Cablevision: We're on the Rebound


About six months into a major restructuring plan that the company said would
put it on the road to profitability, Cablevision Systems Corp. reported
fourth-quarter financial results showing that the strategy is working.

Last August, Cablevision announced restructuring moves aimed at lowering its
debt and addressing a perceived $500 million funding gap for 2003.

As part of the plan, the Bethpage, N.Y.-based MSO said it would reduce
capital spending, pare its work force by 1,300 people, close 26 of its The Wiz
electronics stores and look for strategic alternatives for its Northcoast
Communications and Clearview Cinemas assets.

In its fourth-quarter earnings release Tuesday, Cablevision showed that those
moves are largely done -- it has already closed the 26 Wiz stores and laid off
1,300 workers, has agreed to sell Northcoast to Verizon Wireless for $750
million and has hired J.P. Morgan Chase & Co. to shop Clearview.

In addition, the sale of its Bravo cable network to General Electric Co.'s
NBC television unit for $1.25 billion has gone toward paying down debt, now at
6.4 times adjusted operating cash flow.

Monday night, the company said it would either sell or shut down its
remaining 17 Wiz locations, which should further improve the bottom line.

"These steps, plus an outside equity investment, have ended concerns
regarding the company's liquidity position," Cablevision CEO James Dolan said in
a conference call with analysts.

In November, Cablevision announced that private equity firm Quadrangle
Capital Partners LP would invest $75 million in the company.

On the cable side, strong digital-cable-subscriber growth helped to fuel a 17
percent cash-flow increase to $234.5 million. Revenue was up 8 percent to $583.4

Cablevision added 136,000 digital customers, ending the period with 216,000
subscribers. Cablevision had expected to end the year with between 150,000 and
175,000 subscribers to its digital service, iO: Interactive Optimum.

High-speed-data customers rose by more than 90,000 in the quarter to 770,100

However, the MSO lost about 5,300 basic subscribers for the period, bringing
its total subscriber losses up to 45,000 for the year.

Cablevision president of the New York metropolitan area Tom Rutledge said on
the conference call that about 30,000 of those lost subscribers were due to the
MSO's refusal to carry Yankees Entertainment & Sports Network.

At its Rainbow Media Group networks -- which include AMC, The Independent
Film Channel, WE: Women's Entertainment and MuchMusic USA -- cash flow rose 64
percent and revenue was up 27 percent, mainly due to the addition of advertising
on AMC and WE in the period.

Dolan said the company's planned launch of a satellite for its
direct-broadcast satellite service, expected in March, would be delayed until
May. However, he added, Cablevision remains fully committed to launching the

Cablevision issued guidance for 2003, with cable revenue expected to increase
between 12 percent and 14 percent; cash-flow increases of between 18 percent and
20 percent; and capital expenditures to be about $725 million, or about $345
million less than in 2002.

Basic subscribers are expected to rise by 0.5 percent in 2003. Cablevision
also estimated that it would end 2003 with between 1 million and 1.05 million
high-speed-data customers and between 800,000 and 825,000 digital-cable

Cablevision stock fell 32 cents to $16.75 per share Tuesday.