CSC HOLDINGS INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 2001

OR

- --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to _______

Commission File Registrant; State of Incorporation; IRS Employer
Number Address and Telephone Number Identification No.
- ------ ---------------------------- ------------------
1-14764 Cablevision Systems Corporation 11-3415180
Delaware
1111 Stewart Avenue
Bethpage, NY 11714
(516) 803-2300

1-9046 CSC Holdings, Inc. 11-2776686
Delaware
1111 Stewart Avenue
Bethpage, NY 11714
(516) 803-2300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class: Name of each Exchange on
which Registered:
CABLEVISION SYSTEMS CORPORATION
Cablevision NY Group Class A Common Stock New York Stock Exchange
Rainbow Media Group Class A Common Stock New York Stock Exchange

CSC HOLDINGS, INC. None

Securities registered pursuant to Section 12(g) of the Act:

CABLEVISION SYSTEMS CORPORATION None
CSC HOLDINGS, INC. None

Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

Cablevision Systems Corporation Yes X No
----- -----
CSC Holdings, Inc. Yes X No
----- -----

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrants' knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. _______

Aggregate market value of voting stock held by nonaffiliates of Cablevision
Systems Corporation based on the closing price at which such stock was sold on
the New York Stock Exchange on March 15, 2002: $6,806,095,743.

Number of shares of common stock outstanding as of March 15, 2002:
Cablevision NY Group Class A Common Stock - 133,303,895
Cablevision NY Group Class B Common Stock - 42,145,986
Rainbow Media Group Class A Common Stock - 73,677,019
Rainbow Media Group Class B Common Stock - 21,072,993
CSC Holdings, Inc.Common Stock - 1,000

Documents incorporated by reference - The Registrants intend to file with the
Securities and Exchange Commission, not later than 120 days after the close of
their fiscal year, a definitive proxy statement or an amendment to this report
containing the information required to be disclosed under Part III of Form 10-K
under cover of Form 10-K/A.

TABLE OF CONTENTS

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* These items are omitted because the registrant intends to file with the
Securities and Exchange Commission, not later than 120 days after the close
of its fiscal year, a definitive proxy statement or an amendment to this
report containing the inforamtion required to be disclosed under Part III
of Form 10-K under cover of Form 10-K/A.

PART I

ITEM 1. BUSINESS.

This combined Annual Report on Form 10-K is separately filed by Cablevision
Systems Corporation and CSC Holdings, Inc.

CABLEVISION SYSTEMS CORPORATION

Cablevision Systems Corporation is a Delaware corporation which was organized in
1997. Cablevision's only asset is all of the outstanding common stock of CSC
Holdings.

CSC HOLDINGS

CSC Holdings is a Delaware corporation which was organized in 1985 and is one of
the largest cable operators in the United States. We also have investments in
cable programming networks, entertainment businesses and telecommunications
companies. As of December 31, 2001, we served about 3 million cable television
subscribers in and around the New York City metropolitan area, making us the
seventh largest cable operator in the United States based on the number of
subscribers. Through our 77.5% owned subsidiary, Rainbow Media Holdings, Inc.,
we own interests in and manage numerous national and regional programming
networks, the Madison Square Garden sports and entertainment business and cable
television advertising sales companies. Through Cablevision Lightpath, Inc., our
wholly-owned subsidiary, we provide switched telephone services and high-speed
Internet access to the business market. We also own or have interests in a
number of complementary businesses and companies that include The WIZ (a chain
of 43 consumer electronics stores), Clearview Cinemas (a chain of 59 movie
theaters) and Northcoast Communications, LLC (a wireless personal communications
services business).

TRACKING STOCK

In March 2001, we created and distributed to our stockholders one share of our
Rainbow Media Group tracking stock for every two outstanding shares of
Cablevision common stock and redesignated each share of Cablevision common stock
into one share of our Cablevision NY Group common stock. The Rainbow Media Group
Class A tracking stock trades on the New York Stock Exchange ("NYSE") under the
symbol "RMG" and the redesignated Cablevision NY Group Class A common stock
continues to trade on the NYSE under the symbol "CVC". The Rainbow Media Group
tracking stock is intended to reflect the separate economic performance of
certain of the businesses and interests of Rainbow Media Holdings, including its
national and selected regional programming assets. Cablevision NY Group common
stock is intended to reflect the performance of our assets and businesses not
attributed to the Rainbow Media Group.

When we refer in this Form 10-K to the Rainbow Media Group, we are referring to
the assets and businesses attributed to our Rainbow Media Group tracking stock,
and when we refer to the Cablevision NY Group, we are referring to the assets
and businesses attributed to our Cablevision NY Group common stock.

The following businesses and interests owned by Cablevision have been attributed
to Cablevision NY Group:

- the cable television business, including the residential telephone and
high-speed modem businesses,
- the commercial telephone and internet operations of Lightpath,
- the New York metropolitan area sports and entertainment business,
including Madison Square Garden, professional sports teams, Radio City
Music Hall, MSG Network and Fox Sports Net New York,
- the electronics retail operations of Cablevision Electronics
Investments, Inc., doing business as The WIZ,
- the motion picture theater business of CCG Holdings, Inc., doing
business as Clearview Cinemas,
- the MetroChannels, which feature local sports, news, educational and
other programming in the New York City metropolitan area,
- News12 Networks, a regional news business in the New York City
metropolitan area,
- the advertising sales representation business,
- the common stock of Charter Communications, Inc. received in September
2000 upon the sale of the Kalamazoo, Michigan cable television systems,
- the common stock of Adelphia Communications Corporation received in
November 2000 upon the sale of the cable television systems in the
greater Cleveland, Ohio metropolitan area,
- the common stock of AT&T Corp. received in January 2001 upon the sale of
cable television systems in Boston and eastern Massachusetts and the
AT&T Wireless Services, Inc. common stock received in July 2001 in a
stock distribution by AT&T,
- the interest in certain direct broadcast satellite assets, and
- the interest in Northcoast Communications, a wireless personal
communications services business.

We have a 77.5% interest in Rainbow Media Holdings. National Broadcasting
Company, Inc. ("NBC") currently owns 22.5% interest in Rainbow Media Holdings.
Certain of Rainbow Media Holdings' national programming assets and investments
are attributed to Rainbow Media Group and include:

- Rainbow Media Holdings' ownership interest in five nationally
distributed 24-hour entertainment programming networks:
- American Movie Classics (80%),
- Bravo (80%),
- The Independent Film Channel (80%),
- WE: Women's Entertainment (80%), and
- MuchMusic USA (100%),
- Rainbow Media Holdings' 60% ownership interest in the following regional
sports networks owned by Regional Programming Partners, both of which
Rainbow Media Holdings manages under the Fox Sports Net name:
- Fox Sports Net Florida, and
- Fox Sports Net Ohio,

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- Rainbow Media Holdings' 30% ownership interest in the following regional
sports networks owned by Regional Programming Partners, all of which
Rainbow Media Holdings manages under the Fox Sports Net name:
- Fox Sports Net Chicago,
- Fox Sports Net Bay Area, and
- Fox Sports Net New England,
- Rainbow Media Holdings' 50% ownership interest in National Sports
Partners, which owns and distributes Fox Sports Net,
- Rainbow Media Holdings' 50% ownership interest in National Advertising
Partners, which provides national advertising representation services to
all of the Fox Sports Net regional sports networks,
- Rainbow Network Communications, a full service network programming
origination and distribution company, and
- Sterling Digital LLC, which operates Mag Rack, is a company designed to
develop new niche audience programming.

See discussion below under "Arrangements with NBC" for our agreement with NBC to
permit NBC to exchange its interest in Rainbow Media Holdings for Rainbow Media
Group tracking stock.

THE HOLDING COMPANY REORGANIZATION AND TELE-COMMUNICATIONS TRANSACTIONS

Until March 4, 1998, CSC Holdings was known as Cablevision Systems Corporation.
On that date, CSC Holdings completed a holding company reorganization whereby it
formed a holding company (now named Cablevision Systems Corporation) and CSC
Holdings became a subsidiary of Cablevision Systems Corporation.

In the 1998 holding company reorganization, the Class A common stock and Class B
common stock of CSC Holdings were converted into identical securities of
Cablevision and the Class A common stock of Cablevision became listed on the
American Stock Exchange and traded under the symbol "CVC". On December 7, 1999,
Cablevision's Class A common stock began trading on the NYSE. Cablevision owns
all of the common stock of CSC Holdings.

TELE-COMMUNICATIONS TRANSACTIONS

On March 4, 1998, Cablevision completed transactions with Tele-Communications,
Inc. pursuant to which Cablevision acquired the Tele-Communications cable
television systems located in New Jersey, on Long Island and in New York's
Rockland, Westchester and Orange counties. Cablevision issued to certain
Tele-Communications entities an aggregate of 48,942,172 shares of Cablevision's
Class A common stock. In addition, Cablevision assumed certain related
liabilities, including an aggregate amount of indebtedness for borrowed money
equal to $669 million. The assumed debt was refinanced immediately following the
closing of the transactions with borrowings under an $800 million bridge
revolving credit facility entered into by wholly-owned subsidiaries of
Cablevision that were acquired from Tele-Communications or that hold assets
contributed by Tele-Communications. These subsidiaries were wholly-owned
(directly or indirectly) by Cablevision until April 1999 when Cablevision
contributed these entities to CSC Holdings.

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On March 9, 1999, Tele-Communications merged with a subsidiary of AT&T and
became a wholly-owned subsidiary of AT&T.

CABLE TELEVISION, MODEM AND TELEPHONY OPERATIONS

OUR CABLE TELEVISION, MODEM AND TELEPHONY OPERATIONS ARE WHOLLY ATTRIBUTED TO
CABLEVISION NY GROUP.

GENERAL

Cable television is a service that delivers multiple channels of television
programming to subscribers who pay a monthly fee for the services they receive.
Television signals are received over-the-air 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 governmental authorities for specified periods of time.

Our cable television systems offer varying levels of service which may include,
among other programming, local broadcast network affiliates and independent
television stations, certain other news, information and entertainment channels
such as CNN, CNBC, ESPN, and MTV, and certain premium services such as HBO,
Showtime, The Movie Channel, Starz and Cinemax.

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, from the sale of advertising
time on advertiser supported programming and from installation charges. Certain
services and equipment provided by substantially all of our cable television
systems are subject to regulation.

As of December 31, 2001, our cable television systems served approximately
3,008,000 subscribers, primarily in and around the New York City metropolitan
area. See "Cable Television System Sales" below.

The following table sets forth certain statistical data regarding our cable
television and high-speed Internet access operations as of the dates indicated.

(4)

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(1) Homes passed is based upon homes actually marketed and does not include
multiple dwelling units passed by the cable plant that are not connected to
it.
(2) Based on recurring service revenues for the last month of the period,
excluding installation charges and certain other non-recurring revenues
such as pay-per-view, advertising and home shopping revenues. See
"Subscriber Rates and Services; Marketing and Sales."
(3) Homes released are homes in areas that can be serviced by our high-speed
cable modem service. Homes in additional areas are being released as we
complete our cable plant upgrade and add other necessary equipment to
support the high-speed cable modem business in those new areas. Homes
released do not include multiple dwelling units passed by the cable plant
that are not connected to it.

The Company's cable television systems are concentrated in and around the New
York City metropolitan area. We believe that these systems comprise the largest
metropolitan cluster of cable television systems under common ownership in the
United States (measured by number of subscribers).

SUBSCRIBER RATES AND SERVICES; MARKETING AND SALES.

Our cable television systems offer a package of services, generally marketed as
"Family Cable", which includes, among other programming, broadcast network local
affiliates and independent television stations and certain other news,
information and entertainment channels such as CNN, CNBC, ESPN and MTV. For
additional charges, our cable television systems provide certain premium
services such as HBO, Showtime, The Movie Channel, Starz and Cinemax, which may
be purchased either individually or in combinations or in tiers.

In addition, our cable television systems offer a basic package which includes
broadcast network local affiliates and public, educational or governmental
channels and certain leased access channels.

We have a branded product offering called "Optimum TV", which packages all of
the premium networks available on our cable television systems at discounted
prices. Optimum TV includes the Family and basic services noted above, as well
as all of the premium a la carte programming available on the cable system,
grouped into three premium packages. Optimum TV also includes additional
pay-per-view channels that offer movies and sporting events on a transactional
basis.

In other areas, we offer premium services on an individual basis and as
components of different "tiers". Successive tiers include additional premium
services for additional charges that reflect

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discounts from the charges for such services if purchased individually. For
example, in most of our cable television systems, subscribers may elect to
purchase Family Cable plus one, two or three premium services with declining
incremental costs for each successive tier.

We began the rollout of our digital cable service, branded "iO, Interactive
Optimum", in September 2001. The digital cable services initially offered to
subscribers include a mix of additional cable television programming,
interactive services and multiple channels of commercial-free digital music as
well as enhanced picture quality and CD quality sound. Digital cable programming
and services include:

- additional expanded cable channels only available to digital
subscribers,
- additional channels including multiple channels ("multiplexes") of
HBO, Showtime and other premium services,
- access to video on demand and subscription video on demand
programming for all digital customers,
- Mag Rack, "magazine rack" channels offering content for niche
audiences, and
- interactive services including news, sports, weather, traffic,
email and MSG Game Director, which allows subscribers to select
camera angles to watch New York Knicks and New York Rangers home
games.

Interactive Optimum was initially launched in certain parts of our cable system
in Nassau County and western Suffolk County, New York.

Since our existing cable television systems are substantially fully built, our
sales efforts are primarily directed toward increasing penetration and revenues
in our franchise areas. We market our cable television services through
in-person selling, as well as telemarketing, direct mail advertising,
promotional campaigns and local media and newspaper advertising.

Certain services and equipment (converters supplied to subscribers) provided by
substantially all of our cable television systems are subject to regulation. See
"Regulation - Cable Television."

SYSTEM CAPACITY.

We are engaged in an ongoing effort to upgrade the technical capabilities of our
cable plant and to increase channel capacity for the delivery of additional
programming and new services. Our cable television systems have a minimum
capacity of 42 channels. Currently 97% of our homes are served by at least 77
channels and 84% of the total plant is 750 MHz capable two-way interactive. As a
result of ongoing upgrades, we expect that by December 2002 approximately 98% of
our subscribers will be served by systems having a capacity of at least 77
channels and 95% of the total plant will be 750 MHz capable two-way interactive.
All of the system upgrades either completed or underway will utilize fiber optic
cable.

PROGRAMMING.

Adequate programming is available to the cable television systems from a variety
of sources, including that available from Rainbow Media Holdings and affiliates
of Fox Entertainment Group, Inc. Program suppliers' compensation is typically a
fixed, per subscriber monthly fee based, in most cases, either on the total
number of subscribers of the cable television systems and

(6)

certain of its affiliates, 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. We believe that the
cable television systems will continue to have access to programming services at
reasonable price levels.

FRANCHISES.

The cable television systems are operated primarily in New York, New Jersey and
Connecticut under non-exclusive franchise agreements with state or municipal
franchising authorities. Franchise authorities generally charge a franchise fee
of up to 5% of certain of our revenues that are derived from the operation of
the system within such locality. As permitted by law, these fees are generally
collected from subscribers and remitted to the local franchising authority.

Franchise agreements are usually for a term of ten to fifteen years from the
date of grant, although some renewals have been for shorter terms, generally
between five and ten years in length. Some of the franchises grant us an option
to renew upon expiration of the initial term. Seven of our ten largest
franchises expire between 2007 and 2010. Of the other three, one has expired,
one expires in 2002 and one expires in 2003.

In situations where franchises have expired or not been renewed, we operate
under temporary authority granted by the state cable television regulatory
agencies, while negotiating renewal terms with franchising authorities. The
Cable Communications Policy Act of 1984 and the Cable Television Consumer
Protection and Competition Act of 1992 provide significant procedural
protections for cable operators seeking renewal of their franchises. See
"Regulation - Cable Television." In connection with a renewal, a franchise
authority may impose different and more stringent terms. We are currently
operating under temporary authority in one of our ten largest franchises.

Franchises usually require the consent of franchising authorities prior to the
sale, assignment, transfer or change in ownership or control. Federal law
generally provides localities with 120 days to consider such requests.

CABLE TELEVISION SYSTEM SALES

In September 2000, we completed the sale of our cable television system serving
Kalamazoo, Michigan (which served approximately 49,500 subscribers on the
closing date) to Charter Communications in exchange for 11,173,376 shares of
Charter Communications common stock valued at approximately $165.5 million at
closing.

In November 2000, we completed the sale of our cable television systems in the
greater Cleveland, Ohio metropolitan area (which served approximately 312,700
subscribers on the closing date) to Adelphia Communications for total
consideration of $1.35 billion ($991 million in cash and 10,800,000 shares of
Adelphia Communications Class A common stock valued at approximately $359.1
million at closing).

In January 2001, we completed the sale of our cable television systems in Boston
and eastern Massachusetts (which served approximately 362,000 subscribers on the
closing date) to AT&T

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in exchange for AT&T's cable television systems in certain northern New York
suburbs (which served approximately 130,000 subscribers on the closing date),
44,260,932 shares of AT&T stock valued at approximately $893.5 million at
closing and approximately $289.9 million in cash.

CABLE MODEM SERVICES

OUR CABLE MODEM OPERATIONS ARE ATTRIBUTED TO THE CABLEVISION NY GROUP.

We provide residential high-speed cable modem Internet access in portions of the
greater New York City metropolitan area and parts of southern Connecticut.
High-speed Internet access is provided to customers through a cable modem device
that we sell, either directly or through 28 of our The WIZ stores, to customers
who agree to subscribe to the service for a specified period.

