, from the sale of advertising time on advertiser supported programming and from installation and equipment charges. Certain services and equipment provided by substantially all of our cable television systems are subject to regulation. See "Regulation - Cable Television."

We also provide high-speed data services using our cable television broadband network. High-speed data services are provided to residential and small business customers through a cable modem device. The high-speed data service is marketed as "Optimum Online".

We offer VoIP technology services exclusively to our residential and small business Optimum Online customers, marketed as "Optimum Voice".

Through Optimum Lightpath, a business broadband service provider, we provide telecommunications services to the business market in the greater New York metropolitan area. Optimum Lightpath provides converged data, Internet and voice solutions to mid-sized and large businesses, hospital systems, municipalities, and school systems. As of December 31, 2011, Optimum Lightpath had over 5,000 buildings connected to its fiber network. Optimum Lightpath has built an advanced fiber optic network extending more than 4,800 route miles, which includes approximately 263,000 miles of fiber, throughout the New York metropolitan area. Optimum Business Services provides similar products in our Optimum West service area.

Optimum Online

Optimum Online is our high-speed Internet access offering, which connects customers to the Internet using the same network that delivers our cable television service.

Our plant is designed for download speeds to a maximum of: (i) 15Mbps (megabits per second) downstream and 2Mbps upstream for our Optimum Online level of service, (ii) 30Mbps downstream and 5Mbps upstream for our Optimum Online Boost level of service in our Optimum West service area, (iii) 50Mbps downstream and 8Mbps upstream for our Optimum Online Boost Plus level of service in our New York metropolitan service area, and (iv) 101Mbps downstream and 15Mbps upstream for our Optimum Online Ultra level of service in our New York metropolitan service area.

Optimum Online is available on an Ă  la carte basis with Optimum Online Boost, Optimum Online Boost Plus or Optimum Online Ultra available for an additional charge per month. Discount and promotional pricing are available when Optimum Online is combined with our other service offerings.

We have deployed a broadband wireless network ("WiFi") in commercial and high traffic locations across our New York metropolitan service area as a free value-added benefit to Optimum Online customers. The WiFi feature, which is delivered via wireless access points mounted on our cable television broadband network, allows Optimum Online customers to access the service while they are away from their home or office. WiFi has been activated across our Long Island, Bronx, Brooklyn, New Jersey, Westchester, and Connecticut service areas.

Optimum Online service includes access to complimentary features such as web and mobile access to DVR for iO TV in our New York metropolitan service area, giving users the ability to remotely schedule and manage recordings as well as internet security software, including anti-virus, anti-spyware, personal firewall, and anti-spam protection. Our Optimum Online Boost Plus and Optimum Online Ultra levels also include web hosting, additional storage, and other features.

Optimum Voice

Optimum Voice is a VoIP service available exclusively to Optimum Online subscribers and offers unlimited local, regional and long-distance calling any time of the day or night within the United States, Puerto Rico, U.S. Virgin Islands and Canada with over 20 calling features at a flat monthly rate per month. Discount and promotional pricing is available when Optimum Voice is combined with other service offerings.

Optimum Voice includes over 20 premium calling features, including enhanced voicemail, call waiting, caller ID, caller ID blocking, call return, three-way calling, call forwarding, anonymous and call blocker, among others. In addition, Optimum Voice has recently introduced a number of new features including Click-to-Call and a directory listing self-care tool. Click-to-Call provides users with the convenience of dialing a call from any Internet connected computer simply by clicking on a phone number displayed in a web page. Also, the directory listing self-care tool enables subscribers to make changes to their 411 directory listings. Lastly, the Optimum Voice Homepage allows customers to manage their calling features and directory listings, view their call history, and receive voicemails via the Internet.

Optimum Voice for Business provides for up to 24 voice lines for small and medium businesses. The service provides 14 important business calling features at no additional charge. Optimum Voice for Business also offers business trunking services with support for legacy telecom interfaces and newer internet protocol interfaces. Optimum Voice for Business has also been approved for use with commercial fire alarms. As an optional add-on service in our New York metropolitan service area, Optimum Voice for Business provides customers with toll free capability.

International service for Optimum Voice includes Optimum Voice World Call and Per Minute plans. Optimum Voice World call is for residential customers and provides 250 minutes per month of calling from their Optimum Voice phone to anywhere in the world, including up to 30 minutes of calling to Cuba, with certain restrictions, for a flat monthly fee. Per Minute plans are available to both residential and business customers.

Bundled Offers

We offer several promotional packages with discounted pricing to existing and new customers who subscribe to one or more of our products as compared to the Ă  la carte prices for each individual product. We also offer other pricing discounts for certain products that are added to existing services. For example, we offer an "Optimum Triple Play" package that is a special promotion for new customers or eligible current customers where our three products, video, high-speed data and voice, are each available for a flat fee per month, generally $29.95, for a year, when purchased together. For a total additional fee of $9.95 per month, the Ultimate Triple Play, available in our New York metropolitan service area, includes Optimum Online Boost Plus and a free router for new customers. We have from time to time also offered promotional and other pricing discounts as part of our competitive strategy.

Subscribers to all three of our service offerings who are not on a promotional pricing plan are eligible for "Optimum Rewards", which provides subscribers with a monthly discount on their bill, exclusive discounts and offers for shopping, dining, movie tickets and other benefits.

System Capacity

Our cable plant network in the New York metropolitan service area uses state of the art technology including fiber optic cable. The network is a minimum of 750 MHz two-way interactive system offering a combination of analog and digital channels, high-speed data and voice services. Our cable plant network in the Optimum West service area is on a state of the art hybrid fiber coaxial platform of which 90% of the plant is two-way with a minimum of 750 MHz capacity.

Programming

Adequate programming is available to the cable television systems from a variety of sources. Program suppliers' compensation is typically a fixed, per subscriber monthly fee (subject to contractual escalations) based, in most cases, either on the total number of video subscribers of the cable television systems, or on the number of subscribers subscribing to the particular service. The programming contracts are generally for a fixed period of time and are subject to negotiated renewal. Cable programming costs have increased in recent years and are expected to continue to increase due to additional programming being provided to most subscribers, increased costs to produce or purchase cable programming and other factors.

