Cablevision Cash Flow Rises 12% in Quarter


Woodbury, N.Y. -- Cablevision Systems Corp.'s
third-quarter adjusted operating cash flow rose 12 percent, led by cable operations,
commercial-telephony operations and programming networks, the company said.

Cablevision said cable and commercial telephony on Long
Island, N.Y., delivered 12 percent higher operating cash flow -- a combined $208 million,
from $197 million a year ago, on a pro forma basis.

Cable cash flow rose 11 percent, to $201 million. Cable
revenue rose a pro forma 10 percent, to $464.4 million, while basic subscribers grew a
strong 2.8 percent.

Cablevision said its "Optimum TV" tier added
41,000 subscribers in the quarter and 178,000 over the past year, and advertising revenue
rose 31 percent. Pay-per-view revenue rose 10 percent.

Cablevision shares dipped last Monday, after the results
were released. But by last Wednesday's close, the company's stock was up to
$47.63, up 6 percent from $44.75 the previous Friday.

Cablevision's average recurring revenue per subscriber
rose to $42.67 from $40.14 a year ago.

The company's operating-cash-flow margin (as a revenue
percentage) ticked up to 43.3 percent from 42.8 percent in the second quarter. But
analysts who participated in a conference call with company officials said the company
reported that it plans to accelerate capital spending, warning that this could squeeze
profit margins.

Cablevision promised costly rebuilds in Boston and parts of
New York City as part of recent franchise renewals, and the company plans to step up
rollouts of residential telephony and high-speed-data services.

Recently, some analysts have begun to warn investors that
MSO margins could get squeezed in 1999, as costs for programming and new-service
introductions rise, while basic rate increases are held in check. Those analysts expect
that situation to change in 2000, as new-service revenues become significant, while
capital expenditures shrink.

Cablevision's regional-sports-network assets,
including Madison Square Garden Network, generated $16.9 million in operating cash flow,
up 20 percent on a pro forma basis.

Combined cash flow at American Movie Classics and Bravo
rose 16 percent, to $18.3 million, while the cash-flow deficit for Rainbow Media Holdings
Inc.'s developing services rose to $18.8 million from $12.1 million.