The high-speed cable modem Internet access service, marketed as "Optimum
Online", served approximately 506,700 cable modem subscribers at December 31,
2001 for an overall penetration rate of 17% of homes released. Homes released
are homes that can be serviced by our high-speed cable modem service. We believe
that our cable modem penetration has been driven, in part, by a large number of
customers installing the necessary equipment without the need for a service
call. Cable modems sold through our The WIZ stores include a self-installation
kit that is designed to enable customers to install the cable modem without the
need for a service call.

TELEPHONY

OUR TELEPHONY OPERATIONS ARE ATTRIBUTED TO THE CABLEVISION NY GROUP.

Through Lightpath, a competitive local exchange carrier, we provide basic and
advanced local telecommunications services to the business market in portions of
the greater New York City metropolitan area. Lightpath provides a full range of
local dial tone, switched services, private line and advanced networking
features on the local and long distance levels on its own facilities and
network. As of December 31, 2001, Lightpath serviced over 1,240 buildings with
approximately 122,100 access lines.

As of December 31, 2001, we also provided residential telephone services to
approximately 13,400 subscribers in Long Island, New York and parts of southern
Connecticut.

THE WIZ

OUR RETAIL ELECTRONICS OPERATIONS ARE ATTRIBUTED TO CABLEVISION NY GROUP.

The WIZ is an electronics retailer selling primarily video and audio equipment,
home office equipment, compact disks and other pre-recorded music, digital video
disks, and VHS video and other pre-recorded movies. Our The WIZ stores provide
us with venues to sell cable modems for our Optimum Online service, and we
expect to distribute digital cable boxes for our iO, Interactive Optimum digital
cable service through The WIZ stores in the future. Distribution of the
hardware for these services through The WIZ stores is designed to encourage
sales by providing a convenient means of previewing and subscribing to the
services. The WIZ currently has 43 stores in the New York City metropolitan
area.

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THEATERS

OUR THEATER OPERATIONS ARE ATTRIBUTED TO CABLEVISION NY GROUP.

Clearview Cinemas operates 59 motion picture theaters containing 279 screens in
the New York metropolitan area. The theaters were acquired in December 1998
through 1999, as a result of the acquisition of all of the outstanding shares of
stock of Clearview Cinema Group, Inc. and the acquisition of certain theaters
from Loews Cineplex Entertainment Corporation.

PERSONAL COMMUNICATIONS SERVICE

OUR INVESTMENT IN PERSONAL COMMUNICATION SERVICE LICENSES IS ATTRIBUTED TO
CABLEVISION NY GROUP.

CSC Holdings holds a 49.9% interest, and certain preferential distribution
rights, in Northcoast Communications. Northcoast Communications holds certain
licenses to conduct a personal communications service business. CSC Holdings has
contributed an aggregate of approximately $152.8 million as of December 31, 2001
to Northcoast Communications (either directly or through loans to Northcoast
PCS, LLC, the other member in Northcoast Communications). See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Related Party Transactions."

OTHER INVESTMENTS

OUR INVESTMENT IN R/L DBS COMPANY IS ATTRIBUTED TO CABLEVISION NY GROUP.

In March 2002, Rainbow Media Holdings acquired Loral Space and Communications,
Ltd.'s 50% interest in R/L DBS Company LLC for a purchase price of up to a
present value of $33 million payable only from revenues of R/L DBS' business, if
any, or from any future sale of all or part of the interests in or assets of R/L
DBS. This purchase increased Rainbow Media Holdings' ownership of R/L DBS to
100%.

R/L DBS holds certain frequencies granted by the Federal Communications
Commission ("FCC") for the operation of a direct broadcast satellite business.
CSC Holdings has contributed an aggregate of approximately $117.1 million
through December 31, 2001 to R/L DBS or its predecessor businesses either
directly or through loans to R/L DBS.

In December 2000, the FCC granted an extension to R/L DBS' construction permit
relating to the direct broadcast satellite frequencies held by R/L DBS. The
extension requires the launch of a satellite by March 29, 2003 and commencement
of service offerings by not later than December 29, 2003, with specified six
month interim construction milestones, non-compliance with which would result in
the forfeiture of the construction permit. R/L DBS has entered into an agreement
with a satellite manufacturer for the construction of a satellite scheduled to
be launched in March 2003. The contract with the manufacturer permits R/L DBS to
terminate the contract at its option prior to May 2003 and receive a refund of a
portion of amounts paid through the date of such termination.

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OTHER ASSETS

OUR INVESTMENT IN EQUITY SECURITIES IS ATTRIBUTED TO CABLEVISION NY GROUP.

We own 11,173,376 shares of Charter Communications common stock, 10,800,000
shares of Adelphia Communications class A common stock, 44,260,932 shares of
AT&T common stock and 14,243,166 shares of AT&T Wireless Services common stock
acquired in connection with the sale of certain cable television systems, all of
which shares have been monetized under collateralized prepaid forward contracts.
See "Cable Television System Sales".

In addition, we own warrants to acquire 20,462,596 shares of common stock of At
Home Corporation for $0.25 per share. These warrants were issued to us in
exchange for certain agreements by us with respect to the distribution of the At
Home internet access service to cable subscribers. On September 28, 2001, At
Home filed a petition for reorganization in federal bankruptcy court. On January
8, 2002, At Home terminated its At Home service to all of Cablevision's
Optimum@Home subscribers. In a letter dated January 9, 2002, Cablevision advised
At Home that such termination of service constituted an election by At Home to
terminate the existing master distribution agreement entered into by and between
Cablevision and At Home and all other related agreements.

In 2001 and 2000, we recorded an asset impairment write-down of $108.5 million
and $139.7 million, respectively, related to these warrants which reduced the
carrying value to zero.

PROGRAMMING AND ENTERTAINMENT OPERATIONS

WE ATTRIBUTE CERTAIN PROGRAMMING AND ENTERTAINMENT OPERATIONS TO CABLEVISION NY
GROUP AND OTHERS TO RAINBOW MEDIA GROUP (SEE "TRACKING STOCK" ABOVE).

GENERAL.

We conduct our programming activities through Rainbow Media Holdings, a company
currently 77.5% owned by CSC Holdings and 22.5% by NBC - Rainbow Holdings, Inc.,
a subsidiary of NBC.

Rainbow Media Holdings' businesses include national and regional programming
networks and the Madison Square Garden sports and entertainment business.
Rainbow Media Holdings also owns interests in cable television advertising
businesses.

Rainbow Media Holdings' national entertainment programming networks include
American Movie Classics, Bravo, WE: Women's Entertainment, MuchMusic USA and The
Independent Film Channel.

In April 2001, Metro-Goldwyn-Mayer Inc. ("MGM") acquired a 20% interest in four
programming services of Rainbow Media Holdings (American Movie Classics, Bravo,
The Independent Film Channel, and WE: Women's Entertainment) for $825 million in
cash.

Rainbow Media Holdings owns a 60% interest in, and manages, Regional Programming
Partners, a partnership with Fox Sports Networks, LLC. Regional Programming
Partners owns Madison Square Garden, a sports and entertainment company that
owns and operates the

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Madison Square Garden Arena and the adjoining Theater at Madison Square Garden,
the New York Knickerbockers professional basketball team, the New York Rangers
professional hockey team, the New York Liberty professional women's basketball
team, the Hartford Wolf Pack professional hockey team, the Madison Square Garden
Network, Fox Sports Net New York and Radio City Entertainment (which operates
Radio City Music Hall in New York City). Additionally, Madison Square Garden
manages and operates the Hartford Civic Center in Connecticut. Regional
Programming Partners also owns interests in regional sports networks that
provide regional sports programming to the New England, Chicago, Cincinnati,
Cleveland, San Francisco and Florida areas, in addition to Madison Square Garden
Network and Fox Sports Net New York which provide regional sports programming to
the New York City metropolitan area, as well as MetroChannels which provide
regional and local sports, news, educational and other programming to the New
York metropolitan area. All of the New York area assets are attributed to the
Cablevision NY Group.

National Sports Partners is a national sports network featuring Fox Sports Net,
which provides national sports programming to regional sports networks. National
Sports Partners is 50% owned by Rainbow Media Holdings and is managed and 50%
owned by Fox Sports Networks.

Rainbow Media Holdings owns Rainbow News 12 which operates regional news
networks servicing suburban areas surrounding New York City. Rainbow Media
Holdings also owns and operates Rainbow Advertising Sales Corporation, a cable
television advertising company, and owns a 50% interest in National Advertising
Partners, which sells national advertising for regional sports networks and is
managed and 50% owned by Fox Sports Networks.

The following table sets forth ownership information and estimated subscriber
information as of December 31, 2001 for each of the programming and related
businesses whose ownership interest is held directly or indirectly by Rainbow
Media Holdings. Regional Programming Partners is a 60% owned subsidiary of
Rainbow Media Holdings, with the remaining 40% interest owned by Fox Sports
Networks. See "Arrangements with NBC" below for a summary of NBC's agreement to
exchange its interest in Rainbow Media Holdings for Rainbow Media Group tracking
stock.

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- ----------
(1) Represents the number of subscribers to distributors' systems that receive
the referenced programming network.
(2) Represents the total number of basic subscribers available in systems that
carry the service.
(3) Various of these programming businesses, other than those which are
wholly-owned by Rainbow Media Holdings, are subject to puts, calls, rights
of first refusal and restrictions on transfer.
(4) Rainbow Media Holdings' ownership interest increased to 100% in March 2002.
See "Other Investments" above.

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NATIONAL ENTERTAINMENT PROGRAMMING NETWORKS

The following nationally distributed entertainment networks which acquire,
produce and license programming throughout the United States are attributed to
Rainbow Media Group.

AMERICAN MOVIE CLASSICS

American Movie Classics is a 24-hour movie network featuring classic films and
award-winning original productions about the world of American film. The service
offers background information, lifestyle programming and entertainment about the
world of Hollywood.

American Movie Classics is available on cable television and other distribution
platforms such as direct broadcast satellite. It is carried on basic or expanded
basic tiers for which subscribers do not have to pay a premium to receive the
network. Affiliate revenues, which in 2001 accounted for about 90% of American
Movie Classics' revenues, are based on fees paid by the distributors for the
right to carry the programming.

Distributors generally pay the network according to the number of subscribers
actually receiving American Movie Classics. The network generally enters into
five- to seven-year distribution contracts with its distributors. American Movie
Classics' top nine affiliation agreements with multiple system operators ("MSO")
cover 90% of American Movie Classics' total viewing subscribers and affiliation
agreements covering 7% of those MSOs' subscribers expire prior to the end of
2002. There can be no assurances that these affiliation agreements will be
renewed on similar terms or at all.

American Movie Classics' film library consists of films that are licensed from
major studios such as Columbia TriStar, Twentieth Century Fox, Paramount, Warner
Brothers, Universal, MGM/UA and RKO under long-term contracts. American Movie
Classics has adequate product to program the channel fully through 2004.
American Movie Classics generally structures its contracts for the exclusive
cable television right to carry the films during identified windows.

BRAVO

Bravo premiered in December 1980 as the first national cable network for the
performing arts. Bravo features films and performing arts programming including
jazz, classical music, ballet, opera, dance, theatrical performances, and
original programs on the arts as well as original and licensed television
series.

Bravo is generally carried as part of the basic or expanded basic service where
subscribers do not have to pay a premium fee to receive the network. Affiliate
revenues, which accounted for approximately 58% of total revenues in 2001, are
based on fees paid by the distributors for the right to carry the programming.
Distributors generally pay the network according to the number of subscribers
actually receiving Bravo. Bravo generally enters into five- to ten-year
distribution contracts with its distributors. Bravo's top nine affiliation
agreements with MSOs cover 88% of Bravo's total viewing subscribers and
affiliation agreements covering 9% of those MSOs' subscribers expire prior to
the end of 2002. There can be no assurances that these affiliation agreements
will be renewed on similar terms or at all.

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Bravo's program library consists of films, series and other productions that are
licensed from major studios such as Universal, Disney, Twentieth Century Fox,
Paramount, Sony and Warner Bros. and smaller studios such as Artisan, New Line,
USA, Lion's Gate and Miramax under long-term contracts, in addition to Bravo's
original productions. Bravo has adequate product to program the channel fully
through 2005. Bravo generally structures its contracts for the exclusive cable
television rights to carry the programs during identified window periods.

Beginning in 1998, Bravo launched a traditional format of advertising with
commercial program interruptions and the utilization of Nielsen ratings to gauge
viewership. Advertising revenue represented about 39% of Bravo's revenues for
2001.

THE INDEPENDENT FILM CHANNEL

The Independent Film Channel was launched in 1994 and is the first network
dedicated to independent films and related features and programming. It presents
feature-length films (domestically and internationally produced), documentaries,
shorts, animation, new works, "cult classics" and originally produced programs
which chronicle independent film trends. The Independent Film Channel has
adequate product to program the channel fully through 2005.

The Independent Film Channel's top nine affiliation agreements with MSOs cover
93% of The Independent Film Channel's total viewing subscribers and affiliation
agreements covering 23% of those MSOs' subscribers expire prior to the end of
2002. There can be no assurances that these affiliation agreements will be
renewed on similar terms or at all.

WE: WOMEN'S ENTERTAINMENT

Launched in 1997 as Romance Classics, WE: Women's Entertainment is a 24-hour
entertainment service for women. It is designed to be "time-out TV" to help
women disconnect from the stresses of the everyday world and reconnect with
themselves. WE: Women's Entertainment features recent hit movies, original
biographies of inspiring women and lifestyle programs on subjects like travel,
beauty, home, entertaining and relationships.

WE: Women's Entertainment's top nine affiliation agreements with MSOs cover 92%
of WE: Women's Entertainment's total viewing subscribers and affiliation
agreements covering 16% of those MSOs' subscribers expire prior to the end of
2002. There can be no assurances that these affiliation agreements will be
renewed on similar terms or at all.

WE: Women's Entertainment has licensed exclusive film titles to supplement its
slate of original programming, providing adequate product volume through 2005.
Exclusive deals have been concluded with major Hollywood studios such as
Twentieth Century Fox, Universal and Columbia as well as independents such as
Castle Hill and Artisan.

MUCHMUSIC USA

MuchMusic USA is a 24-hour, all-music entertainment programming network which
was launched in the United States in July 1994 and currently features a lineup
of music videos, concerts, interviews and drop-in performances of established
and new artists in a mix of U.S. produced programming and the MuchMusic
programming feed produced by Chum Limited, a

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Canadian programmer. A license agreement with Chum Limited allows MuchMusic USA
to use all or part of the MuchMusic programming.

MuchMusic's top nine affiliation agreements with MSOs cover 96% of MuchMusic's
total viewing subscribers and affiliation agreements covering 16% of those MSOs'
subscribers expire prior to the end of 2002. There can be no assurances that
these affiliation agreements will be renewed on similar terms or at all.

REGIONAL SPORTS NETWORKS - attributed to Rainbow Media Group

Rainbow Media Holdings has a 60% interest in two regional sports networks, in
Ohio and Florida, operating under the Fox Sports Net name and has a 30% interest
in three other regional sports networks, in Chicago, New England and the Bay
Area, also operating under the Fox Sports Net name. Rainbow Media Holdings
manages each of these regional sports networks, which are distributed in their
respective region in the United States through cable television as well as
through direct broadcast satellite and TVRO distributors.

NATIONAL SPORTS PARTNERS - attributed to Rainbow Media Group

Fox Sports Net is distributed by National Sports Partners, a 50%/50% partnership
between Rainbow Media Holdings and Fox Sports Networks that was formed in
December 1997 and is managed by Fox Sports Networks. Fox Sports Net was launched
during January 1998 and links 22 regional sports networks under the Fox Sports
Net name, including the five Fox Sports Net networks in which Rainbow Media
Holdings owns an interest described above, and delivers local, regional and
national sports programming.

OTHER SERVICES - attributed to Rainbow Media Group

NATIONAL ADVERTISING PARTNERS

National Advertising Partners is a 50%/50% partnership between Rainbow Media
Holdings and Fox Sports Networks that was formed in December 1997 and began
operations under the management of Fox Sports Networks in January 1998. National
Advertising Partners provides national advertising representation services for
Fox Sports Net and the Fox Sports Net regional programming networks, offering
advertisers access to millions of sports fans in the nation's top television
markets and covering most of the Major League Baseball, National Basketball
Association and National Hockey League teams.

RAINBOW NETWORK COMMUNICATIONS

Rainbow Network Communications, which is wholly-owned by Rainbow Media Holdings,
is a full service network programming origination and distribution company. Its
services include origination, transmission, video engineering, uplinking,
encryption, affiliate engineering, technology consulting, transponder
negotiation, content ordering, quality control and editing.

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STERLING DIGITAL LLC

Sterling Digital LLC, which operates Mag Rack, is designed to develop new niche
audience programming to be distributed and marketed using new media platforms.
Our iO, Interactive Optimum digital cable service includes Mag Rack.

ARRANGEMENTS WITH NBC

Through March 31, 2002, NBC has exchanged 3.5% of its interest in Rainbow
Media Holdings for 7,674,940 shares of Rainbow Media Group Class A tracking
stock. As a result, NBC currently owns 22.5% of the equity securities of Rainbow
Media Holdings. We own the remaining 77.5% of Rainbow Media Holdings.