Franchises

Our cable television systems are operated in New York, New Jersey, Connecticut, Montana, Wyoming, Colorado and Utah under non-exclusive franchise agreements, where required by the franchising authority, with state and/or municipal or county franchising authorities. Although the terms of franchise agreements differ from jurisdiction to jurisdiction, they typically require payment of franchise fees and contain regulatory provisions addressing, among other things, upgrades, service quality, cable service to schools and other public institutions, insurance and indemnity bonds. The terms and conditions of cable franchises vary from jurisdiction to jurisdiction. Franchise authorities generally charge a franchise fee of not more than 5% of certain of our cable service revenues that are derived from the operation of the system within such locality. We generally pass the franchise fee on to our subscribers.

Franchise agreements are usually for a term of 5 to 15 years from the date of grant; most are 10 years. Franchises usually are terminable only if the cable operator fails to comply with material provisions, and then only after complying with substantive and procedural protections afforded by the franchise and federal and state law. As of December 31, 2011, our ten largest franchise areas comprised approximately 44% of our total video customers and of those, two franchises comprising approximately 110,000 video customers, are expired. We are currently operating in these franchise areas under temporary authority. The Company has never lost a franchise for an area in which it operates. When a franchise agreement reaches expiration, a franchising authority may seek to impose new requirements, including requirements to upgrade facilities, to increase channel capacity and to provide additional support for local public, education and government access programming. Negotiations can be protracted, and franchise agreements sometimes expire before a renewal is negotiated and finalized. New York and New Jersey state laws provide that pre-existing franchise terms continue in force during the renewal negotiations until agreement is reached or one or both parties seek to pursue "formal" franchise remedies under federal law. In Montana, Wyoming, Colorado and Utah, the Company's right to operate following the expiration of a franchise for franchises still in renewal negotiations is protected by federal law and/or the consent of the municipality. In approximately 40 municipalities in Montana, Wyoming, and Colorado, the Company operates its cable television systems without a franchise, pursuant to Section 621(b)(2) of the Federal Cable Act, which provides that no franchise is required in communities where the cable operator or its predecessor lawfully provided service as of July 1, 1984 and the municipality has not requested a franchise. Federal law provides significant substantive and procedural protections for cable operators seeking renewal of their franchises. See "Regulation - Cable Television." Despite the Company's efforts and the protections of federal law, it is possible that one or more of the Company's franchises may be subject to termination or non-renewal or we may be required to make significant additional investments in response to requirements imposed in the course of the franchise renewal process.

Optimum Lightpath holds a franchise from New York City which grants rights of way authority to provide telecommunications services throughout the five boroughs. The franchise expired on December 20, 2008 and renewal discussions with New York City are ongoing. We believe we will be able to obtain renewal of the franchise and have received assurance from New York City that the expiration date of the franchise is being treated as extended until a formal determination on renewal is made. Failure to ultimately obtain renewal of the franchise could negatively affect Optimum Lightpath's revenues.

Other

Newsday

Newsday consists of the Newsday daily newspaper, amNew York, Star Community Publishing Group and online websites, including newsday.com and exploreLI.com. Newsday has also developed and deployed applications for iPhone, iPad and Android devices.

Our publications are distributed through both paid and free distribution in various ways across Long Island and the New York metropolitan service area. Our products include:

•

the Newsday daily newspaper, which is primarily distributed on Long Island, New York and in the New York metropolitan area
•

amNew York, a free daily newspaper distributed in New York City; and
•

Star Community Publishing, a group of weekly shopper publications.

News 12 Networks

The regional news services provided by the Company include News 12 Long Island, News 12 New Jersey, News 12 Westchester, News 12 Connecticut, News 12 The Bronx, News 12 Brooklyn, News 12 Hudson Valley, and News 12 Interactive, as well as News 12 Traffic and Weather (collectively, the "News 12 Networks"). The News 12 Networks include seven 24-hour local news channels and five traffic and weather services dedicated to covering areas within the New York metropolitan area. News 12 Networks is available to all subscribers throughout our footprint in the New York metropolitan area.

CEO BACKGROUND



ZACHARY W. CARTER, 61, Director of the Company since 2006. Partner at the law firm of Dorsey & Whitney LLP, in New York, New York since 1999. Prior to that time, Mr. Carter’s career in public service included serving as United States Attorney for the Eastern District of New York from 1993 to 1999. Mr. Carter is a director of Marsh & McLennan Companies, Inc.

n light of Mr. Carter’s experience as a practicing attorney, his government service, his service as a director of another public company, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class A stockholders, has concluded that he should be reelected to the Board.

THOMAS V. REIFENHEISER, 75 , Director of the Company since 2002. Mr. Reifenheiser retired as a Managing Director of JP Morgan Chase, overseeing the Global Media and Telecommunications Division in September 2000 after 38 years with JP Morgan Chase and its predecessors. Mr. Reifenheiser is a director of Lamar Advertising Company. During the past five years, Mr. Reifenheiser was a director of Citadel Broadcasting Corporation and Mediacom Communications Corporation.

In light of Mr. Reifenheiser’s experience as a commercial banker to media and telecommunications companies, his service as a director of other public companies, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class A stockholders, has concluded that he should be reelected to the Board.

VICE ADMIRAL JOHN R. RYAN USN (RET.), 65 , Director of the Company since 2002. President and Chief Executive Officer of the Center for Creative Leadership in Greensboro, North Carolina since June 2007. He was Chancellor of the State University of New York from June 2005 to June 2007. He was President of the State University of New York Maritime College from June 2002 to June 2005, Interim President of State University at Albany from February 2004 to February 2005, and Superintendent of the United States Naval Academy from June 1998 to June 2002. Vice Admiral Ryan’s military career included positions as Commander of the Maritime Surveillance and Reconnaissance Force, US Sixth Fleet/Commander, Fleet Air Mediterranean/Commander, Maritime Air Forces, Mediterranean until his retirement from the U.S. Navy in July 2002. Vice Admiral Ryan is a director of CIT Group Inc.

In light of Vice Admiral Ryan’s experience in military service, his leadership positions at major universities, his experience as the chief executive officer of another company, his service as a director of another public company, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class A stockholders, has concluded that he should be reelected to the Board.