In connection with the distribution of the Rainbow Media Group tracking stock,
NBC was given the right to exchange its 26% interest in Rainbow Media Holdings
common stock (at the date of the tracking stock distribution) over a period of
up to 9 years for approximately 44.7 million shares of Rainbow Media Group
tracking stock ( a 34% interest), based on the number of shares of Rainbow Media
Group tracking stock outstanding on the date of the tracking stock distribution.
NBC's exchange occurs on a deferred basis in the following steps:

- First, we effected a recapitalization of Rainbow Media Holdings and
created a new class of Rainbow Media Holdings preferred stock which is
held by us that is entitled to receive any and all dividends and
distributions on, and carries a liquidation preference with respect to,
Cablevision NY Group businesses and interests owned by Rainbow Media
Holdings. NBC converted all of its Rainbow Media Holdings common stock
into Rainbow Media Holdings Class A common stock and has the right to
exchange its Rainbow Media Holdings Class A common stock, representing
26% of the outstanding equity securities of Rainbow Media Holdings (at
the date of the tracking stock distribution), for 34% of the Rainbow
Media Group Class A tracking stock.
- Second, NBC may exchange each share of Rainbow Media Holdings common
stock held by it for approximately 16,868 shares of Rainbow Media Group
Class A tracking stock, for an aggregate of approximately 44.7 million
shares. NBC can make this exchange, in whole or in part, at its
election, each calendar quarter prior to December 31, 2009, and any
shares not exchanged prior to December 31, 2009 will be exchanged then.
Through March 31, 2002, NBC exchanged 3.5% of its interest in Rainbow
Media Holdings for 7,674,940 shares of Rainbow Media Group Class A
tracking stock.
- NBC agreed not to transfer any shares of Rainbow Media Group tracking
stock received upon an exchange for Rainbow Media Holdings common stock
(other than to other wholly-owned subsidiaries of NBC) until March 29,
2002. After March 29, 2002, NBC is entitled to transfer any shares of
Rainbow Media Group tracking stock subject to certain limitations.
- NBC has demand registration rights with respect to shares of its Rainbow
Media Group Class A tracking stock.

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SALES OF CABLEVISION COMMON STOCK BY AT&T

In October 2001, AT&T sold 19,151,285 shares of the Cablevision NY Group Class A
common stock it held under a registration statement filed by Cablevision with
the Securities and Exchange Commission, and concurrently with that sale,
subsidiaries of AT&T, through a trust, sold 26,918,195 units of a mandatorily
exchangeable trust security exchangeable into 26,918,195 shares of Cablevision
NY Group Class A common stock on or after November 15, 2004. Until termination
of the trust, AT&T will continue to beneficially own and vote the shares. AT&T
has agreed not to engage in any additional transactions relating to its
remaining 2,872,692 shares of Cablevision NY Group Class A common stock until
April 21, 2002.

In December 2001, AT&T sold 14,679,750 shares of the Rainbow Media Group Class A
common stock it held under a registration statement filed by Cablevision with
the Securities and Exchange Commission, and concurrently with that sale,
subsidiaries of AT&T, through a trust, sold 9,791,336 units of a mandatorily
exchangeable trust security exchangeable into 9,791,336 shares of Rainbow Media
Group Class A common stock on or after February 15, 2005. Until termination of
the trust, AT&T will continue to beneficially own and vote these shares.

Subsidiaries of AT&T have certain rights and obligations relating to Cablevision
under Cablevision's stockholders agreement with AT&T, including registration
rights. Upon the sale by AT&T of its shares of Cablevision NY Group Class A
common stock as described above, the Stockholders Agreement ceased to be
effective and will remain ineffective unless AT&T retains ownership of 5% or
more of the shares of Cablevision NY Group Class A common stock upon termination
of the trusts. Cablevision understands that AT&T has the right to cash settle
the prepaid forward contracts under which the trusts agreed to purchase
26,918,195 shares of Cablevision NY Group Class A common stock and 9,791,336
shares of Rainbow Media Group Class A common stock. In that event, if certain
conditions are satisfied, AT&T will continue to own those shares and may have
certain registration rights with respect to those shares under the stockholders
agreement.

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COMPETITION

CABLE TELEVISION

Our cable television systems compete with a variety of other television
programming delivery systems. The extent of our competition from broadcasters
depends upon the number and quality of the broadcast television signals
available to homes within our market by over-the-air reception, as compared to
the number and quality of signals distributed by our cable systems.

The primary competitor to our cable television systems is direct broadcast
satellite (DBS). DBS systems permit satellite transmissions from the low-power
C-Band or the higher power Ku-Band to be received by a dish antenna at the
viewer's home. Two DBS systems, EchoStar and DirecTV, are now available to our
customers. Their application to merge is being reviewed by the Department of
Justice and the FCC. The federal copyright laws now permit DBS systems to
retransmit local broadcast television signals to their customers. This has
enhanced the competitive position of DBS.

A telephone company may now, due to the Telecommunications Act of 1996, become a
cable system operator, fully subject to the franchising, rate and other federal
regulations applied to a cable system. Or it can operate an "open video system,"
(OVS) subject only to selected portions of the federal regulations applicable to
our cable systems. A post-1996 court decision, however, restored certain local
municipal franchising powers over OVS, making it a less attractive alternative
to cable's competitors. Companies have sought OVS status in areas in which our
cable television systems operate in New York City, Westchester County, and
northern New Jersey. One, RCN Corporation, is currently operating both OVS and
franchised cable television systems that compete with us in portions of New York
City and New Jersey.

Multichannel multipoint distribution services ("MMDS") also compete with us.
MMDS deliver television programming over microwave super-high frequency channels
received by subscribers with a special antenna. An MMDS operator is not required
to obtain a municipal franchise, and is subject to fewer FCC regulatory
requirements than are our cable systems.

Satellite master antenna ("SMATV") systems, like MMDS, generally serve large
multiple dwelling units under an agreement with the landlord. The FCC has
preempted all state and local regulation of SMATV. The statutory definition of a
cable system excludes facilities that do not use public rights-of-way. This
exempts SMATV, like MMDS, from local franchise and other requirements applicable
to cable system operators.

The FCC has established a wireless local multipoint distribution service
("LMDS") in the higher bands of the electromagnetic spectrum that could be used
to offer multichannel video in competition with our cable television systems, as
well as offer two-way communications services. The FCC has held auctions to
select LMDS licensees, but LMDS has not yet become a significant video
competitor in our market.

Although substantially all the franchises of our cable television system are
non-exclusive, and municipalities are prohibited by law from unreasonably
refusing to grant competitive franchises, most franchising authorities have
granted only one franchise in each area we serve. Other cable television
operators, however, could receive cable franchises for areas where our cable
television

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systems are operated, or a municipality that regulates us could build its own
cable system to compete with us.

The full extent to which developing media will compete with our cable television
systems may not be known for several years. There can be no assurance that
existing, proposed or as yet undeveloped technologies, including technologies
that provide video over the Internet, will not become dominant in the future and
render our cable television systems less profitable or even obsolete.

PROGRAMMING AND ENTERTAINMENT

Rainbow Media Holdings' programming networks compete in two basic markets, each
of which is highly competitive. First, Rainbow Media Holdings' programming
networks compete in the market for distribution of programming networks to cable
television systems and other distributors of video services, such as direct
broadcast satellite services. For example, American Movie Classics and Fox
Sports Net Chicago compete with other networks for the right to be carried on
cable television systems and ultimately for viewing by each system's
subscribers. Second, Rainbow Media Holdings' programming networks compete with
other networks that sell to cable television systems and other video service
distributors as well as and with broadcast and other programming entities to
secure desired entertainment and sports programming. In each of these markets,
some of Rainbow Media Holdings' competitors are large publicly held companies
that have greater financial resources than us, Rainbow Media Holdings and the
Rainbow Media Group.

In addition to the proposed merger of DirecTV and EchoStar, the Department of
Justice and the FCC are currently reviewing the proposed merger of AT&T
Broadband and Comcast. If either merger is ultimately approved and consummated,
it is likely that Rainbow Media Holdings' networks will face increased
competition in the future both for the right to be carried, and the right to be
carried on a preferential "tier," by the distribution systems owned by the
combined companies.

DISTRIBUTION OF PROGRAMMING NETWORKS

The business of distributing programming networks to cable television systems
and other video service distributors is highly competitive, and most existing
channel capacity is in use. In distributing a programming network, Rainbow Media
Holdings faces competition with other providers of programming networks for the
right to be carried by a particular cable system and for the right to be carried
by that cable system on a preferential "tier". Once Rainbow Media Holdings'
network is selected by a cable system or satellite distributor, that network
competes not only with the other channels available on the cable network for
viewers, but also with off-air broadcast television, pay-per-view and
video-on-demand networks, online, radio, print, media, motion picture theaters,
video cassettes and other sources of information, sporting events, and
entertainment.

Important to Rainbow Media Holdings' success in each area of competition it
faces are the prices it charges for its programming network, the quantity,
quality and variety of the programming offered on its network, and the
effectiveness of the networks' marketing efforts. The competition for viewers in
the context of non-premium programming networks is directly

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correlated with the competition for advertising revenues with each of the
competitors discussed above.

Competition with other programming networks may be hampered because the cable
television systems through which distribution is sought may be affiliated with
other programming networks. In addition, because such affiliated cable
television systems may have a substantial number of subscribers, the ability of
such programming networks to obtain distribution on affiliated cable television
operators may lead to increased subscriber and advertising revenue for such
networks because of their increased penetration compared to Rainbow Media
Holdings' programming networks. Even if such affiliated cable television
operators were to continue to carry Rainbow Media Holdings' programming
networks, there is no assurance that such cable television operators would not
move Rainbow Media Holdings' networks to less desirable tiers in the operator's
services offering while moving the affiliated programming network to a more
desirable tier, thereby giving the affiliated programming network a competitive
advantage.

New programming networks with affiliations to desired broadcasting networks may
also have a competitive advantage over Rainbow Media Holdings' new networks in
obtaining distribution through the "bundling" of affiliation agreements with the
right to carry the broadcasting network.

An important part of our strategy involves exploiting identified niches of the
cable television viewing audience that are generally well-defined and limited in
size. Rainbow Media Holdings has faced and will continue to face increasing
competition as other programming networks are launched that seek to serve the
same or similar niches.

SOURCES OF PROGRAMMING

Rainbow Media Holdings also competes with other programming networks to secure
desired programming. Although some of this programming is generated internally
through Rainbow Media Holdings' efforts in original programming, most of Rainbow
Media Holdings' programming is obtained through agreements with other parties
that have produced or own the rights to such programming. Competition for such
programming will increase as the number of programming networks increases. Other
programming networks that are affiliated with programming sources such as movie
or television studios, film libraries, or sports teams may have a competitive
advantage over Rainbow Media Holdings in this area.

COMPETITION FOR ENTERTAINMENT PROGRAMMING SOURCES. With respect to the
acquisition of entertainment programming, such as syndicated programs and
movies, which are not produced by or specifically for programming networks,
competitors include:

- national commercial broadcast television networks,
- local commercial broadcast television stations,
- the Public Broadcasting Service and local public television stations,
- pay-per-view programs
- other cable program networks

Some of these competitors have exclusive contracts with motion picture studios
or independent motion picture distributors or own film libraries.

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COMPETITION FOR SPORTS PROGRAMMING SOURCES. Because the loyalty of the sports
viewing audience to a sports programming network is driven by loyalty to a
particular team or teams, access to adequate sources of sports programming is
particularly critical to Rainbow Media Holdings' sports networks. Our sports
networks compete for national rights for teams or events principally with:

- national cable networks that specialize in or carry sports programming,
- television "superstations" which distribute sports and other programming
by satellite,
- the national commercial broadcast television networks,
- independent syndicators that acquire and resell such rights nationally,
regionally and locally, and
- direct broadcast satellite operators.

Rainbow Media Holdings' sports networks also compete for local and regional
rights with the same group of competitors, with local commercial broadcast
television stations, with other local commercial and regional sports networks
and with the sports teams which hold such rights.

The owners of distribution outlets such as cable television systems may also
contract directly with the sports teams in their local service areas for the
right to distribute a number of such teams' games on their systems. Some of
these competitors may also have ownership interests in sports teams or sports
promoters, which may give them an advantage in obtaining broadcast rights for
such teams or the sports promoted by such promoters.

In order to remain competitive in the acquisition and retention of rights to
sports programming, Rainbow Media Holdings' sports networks attempt to secure
long-term rights agreements with teams and athletic conferences. Rainbow Media
Holdings also attempts to include, in rights agreements with teams, terms that
provide Rainbow Media Holdings' sports networks with exclusive negotiation
periods prior to the scheduled expiration of the term of such agreements and/or
which provide Rainbow Media Holdings' sports networks with the right to match an
offer made by a competing distributor of sports programming. Rainbow Media
Holdings' sports networks, however, are not always successful in attaining these
objectives, and Rainbow Media Holdings cannot be assured that its strategy will
enable its sports networks to offer sports programming of the type and in the
quantity or quality necessary for such networks to remain competitive.

In addition to the above considerations, Rainbow Media Holdings operates in an
environment that is affected by changes in technology. It is difficult to
predict the future effect of technology on many of the factors affecting Rainbow
Media Holdings' competitive position. For example, data compression technology
may make it possible for most video programming distributors to increase their
channel capacity, thereby reducing the competition among programming networks
and broadcasters for channel space. As more channel space becomes available, the
position of Rainbow Media Holdings' programming networks in the most favorable
tiers of these distributors would be an important goal. Likewise, Rainbow Media
Holdings' inability to place its programming networks on distributors' favorable
tiers would be a competitive disadvantage.

Numerous businesses compete with Madison Square Garden, Radio City Entertainment
and CCG Holdings, Inc. for the entertainment expenditures of consumers.

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TELEPHONE SERVICES

Lightpath faces substantial competition from incumbent local exchange carriers
("ILECs"), such as Verizon, which are the dominant providers of local telephone
services in their respective service areas. ILECs have significant advantages
over Lightpath, including greater capital resources, an existing fully
operational local network, and long-standing relationships with customers.

While Lightpath and the ILECs are competitors, Lightpath must enter into
interconnection agreements with each ILEC so that Lightpath's customers can make
and receive calls to and from customers served by the ILEC. Federal and State
law and regulations require ILECs to enter into such agreements and provide such
facilities and services, at prices subject to regulation. The specific price,
terms and conditions of each agreement, however, depend on the outcome of
negotiations between Lightpath and an ILEC. Agreements are also subject to
approval by the state public service commission. Lightpath has entered into
interconnection agreements with Verizon for New York, New Jersey, and
Connecticut, which have been approved by the respective state commissions.

Lightpath also faces competition from one or more competitive access providers
("CAPs") and other new entrants in the local telecommunications marketplace,
Competitive Local Exchange Carriers ("CLECs"), such as Teleport Communications
Group, Inc. ("Teleport"), now part of AT&T, and MFS Communications Company, Inc.
("MFS"), now part of WorldCom as well as many others. In addition to the ILECs
and competitive service providers, other potential competitors capable of
offering local, private line and special access services include electric
utilities, long distance carriers, microwave carriers, wireless telephone system
operators (such as cellular, PCS, and specialized mobile radio), and private
networks built by large end users. A continuing trend toward business
combinations and alliances in the telecommunications industry may create
significant new competitors to Lightpath.

Many ILECs and certain of Lightpath's other potential competitors have
financial, personnel and other resources significantly greater than those of
Lightpath. Some of these competitors have existing networks or conduits that
could be adapted to provide local exchange services. There can be no assurance
that Lightpath will be able to compete effectively against these competitors.
Lightpath may also face competition from new technologies and services
introduced in the future.

RETAIL ELECTRONICS

The consumer retail electronics business is highly competitive. Cablevision
Electronics competes with national and regional retail electronics chains which
continue to expand in the New York metropolitan area, as well as with computer,
office product and entertainment superstores, general merchandise retailers,
discount stores and factory direct and Internet retailers. Some of these
competitors operate on a significantly larger scale than Cablevision Electronics
and are able to translate their scale to purchasing and pricing advantage.
Competition is primarily based on price, service and selection of merchandise.
Cablevision Electronics competes on the basis of these factors, with special
emphasis placed on the quality of the customer experience in the stores and on
selling and bundling merchandise that supports the in-home connectivity of our
high speed data, video and telephony services.

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REGULATION

CABLE TELEVISION

Our cable television systems are regulated under Congressionally imposed uniform
national guidelines, first set in the 1984 Cable Act and amended by the Cable
Television Consumer Protection and Competition Act of 1992 and the
Telecommunications Act of 1996.

This federal legislation authorizes states or localities to franchise our cable
television systems but sets limits on their franchising powers. It sets a
ceiling on cities imposing franchise fees of more than 5% of our gross revenues
from our provision of cable services. It prohibits localities from requiring us
to carry specific programming services, and protects us in seeking franchise
renewals by limiting the factors a locality may consider and requiring a due
process hearing before denial of renewal. Our franchising authorities cannot
grant an exclusive cable franchise to us and cannot unreasonably refuse to award
an additional franchise to compete with us.

Localities may require free access to public, educational or governmental
channels on our systems. We must make a limited number of commercial leased
access channels available for potentially competitive video services. Federal
law prohibits obscene programming and requires us to sell or lease devices to
block programming considered offensive by a customer.

Under the 1984 Cable Act, rates were unregulated for the cable services provided
by substantially all of our cable television systems. The 1992 Cable Act
reintroduced rate regulation for certain cable services and equipment that is
provided by substantially all of our systems.

Federal law requires us to establish a "basic service" package consisting, at a
minimum, of all local broadcast signals and all non-satellite delivered distant
broadcast signals that we choose to carry, as well as all public, educational
and governmental access programming carried by our systems.

The rates for our basic service package are still subject to regulation by local
franchising authorities.

Local municipalities or state cable television regulators may also still
regulate the rates we charge for the installation and lease of the equipment
used by subscribers to receive the basic service package, including equipment
that may also be used to receive other packages of programming, and the
installation and monthly use of connections for additional television sets.