VINCENT TESE, 68 , Director of the Company since 1996. Mr. Tese served as Chairman and Chief Executive Officer of the New York State Urban Development Corporation from 1985 to 1987 and as Director of Economic Development for New York State from 1987 to December 1994. Mr. Tese is Executive Chairman of Bond Street Holdings LLC and Premier American Bank and is a director of Intercontinental Exchange, Inc., ICE U.S. Trust LLC, Mack-Cali Realty Corporation, Madison Square Garden, Inc., Municipal Art Society, and Wireless Cable International, Inc. and a trustee of New York Presbyterian Hospital and New York University School of Law. During the past five years, Mr. Tese was a director of Gabelli Asset Management, National Wireless Holdings, Inc., The Bear Stearns Companies, Inc, Bowne & Company, Inc., Cabrini Mission Society, Catholic Guardian Society, Custodial Trust Co, Magfusion, Inc., NRDC Acquisition Corp., GGCP, Inc., Retail Opportunity Investments Corp. and Xanboo Inc.

In light of Mr. Tese’s experience as the chief executive officer of the New York State Urban Development Corporation, his government service, his experience as the executive chairman of private companies, his service as a director of other public companies, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class A stockholders, has concluded that he should be reelected to the Board.

DR. LEONARD TOW, 82 , Director of the Company since 2005. Chief Executive Officer of New Century Holdings LLC, an outdoor advertising company, since January 2005. Director of Citizens Communications Company from 1989 to September 2004. Chairman and Chief Executive Officer of Citizens Communications Company from 1990 to September 2004.

In light of Mr. Tow’s experience as a founder and chief executive officer of a major cable television company, his experience as the chief executive officer of a private company, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class A stockholders, has concluded that he should be reelected to the Board.

Directors to be elected by Class B Stockholders


RAND V. ARASKOG, 79 , Director of the Company since 2005. Self-employed as a private investor as principal in RVA Investments since March 1998. During the past five years, Mr. Araskog was a director of ITT Educational Services, Inc., Rayonier, Inc. and International Steel Group, Inc.

In light of Mr. Araskog’s experience as the chief executive officer of a public company and as a principal in a private investment company, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that he should be reelected to the Board.


MANAGEMENT DISCUSSION FROM LATEST 10K

Summary

Our future performance is dependent, to a large extent, on general economic conditions including capital and credit market conditions, the impact of direct competition, our ability to manage our businesses effectively, and our relative strength and leverage in the marketplace, both with suppliers and customers.

Additional capital and credit market disruptions could cause broader economic downturns, which may lead to lower demand for our products, such as cable television services, as well as lower levels of television and newspaper advertising, and increased incidence of customer's inability to pay for the services we provide. We have experienced some of the effects of this economic downturn. Continuation of events such as these may adversely impact our results of operations, cash flows and financial position.

On February 9, 2010, Cablevision distributed to its stockholders all of the outstanding common stock of 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.

On June 30, 2011, Cablevision distributed to its stockholders all of the outstanding common stock of AMC Networks Inc., 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.

As a result of the AMC Networks Distribution and the MSG Distribution, the Company no longer consolidates the financial results of AMC Networks or Madison Square Garden for the purpose of its own financial reporting and the historical financial results of AMC Networks and Madison Square Garden have been reflected in the Company's consolidated financial statements as discontinued operations for all periods presented through the AMC Networks Distribution date and the MSG Distribution date.

Telecommunications Services

Our Telecommunications Services segment, which accounted for 94% of our consolidated revenues, net of inter-segment eliminations, for the year ended December 31, 2011, derives revenues principally through monthly charges to subscribers of our video, high-speed data and VoIP services and commercial data and voice services operations. These monthly charges include fees for cable television programming, high-speed data and voice services, as well as equipment rental, DVR, video-on-demand, pay-per-view, installation and home shopping commissions. Revenue increases are derived from rate increases, increases in the number of subscribers to these services, including additional services sold to our existing subscribers, upgrades by video customers in the level of programming package to which they subscribe, and acquisition transactions that result in the addition of new subscribers . We have not implemented a residential rate increase in 2012 and plan to extend the term of certain promotional offers, which will negatively impact revenue growth and our operating income. In addition, our ability to increase the number of subscribers to our services is significantly related to our penetration rates (the number of subscribers to our services as a percentage of serviceable passings, which represent the estimated number of single residence homes, apartment and condominium units and commercial establishments passed by the cable network in areas serviceable without further extending the transmission lines, including our commercial data and voice customers). As penetration rates increase, the number of available homes to which we can market our services generally decreases. We also derive revenues from the sale of advertising time available on the programming carried on our cable television systems. Programming costs are the most significant part of our operating expenses and are expected to continue to increase primarily as a result of contractual rate increases and additional service offerings. Additionally, we currently anticipate an increase in our operating expenses as we make additional investments designed to enhance our products and services with a focus on retention and acquisition of subscribers.

In 2011, in our New York metropolitan service area, we began offering a free Optimum App for the iPad, iPod Touch and iPhone, which allows our cable television customers to experience iO TV digital service on their device in the home. While most programmers have not objected to the inclusion of their programming in the in-home application, certain programmers have asserted that the application is a material breach of their affiliation agreements and a copyright violation yielding statutory damages. The Company has reached satisfactory resolutions of the issues with certain of these programmers. Other programmers continue to have concerns, but the Company believes it has a strong legal position.

Our cable television service, which accounted for 54% of our consolidated revenues, net of inter-segment eliminations, for the year ended December 31, 2011, faces competition from video service provided by incumbent telephone companies, DBS service providers and others. As discussed in greater detail below, we face intense competition in our New York metropolitan service area from two incumbent telephone companies Verizon and AT&T, which offer video programming in addition to their voice and high-speed Internet access services. To the extent the incumbent telephone companies, who have financial resources that exceed ours, continue to offer promotional packages at prices lower than ours, our ability to maintain or increase our existing customers and revenue may continue to be negatively impacted. There are two major providers of DBS service in the United States, DISH Network and DirecTV, each with significantly higher numbers of subscribers than we have. We compete in our service areas with these DBS competitors by "bundling" our service offerings with products that the DBS companies cannot efficiently provide at this time, such as high-speed data service, voice service and interactive services carried over the cable distribution plant. Historically, we have made substantial investments in the development of new and innovative programming options and other service offerings for our customers as a way of differentiating ourselves from our competitors. We currently anticipate a significant increase in our level of capital expenditures to enhance our product and service offerings.

Verizon and AT&T offer video programming as well as voice and high-speed Internet access services to residential customers in our New York metropolitan service area. Verizon has constructed fiber to the home network plant that passes a significant number of households in our New York metropolitan service area (while difficult to assess, our estimates indicate that Verizon passes more than 45% of these households, based on currently available information). Verizon has obtained authority to provide video service for a majority of these homes passed, on a statewide basis in New Jersey, in numerous local franchises in New York State, including all of New York City, and in a small portion of Connecticut. AT&T offers video service in competition with us in most of our Connecticut service area. This competition impacts our video revenue in these areas and may continue to do so in the future.

Our high-speed data services business, which accounted for 20% of our consolidated revenues, net of inter-segment eliminations, for the year ended December 31, 2011, faces intense competition from other providers of high-speed Internet access, including Verizon and AT&T in our New York metropolitan service area and CenturyLink in our Optimum West service area. Due to our high penetration in our New York metropolitan service area (54.9% of serviceable passings at December 31, 2011) and the impact of intense competition, our ability to maintain or increase our existing customers and revenue in the future may continue to be negatively impacted.

Our VoIP offering, which accounted for 13% of our consolidated revenues, net of inter-segment eliminations, for the year ended December 31, 2011, faces intense competition from other providers of voice services, including carriers such as Verizon and AT&T in the New York metropolitan service area and CenturyLink in our Optimum West service area. We compete primarily on the basis of pricing, where unlimited United States and Canada (including Puerto Rico in the New York metropolitan service area and the U.S. Virgin Islands in the Optimum West service area) long distance, regional and local calling, together with certain features for which the incumbent providers charge extra, are offered at one low price. Due to our high penetration in the New York metropolitan service area (44.7% of serviceable passings at December 31, 2011) and the impact of intense competition, our ability to maintain or increase our existing customers and revenue in the future may continue to be negatively impacted.

The Telecommunications Services segment advertising and other revenues accounted for 2% of our consolidated revenues, net of inter-segment eliminations, for the year ended December 31, 2011.

Optimum Lightpath, which operates in our New York metropolitan service area accounted for 4% of our consolidated revenues, net of inter-segment eliminations, for the year ended December 31, 2011. Optimum Lightpath operates in the most competitive business telecommunications market in the country and competes against the very largest telecommunications companies - incumbent local exchange carriers such as Verizon and AT&T, other competitive local exchange companies and long distance companies. To the extent that dominant market leaders decide to reduce their prices, future success of our Optimum Lightpath business may be negatively impacted. The trend in business communications has been shifting from a wired voice medium to a wireless data medium. This trend could also negatively impact the future growth of Optimum Lightpath if it were to accelerate.

Other

Our Other segment, which accounted for 6% of our consolidated revenues, net of inter-segment eliminations, for the year ended December 31, 2011, includes the operations 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) our motion picture theatre business, Clearview Cinemas, (iii) the News 12 Networks, our regional news programming services, (iv) the MSG Varsity network, our network dedicated entirely to showcasing high school sports and activities, (v) our 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.

Newsday

Newsday's revenue is derived primarily from the sale of advertising and the sale of newspapers ("circulation revenue"). For the year ended December 31, 2011, advertising revenues accounted for 71% and circulation revenues accounted for approximately 28% of the total revenues of Newsday. Newsday's circulation revenue is derived primarily from home delivery subscriptions of the Newsday newspaper, and single copy sales of Newsday through local retail outlets.

Local economic conditions affect the levels of retail and classified newspaper advertising revenue. General economic conditions, changes in consumer spending, auto sales, housing sales, unemployment rates, job creation, readership and circulation levels and rates all impact demand for advertising. For the year ended December 31, 2011, Newsday experienced a decline of $20,750 (9%) in advertising revenues as compared to 2010. Circulation revenue for the year ended December 31, 2011 increased $958 (1%) over the same period in the prior year due primarily to the impact of home delivery price increases.

Newsday and the newspaper industry generally have experienced significant declines in advertising and circulation revenue as circulation and readership levels continue to be adversely affected by competition from new media news formats and less reliance on newspapers by some consumers, particularly younger consumers, as a source of news and classifieds. A prolonged decline in circulation levels would also have a material adverse effect on the rate and volume of advertising revenues.

Newsday's largest categories of operating expenses relate to the production and distribution of its print products. These costs are driven by volume (number of newspapers printed and number of pages printed) and the number of pages printed are impacted by the volume of advertising and editorial pages. The majority of Newsday's other costs, such as editorial content creation, rent and general and administrative expenses do not directly fluctuate with changes in advertising and circulation revenue.


Clearview Cinemas

Clearview Cinemas derives revenues primarily from box office ticket sales, concession stand sales, and, to a lesser extent, from advertising shown at the start of each performance and from venue rentals. Our ability to attract customers to our theatres is, to a large extent, dependent on our ability to obtain high quality film content at competitive pricing.

News 12 Networks

Our News 12 Networks, which include seven 24-hour local news channels and five traffic and weather services dedicated to covering areas within the New York metropolitan area, derives its revenues from the sale of advertising on its networks and affiliation fees paid by cable operators, principally Cablevision.

MSG Varsity

MSG Varsity is a network dedicated entirely to showcasing high school sports and activities. It does not receive intercompany affiliation fees from the Telecommunications Services segment and has minimal revenues.

Cablevision Media Sales

Cablevision Media Sales, previously Rainbow Advertising Sales Corporation, is a cable television advertising company that derives its revenues from the sale of local and regional commercial advertising time on cable television networks in the New York metropolitan area, which offers advertisers the opportunity to target geographic and demographic audiences.

Critical Accounting Policies

In preparing its financial statements, the Company is required to make certain estimates, judgments and assumptions that it believes are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. The significant accounting policies, which we believe are the most critical to aid in fully understanding and evaluating our reported financial results, include the following:

Impairment of Long-Lived and Indefinite-Lived Assets:

The Company's long-lived and indefinite-lived assets at December 31, 2011 include goodwill of $442,773, other intangible assets of $1,548,994 ($1,296,123 of which are indefinite-lived intangible assets), and $3,269,232 of property, plant and equipment. Such assets accounted for approximately 74% of the Company's consolidated total assets. Goodwill and identifiable indefinite-lived intangible assets, which represent primarily the Company's cable television franchises, various trademarks and licenses, are tested annually for impairment during the first quarter ("annual impairment test date") and upon the occurrence of certain events or substantive changes in circumstances.