The FCC's rules prevent us, unless we can justify higher rates on the basis of
our costs, from raising the rates we charge for the basic service package beyond
an inflation indexed amount, plus increases in certain costs beyond our control,
such as taxes, franchise fees and increased programming costs that exceed the
inflation index. Increases in fees we pay to broadcast stations for the
retransmission of their signals, may also be passed through to our subscribers.

The FCC also adopted guidelines for "cost-of-service" showings, pursuant to
which we can attempt to justify rates in excess of the basic service package
benchmarks. The FCC in addition permits rate adjustments attributed to the cost
of a rebuild or a substantial upgrade of our cable systems plant.

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The FCC's authority to reduce the rates for our service packages other than our
basic service package, in response to complaints by a franchising authority, if
the FCC found that our rates were unreasonable, has now sunset. Services that we
offer on a per channel or per program basis, like HBO, have never been subject
to rate regulation by either local municipalities or the FCC.

We are required by federal law to carry all local broadcast stations, or, at the
option of a local broadcaster, to obtain the broadcaster's prior consent for
retransmission of its signal. A substantial number of local broadcast stations
currently carried by our cable television systems have elected to negotiate for
retransmission consent. Our cable television systems have reached retransmission
consent agreements with most broadcast stations they currently carry, but the
potential remains for discontinued broadcast station carriage if such an
agreement is not renewed following its expiration.

The FCC is currently considering whether to adopt similar "must carry" rules for
broadcasters' new digital TV channels. The FCC last year reached the tentative
conclusion that "dual must carry" rules would be unconstitutional, if our
systems were required to carry these digital channels, in addition to
broadcasters' existing analog broadcast channels, before the statutorily
required transition from analog to digital broadcasting in 2006. But the FCC has
asked for additional information to help it finally resolve this issue.

In some instances, Rainbow Media Holdings has been ordered by the FCC to provide
its satellite-delivered programming to multichannel video programmers after such
programmers have filed complaints pursuant to federal "program-access" rules.

Congress has required the FCC to set limits on the number of channels that we
can program with programming services we control, and a national limit on the
number of subscribers we can serve. The FCC established a 40% limit on the
number of channels of one of our cable television systems that can be occupied
by programming services in which we have an attributable interest. The FCC also
set a national limit of 30% on the number of multichannel video households that
we can serve. The FCC later modified its cable ownership attribution rules,
maintaining its 5% voting stock benchmark, but attributing cable subscribers to
a partnership if a limited partner is involved in the partnership's "video
programming" activities. Both rule modifications affected us because of AT&T's
investment in us.

Last year, a federal appellate court held unconstitutional the FCC's rules
establishing the 30% national multichannel subscriber limit and the 40% channel
occupancy limit. It also eliminated the FCC's rule attributing cable subscribers
in a system held by a partnership to a limited partner if the limited partner is
involved in the partnership's "video programming" activities. The court upheld
the FCC's 5% voting stock benchmark for an "attributable interest" in a cable
system. This year, a different panel of the same court invalidated an FCC rule
that barred us from owning a broadcast station in the same market in which we
own a cable system.

The Telecommunications Act of 1996, besides deregulating the rates for our
non-basic tiers of service, also permitted our regulated equipment rates to be
computed by aggregating our costs of broad categories of equipment at the
franchise, system, regional or company level.

All our local rate regulation, including regulation of our basic service
package, is by federal law eliminated if one of our cable systems is subject to
"effective competition" from another

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multichannel video programming provider, such as a telephone company, a DBS
operator, or a competing OVS or cable company like RCN. The 1996 Act expanded
the definition of "effective competition" to include instances in which a local
telephone company or its affiliate (or a multichannel video programming
distributor using the facilities of a telephone company or its affiliates)
offers video programming comparable to ours to subscribers in our franchise area
by any means other than DBS. Our cable television systems gain greater
flexibility in packaging and pricing when the FCC makes a finding of "effective
competition" based on such competition. We have been successful in obtaining
from the FCC such an "effective competition" finding in certain communities in
our market.

The FCC was required by federal law to initiate a process through which the
cable industry would develop standards to allow subscribers to use set top boxes
purchased or leased from any distributor to access programming on their local
cable system. These standards have now been developed.

FCC rules require that we black out certain network and sports programming on
imported distant broadcast television signals upon request. The FCC also
requires that we delete syndicated programming carried on distant signals upon
the request of any local television/broadcast station holding the exclusive
right to broadcast the same program within our local television market and, in
certain cases, upon the request of the copyright owner of such programs. These
rules affect the diversity and cost of programming options for our cable
television systems.

The FCC regulates us in such areas as customer service, technical standards,
equal employment opportunity, privacy, rates for leased access channels, and
obscenity and indecency. The FCC is also tasked by Congress to promote
compatibility between cable television systems and other consumer electronic
equipment such as "cable ready" television sets and videocassette recorders.

The FCC also imposes restrictions on our origination cablecasting channels and
rules governing political broadcasts; ownership and control of cable home wiring
in single family residences and multiple dwelling units; and limitations on
advertising contained in children's programming that we carry.

The FCC requires us to pay annual "regulatory fees" for its services that we may
pass on to subscribers as "external cost" adjustments to our basic cable service
rates. Other fees are assessed for the FCC licenses we hold for business radio,
cable television relay systems and earth stations. These fees may not be
collected from our subscribers.

The FCC has authority to regulate utility company rates for cable rental of
pole and conduit space unless states establish preemptive regulations in this
area. The states in which our cable television systems operate have adopted
such regulations. The 1996 Act requires that utilities provide cable
television systems and telecommunications carriers with nondiscriminatory
access to any pole, conduit or right-of-way controlled by the utility.

The FCC has adopted regulations to govern the charges for pole attachments used
by companies providing telecommunications services, including cable operators
like us. These pole attachment regulations did not become effective until last
year, and subsequent increases in attachment rates resulting from the FCC's new
regulations will be phased in throughout equal annual increments over five
years, until 2006. The FCC's authority to set pole access rates for cable
Internet access services was recently upheld by the Supreme Court.

(25)

Some parties have proposed in the past few years federal, state and local
requirements that would force cable systems to provide carriage to third-party
Internet service providers in addition to services the system itself provides,
such as our Optimum Online cable modem service. Several federal court decisions
have invalidated local franchising authority requirements that the cable system
in the community provide access to all third-party Internet service providers.
Some local franchising authorities where we operate might attempt to impose a
similar requirement on us. Faced with this uncertainty, the FCC opened an
inquiry into how to classify the provision of this service by a cable system for
regulatory purposes. In March, 2002, the FCC determined that services like
Optimum Online should be classified as "information services." This category of
services are traditionally subjected by the FCC to a lesser degree of regulation
than "telecommunications services," which normally must offer their facilities
to all comers on a common carrier basis. The FCC has put out for public comment
the proper regulatory consequences of its classification decision.

FEDERAL COPYRIGHT REGULATION. There are no restrictions on the number of distant
broadcast television signals that our systems may legally import, but we are
required to pay copyright royalty fees to receive a statutory compulsory license
to carry them. The U.S. Copyright Office has increased our royalty fees from
time to time and has, at times, recommended to Congress changes in the statutory
compulsory licenses for cable television carriage of broadcast signals. Such
changes could adversely affect the ability of our cable television systems to
obtain such programming, and could increase the cost of such programming.

STATE AND MUNICIPAL REGULATION OF CABLE TELEVISION. Regulatory responsibility
for local aspects of the cable business such as franchisee selection, system
design and construction, safety, and consumer services remains with either state
or local officials and, in some jurisdictions, with both. Federal law limits the
damages for certain constitutional claims by cable operators and others against
franchising authorities for their franchising activities.

New York law provides for comprehensive state-wide cable regulation, including
approval of transfers of our cable franchises and consumer protection
legislation. New Jersey and Connecticut also regulate us at the state level.
State and local franchising jurisdiction, however, must be exercised
consistently with federal law. Among the more significant federal restrictions
is a 5% ceiling on franchise fees and mandatory renegotiation of certain
franchise requirements if warranted by changed circumstances.

PROGRAMMING AND ENTERTAINMENT

Cable television program distributors, such as Rainbow Media Holdings, and
including the businesses attributed to the Rainbow Media Group, are not directly
regulated by the FCC. But they are regulated indirectly when they are affiliated
with a cable television system operator like Cablevision. Moreover, to the
extent that regulations and laws, either presently in force or proposed, hinder
or stimulate the growth of the cable television and satellite industries, which
are directly regulated by the FCC, Rainbow Media Holdings' business will be
directly affected.

Federal law limits our ability to freely manage the sale of Rainbow Media
Holdings' services. The "program access" provisions of federal law require that
Rainbow Media Holdings' programming services, to the extent that they are
delivered by satellite, be sold to other multichannel video programming
providers, such as MMDS, SMATV and DBS, that compete with our local cable
television systems. Rainbow Media Holdings cannot have exclusive

(26)

contracts with cable operators, nor can it unreasonably discount as to prices,
terms and conditions of sale or distribution.

The FCC has declined to extend these program-access rules to cover
terrestrially-delivered sports or news programming created by cable-system
affiliated programmers such as Rainbow Media Holdings, and proposals by our
competitors made to Congress to adopt such extensions have not been successful.
It is not possible to predict whether such an expansion of the program access
rules might in the future be adopted by the FCC or Congress and, if so, what
effect it might have on Rainbow Media Holdings.

Broadcast stations have the right to be carried on our cable television systems
and those of other cable companies under the so-called "must carry" rules. This
reduces significantly the amount of channel space that is available for carriage
by cable television systems of networks distributed by Rainbow Media Holdings.
The FCC is currently considering whether to require cable television systems
also to carry each broadcast station's digital broadcast signal, as well as its
existing analog broadcast signal, during the transition period to complete
conversion of all broadcast television stations from analog technology to
digital technology: This transition is currently scheduled to occur by December
31, 2006. This "dual must carry," would even more significantly reduce the
amount of channel space available for Rainbow Media Holdings' services both on
our cable television systems and those owned by other companies. The FCC last
year tentatively determined that such "dual must carry" obligations would be
unconstitutional, but is continuing to study the issue.

The FCC has also imposed requirements on cable operators that, in effect,
require certain of Rainbow Media Holdings' services to provide closed captioning
for the hearing-impaired.

All satellite carriers must under federal law offer their service to deliver
Rainbow Media Holdings and its competitor programming networks on a
nondiscriminatory basis (including by means of a lottery). A satellite carrier
cannot unreasonably discriminate against any customer in its charges or
conditions of carriage. Numerous competing satellite services today provide
transponders that Rainbow could use to deliver its programming networks.

TELEPHONE SERVICES

The 1996 Act was enacted to remove barriers to entry in the local telephone
market that continues to be monopolized by the Bell Operating Companies ("BOCs")
and other ILECs by preempting state and local laws that restrict competition and
by requiring ILECs to provide competitors, such as cable operators and long
distance companies, with nondiscriminatory access and interconnection to the BOC
and ILEC networks. The law permits the BOCs to enter the market for long
distance service (through a separate subsidiary), on a state-by-state basis,
after they satisfy a "competitive checklist." The 1996 Act also facilitates the
entry of utility companies into the telecommunications market.

The 1996 Act entitles Lightpath to certain rights, but as a telecommunications
carrier, it also subjects Lightpath to regulation by the FCC. Lightpath's
designation as a telecommunications carrier also results in other regulations
that may affect Lightpath and the services it offers. The rights and obligations
to which CLECs are entitled and subject have been and likely will continue to be
subject to litigation in the courts and further review and revision by the FCC
and Congress.

(27)

The 1996 Act requires Lightpath to interconnect directly or indirectly with
other telecommunications carriers. In some cases, interconnecting carriers must
compensate each other for the transport and termination of calls on their
network (I.E., reciprocal compensation). Accordingly, Lightpath is entitled, in
some cases, to reciprocal compensation from carriers when it terminates their
originating calls on its network. With regard to reciprocal compensation, the
FCC issued an order capping compensation for some ISP-bound traffic and
eliminating compensation for other ISP-bound traffic. This matter is on appeal
to the courts and is before the FCC on reconsideration. Further, the FCC is
exploring methods to unify intercarrier compensation and access charges and is
considering a bill-and-keep approach (i.e., no compensation is paid between
carriers) as well as other alternative modifications to the existing
intercarrier compensation regimes. Lightpath's revenues may be negatively
affected by FCC and court decisions on both compensation matters.

In addition to these proceedings and matters arising under the obligations of
the 1996 Act, there are several other competition-related issues that the FCC is
reviewing as part of its ongoing examination of the competitive marketplace.
First, the FCC is considering whether to adopt a set of performance measures and
standards for certain ILEC services provided to CLECs to improve the quality of
service competitors receive with respect to those services. Second, the FCC is
considering how to regulate broadband services provisioned by ILECs and other
wireline providers of broadband Internet access services, which includes
Lightpath. The outcome of this broadband proceeding may affect the degree of
regulation to which Lightpath's services are subject in the future, including
increased costs due to a finding that these services should be subject to
universal service contribution requirements discussed below.

Lightpath is subject to federal and state regulations that implement universal
service support for access to advanced telecommunications services and
information services by rural, high-cost, and low-income markets at reasonable
rates; and access to advanced telecommunications services by schools, libraries,
and rural health care providers. Currently, the FCC assesses Lightpath for
payments and other subsidies on the basis of a percentage of interstate revenue
it receives from certain customers. The FCC is reviewing the basis for
contribution to universal service and considering assessments based on a
flat-fee charge, such as a per-line charge. States may also assess such payments
and subsidies for state universal service programs. Changes to universal service
contributions may affect Lightpath's revenues.

Lightpath is also subject to other FCC requirements in connection with the
interstate long distance services it provides, including the payment of
regulatory fees to fund the Telecommunication Relay Services fund, local number
portability administration, and the North American Numbering Plan.

Like ILECs, CLECs may assess interstate access charges on interexchange carriers
whose customers access the ILEC or CLEC's local network. CLECs have not been
subject to the extensive regulation to which ILECs have been subject and CLECs
have been able to set their own interstate access rates so long as they are
just, reasonable, and not unreasonably discriminatory. However, the FCC has
issued an order implementing a benchmark of decreasing access rates that CLECs
can charge, moving such rates in alignment with lower ILEC access rates. The
order is under reconsideration by the FCC.

Finally, as ILECs obtain authority to offer long distance services bundled with
local services, which allows them to enter the long distance market and to
compete with other interexchange

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carriers like Lightpath, Lightpath's revenues may be affected by customers who
choose to obtain local and long distance services from the dominant service
provider in the market, the BOC.

Lightpath is also subject to regulation by the state public service commission
in each state in which it provides service. In order to provide service,
Lightpath must seek approval from each such state commission. Lightpath is
currently authorized to provide service in New York, Connecticut, and New
Jersey.

Lightpath's regulatory obligations vary from state to state and include some or
all of the following requirements: filing tariffs (rates, terms and conditions);
filing operational, financial, and customer service reports; seeking approval to
transfer the assets or capital stock of the telephone company; seeking approval
to issue stocks, bonds, and other forms of indebtedness of the telephone
company; filing all contracts or other documentation involving transactions
between the telephone company and its affiliates; reporting customer service and
quality of service requirements; making contributions to state universal service
support programs; geographic build-out; and other matters relating to
competition.

EMPLOYEES AND LABOR RELATIONS

As of December 31, 2001, we had 16,204 full-time, 3,700 part-time and 6,876
temporary employees of which 493, 1,115 and 3,440, respectively, were covered
under collective bargaining agreements. We believe that our relations with our
employees are satisfactory.

ITEM 2. PROPERTIES.

We lease certain real estate where our business offices, microwave receiving
antennae, earth stations, transponders, microwave towers, warehouses, headend
equipment, hub sites, program production studios and access studios are located.
We occupy several leased business offices in Woodbury, New York with an
aggregate of approximately 296,000 square feet of space, business offices in
Jericho, New York with approximately 621,000 square feet of space, and warehouse
space in Farmingdale, New York with approximately 34,000 square feet. Other
significant leasehold properties include approximately 309,000 square feet
housing Madison Square Garden's office operations and warehouse and
approximately 569,000 square feet comprising Radio City Music Hall. The WIZ
leases 43 retail store locations, a warehouse and a corporate office aggregating
approximately 1,766,000 square feet.

We own our headquarters building located in Bethpage, New York with
approximately 546,000 square feet of space and through Madison Square Garden,
also own the Madison Square Garden arena and theater complex in New York City
comprising approximately 1,016,000 square feet. We generally own all assets
(other than real property) related to our cable television operations, including
our program production equipment, headend equipment (towers, antennae,
electronic equipment and satellite earth stations), cable system plant
(distribution equipment, amplifiers, subscriber drops and hardware), converters,
test equipment, tools and maintenance equipment. We also generally own our
service and other vehicles.

Clearview Cinemas leases 48 theaters with approximately 43,800 seats and owns an
additional 11 theaters with approximately 9,200 seats.

We believe our properties are adequate for our use.

(29)

ITEM 3. LEGAL PROCEEDINGS.

We are party to various lawsuits, some involving substantial amounts. Management
does not believe that the resolution of such lawsuits will have a material
adverse impact on our financial position.

On April 25, 2001, At Home commenced a lawsuit in the Court of Chancery of the
State of Delaware alleging that Cablevision had breached its obligations under
certain agreements with At Home. The suit seeks a variety of remedies including:
recision of the agreements between At Home and Cablevision and cancellation of
all warrants currently held by Cablevision, damages, and/or an order prohibiting
Cablevision from continuing to offer its Optimum Online service and requiring it
to convert its Optimum Online customers to the Optimum@Home service and to roll
out the Optimum@Home service. Cablevision has filed an answer to the complaint
denying the material allegations and asserting various affirmative defenses. On
September 28, 2001, At Home filed a petition for reorganization in federal
bankruptcy court.

On January 8, 2002, At Home terminated its At Home service to all of
Cablevision's Optimum@Home subscribers. In a letter dated January 9, 2002,
Cablevision advised At Home that such termination of service constituted an
election by At Home to terminate the existing master distribution agreement
entered into by and between Cablevision and At Home and all other related
agreements.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

PART II

ITEM 5. MARKET FOR THE REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

Cablevision NY Group Class A common stock and Cablevision's Class A common stock
prior to its re-designation as Cablevision NY Group Class A common stock, on
March 30, 2001, were traded on the NYSE under the symbol "CVC". On March 30,
2001, Rainbow Media Group Class A tracking stock began trading on the NYSE under
the symbol "RMG".

PRICE RANGE OF CABLEVISION CLASS A COMMON STOCK

The following table sets forth for the periods indicated the intra-day high and
low sales prices per share of the Cablevision Class A common stock prior to its
re-designation as Cablevision NY Group Class A common stock on March 30, 2001,
as reported on the NYSE.

(30)

PRICE RANGE OF CABLEVISION NY GROUP CLASS A COMMON STOCK

The following table sets forth for the periods indicated the intra-day high and
low sales prices per share of the Cablevision NY Group Class A common stock
after the re-designation on March 30, 2001, as reported on the NYSE.

PRICE RANGE OF RAINBOW MEDIA GROUP CLASS A TRACKING STOCK

The following table sets forth for the periods indicated the intra-day high and
low sales prices per share of Rainbow Media Group Class A tracking stock after
the initial issuance and distribution on March 30, 2001, as reported on the
NYSE.

As of March 15, 2002, there were 1,018 holders of record of Cablevision NY Group
Class A common stock and 967 holders of record of Rainbow Media Group Class A
tracking stock.

See Item 1. "Business - Tracking Stock" for a description of the tracking stock
distributed to Cablevision's stockholders on March 29, 2001.

There is no public trading market for the Cablevision NY Group Class B common
stock, par value $.01 per share or the Rainbow Media Group Class B common stock,
par value $.01 per share. As of March 15, 2002, there were 30 holders of record
of each of Cablevision NY Group Class B common stock and Rainbow Media Group
Class B common stock.

All outstanding shares of common stock of CSC Holdings are held by Cablevision.

See Item 1. "Business - The Holding Company Reorganization and
Tele-Communications Transactions" for a description of the changes to our
capitalization as a result of the 1998 holding company reorganization.

(31)

DIVIDENDS. Neither CSC Holdings nor Cablevision have paid any dividends on
shares of Class A or Class B common stock. Cablevision does not anticipate
paying any cash dividends on shares of Cablevision NY Group Class A or Class B
common stock or Rainbow Media Group Class A or Class B common stock in the
foreseeable future.

Cablevision and CSC Holdings may pay cash dividends on their capital stock only
from surplus as determined under Delaware law. If dividends are paid on the
Cablevision NY Group common stock, holders of the Cablevision NY Group Class A
common stock and Cablevision NY Group Class B common stock are entitled to
receive dividends, and other distributions in cash, stock or property, equally
on a per share basis, except that stock dividends with respect to Cablevision NY
Group Class A common stock may be paid only with shares of Cablevision NY Group
Class A common stock and stock dividends with respect to Cablevision NY Group
Class B common stock may be paid only with shares of Cablevision NY Group Class
B common stock. If dividends are paid on the Rainbow Media Group common stock,
holders of the Rainbow Media Group Class A common stock and Rainbow Media Group
Class B common stock are entitled to receive dividends, and other distributions
in cash, stock or property, equally on a per share basis, except that stock
dividends with respect to Rainbow Media Group Class A common stock may be paid
only with shares of Rainbow Media Group Class A common stock and stock dividends
with respect to Rainbow Media Group Class B common stock may be paid only with
shares of Rainbow Media Group Class B common stock.

Subject to the above, dividends may be declared and paid on Cablevision NY Group
common stock and/or Rainbow Media Group common stock in equal or unequal
amounts.

CSC Holdings paid $174.5 million of cash dividends on the Series H and M
Preferred Stock in 2001 and paid $25.5 million of cash dividends on the Series H
Preferred Stock and $139.8 million of dividends in additional shares of Series H
and M Preferred Stock in 2000. CSC Holdings is restricted from paying dividends
on its preferred stock under the provisions of its senior credit agreement if a
default has occurred and is continuing under such agreement. Additionally, CSC
Holdings' senior credit agreement, senior debentures and senior subordinated
debt instruments may restrict the payment of dividends in respect of any shares
of capital stock in certain circumstances.

Dividends may not be paid in respect of shares of Cablevision's common stock
unless all dividends due and payable in respect of the preferred stock of CSC
Holdings have been paid or provided for. See Item 7. - "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources."

(32)

ITEM 6. SELECTED FINANCIAL DATA.

SELECTED FINANCIAL AND STATISTICAL DATA

The operating and balance sheet data included in the following selected
financial data have been derived from the consolidated financial statements of
Cablevision Systems Corporation and CSC Holdings, Inc. Acquisitions made by
these companies were accounted for under the purchase method of accounting and,
accordingly, the acquisition costs were allocated to the net assets acquired
based on their fair value, except for assets previously owned by Charles F.
Dolan or affiliates of Mr. Dolan which were recorded at historical cost.
Acquisitions are reflected in operating, balance sheet and statistical data from
the time of acquisition. CSC Holdings, Inc.'s operating, balance sheet and
statistical data prior to April 5, 1999 has been restated to include the
financial position, results of operations and statistical information of the
systems acquired from Tele-Communications from March 4, 1998, the date of
acquisition by the Company. The selected financial data presented below should
be read in conjunction with the consolidated financial statements of Cablevision
Systems Corporation and CSC Holdings, Inc. and the notes thereto included in
Item 8 of this Report.

(33)

Net income (loss) per share attributed to CNYG and RMG for 1997 is not presented
since the retroactive allocation is not practicable to compute.

(34)

- ----------
(*) Per share information for the years ended December 31, 2001, 2000, 1999 and
1998 are not presented since CSC Holdings became a wholly-owned subsidiary
of Cablevision in 1998.

(36)

- ----------
(1) Restated for 1997 and 1998 to conform to 1999's definition and reflects in
1997 the operations of certain cable television systems which had
relatively lower premium unit penetration and were sold by December 1998.
(2) Based on recurring service revenues divided by average subscribers for the
month of December.
(3) Homes released are homes in areas that can be serviced by our high-speed
cable modem service. Homes in additional areas are being released as we
complete our cable plant upgrade and add other necessary equipment to
support the high-speed cable modem business in those new areas. Homes
released do not include multiple dwelling units passed by the cable plant
that are not connected to it.

(37)

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

This Annual Report contains or incorporates by reference statements that
constitute forward looking information within the meaning of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that 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 the forward looking statements as a result of various
factors. Factors that may cause such differences to occur include but are not
limited to:

- the level of the Company's revenues;
- subscriber demand and growth, including demand for and growth of our
digital cable service, which are impacted by competition from other
services, such as DBS, and the other factors set forth below;
- the cost of programming and industry conditions;
- the regulatory environment in which the Company operates;
- general economic conditions in the areas in which we operate;
- demand for advertising time and space;
- the level of capital expenditures and whether our capital expenditures
increase as expected;
- the level of our expenses, including costs of our new services, such as
expenses related to the introduction of our digital services;
- pending and future acquisitions and dispositions of assets;
- market demand for new services;
- whether any pending uncompleted transactions are completed on the terms
and at the times set forth (if at all);
- competition from existing competitors and new competitors entering the
Company's franchise areas;
- other risks and uncertainties inherent in the cable television business,
the programming and entertainment businesses and the Company's other
businesses;
- financial community and rating agency perceptions of the Company's
business, operations, financial condition and the industry in which it
operates; and
- the factors described in Cablevision'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 or revise the forward-looking
statements contained or incorporated by reference herein, except as otherwise
required by applicable federal securities laws.

(38)

CABLEVISION SYSTEMS CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

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:

RESTRUCTURING CHARGE:

In 2001, the Company recorded a charge to income representing the cost of
restructuring its operations in accordance with a plan approved by the Board of
Directors and communicated to potentially affected employees. The costs included
in the charge principally consisted of employee termination costs, such as
severance pay and outplacement services, and provisions for lease termination
costs, including an estimate of costs incurred during a projected vacancy
period, estimated brokerage commissions and tenant allowances.

Costs related to employee terminations are estimated on an individual by
individual basis, giving effect to the announced severance plan. Costs for lease
terminations are projected in consultation with real estate professionals.

Changes in estimates, as the plan is implemented and additional facts are
gathered, will be reflected in current operations as adjustments to the
restructuring charge, separately reported and identified.

INTER-GROUP ALLOCATIONS AND TRANSACTIONS:

The Company has included combined financial data for each of the Rainbow Media
Group and Cablevision NY Group in the footnotes to its consolidated financial
statements. The combined financial data of Rainbow Media Group and Cablevision
NY Group reflect the application of certain allocation and cash management
policies of Cablevision. Certain costs of Cablevision, including general and
administrative costs, such as costs of maintaining corporate headquarters,
facilities and common support functions, have been allocated by Cablevision to
the groups generally based upon specific usage measured by proportionate
headcount or square footage or based upon management's estimate of the level of
effort expended on each business unit based on historical trends. These
allocation policies are described in detail in Note 20 to the consolidated
financial statements. Cablevision's board of directors may modify or rescind any
of these allocation policies without the approval of the stockholders, although
no such changes have been made in the reported results or are currently
contemplated. Any such changes adopted by the board of directors would be made
on the basis of its good faith business judgment of Cablevision's best
interests, taking into consideration the best interests of all Cablevision
shareholders. Management believes that these allocations have been made on a
reasonable basis. However, it is not practicable to determine whether the
allocated amounts represent amounts that

(39)

might have been incurred on a stand-alone basis, as there are no
company-specific or comparable industry benchmarks with which to make such
estimates.

The Company has attributed certain of its assets and operations to either
Cablevision NY Group or Rainbow Media Group. As previously disclosed, in its
discretion, the Company may change the attribution of these assets and
operations between the groups.

In addition, the Cablevision NY Group provides services to and receives services
from the Rainbow Media Group. As many of these transactions are conducted
between subsidiaries under common control of Cablevision, amounts charged for
these services have not necessarily been based upon arm's length negotiations
and do not necessarily represent the amounts that would be charged by
unaffiliated third parties.

IMPAIRMENT OF LONG-LIVED ASSETS:

The Company's long-lived assets at December 31, 2001 include excess costs over
fair value of net assets acquired of approximately $1.5 billion and
approximately $1.1 billion of other intangible assets. Such assets accounted for
approximately 25% of the Company's consolidated total assets.

In assessing the recoverability of the Company's goodwill and other intangibles
the Company must make assumptions regarding estimated future cash flows and
other factors to determine the fair value of the respective assets. If these
estimates or material related assumptions change in the future, the Company may
be required to record impairment charges for these assets not previously
recorded. On January 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets," and will
be required to analyze its goodwill for impairment issues during the first six
months of fiscal 2002, and then on a periodic basis thereafter. See "Impact of
Recently Issued Accounting Standards." During the years ended December 31, 2001
and 2000, the Company recorded an impairment loss of $99.9 million and $47.5
million representing the balance of goodwill related to certain theaters of
Clearview Cinemas. In 1999, the Company recorded an impairment loss of $35.5
million representing the balance of goodwill recorded in connection with the
acquisition of certain assets associated with The WIZ store locations.

VALUATION OF DEFERRED TAX ASSETS:

Deferred tax assets resulted primarily from the Company's historical net
operating losses. In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred tax asset will be realized. The ultimate realization of the
deferred tax asset is dependent upon the generation of future taxable income
during the periods in which temporary differences between book and tax or net
operating loss carry forwards become deductible. If such estimates and related
assumptions change in the future, the Company may be required to record
additional valuation allowances against its deferred tax assets resulting in
additional income tax expense in the Company's consolidated statement of
operations. Management evaluates the realizability of the deferred tax assets
and the need for additional valuation allowances quarterly. In 2001 and 2000,
the Company reduced the valuation allowances related to its net deferred tax
assets by $310 million and $193 million

(40)

respectively. Future changes to the valuation allowance will depend on estimates
of, and assumptions relating to, the Company's future level of taxable income.

RECENT TRANSACTIONS - CABLEVISION NY GROUP

2001 TRANSACTION. In January 2001, CSC Holdings completed the sale of its cable
systems in Boston and eastern Massachusetts to AT&T in exchange for AT&T's cable
television systems in certain northern New York suburbs and for AT&T common
stock and cash.

2000 TRANSACTIONS. In August 2000, Rainbow Media Holdings purchased the
remaining interests in News 12 New Jersey LLC that it did not already own from
the Newark Morning Ledger Co. In September 2000, CSC Holdings completed the sale
of its cable television system serving Kalamazoo, Michigan and in November 2000,
CSC Holdings completed the sale of its cable television systems in the greater
Cleveland, Ohio metropolitan area.

1999 TRANSACTIONS. In April 1999, CSC Holdings purchased ITT Corporation's
remaining minority interest in Madison Square Garden. In 1999, CSC Holdings
acquired interests in the real property and assets related to certain movie
theaters.

RECENT TRANSACTIONS - RAINBOW MEDIA GROUP

2001 TRANSACTION. In April 2001, MGM acquired a 20% interest in certain national
programming businesses of Rainbow Media Holdings which are included in Rainbow
Media Group.

2000 TRANSACTIONS. In October 2000, Rainbow Media Holdings completed the sale of
its Bravo Latin America programming business. In August 2000, Sterling Digital
was acquired by CSC Holdings from Charles F. Dolan and attributed to Rainbow
Media Group. In May 2000, Rainbow Media Holdings acquired the 50% interest in
MuchMusic USA Venture held by Chum, Ltd., increasing Rainbow Media Holdings'
ownership to 100%. In January 2000, Regional Programming Partners acquired the
70% interest in SportsChannel Florida Associates held by Front Row
Communications, Inc., increasing Regional Programming Partners' ownership to
100%.

The above transactions completed in 2001, 2000 and 1999 are collectively
referred to as the "Transactions."

(41)

RESULTS OF OPERATIONS - CABLEVISION SYSTEMS CORPORATION

The following table sets forth on a historical basis certain items related to
operations as a percentage of net revenues for the periods indicated.

STATEMENT OF OPERATIONS DATA

(42)

(43)

COMPARISON OF YEAR ENDED DECEMBER 31, 2001 VERSUS YEAR ENDED DECEMBER 31, 2000.

CONSOLIDATED RESULTS - CABLEVISION SYSTEMS CORPORATION

REVENUES, NET for the year ended December 31, 2001 decreased $6.5 million as
compared to revenues for the prior year. The net decrease is attributable to the
following:

TECHNICAL AND OPERATING EXPENSES for 2001 increased $70.1 million (4%) compared
to 2000. An increase of $156.6 million resulted from increased costs directly
associated with the growth in revenues and subscribers referred to above and an
increase of $48.8 million resulted from costs relating to certain Knicks player
transactions at Madison Square Garden. These increases were partially offset by
decreases of approximately $105.3 million attributable to the Transactions and a
$30.0 million decrease attributable to a settlement from YankeeNets (see
discussion below). As a percentage of revenues, technical and operating expenses
increased 1% during 2001 as compared to 2000.

RETAIL ELECTRONICS COST OF SALES amounted to approximately $563.4 million (83%
of retail electronics sales) for 2001 compared to approximately $550.0 million
(81% of retail electronics sales) for 2000. Cost of sales includes the cost of
merchandise sold, including freight costs incurred and certain occupancy and
buying costs, for the Company's retail electronics segment.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $44.4 million (4%) for
2001 as compared to 2000. The net decrease for 2001 was comprised of a $109.2
million decrease in expenses related to the Company's stock plan, a $10.3
million decrease related to a long-term incentive plan (as the criteria for the
payout of certain awards were not satisfied), a decrease of approximately $52.3
million attributable to the Transactions and a decrease of approximately $3.5
million due to lower Year 2000 remediation costs. These decreases were partially
offset by increases of approximately $130.9 million that resulted primarily from
additional customer service, sales and marketing and administrative costs. As a
percentage of revenues, selling, general and administrative expenses decreased
1% in 2001 compared to 2000. Excluding the effects of the stock plan, the
long-term incentive plan and the Year 2000 remediation costs, as a percentage of
revenues such costs increased 2% during 2001 as compared to 2000.

(44)

RESTRUCTURING CHARGES of $56.4 million in 2001 represent the expenses associated
with the elimination of approximately 600 positions, including severance and
outplacement costs, and facility realignment.

DEPRECIATION AND AMORTIZATION EXPENSE increased $123.0 million (12%) for 2001 as
compared to 2000. Approximately $92.1 million of the net increase was due
primarily to depreciation of new plant assets, partially offset by decreases
from certain intangible assets becoming fully amortized. Approximately $42.1
million of the increase resulted from higher impairment charges related to
goodwill and capitalized software. (The 2001 amount included a $99.9 million
write-off of goodwill recorded in connection with the Clearview acquisition. The
2000 amount included a $47.5 million write-off of Clearview goodwill and a $10.3
million write-off of capitalized software costs). These increases were partially
offset by a decrease of $11.2 million which resulted from the Transactions.