The Company is required to determine goodwill impairment using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill utilizing an enterprise-value based premise approach. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill that would be recognized in a business combination. For the purpose of evaluating goodwill impairment at the annual impairment test date, the Company had three reporting units containing approximately 98% of the Company's goodwill balance of $442,067. These reporting units are the Consumer Services (cable television) reporting unit in the Telecommunications Services reportable segment ($401,320), the Optimum Lightpath reporting unit in the Telecommunications Services reportable segment ($21,487), and the Clearview Cinemas reporting unit in the Other reportable segment ($10,348).

MANAGEMENT DISCUSSION FOR LATEST QUARTER

Summary

Our future performance is dependent, to a large extent, on general economic conditions including capital and credit market conditions, the impact of direct competition, our ability to manage our businesses effectively, and our relative strength and leverage in the marketplace, both with suppliers and customers. See "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2010.

Additional capital and credit market disruptions could cause broader economic downturns, which may lead to lower demand for our products, such as cable television services, as well as lower levels of television and newspaper advertising, and increased incidence of customer's inability to pay for the services we provide. We have experienced some of the effects of this economic downturn. Continuation of events such as these may adversely impact our results of operations, cash flows and financial position.

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").

On June 30, 2011, Cablevision distributed to its stockholders all of the outstanding common stock of AMC Networks Inc. ("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").

As a result of the AMC Networks Distribution and the MSG Distribution, the Company no longer consolidates the financial results of AMC Networks or Madison Square Garden for the purpose of its own financial reporting and the historical financial results of AMC Networks and Madison Square Garden have been reflected in the Company's consolidated financial statements as discontinued operations for all periods presented through the AMC Networks Distribution date and the MSG Distribution date.

Telecommunications Services

Our Telecommunications Services segment, which accounted for 94% of our consolidated revenues, net of inter-segment eliminations, for the nine months ended September 30, 2011, derives revenues principally through monthly charges to subscribers of our video, high-speed data and Voice over Internet Protocol ("VoIP") services and commercial data and voice services operations (Optimum Lightpath) . These monthly charges include fees for cable television programming, high-speed data and voice services, as well as equipment rental, DVR, video-on-demand, pay-per-view and installation. Revenue increases are derived from rate increases, increases in the number of subscribers to these services, including additional services sold to our existing subscribers, upgrades by video customers in the level of programming package to which they subscribe, and acquisition transactions that result in the addition of new subscribers . Our ability to increase the number of subscribers to our services is significantly related to our penetration rates (the number of subscribers to our services as a percentage of serviceable passings, which represent the estimated number of single residence homes, apartment and condominium units and commercial establishments passed by the cable distribution network in areas serviceable without further extending the transmission lines, including our Optimum Lightpath customers). As penetration rates increase, the number of available homes to which we can market our services generally decreases. We also derive revenues from the sale of advertising time available on the programming carried on our cable television systems. Programming costs are the most significant part of our operating expenses and are expected to increase primarily as a result of contractual rate increases and additional service offerings.

The Company recently launched its in-home iPad application (which allows subscribers to use the iPad as an additional television monitor in the home) and while most programmers have not objected to the inclusion of their programming in the in-home application, certain programmers have asserted that the application is a material breach of their affiliation agreements and a copyright violation yielding statutory damages. The Company has reached satisfactory resolutions of the issues with certain of these programmers. The Company is engaged in ongoing discussions with other programmers and believes it has a strong legal position.

Our cable television video services, which accounted for 55% of our consolidated revenues, net of inter-segment eliminations, for the nine months ended September 30, 2011, face competition from video service provided by incumbent telephone companies, direct broadcast satellite ("DBS") service providers and others. As discussed in greater detail below, we face intense competition in our New York metropolitan service area from incumbent telephone companies Verizon Communications, Inc. ("Verizon") and AT&T Inc. ("AT&T"), which offer video programming in addition to their voice and high-speed Internet access services. To the extent the incumbent telephone companies, who have financial resources that exceed ours, continue to offer promotional packages at prices lower than ours, our ability to maintain or increase our existing customers and revenue may continue to be negatively impacted. There are two major providers of DBS service in the United States, each with significantly higher numbers of subscribers than we have. We compete in our service areas with these DBS competitors by "bundling" our service offerings with products that the DBS companies cannot efficiently provide at this time, such as high-speed data service, voice service and interactive services carried over the cable distribution plant. Historically, we have made substantial investments in the development of new and innovative programming options and other product enhancements for our customers as a way of differentiating ourselves from our competitors. We likely will continue to do so in order to remain an effective competitor, which could increase our operating expenses and capital expenditures.

Verizon and AT&T offer video programming as well as voice and high-speed Internet access services to residential customers in our New York metropolitan service area. Verizon has constructed fiber to the home network plant that passes a significant number of households in our New York metropolitan service area (while difficult to assess, our estimates indicate more than 40% of these households, based on currently available information). Verizon has obtained authority to provide video service for a majority of these homes passed, on a statewide basis in New Jersey, in numerous local franchises in New York State, including all of New York City, and in a small portion of Connecticut. AT&T offers such service in competition with us in most of our Connecticut service area. This competition impacts our video revenue in these areas and may continue to do so in the future.

Our high-speed data services business, which accounted for 20% of our consolidated revenues, net of inter-segment eliminations, for the nine months ended September 30, 2011, faces intense competition from other providers of high-speed Internet access, including Verizon and AT&T in our New York metropolitan service area and CenturyLink, Inc. ("CenturyLink") in our Bresnan Broadband Holdings, LLC ("Bresnan Cable") service area. Our growth rate in high-speed data customers and revenues in our New York metropolitan service area has slowed from the growth rates we have experienced in the past due to our high penetration in this service area (55% of serviceable passings at September 30, 2011) and from the impact of intense competition. Accordingly, our ability to maintain or increase our existing customers and revenue in the future may continue to be negatively impacted. In addition, the regulatory framework for high-speed data service may affect our competitive position.