NET INTEREST EXPENSE decreased $36.6 million (7%) during 2001 compared to 2000.
The net decrease was primarily attributable to lower interest rates and an
increase in interest income, partly offset by higher overall average debt
balances.

EQUITY IN NET LOSS OF AFFILIATES increased to $68.0 million in 2001 from $16.7
million in 2000. Such amounts consist of the Company's share of the net income
or loss of certain businesses in which the Company has varying minority
ownership interests. The increase resulted primarily from the Company's share of
the net losses of Northcoast Communications and R/L DBS, which share amounted to
$43.0 million and $13.9 million, respectively, in 2001. In 2000, the Company's
share of the net loss of Northcoast Communications was $2.5 million.

GAIN ON SALE OF CABLE ASSETS AND PROGRAMMING INTERESTS, NET for the year ended
December 31, 2001 consists primarily of a gain of $1,441.7 million recognized on
the disposition of the Company's cable television systems in Massachusetts and a
gain of $746.3 million from the sale of a 20% minority interest in certain of
the Company's programming businesses, partly offset by a $12.1 million
adjustment to the gain on the disposition of the Company's cable television
systems in Ohio. For the year ended December 31, 2000, the Company recognized
gains of $1,204.2 million from the disposition of the Company's cable television
systems in Kalamazoo, Michigan and Ohio and $5.7 million from the sale of
certain programming assets.

IMPAIRMENT CHARGES ON INVESTMENTS for the years ended December 31, 2001 and 2000
consists of the following:

(45)

GAIN ON INVESTMENTS, NET for the year ended December 31, 2001 consists of the
following:

WRITE-OFF OF DEFERRED FINANCING COSTS of $18.8 million in 2001 and $5.2 million
in 2000 consist principally of costs written off in connection with amendments
to, or termination of, the Company's credit agreements and the redemption of the
Company's senior subordinated notes.

GAIN ON DERIVATIVE CONTRACTS, NET of $281.8 million for the year ended
December 31, 2001 consists principally of $250.4 million of unrealized gains
due to the change in fair value of the Company's prepaid forward contracts
relating to the AT&T, AT&T Wireless, Adelphia Communications and Charter
Communications shares, and $31.4 million due to unrealized and realized gains
on its interest rate swap contracts.

LOSS ON REDEMPTION OF NOTES of $15.3 million in 2001 consists principally of the
premium paid to redeem the Company's $300 million face value 9-1/4% senior
subordinated notes due 2005 and its $150 million face value 9-7/8% senior
subordinated notes due 2006.

GAIN ON TERMINATION OF AT HOME AGREEMENT of $25.2 million consists primarily of
the recognition of the remaining unamortized deferred revenue at December 31,
2001 relating to warrants previously received from At Home.

MINORITY INTERESTS for the year ended December 31, 2001 include CSC Holdings'
preferred stock dividend requirements, Fox Sports Networks' share of the net
loss of Regional Programming Partners, MGM's share of the net income or loss of
American Movie Classics, Bravo, The Independent Film Channel and WE: Women's
Entertainment and NBC's share of the net income of Rainbow Media Holdings. For
2000, minority interests include CSC Holdings' preferred stock dividend
requirements, Fox Sports Networks' share of the net income of Regional
Programming Partners and NBC's share of the net loss of Rainbow Media Holdings.

NET MISCELLANEOUS EXPENSE increased to $18.1 million for 2001 compared to $9.5
million for 2000. The increase was due primarily to increased losses on the
disposal of certain fixed assets.

INCOME TAX EXPENSE amounted to $187.7 million and $42.5 million in 2001 and
2000, respectively, and resulted from the Transactions, partially offset by a
reduction in the tax valuation allowance of $310.1 million and $192.6 million in
2001 and 2000, respectively. The Company did not reduce its valuation allowance
in excess of these amounts due to uncertainties regarding the realizability of
the deferred tax asset.

(46)

BUSINESS SEGMENTS RESULTS - CABLEVISION SYSTEMS CORPORATION

The Company classifies its business interests into four segments:

- Telecommunication Services, consisting principally of its cable
television, telephone and modem services operations;
- Rainbow Media Group, consisting principally of interests in national and
regional cable television programming networks;
- Madison Square Garden, which owns and operates professional sports
teams, regional cable television networks, live productions and
entertainment venues; and
- Retail Electronics, which represents the operations of Cablevision
Electronics' retail electronics stores.

The Company allocates certain costs to each segment based upon their
proportionate estimated usage of services. The financial information for the
segments does not include inter-segment eliminations.

TELECOMMUNICATION SERVICES

The table below sets forth, for the periods presented, certain historical
financial information and the percentage that those items bear to revenue for
the Company's telecommunication services segment.

REVENUES for the year ended December 31, 2001 decreased $52.7 million (2%) as
compared to revenues for the prior year. The net decrease is attributable to the
following:

(47)

TECHNICAL AND OPERATING EXPENSES for 2001 decreased $21.5 million (2%) compared
to 2000. A $106.1 million decrease attributable to the Transactions was
partially offset by increased costs of approximately $84.6 million directly
associated with the growth in revenues and subscribers referred to above. As a
percentage of revenues, technical and operating expenses remained relatively
constant during 2001 as compared to 2000.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $58.3 million (11%) for
2001 as compared to 2000. The net decrease for 2001 consisted of decreases of
$53.6 million which resulted from the Transactions, $55.4 million attributable
to lower expenses relating to a stock plan, and $5.2 million attributable to
lower expenses relating to a long-term incentive plan (as the criteria for the
payout of certain awards were not satisfied), partially offset by increases in
various costs aggregating $55.9 million, primarily attributable to the Company's
developing cable modem business. As a percentage of revenues, selling, general
and administrative expenses decreased 2% for 2001 compared to 2000. Excluding
the effects of the stock plan and the long-term incentive plan, as a percentage
of revenues such costs increased 1% during 2001 compared to 2000.

RESTRUCTURING CHARGES of $7.9 million in 2001 represent the expenses associated
with the elimination of positions, including severance and outplacement costs,
and facility realignment.

DEPRECIATION AND AMORTIZATION EXPENSE increased $61.8 million (10%) for 2001 as
compared to 2000. The increase was comprised of a net increase of approximately
$73.4 million due primarily to depreciation of new plant assets, partially
offset by decreases from certain intangible assets becoming fully amortized and
a decrease of $11.6 million which resulted from the Transactions.

RAINBOW MEDIA GROUP

Refer to "Rainbow Media Group" discussion below.

MADISON SQUARE GARDEN

The table below sets forth, for the periods presented, certain historical
financial information and the percentage that those items bear to revenue for
Madison Square Garden.

REVENUES for the year ended December 31, 2001 decreased $34.5 million (4%) as
compared to revenues for the prior year. This decline was primarily attributable
to lower sales resulting from

(48)

a change in the mix of events presented at MSG's arena, together with fewer
shows at Radio City Music Hall. As a result of a decline in New York City
tourism, attendance was also lower at the Company's holiday shows at Radio City
Music Hall and the Theater at Madison Square Garden. In addition, revenues were
lower as a show tour ended in April 2001. Knicks playoff revenues were lower in
2001 as the team was eliminated in the first round of the NBA playoffs as
compared to advancing to the third round in the same period of the prior year
and the Rangers revenues were lower in 2001 due to the receipt of National
Hockey League expansion revenue in 2000. Partially offsetting these declines
were higher revenues for Radio City Entertainment's Christmas Show performances
outside New York City, as well as higher revenues at MSG Networks primarily
resulting from increased affiliate fees, partially offset by a decline in
advertising revenues.

TECHNICAL AND OPERATING EXPENSES for the year ended December 31, 2001 increased
$33.5 million (6%) over the same 2000 period. This increase is primarily due to
provisions recorded in 2001 for certain player transactions, higher team
compensation, as well as higher contractual rights expense in MSG Networks.
Commencing with the 2001/2002 season, Knick player compensation, as well as the
provision for certain player transactions, includes a provision for a luxury tax
which is expected to be owed to the National Basketball Association at the end
of the season. Partially offsetting this increase in technical and operating
expenses for the year ended December 31, 2001 was a credit of $30.0 million as a
result of the settlement of litigation with the YankeeNets. As a result of the
settlement, Madison Square Garden received $30.0 million from YankeeNets in 2001
and Madison Square Garden's rights to telecast New York Yankee games ended at
the conclusion of the 2001 baseball season. Also offsetting the increase is a
decrease in costs directly associated with the changes in revenues discussed
above.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES for the year ended December 31,
2001 increased $2.7 million (2%) as compared to the 2000 level. This increase is
primarily due to a higher provision for severance, increased legal and
professional fees associated with the YankeeNets litigation and other general
cost increases, partially offset by a $15.8 million decrease in Madison Square
Garden's proportionate share of expense related to Cablevision's stock plan and
a $2.4 million decrease in Madison Square Garden's proportionate share of
expense related to Cablevision's long-term incentive plan (as the criteria for
the payout of certain awards were not satisfied).

RESTRUCTURING CHARGES of $2.8 million in 2001 represent the expenses associated
with the elimination of positions, including severance and outplacement costs,
and facility realignment.

DEPRECIATION AND AMORTIZATION EXPENSE for the year ended December 31, 2001
decreased $18.3 million (16%) as compared to 2000 due primarily to lower
amortization expense as certain intangibles assets have been fully amortized.

RETAIL ELECTRONICS

The table below sets forth, for the periods presented, certain historical
financial information and the percentage that those items bear to revenue for
the Company's retail electronics segment, Cablevision Electronics.

(49)

REVENUES for the year ended December 31, 2001 decreased $14.8 million (2%) to
approximately $678.6 million, compared to revenues of approximately $693.4
million for the year ended December 31, 2000. The net decrease for the year
ended December 31, 2001 was comprised of a decrease of $29.7 million in cable
modem sales no longer being recorded in the retail electronics segment,
partially offset by an increase in comparable store sales of $2.7 million and an
increase of $12.2 million in revenues from new and relocated stores.

COST OF SALES for the year ended December 31, 2001 amounted to approximately
$563.4 million (83% of revenues) compared to costs of sales of $565.6 million
(82% of revenues) for the year ended December 31, 2000. Such costs include the
cost of merchandise sold, including freight costs incurred as well as certain
occupancy and buying costs. The increase in cost of sales, as a percentage of
revenues, is primarily attributable to a $17.1 million write-down of inventory
as a result of the Company's decision to implement a new merchandising strategy.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES amounted to approximately $190.2
million (28% of revenues) for the year ended December 31, 2001 and $186.5
million (27% of revenues) for the year ended December 31, 2000. The increase was
primarily attributable to increased professional fees and employee related
expenses. Selling, general and administrative expenses consist of retail store
expenses (excluding certain store occupancy costs), salaries and commissions of
store personnel, advertising expenses, operation of the distribution center and
corporate support functions other than buying.

RESTRUCTURING CHARGES of $13.7 million in 2001 represent the expenses associated
with the elimination of positions, including severance and outplacement costs,
and facility realignment.

DEPRECIATION AND AMORTIZATION EXPENSE amounted to approximately $32.9 million
(5% of revenues) for the year ended December 31, 2001 and $29.7 million (4% of
revenues) for the year ended December 31, 2000. The increase in 2001 of $3.2
million resulted primarily from depreciation of new asset additions.

(50)

COMPARISON OF YEAR ENDED DECEMBER 31, 2000 VERSUS YEAR ENDED DECEMBER 31, 1999.

CONSOLIDATED RESULTS - CABLEVISION SYSTEMS CORPORATION

REVENUES for the year ended December 31, 2000 increased $468.1 million (12%) as
compared to revenues for the prior year. Approximately $236.1 million (6%) was
from increases in revenue sources such as Rainbow Media Holdings' programming
and entertainment services, advertising on the Company's cable television
systems, revenue derived from the developing cable modem and telephone
businesses and deferred revenue recognized in connection with the warrants
previously received from At Home; approximately $81.5 million (2%) resulted from
higher revenue per subscriber; approximately $78.8 million (2%) resulted from
higher retail electronics revenue and approximately $36.4 million (1%) of the
increase was attributable to the Transactions. The remaining increase of $35.3
million (1%) was attributable to internal growth of 65,800 in the average number
of subscribers during the year.

TECHNICAL AND OPERATING EXPENSES for 2000 increased $161.5 million (11%) over
the 1999 amount. Approximately $135.4 million (9%) reflected increased costs
directly associated with the growth in revenues and subscribers discussed above,
as well as increases in programming costs for cable television services, with
the remaining $26.1 million (2%) attributable to the Transactions. As a
percentage of revenues, technical and operating expenses remained relatively
constant during 2000 as compared to 1999.

RETAIL ELECTRONICS COST OF SALES amounted to approximately $550.0 million (81%
of retail electronics sales) for 2000, compared to approximately $484.8 million
(80% of retail electronics sales) for 1999. Cost of sales includes the cost of
merchandise sold, including freight costs incurred, as well as store occupancy
and buying costs for the retail electronics segment.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $24.2 million (2%) for
2000 as compared to the 1999 level. The change from the prior year resulted from
decreases of approximately $159.5 million (13%) reflecting lower charges related
to an incentive and stock plan and approximately $37.2 million (3%) due to lower
Year 2000 remediation costs. Partially offsetting these decreases were net
increases of approximately $129.4 million (11%) resulting from higher
administrative, sales and marketing and customer service costs, approximately
$38.5 million (3%) to expense the unamortized portion of deferred acquisition
costs related to the Company's cable modem program and approximately $4.6
million directly attributable to the Transactions. As a percentage of revenues,
selling, general and administrative expenses decreased 4% in 2000 compared to
1999. Excluding the effects of the incentive stock plan and Year 2000
remediation costs, as a percentage of revenues such costs increased 2% during
2000 as compared to 1999.

OPERATING PROFIT BEFORE DEPRECIATION AND AMORTIZATION increased $265.5 million
(37%) to $985.2 million for the year ended December 31, 2000 from $719.7 million
for the comparable period in 1999. Approximately $159.5 million (22%) resulted
from lower costs related to an incentive and stock plan and approximately $106.0
million (15%) resulted from the combined effect of the revenue and expense
changes discussed above. On a pro forma basis, giving effect to the Transactions
as if they had occurred on January 1, 1999 and excluding the Company's systems
held for sale, the incentive and stock plan costs referred to above, the charge
related to cable modems discussed above, and the costs of Year 2000 remediation,
operating profit before depreciation and amortization would have increased 12.0%
in 2000. Operating profit before

(51)

depreciation and amortization is presented here to provide additional
information about the Company's ability to meet future debt service, capital
expenditures and working capital requirements. Operating profit before
depreciation and amortization should be considered in addition to and not as a
substitute for net income (loss) and cash flows as indicators of financial
performance and liquidity as reported in accordance with generally accepted
accounting principles.

DEPRECIATION AND AMORTIZATION EXPENSE increased $124.4 million (14%) during 2000
as compared to 1999. Approximately $22.3 million (3%) resulted from higher
impairment charges related to goodwill and capitalized software costs. (The 2000
amount included a $47.5 million write-off of goodwill which resulted from the
Clearview acquisition and $10.3 million from the write-off of capitalized
software costs. The 1999 amount included a $35.5 million write-off of goodwill
related to the acquisition of The WIZ stores). As discussed in `Liquidity and
Capital Resources,' continued and projected operating losses in the retail
electronics operations will require significant additional financial support
from CSC Holdings. In addition, if current trends continue, the Clearview
theater operations will require additional support from CSC Holdings.
Approximately $83.0 million (9%) resulted primarily from depreciation on new
plant assets. The remaining $19.1 million (2%) of the increase was directly
attributable to the Transactions.

NET INTEREST EXPENSE increased $96.9 million (21%) during 2000 compared to 1999.
The net increase is primarily attributable to higher debt incurred to fund
acquisitions and capital expenditures and higher interest rates.

EQUITY IN NET LOSS OF AFFILIATES decreased to $16.7 million in 2000 from $19.2
million in 1999. Such amounts consist of the Company's share of the net profits
and losses of certain programming businesses and a personal communication
services business in which the Company has varying minority ownership interests.

GAIN ON SALE OF CABLE ASSETS AND PROGRAMMING INTERESTS for the year ended
December 31, 2000 consists of a gain of $1,204.2 million from the disposition of
the Company's cable television systems in Kalamazoo, Michigan and Ohio and $5.7
million from the sale of certain programming assets.

IMPAIRMENT CHARGES ON INVESTMENTS for the year ended December 31, 2000 consists
of a charge of $139.7 million relating to an other-than-temporary decline in the
fair value of the Company's At Home warrants and a charge of $6.7 million
relating to an other-than-temporary decline in the fair value of the Company's
investment in Salon.com. The 1999 impairment charge of $15.1 million resulted
from the write-off of an investment held by Rainbow Media Holdings.

GAIN ON INVESTMENTS, NET for the year ended December 31, 1999 of $10.9 million
resulted from the sale of certain investments.

WRITE OFF OF DEFERRED FINANCING COSTS of $5.2 million in 2000 and $4.4 million
in 1999 consist principally of the write off of deferred financing costs in
connection with amendments to or termination of the Company's credit agreements.

MINORITY INTERESTS for the years ended December 31, 2000 and 1999 include CSC
Holdings' preferred stock dividend requirements, Fox Sports Networks' 40% share
of the net income of

(52)

Regional Programming Partners, ITT's share of the net loss of Madison Square
Garden through April 8, 1999 and NBC's share of the net loss of Rainbow Media
Holdings.

INCOME TAX EXPENSE for 2000 includes a $42.5 million income tax provision
resulting from the Transactions. In 2000, the Company reduced its valuation
allowance by $192.6 million to offset the deferred tax liability resulting from
the 2000 dispositions. The Company did not reduce its valuation allowance in
excess of this amount due to uncertainties regarding the realizability of the
deferred tax asset. In 1999, the Company recorded $6.6 million related to
federal, state and local income taxes. In 1999, the Company increased its tax
valuation allowance by $211.8 million due to uncertainties regarding the
realizability of the deferred tax asset.

BUSINESS SEGMENTS RESULTS - CABLEVISION SYSTEMS CORPORATION

TELECOMMUNICATION SERVICES

The table below sets forth, for the periods presented, certain historical
financial information and the percentage that those items bear to revenue for
the Company's telecommunication services segment.

REVENUES for the year ended December 31, 2000 increased $176.9 million (8%) as
compared to revenues for the prior year. Approximately $81.5 million (4%)
resulted from higher revenue per subscriber and approximately $66.8 million (3%)
was attributable to revenues from the Company's developing cable modem and
telephone businesses and deferred revenue recognized in connection with warrants
previously received from At Home. Approximately $35.3 million (2%) of the
increase was attributable to internal growth of 65,800 in the average number of
subscribers during the year and $21.5 million resulted from increases in other
revenue sources including advertising on the Company's cable television systems.
Partially offsetting these increases was a decrease of approximately $28.2
million (1%) resulting from the Transactions.

TECHNICAL AND OPERATING EXPENSES for 2000 increased $62.8 million (7%) over the
1999 amount. Approximately $75.8 million (9%) was attributable to increased
costs directly associated with the growth in subscribers and revenues discussed
above, as well as to increases in programming costs for cable television
services. This increase was partially offset by a decrease of approximately
$13.0 million (2%) attributable to the Transactions. As a percentage of
revenues, technical and operating expenses remained constant during 2000 as
compared to 1999.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES increased $.3 million in 2000 as
compared to the 1999 level. The net change from the prior year consisted of a
net increase of approximately

(53)

$65.7 million (13%) attributable to increases in sales and marketing and
customer service costs and approximately $38.5 million (7%) to expense the
unamortized portion of deferred acquisition costs related to the Company's cable
modem program, partially offset by decreases of approximately $77.6 million
(15%) due to lower charges related to an incentive and stock plan, approximately
$20.3 million (4%) directly attributable to the Transactions and approximately
$6.0 million (1%) attributable to lower Year 2000 remediation costs. As a
percentage of revenues, selling, general and administrative expenses decreased
2% in 2000 compared to 1999. Excluding the effects of the incentive and stock
plan and Year 2000 remediation costs, as a percentage of revenues such costs
increased 3%.

DEPRECIATION AND AMORTIZATION EXPENSE increased $27.7 million (4%) during 2000
as compared to 1999. Approximately $36.1 million (5%) of the increase resulted
primarily from depreciation on new plant assets, partially offset by a decrease
of $8.4 million (1%) attributable to the Transactions.

RAINBOW MEDIA GROUP

Refer to "Rainbow Media Group" discussion below.

MADISON SQUARE GARDEN

The table below sets forth, for the periods presented, certain historical
financial information and the percentage that those items bear to revenue for
Madison Square Garden.

REVENUES for the year ended December 31, 2000 increased $91.2 million (12%) as
compared to revenues for the prior year. Approximately $38.2 million (5%) of the
increase was attributable to internal growth in subscribers and rate increases
in Madison Square Garden's programming services and approximately $18.0 million
(2%) of the increase was due to higher advertising revenues. The remaining
increase of approximately $35.0 million (5%) was primarily attributable to a
greater number of concerts, sporting and other special events at Madison Square
Garden and Radio City Music Hall which was temporarily closed for restoration in
1999.

TECHNICAL AND OPERATING EXPENSES increased $48.3 million (9%) for the year ended
December 31, 2000 over the same 1999 period due primarily to increased team
compensation costs as well as increased costs directly associated with the
increases in revenues discussed above. As a percentage of revenues, technical
and operating expenses decreased 2% in 2000 over the 1999 period.

(54)

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES increased $23.7 million (20%) for
2000 as compared to the 1999 level. Approximately $14.9 million (13%) of the
increase resulted from an allocation of its proportionate share of expenses
related to Cablevision's incentive and stock plan. The remaining increase was
primarily associated with the support for the higher levels of revenues,
severance expense and general cost increases.

DEPRECIATION AND AMORTIZATION EXPENSE increased $2.1 million (2%) during 2000 as
compared to 1999 due primarily to depreciation on fixed asset additions.

RETAIL ELECTRONICS

The table below sets forth, for the periods presented, certain historical
financial information and the percentage that those items bear to revenue for
the Company's retail electronics segment, Cablevision Electronics.

REVENUES for the year ended December 31, 2000 increased $90.1 million (15%) to
approximately $693.4 million compared to revenues of approximately $603.3
million for the year ended December 31, 1999. Comparable store sales accounted
for $50.7 million (8%) of the increase in revenue, while new and relocated
stores contributed $16.4 million (3%) of the increase. Sales of cable modems
accounted for the remaining increase of $23.0 million (4%).

RETAIL ELECTRONICS COST OF SALES amounted to approximately $565.6 million (82%
of revenues) for the year ended December 31, 2000 compared to $484.8 million
(80% of revenues) for the year ended December 31, 1999. Cost of sales includes
the cost of merchandise sold, including freight costs incurred, as well as store
occupancy and buying costs. The increase in cost of sales, as a percentage of
revenues, is primarily attributable to changes in the sales mix and inventory
provisions.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES amounted to approximately $186.5
million (27% of revenues) for the year ended December 31, 2000 and approximately
$160.6 million (27% of revenues) for the year ended December 31, 1999. Selling,
general and administrative expenses consist of all retail store expenses
(excluding store occupancy costs), the salaries and commissions of sales
personnel, the costs of advertising, the costs of operating the distribution
center and corporate support functions other than buying.

DEPRECIATION AND AMORTIZATION EXPENSE amounted to approximately $29.7 million
(4% of revenues) for the year ended December 31, 2000 and includes approximately
$10.3 million relating to the write-off of certain capitalized software costs.
For the year ended December 31,

(55)

1999 depreciation and amortization amounted to approximately $44.9 million (7%
of revenues) and included approximately $35.5 million related to the write off
of goodwill which resulted from the acquisition of The WIZ stores. As discussed
in `Liquidity and Capital Resources,' continued and projected operating losses
in the retail electronics operations will require significant additional
financial support from CSC Holdings.

CABLEVISION SYSTEMS CORPORATION

OPERATING ACTIVITIES

Net cash used in operating activities amounted to $222.5 million for the year
ended December 31, 2001 compared to net cash provided by operating activities of
$124.6 million for the year ended December 31, 2000. The 2001 cash used in
operating activities resulted primarily from non-cash items aggregating $2,037.3
million and a net decrease in cash resulting from changes in assets and
liabilities of $334.2 million, partially offset by $2,149.0 million of income
before depreciation and amortization.

Net cash provided by operating activities amounted to $124.6 million for the
year ended December 31, 2000 compared to $274.1 million for the year ended
December 31, 1999. The 2000 cash provided by operating activities consisted
primarily of $1,247.5 million of income before depreciation and amortization,
partially offset by $892.9 million of non-cash items and a decrease in cash
resulting from changes in assets and liabilities of $230.0 million.

Net cash provided by operating activities amounted to $274.1 million for the
year ended December 31, 1999. The 1999 cash provided by operating activities
consisted primarily of $93.2 million of income before depreciation and
amortization, $145.7 million of non-cash items and a net increase in cash
resulting from changes in assets and liabilities of $35.2 million.

INVESTING ACTIVITIES

Net cash used in investing activities for the year ended December 31, 2001 was
$325.4 million compared to $524.0 million for the year ended December 31, 2000.
The 2001 investing activities consisted of $1,385.4 million of capital
expenditures and other net cash payments of $58.2 million, partially offset by
net proceeds from the sale of cable assets and programming interests of $1,118.2
million.

Net cash used in investing activities for the year ended December 31, 2000 was
$524.0 million compared to $1,031.5 million for the year ended December 31,
1999. The 2000 investing activities consisted of $1,326.0 million of capital
expenditures, $128.8 million of payments for acquisitions and other net cash
payments of $60.2 million, partially offset by net proceeds of $991.0 million
from the sale of cable assets and a programming interest.

Net cash used in investing activities for the year ended December 31, 1999 was
$1,031.5 million. The 1999 investing activities consisted of $871.2 million of
capital expenditures, $117.7 million of payments for acquisitions and other net
cash payments of $53.5 million, partially offset by net proceeds of $10.9
million from the sale of investments.

(56)

FINANCING ACTIVITIES

Net cash provided by financing activities amounted to $617.9 million for the
year ended December 31, 2001 compared to $374.6 million for the year ended
December 31, 2000. In 2001, the Company's financing activities consisted
primarily of $1,549.4 million of proceeds from collateralized indebtedness,
$996.8 million from the issuance of senior notes and $239.3 million of proceeds
from prepaid interest rate derivative contracts, partially offset by net bank
debt repayments of $1,638.4 million, payments for the redemption of senior
subordinated notes of $466.7 million and other net cash payments of $62.5
million.

Net cash provided by financing activities amounted to $374.6 million for the
year ended December 31, 2000 compared to $646.2 million for the year ended
December 31, 1999. In 2000 the Company's financing activities consisted
primarily of $408.9 million of net proceeds from bank debt and $25.6 million
from the issuance of common stock, partially offset by other net cash payments
aggregating $59.9 million.

Net cash provided by financing activities amounted to $646.2 million for the
year ended December 31, 1999. The 1999 financing activities consisted primarily
of $497.7 million derived from the issuance of senior notes and $202.9 million
from the net proceeds from bank debt, partially offset by other net cash
payments aggregating $54.4 million.

(57)

CSC HOLDINGS, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

In April 1999, Cablevision contributed the cable television systems acquired
from Tele-Communications, Inc. ("TCI Systems") on March 4, 1998 to CSC Holdings.
This transaction was accounted for in a manner similar to a pooling of
interests, whereby the assets and liabilities of the TCI Systems were recorded
at historical book value. Prior period consolidated financial statements of CSC
Holdings have been restated to include the financial position and results of
operations of the TCI Systems from March 4, 1998. As a result, the operations of
CSC Holdings are identical to the operations of Cablevision Systems Corporation,
except for dividends attributable to the preferred stock of CSC Holdings which
have been reported in minority interests in the consolidated financial
statements of Cablevision. Refer to Cablevision's Management's Discussion and
Analysis of Financial Condition and Results of Operations above.

RAINBOW MEDIA GROUP

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The Rainbow Media Group tracking stock represents an interest in Cablevision and
is not a direct interest in the businesses and interests included in Rainbow
Media Group. Dividends (if any), entitlements in the event of a merger or
similar transaction and rights in liquidation will not necessarily be related to
the performance of Rainbow Media Group or the value of the assets in Rainbow
Media Group. Instead, such determinations will be made by the Cablevision Board
of Directors, subject to the provisions of Cablevision's amended certificate of
incorporation. The Company does not expect to pay any dividends on any series of
Cablevision common stock for the foreseeable future.

In connection with the preparation of the financial information for the Rainbow
Media Group tracking stock, certain allocations of Cablevision costs have been
made based on existing policies. If those policies were altered, which
Cablevision is entitled to do at any time, there could be material adverse
effects on the Rainbow Media Group financial statements.

(58)

RESULTS OF OPERATIONS - RAINBOW MEDIA GROUP

The following table sets forth on a historical basis certain items related to
operations as a percentage of net revenues for the periods indicated.

STATEMENT OF OPERATIONS DATA

(59)

COMPARISON OF YEAR ENDED DECEMBER 31, 2001 VERSUS YEAR ENDED DECEMBER 31, 2000

RAINBOW MEDIA GROUP

REVENUES for the year ended December 31, 2001 increased $104.1 million (21%) as
compared to revenues for the prior year. Approximately $72.8 million of the
increase was attributed to growth in programming network subscribers and rate
increases, approximately $27.6 million of the increase was due to higher
advertising revenue and the remaining $3.7 million of the increase was due
primarily to the Transactions.

TECHNICAL AND OPERATING EXPENSES for the year ended December 31, 2001 increased
$58.9 million (31%) compared to 2000. Approximately $44.8 million resulted from
increased costs directly associated with the net increases in revenues discussed
above. The remaining $14.1 million was directly attributable to the
Transactions. As a percentage of revenues, such costs increased 3% during 2001
compared to 2000.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES increased $15.7 million (8%) for
2001 compared to 2000. An increase of approximately $25.6 million resulted from
higher sales, marketing, advertising and other general cost increases and an
increase of approximately $13.9 million was attributable to the Transactions.
These increases were partially offset by a $23.4 million decrease in charges
attributed to Rainbow Media Group related to a stock plan of Cablevision and a
$0.4 million decrease in charges attributed to Rainbow Media Group related to a
long-term incentive plan of Cablevision. As a percentage of revenues, selling,
general and administrative expenses decreased 5% in 2001 compared to 2000.
Excluding the effects of the stock plan and the long-term incentive plan, as a
percentage of revenue, such expenses increased 1%.

RESTRUCTURING CHARGES of $11.7 million in 2001 represent the expenses associated
with facility realignment.

DEPRECIATION AND AMORTIZATION EXPENSE decreased $2.6 million for the year ended
December 31, 2001, when compared to 2000. This decrease was primarily due to
certain intangible assets being fully amortized during 2000.

NET INTEREST EXPENSE decreased $39.7 million for the year ended December 31,
2001 as compared to the prior year. The net decrease is primarily attributable
to lower debt balances.

EQUITY IN NET LOSS OF AFFILIATES decreased to $5.2 million in 2001 from $16.0
million in 2000. Such amounts consist of Rainbow Media Group's share of the net
profits and losses of certain programming businesses, primarily regional and
national sports programming companies and a national advertising company, in
which Rainbow Media Holdings has varying minority ownership interests.

GAIN ON SALE OF PROGRAMMING INTERESTS of $746.3 million for the year ended
December 31, 2001 resulted from the sale of a 20% minority interest in certain
national programming businesses. The gain on sale of programming interests of
$5.7 million for the year ended December 31, 2000 resulted from the sale of
certain programming assets.

(60)

IMPAIRMENT CHARGES ON INVESTMENTS represents primarily an other-than-temporary
decline in the fair value of Rainbow Media Holdings' investment in Salon.com.

WRITE-OFF OF DEFERRED FINANCING COSTS of $7.4 million for 2001 consists
principally of costs written off in connection with the termination of certain
credit agreements.

INCOME TAX EXPENSE for the year ended December 31, 2001 was a direct result of
the pre-tax income resulting primarily from the Transactions, partially offset
by a reduction in the tax valuation allowance of $106.4 million.

(61)

COMPARISON OF YEAR ENDED DECEMBER 31, 2000 VERSUS YEAR ENDED DECEMBER 31, 1999

RAINBOW MEDIA GROUP

REVENUES for the year ended December 31, 2000 increased $123.1 million (34%) as
compared to revenues for the prior year. Approximately $56.3 million (16%) of
the increase was a direct result of the Transactions, approximately $46.8
million (13%) of the increase was attributable to growth in programming network
subscribers and rate increases and approximately $20.0 million (5%) of the
increase was attributable to higher advertising and other revenues.

TECHNICAL AND OPERATING EXPENSES increased $41.1 million (28%) for the year
ended December 31, 2000 over the same 1999 period. Approximately $36.1 million
(25%) of the increase was directly attributable to the Transactions. The
remaining $5.0 million (3%) increase was related to those costs directly
associated with the increases in revenues discussed above. As a percentage of
revenues, technical and operating expenses decreased 1% during 2000 compared to
1999.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES increased $40.9 million (27%) for
2000 as compared to the 1999 level. Approximately $34.5 million (23%) of the
increase was attributable to increases in sales and marketing initiatives and
other general cost increases and approximately $15.0 million (10%) was the
direct result of the Transactions. Partially offsetting these increases were
decreases of $5.8 million (4%) from lower charges attributed to RMG related to
Cablevision's incentive and stock plan with the remaining decrease of $2.8
million (2%) resulting from lower Year 2000 remediation costs. As a percentage
of revenues, selling, general and administrative expenses decreased 2% in 2000
compared to 1999. Excluding the effects of the incentive and stock plan charges
and Year 2000 remediation costs, as a percentage of revenues such costs
increased 1%.

DEPRECIATION AND AMORTIZATION EXPENSE increased $5.0 million (13%) during 2000
as compared to 1999. Increases of $11.2 million (28%) as a result of the
Transactions were partially offset by net decreases of approximately $6.2
million (15%) due primarily to lower amortization expense as certain intangible
assets became fully amortized during the period.

NET INTEREST EXPENSE increased $17.6 million (54%) during 2000 compared to 1999.
The net increase is primarily attributable to higher debt balances.

EQUITY IN NET LOSS OF AFFILIATES increased to $16.0 million in 2000 from $7.7
million in 1999. Such amounts consist of Rainbow Media Group's share of the net
profits and losses of certain programming businesses, primarily regional and
national sports programming companies and a national advertising company, in
which Rainbow Media Holdings has varying minority ownership interests.

GAIN ON SALE OF PROGRAMMING INTERESTS for the year ended December 31, 2000
resulted from the sale of certain programming assets.

IMPAIRMENT CHARGES ON INVESTMENTS for the year ended December 31, 2000 of $6.7
million represents an other-than-temporary decline in the fair value of Rainbow
Media Holdings' investment in Salon.com.

(62)

NET MISCELLANEOUS EXPENSE decreased to $0.2 million for the year ended December
31, 2000 compared to $1.7 million for the prior year. In 1999, miscellaneous
expense consisted principally of the write off of deferred financing costs in
connection with amendments to American Movie Classics Company's credit
agreement.