Our VoIP offering, which accounted for 13% of our consolidated revenues, net of inter-segment eliminations, for the nine months ended September 30, 2011, faces intense competition from other providers of voice services, including carriers such as Verizon and AT&T in the New York metropolitan service area and CenturyLink in our Bresnan Cable service area. We compete primarily on the basis of pricing, where unlimited United States and Canada (including Puerto Rico in the New York metropolitan service area and the U.S. Virgin Islands in the Bresnan Cable service area) long distance, regional and local calling, together with certain features for which the incumbent providers charge extra, are offered at one low price. Our growth rate in VoIP customers and revenues has slowed from the growth rates we have experienced in the past due to our increasing penetration in the New York metropolitan service area (44% of serviceable passings at September 30, 2011) and from the impact of intense competition. Accordingly, our ability to maintain or increase our existing customers and revenue in the future may continue to be negatively impacted. In addition, the regulatory framework for voice services may affect our competitive position.

The Telecommunications Services segment advertising and other revenues accounted for 2% of our consolidated revenues, net of inter-segment eliminations, for the nine months ended September 30, 2011.

Optimum Lightpath, which operates in our New York metropolitan area accounted for 4% of our consolidated revenues, net of inter-segment eliminations, for the nine months ended September 30, 2011. Optimum Lightpath operates in the most competitive business telecommunications market in the country and competes against the very largest telecommunications companies - incumbent local exchange companies such as Verizon and AT&T, other competitive local exchange companies and long distance companies. To the extent that dominant market leaders decide to reduce their prices, future success of our Optimum Lightpath business may be negatively impacted. The trend in business communications has been shifting from a wired voice medium to a wireless data medium. This trend could also negatively impact the future growth of Optimum Lightpath if it were to accelerate.

Other

Our Other segment, which accounted for 6% of our consolidated revenues, net of inter-segment eliminations, for the nine months ended September 30, 2011 includes the operations 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) our motion picture theater business ("Clearview Cinemas"), (iii) the News 12 Networks, our regional news programming services, (iv) the MSG Varsity network, our network dedicated entirely to showcasing high school sports and activities, (v) our 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.

Newsday

Newsday's revenue is derived primarily from the sale of advertising and the sale of newspapers ("circulation revenue"). For the nine months ended September 30, 2011, advertising revenues accounted for 71% and circulation revenues accounted for 28% of the total revenues of Newsday. Newsday's circulation revenue is derived primarily from home delivery subscriptions of the Newsday daily newspaper, and single copy sales of Newsday at the newsstand or through local retail outlets.

Local economic conditions affect the levels of retail and classified newspaper advertising revenue. General economic conditions, changes in consumer spending, auto sales, housing sales, unemployment rates, job creation, readership and circulation levels and rates all impact demand for advertising. For the three and nine months ended September 30, 2011, Newsday experienced a decline of $5,924 (11%) and $16,103 (10%), respectively, in advertising revenues as compared to the comparable period in 2010.

As filed with the Audit Bureau of Circulation ("ABC") on October 17, 2011 and subject to audit by the ABC, Newsday submitted its most recent Publishers statement which indicated total average circulation for the six months ended September 25, 2011 of approximately 405,000 on weekdays, approximately 390,000 on Saturdays and approximately 477,000 on Sundays. These circulation figures include for the first time digital subscriptions to Newsday's restricted access website as these were not previously reported. These circulation figures include Newsday's total average print circulation of approximately 292,000 on weekdays, approximately 278,000 on Saturdays and approximately 357,000 on Sundays, which represents a decline of approximately 6.9%, 5.5%, and 4.6%, respectively, over the comparable prior year period. Circulation revenue for the three months ended September 30, 2011 decreased $314 (1.5%) over the same period in the prior year due primarily to a decline in single copy sales volume. Circulation revenue for the nine months ended September 30, 2011 increased $1,194 (2%) over the same period in the prior year due primarily to higher home delivery subscription revenue driven by home delivery subscription price increases.

Newsday's largest categories of operating expenses relate to the production and distribution of its print products. These costs are driven by volume (number of newspapers printed and number of p ages printed) and the number of pages printed are impacted by the volume of advertising and editorial page counts. The majority of Newsday's other costs, such as editorial content creation, rent and general and administrative expenses do not directly fluctuate with changes in advertising and circulation revenue.

Newsday and the newspaper industry generally have experienced significant declines in advertising and circulation revenue as circulation and readership levels continue to be adversely affected by competition from new media news formats and less reliance on newspapers by some consumers, particularly younger consumers, as a source of news. A prolonged decline in circulation levels would also have a material adverse effect on the rate and volume of advertising revenues.

Clearview Cinemas

Clearview Cinemas derives revenues primarily from box office ticket sales, concession stand sales, and, to a lesser extent, from advertising shown at the start of each performance and from venue rentals. Our ability to attract customers to our theaters is, to a large extent, dependent on our ability to obtain high quality film content at competitive pricing.

News 12 Networks

Our News 12 Networks, which include seven 24-hour local news channels and five traffic and weather services dedicated to covering areas within the New York metropolitan area, derives its revenues from the sale of advertising on its networks and affiliation fees paid by cable operators, principally Cablevision.

MSG Varsity

MSG Varsity is a network dedicated entirely to showcasing high school sports and activities. One of the many components of this programming service is the involvement of high schools throughout our New York metropolitan area footprint as co-producers of MSG Varsity's content, in addition to content created by our professional productions. MSG Varsity is available to all subscribers throughout our footprint in the New York metropolitan area.

Cablevision Media Sales

Cablevision Media Sales is a cable television advertising company that sells local and regional commercial advertising time on cable television networks in the New York metropolitan area and offers advertisers the opportunity to target geographic and demographic audiences.

CONF CALL

Patricia Armstrong

Thank you. Good morning and welcome to Cablevision's fourth quarter 2011 earnings conference call. Joining me this morning are Jim Dolan, President and CEO of Cablevision and Gregg Seibert, Executive Vice President and Chief Financial Officer.

Following a discussion of the Company's fourth quarter 2011 results, we will open the call for questions. If you don't have a copy of today's earnings release, it is available on our website at cablevision.com. Please take note of the following. Today's discussion may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigations 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 that could cause actual results to differ.

Please refer to the Company's filings with the Securities and Exchange Commission for a discussion of risks and uncertainties. The Company disclaims any obligation to update the forward-looking statements that may be discussed during this call.

Let me point out that on Page 6 of today's earnings release, we provide consolidated operations data and a reconciliation of adjusted operating cash flow, or AOCF, to operating income.

I would now like to introduce Jim Dolan, President and CEO of Cablevision.

James L. Dolan

Thank you, Pat and good morning. 2011 marked the substantial completion of a multi-year multistep process to enhance shareholder value. As most of you may recall, in August of 2008 we announced that our Board of Directors had authorized management to explore several options to enhance the value of Cablevision for its shareholders.

The spin-off of AMC last year marked another significant milestone in this process, which also included the spin-off of MSG, as well as the initiation of a quarterly dividend and a share repurchase program. Since that time we have also refinanced extended the maturities of much of our debt portfolio and completed the acquisition of the Bresnan Properties, an acquisition that we continue to believe will be accretive to shareholder value.

We remained focused on striking the right balance between returning capital to our shareholders and investing capital in the business as this balance is a critical component of our future success.

It is worth noting that since 2008, despite substantially reducing the size and cash flows of the Company by spinning off AMC and MSG, Cablevision has not only maintained its quarterly dividend, but we have increased it twice to its current level of $0.15 per share and last week, our Board of Directors approved another $0.15 per share dividend payable at the end of March.

In 2011, Cablevision also remained committed to its share repurchase program, buying back more than 20 million shares of Class A stock during the year.

Now turning to our operating results; despite a tough economy and competitive pressures, we continue to grow our high speed data and voice customers and our overall average revenue per subscriber. While we lost video subscribers in the quarter, we are taking steps to maintain or increase our video sub-base in the future.

For the fourth quarter of 2011 Cablevision's consolidated revenue grew at 7.3% and AOCF increased 21%. The Company's results reflect a number of unusual items which Gregg will talk more about shortly. Excluding these items revenue was up 1% and AOCF grew 0.8% for the quarter.

During our last call we talked about the emergence of some underlying trends with regard to certain subscriber metrics, including healthy increases in high speed data and voice customers as well as reduced video subscriber losses. This continued with our fourth quarter results. We also saw a positive momentum with our Bresnan properties which we are now calling Optimum West.

For the fourth quarter these properties reported subscriber increases across basic video, high speed data and voice services. Cablevision generated approximately $583 million in free cash flow in 2011 and an 8.7% improvement over 2010.

Over the course of the year we also continued to rollout new products and service offerings to enhance our customer's experience such as our in-home mobile apps and ultimate triple play offer. At the same time we remained focused on enhancing our existing products. As you know we were disappointed in the results of an SEC test conducted last spring on broadband speeds.

Since then we have invested the necessary time and resources to make significant improvements. As a result according to a recent test conducted by the same broadband testing firm our broadband speeds now exceed our advertised speeds throughout all periods of the day. Maintaining an industry leading level of service is critical for Cablevision.

Today, our customers expect more from us than ever before, and in 2012 we will strive to do two things. One, meet and more importantly, exceed the expectations of our existing customers. Two, prove to those who are making choices about a new provider that no one offers better products or better service than Cablevision. We will achieve this by continuing to focus on improving the product experience for our customers. Whether it's adding more content to our VoD offering or rolling out our RS-DVR product, we have one goal to ensure that our products are better than anything else on the market.

Looking ahead, one very important product for the Company is Wi-Fi. Wireless data usage is growing as more and more of our customers want to take their television and computer experience to mobile with devices such as iPads and smartphones. We think our Wi-Fi network is better equipped to handle this usage and that this wireless extension of our Optimum online service will provide a real advantage for the Company as we continue to expand our Wi-Fi coverage.

Another product that has experienced increased usages is our Optimum app for iPad, iPad touch and iPhone devices. In the fourth quarter alone, users of the app increased 70% and now exceed 500,000. Cablevision will soon launch the HBO GO and Max GO products throughout our footprint, which will allow our customers to enjoy this programming on mobile devices in or out of the home and we expect more and more programming services to be added in the coming months.

In addition to improving our products, we want to improve our relationship with our existing customers and ensure that they know that we value them in their business. We will also continue to explore fresh ways to attract new customers.

One quick example of this is a new program that offers people who are moving into Cablevision areas the opportunity for next day installation. The early results from the pilot test reflect higher completed sales than the prior Company average. This program will be rolled out across our east footprint by the end of the first quarter.

I wanted to emphasize that at its core our business is strong. Our suite of products is in high demand and we will work to continue to grow these products to meet our customers' evolving needs. This means that 2012 will be a year of investment, both in capital spending and in operating execution. In fact, we expect to accelerate certain 2013 projects into this current year resulting in higher capital expenditures in 2012. We will be smart and efficient in this process which should set us on a path towards a stronger 2013 and beyond.

We will also remain focused on pricing, packaging and the overall quality of our service. Cablevision has not announced the 2012 rate increase. While in the short term this is expected to impact our revenue and AOCF growth, we believe that actions like this will not go unnoticed by our customers and ultimately are healthy for the long term.

Our intention is to maintain discipline in our pricing and packaging, so though you may not have a rate increase this year, we have eliminated the very low price offers that have been in the market in the past few years.

Cablevision has been in the business for nearly 40 years. Our ability to change and adapt with the times has ensured our position as a leading media and telecommunications company. Looking ahead we have an excellent management team with decades of cable experience and I have tremendous confidence that together we will build on this already strong foundation to continue delivering value for both our customers and our shareholders.

I will now like to turn the call over to our Chief Financial Officer, Gregg Seibert.

Gregg Seibert

Thank you, Jim, and good morning everyone. In the fourth quarter we gained 20,300 high speed data customers some 30,500 voice customers, while basic video customers declined by 14,000. Of these amounts the Optimum West contribution was 7,000 high-speed data customers, 8,000 voice customers, and 600 basic video customers. All of these quarterly changes in total company customer counts compared favorably with both third quarter of 2011, as well as the fourth quarter of 2010. The average revenue per video customer across all properties was $154.10 in the fourth quarter, a sequential increase of $2.39. RPS in the eastern properties rose by more $2 in the quarter and the west property saw an increase in RPS of over $5.

Turning to our financials, most of you will recall that we acquired Bresnan Communications in December of 2010. As a result, while our 2011 fourth quarter numbers contain results from these properties for the entire quarter, the 2010 fourth quarter reflects approximately 2 weeks of their results. That said cable revenue for the quarter was up 8% over the prior year 1.2% after excluding Bresnan. AOCF for the Cable segment grew by 17% versus the prior year and would have been up 8% excluding Bresnan.

As Jim mentioned, there were a number of unusual items which affected the quarter. Page 4 of the earnings release contains these details, which include the impacts from the October snowstorm, compensation and executive separation adjustments and the favorable programming adjustment.

If we were to exclude each of these items, as well as the impact of Optimum West, the Cable segment AOCF would have reflected a decline of 1.8% in the quarter and the total Company consolidated AOCF would have been higher by 0.8%. The cable operating margin after adjusting for these items was 39.1%, down slightly from prior year primarily due to programming cost increases.

Advertising revenue in the fourth quarter was flat compared with last year’s fourth quarter. Ad sales in the east were down by roughly 7%, reflecting the strong political advertising market in the fourth quarter of 2010. Non-political ad sales were up 8% in the quarter in the core Cablevision footprint.

The SME business continues to withstand pressure from a tough economy as well as competition. The SME product bundle typically includes data and voice services and today’s new SME customer is taking both products to pay more than a $140 per month on average.

Our small business customers are enjoying more and more benefits in their product bundle. We have developed partnerships with top suppliers such as FedEx, Sprint and ADP to provide pre-negotiated offers on services that are essential to small businesses. In doing so we have enhanced what was already considered an attractive proposition to our small business customers.

At Optimum Lightpath, we reached the milestone in the fourth quarter by connecting to our 5,000th building. Revenue in the quarter was up 9.6% and AOCF increased 24% over the prior year period. Excluding the unusual items I referenced earlier, AOCF was up 12% versus the prior year period. Optimum West is making progress.

At year-end, digital penetration reached 77% of basic subs, high speed data subs as a percent of passings reached 40% and voice subs ended the year at 23% of passings. The average revenue per sub for the west properties was $134.60 in the fourth quarter, which as I mentioned, is up over $5 sequentially. So, we are seeing progress, but believe that there is potential for more top line growth as we continue to sell in more products to existing customers, as well as add new customers.

The AOCF margin for the west properties was 31.1% in the fourth quarter. As we have mentioned in the past, we are currently disputing a property tax assessment, but have to make certain protest payments in the meantime. We made a $5.5 million protest payment in the fourth quarter, which adversely affected our margins.

Capital spending for the west was $24 million in the quarter, as we purchased CPE to support our unit growth and extended a fiber ring, which now connects about 85% of our Optimum West customers. Cable capital spending in the fourth quarter was a $177 million including the Optimum West properties. For the full year, total cable capital spending was $654 million.

Embedded in our 2011 capital amounts are expenditures needed to pursue more and better products for our customers as well as a better customer experience. Certain of these expenditures are expected to continue into 2012, including the all digital rollout in the east, which is currently scheduled to be complete by this summer, the continuing rollout of DVR Plus, our broadband network augmentation project intended to enhance broadband speeds, which should be completed by the end of the first quarter.

And Jim mentioned our focus on Wi-Fi. We have the largest Wi-Fi network in the country with 35,000 locations throughout our footprint. Usages increased by over 300% in the past year and over 1 million devices have been registered through automatic sign in.

So, as Jim noted, 2012 will be a year of investment for Cablevision. I will reiterate that we are accelerating several capital projects and expect to see higher capital spending in 2012 than we incurred in 2011. And we expect that free cash flow will be lower in 2012 than what was generated in 2011.

Now, turning to the company’s financial position; free cash flow from continuing operations for the 12 months ended December 31, was $583 million and compares with the 2010 full year free cash flow of $536 million, an increase of 8.7%.

Free cash flow per share for the 12 months ended December 31, 2011 was $2.05, a 15% increase compared with free cash flow per share of $1.78 in the prior year period. At year end, the company’s consolidated cash position was $612 million and net debt was $10.1 billion. We have $1.35 billion undrawn and available under the $1.41 billion revolving credit facility at CSC Holdings.

In the fourth quarter we executed a number of successful financing transactions that continue to expand our debt maturity profile. First, we entered into an extended term loan A facility, which provided $600 million of term loans priced at LIBOR plus 200 basis points for the final maturity date of December 2016. The proceeds from the term loan A facility were used to make a voluntary prepayment of $339 million of the un-extended term loan A and B loans maturing during the 2012, 2013 timeframe.

We then issued $1 billion of 6.75% senior notes to 2021. Proceeds from this issuance were used to tender for approximately $682 million of CSC Holdings' senior notes due in 2012, 2014 and 2015. In addition to the tender transaction, we repurchased approximately $86 million of the 6.75% senior notes in an open market transaction.

In calculating our total Company leverage ratio, annual AOCF is determined using the latest quarter annualized. There are no exclusions for the items which I addressed earlier. As a result, at December 31, the Company's consolidated net leverage ratio was 4.1 times. Without the usual items, the consolidated ratio would have been approximately 4.5 times, which we consider to be a more representative measure of our total Company financial leverage. The CSC Holdings restricted group leverage ratio was 3.6 times.

At year end, Bresnan net debt was approximately $1 billion, $75 million undrawn and available on its revolving credit facility. The leverage ratio for the quarter were 6.9 times, down from the third quarter ratio of 7 times. We have mentioned in the past that our target leverage ratio for the total Company has been roughly 4.5 times going [a size] 5 times under certain circumstances.

As we look at our 2012 initiatives, coupled with higher programming costs, we do not anticipate AOCF growth in 2012. As a result at times we could see leverage in 2012 exceeding five times. While this is higher than our previous target, we are confident that we can manage our operations with this level of debt and will continue to monitor our debt levels closely.

The Cablevision NOL was $1.7 billion at December 31. We have taken advantage of the bonus depreciations provision in 2010 and 2011 and intend to do so again in 2012 to the extend we can, which lengthens the timing for our NOL utilization.

Turning to the company’s stock repurchase program, in the fourth quarter, we repurchased approximately 4.6 million shares of Cablevision stock, totaling $67.4 million. This represents approximately 2% of the company’s outstanding Class A shares. From inception of the program through the end of 2011, we have repurchased 31.7 million shares and our total outstanding Class A shares have decreased from $251 million to $220 million, or roughly 12.6%. At December 31, we had a $144 million remaining under our existing repurchase authorization. We currently expect to continue our repurchase program in the coming quarter.

Operator, we’d now like to open the call for questions.

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