RAINBOW MEDIA GROUP

OPERATING ACTIVITIES

Net cash used in operating activities amounted to $91.7 million for the year
ended December 31, 2001 compared to net cash provided by operating activities of
$31.1 million for the year ended December 31, 2000. The 2001 cash used in
operating activities consisted of $617.4 million of income before depreciation
and amortization, more than offset by non-cash items aggregating $704.8 million
and a net decrease in cash resulting from changes in assets and liabilities of
$4.3 million .

Net cash provided by operating activities amounted to $31.1 million for the year
ended December 31, 2000 compared to $29.7 million for the year ended December
31, 1999. The 2000 cash provided by operating activities consisted primarily of
$36.2 million of income before depreciation and amortization and $54.7 million
of non-cash items, partially offset by a net decrease in cash resulting from
changes in assets and liabilities of $59.8 million.

Net cash provided by operating activities amounted to $29.7 million for the year
ended December 31, 1999. The 1999 cash provided by operating activities
consisted primarily of $20.6 million of income before depreciation and
amortization and $43.1 million of non-cash items, partially offset by a net
decrease in cash resulting from changes in assets and liabilities of $34.0
million.

INVESTING ACTIVITIES

Net cash provided by investing activities for the year ended December 31, 2001
was $799.8 million compared to net cash used in investing activities of $10.9
million for the year ended December 31, 2000. The 2001 investing activities
consisted of proceeds from the sale of certain programming interests of $825.0
million and other proceeds of $0.9 million, partially offset by capital
expenditures of $13.7 million and contributions to investees of $12.4 million.

Net cash used in investing activities for the year ended December 31, 2000 was
$10.9 million compared to $11.9 million for the year ended December 31, 1999.
The 2000 investing activities consisted of capital expenditures of $19.8
million, partially offset by $8.8 million of proceeds from the sale of
programming interests.

Net cash used in investing activities for the year ended December 31, 1999 was
$11.9 million. The 1999 investing activities consisted of $12.6 million of
capital expenditures, partially offset by $0.7 million of proceeds from the sale
of equipment.

(63)

FINANCING ACTIVITIES

Net cash used in financing activities amounted to $656.0 million for the year
ended December 31, 2001 compared to $20.2 million for the year ended December
31, 2000. In 2001, financing activities consisted primarily of net repayments of
bank debt and a note aggregating $654.8 million and other net payments of $6.5
million, partially offset by contributions from Cablevision NY Group of $5.3
million.

Net cash used in financing activities amounted to $20.2 million for the year
ended December 31, 2000 compared to $17.8 million for the year ended December
31, 1999. In 2000, financing activities consisted primarily of net distributions
to Cablevision NY Group of $65.5 million and other net cash payments aggregating
$4.6 million, partially offset by $49.9 million of net proceeds from bank debt.

Net cash used in financing activities amounted to $17.8 million for the year
ended December 31, 1999. In 1999, financing activities consisted primarily of
net distributions to Cablevision NY Group of $125.0 million and other cash
payments aggregating $6.7 million, partially offset by $113.9 million of net
proceeds from bank debt.

(64)

CABLEVISION NY GROUP

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS - CABLEVISION NY GROUP

The following table sets forth on a historical basis certain items related to
operations as a percentage of net revenues for the periods indicated.

STATEMENT OF OPERATIONS DATA

(65)

STATEMENT OF OPERATIONS DATA (cont'd)

(66)

COMPARISON OF YEAR ENDED DECEMBER 31, 2001 VERSUS YEAR ENDED DECEMBER 31, 2000

COMBINED RESULTS - CABLEVISION NY GROUP

REVENUES for the year ended December 31, 2001 decreased $114.1 million (3%) as
compared to revenues for the prior year. The net decrease is attributable to the
following:

TECHNICAL AND OPERATING EXPENSES increased $7.6 million for 2001 compared to
2000. An increase of approximately $100.0 million resulted from increased costs
directly associated with the growth in revenues and subscribers referred to
above and an increase of $48.8 million resulted from costs relating to the
Knicks player transactions. These increases were partially offset by a decrease
of $111.2 million attributable to the Transactions and a decrease of $30.0
million attributable to a settlement from YankeeNets. As a percentage of
revenues, technical and operating expenses increased 1% during 2001 as compared
to 2000.

RETAIL ELECTRONICS COST OF SALES amounted to approximately $563.4 million (83%
of retail electronics sales) for 2001 compared to approximately $550.0 million
(81% of retail electronics sales) for 2000. Cost of sales includes the cost of
merchandise sold, including freight costs incurred and certain occupancy and
buying costs, for the Company's retail electronics segment.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $60.1 million (6%) for
2001 as compared to 2000. The net decrease for 2001 was comprised of an $88.4
million decrease in charges attributed to Cablevision NY Group related to a
stock plan of Cablevision, a decrease of approximately $53.6 million directly
attributable to the Transactions, a decrease of $9.9 million in charges
attributed to Cablevision NY Group related to a long-term incentive plan of
Cablevision (as the criteria for the payout of certain awards were not
satisfied), and a decrease of approximately $3.4 million due to lower Year 2000
remediation costs. These decreases were partially offset by increases of
approximately $95.2 million that resulted from higher administrative, sales and
marketing and customer service costs. As a percentage of revenues, selling,
general and administrative expenses decreased 1% in 2001 compared to 2000.
Excluding the effects of the stock plan, the long-term incentive plan and Year
2000 remediation costs, as a percentage of revenues such costs increased 2%
during 2001 as compared to 2000.

(67)

RESTRUCTURING charges of $44.8 million in 2001 represent the expenses associated
with the elimination of positions, including severance and outplacement costs,
and facility realignment.

DEPRECIATION AND AMORTIZATION EXPENSE increased $125.6 million (13%) for 2001 as
compared to 2000. Approximately $95.1 million of the net increase was due
primarily to depreciation of new plant assets, partially offset by decreases
from certain intangible assets becoming fully amortized. Approximately $42.1
million of the net increase resulted from higher impairment charges related to
goodwill and capitalized software. (The 2001 amount included a $99.9 million
write-off of goodwill recorded in connection with the Clearview acquisition. The
2000 amount included a $47.5 million write-off of Clearview goodwill and a $10.3
million write-off of capitalized software costs.) These increases were partially
offset by a decrease of $11.6 million which resulted from the Transactions.

NET INTEREST EXPENSE increased $3.1 million (1%) for 2001 compared to 2000. The
net increase was attributable primarily to higher average debt balances,
partially offset by lower interest rates and higher interest income.

EQUITY IN NET LOSS OF AFFILIATES increased to $62.8 million in 2001 from $0.7
million in 2000. Such amounts consist of Cablevision NY Group's share of the net
profits and losses of certain businesses in which Cablevision has varying
minority ownership interests. The increase resulted primarily from Cablevision
NY Group's share of the net losses of Northcoast Communications and R/L DBS,
which share amounted to $43.0 million and $13.9 million, respectively, in 2001.
Cablevision NY Group's share of the net loss of Northcoast Communications was
$2.5 million in 2000.

GAIN ON SALE OF CABLE ASSETS, NET for the year ended December 31, 2001 consists
primarily of a gain of $1,441.7 million recognized on the disposition of
Cablevision's cable television systems in Massachusetts, partly offset by a
$12.1 million adjustment to the gain on the disposition of Cablevision's cable
television systems in Ohio. For the year ended December 31, 2000, Cablevision NY
Group recognized a gain of $1,204.2 million from the disposition of
Cablevision's cable television systems in Kalamazoo, Michigan and Ohio.

IMPAIRMENT CHARGES ON INVESTMENTS for the years ended December 31, 2001 and 2000
of $108.5 million and $139.7 million, respectively, represents the charge for an
other-than-temporary decline in the fair value of the Company's At Home
warrants.

GAIN ON INVESTMENTS, NET for the year ended December 31, 2001 consists of the
following:

(68)

WRITE-OFF OF DEFERRED FINANCING COSTS of $11.3 million in 2001 and $5.2 million
in 2000 consist principally of costs written off in connection with amendments
to CSC Holdings' credit agreements and the redemption of CSC Holdings' senior
subordinated notes.

GAIN ON DERIVATIVE CONTRACTS, NET of $281.8 million for the year ended
December 31, 2001 consists principally of $250.4 million of unrealized gains
due to the change in fair value of Cablevision NY Group's prepaid forward
contracts relating to the AT&T, AT&T Wireless, Adelphia Communications and
Charter Communications shares and $31.4 million due to unrealized and
realized gains on its interest rate swap contacts.

LOSS ON REDEMPTION OF NOTES of $15.3 million in 2001 consists principally of the
premium paid to redeem CSC Holdings' $300 million face value 9-1/4% senior
subordinated notes due 2005 and its $150 million face value 9-7/8% senior
subordinated notes due 2006.

GAIN ON TERMINATION OF AT HOME AGREEMENT of $25.2 million consists primarily of
the recognition of the remaining unamortized deferred revenue at December 31,
2001 relating to warrants previously received from At home.

NET MISCELLANEOUS EXPENSE increased to $18.2 million for 2001 compared to $9.3
million for 2000 due primarily to increased losses on the disposal of certain
fixed assets.

INCOME TAX BENEFIT for 2001 of $39.1 million resulted primarily from a reduction
of $203.7 million in the tax valuation allowance exceeding the provision for
taxes on the current year income. In 2000, the income tax provision of $42.5
million represented current state and federal taxes resulting from the
Transactions. The balance of the 2000 provision was offset by a reduction in the
tax valuation allowance of $195.1 million. Cablevision NY Group did not reduce
its valuation allowance in excess of these amounts due to uncertainties
regarding the realizability of the deferred tax asset.

(69)

COMPARISON OF YEAR ENDED DECEMBER 31, 2000 VERSUS YEAR ENDED DECEMBER 31, 1999

COMBINED RESULTS - CABLEVISION NY GROUP

REVENUES for the year ended December 31, 2000 increased $344.7 million (10%) as
compared to revenues for the prior year. Approximately $81.5 million (3%)
resulted from higher revenue per cable television subscriber; approximately
$80.0 million (2%) resulted from increases in revenue from Cablevision NY
Group's programming and entertainment services including Madison Square Garden;
approximately $78.8 million (2%) resulted from higher retail electronics
revenues; approximately $66.8 million (2%) was due to increases in revenue
derived from the developing cable modem and telephone businesses and deferred
revenue recognized in connection with the warrants previously received from At
Home; and approximately $35.3 million (1%) was attributable to internal growth
of 65,800 in the average number of cable television subscribers during the year.
Other net increases, primarily from advertising on Cablevision NY Group's cable
television systems, amounted to $22.9 million. These increases were partially
offset by a decrease of approximately $20.6 million attributable to the
Transactions.

TECHNICAL AND OPERATING EXPENSES for 2000 increased $120.1 million (9%) over the
1999 amount. Approximately $128.6 million (9%) reflected increased costs
directly associated with the growth in revenues and subscribers discussed above,
as well as increases in programming costs for cable television services,
partially offset by a decrease of $8.5 million attributable to the Transactions.
As a percentage of revenues, technical and operating expenses remained
relatively constant during 2000 as compared to 1999.

RETAIL ELECTRONICS COST OF SALES amounted to approximately $550.0 million (81%
of retail electronics sales) for the year ended December 31, 2000, compared to
approximately $484.8 million (80% of retail electronics sales) for 1999. Cost of
sales includes the cost of merchandise sold, including freight costs incurred,
as well as store occupancy and buying costs for the retail electronics segment.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $65.1 million (6%) for
2000 as compared to the 1999 level. The change from the prior year resulted from
decreases of approximately $151.6 million (14%) reflecting lower charges
attributed to Cablevision NY Group related to an incentive and stock plan,
approximately $34.4 million (4%) due to lower Year 2000 remediation costs and
approximately $12.5 million (1%) directly attributable to the Transactions.
Offsetting these decreases was an increase of approximately $94.9 million (9%)
resulting from higher administrative, sales and marketing and customer service
costs and approximately $38.5 million (4%) to expense the unamortized portion of
deferred acquisition costs related to Cablevision NY Group's cable modem
program. As a percentage of revenues, selling, general and administrative
expenses decreased 4% in 2000 compared to 1999. Excluding the effects of the
incentive and stock plan and Year 2000 remediation costs, as a percentage of
revenues such costs increased 2% during 2000 as compared to 1999.

OPERATING PROFIT BEFORE DEPRECIATION AND AMORTIZATION increased $224.5 million
(34%) to $881.2 million for the year ended December 31, 2000 from $656.7 million
for the comparable period in 1999. Approximately $151.6 million (23%) of the
increase resulted from lower costs related to an incentive and stock plan and
approximately $72.9 million (11%) resulted from the

(70)

combined effect of the revenue and expense changes discussed above. On a pro
forma basis, giving effect to the Transactions as if they had occurred on
January 1, 1999 and excluding the Company's systems held for sale, the incentive
and stock plan costs referred to above, the charge related to cable modems
discussed above, and the costs of Year 2000 remediation, operating profit before
depreciation and amortization would have increased 10% in 2000. Operating profit
before depreciation and amortization is presented here to provide additional
information about Cablevision NY Group's ability to meet future debt service,
capital expenditures and working capital requirements. Operating profit before
depreciation and amortization should be considered in addition to and not as a
substitute for net income (loss) and cash flows as indicators of financial
performance and liquidity as reported in accordance with generally accepted
accounting principles.

DEPRECIATION AND AMORTIZATION EXPENSE increased $119.4 million (14%) during 2000
as compared to 1999. Approximately $22.3 million (3%) resulted from higher
impairment charges related to goodwill and capitalized software costs. (The 2000
amount included a $47.5 million write-off of goodwill which resulted from the
Clearview acquisition and $10.3 million from the write-off of capitalized
software costs. The 1999 amount included a $35.5 million write-off of goodwill
related to the acquisition of The WIZ stores). Approximately $89.3 million (10%)
resulted primarily from depreciation on new plant assets. The remaining $7.8
million (1%) increase was directly attributable to the Transactions.

NET INTEREST EXPENSE increased $79.2 million (18%) during 2000 compared to 1999.
The net increase is primarily attributable to debt incurred to fund capital
expenditures and higher interest rates.

EQUITY IN NET LOSS OF AFFILIATES decreased to $0.7 million in 2000 from $11.6
million in 1999. Such amounts consist of Cablevision NY Group's share of the net
profits and losses of certain programming businesses and a personal
communications services business in which Cablevision has varying minority
ownership interests.

GAIN ON SALE OF CABLE ASSETS AND PROGRAMMING INTERESTS for the year ended
December 31, 2000 represents a gain of $1,204.2 million from the disposition of
Cablevision NY Group's cable television systems in Kalamazoo, Michigan and Ohio.

IMPAIRMENT CHARGES ON INVESTMENTS for the year ended December 31, 2000
represents a charge of $139.7 million relating to an other-than-temporary
decline in the fair value of the At Home warrants. The 1999 impairment charge of
$15.1 million resulted from the write-off of an investment held by Rainbow Media
Holdings.

GAIN ON INVESTMENTS, NET for the year ended December 31, 1999 of $10.9 million
resulted from the sale of certain marketable securities.

WRITE-OFF OF DEFERRED FINANCING COSTS of $5.2 million in 2000 and $3.0 million
in 1999 consists principally of the write-off of deferred financing costs in
connection with amendments to or termination of CSC Holdings' credit agreements.

INCOME TAX EXPENSE of $42.5 million in 2000 represented current state and
federal taxes resulting from the Transactions. The balance of the 2000 provision
was offset by a reduction in the tax

(71)

valuation allowance of $195.1 million. Cablevision NY Group did not reduce its
valuation allowance in excess of this amount due to uncertainties regarding the
realizability of the deferred tax asset. In 1999, Cablevision NY Group recorded
$6.6 million related to federal, state and local income taxes. In 1999,
Cablevision NY Group increased its tax valuation allowance by $205.6 million due
to uncertainties regarding the realizability of the deferred tax asset.

BUSINESS SEGMENTS RESULTS - CABLEVISION NY GROUP

CNYG classifies its business interests into three segments:

- Telecommunication Services, consisting principally of its cable
television, telephone and cable modem services operations;
- Madison Square Garden, which owns and operates professional sports teams,
regional cable television networks, live productions and entertainment
venues; and
- Retail Electronics, which represents the operations of Cablevision
Electronics' retail electronics stores.

CSC Holdings allocates certain costs to each segment based upon their
proportionate estimated usage of services. The financial information for the
segments does not include inter-segment eliminations.

TELECOMMUNICATION SERVICES

Refer to Cablevision Systems Corporation's Management's Discussion and Analysis
of Financial Condition and Results of Operations filed as part of this document.

MADISON SQUARE GARDEN

Refer to Cablevision Systems Corporation's Management's Discussion and Analysis
of Financial Condition and Results of Operations filed as part of this document.

RETAIL ELECTRONICS

Refer to Cablevision Systems Corporation's Management's Discussion and Analysis
of Financial Condition and Results of Operations filed as part of this document.

(72)

CABLEVISION NY GROUP

OPERATING ACTIVITIES

Net cash provided by operating activities amounted to $330.9 million for the
year ended December 31, 2001 compared to $119.1 million for the year ended
December 31, 2000. The 2001 cash provided by operating activities consisted
primarily of $1,915.6 million of income before depreciation and amortization,
partially offset by $1,542.0 million of non-cash items and a net decrease in
cash resulting from changes in assets and liabilities of $42.7 million.

Net cash provided by operating activities amounted to $119.1 million for the
year ended December 31, 2000 compared to $245.5 million for the year ended
December 31, 1999. The 2000 cash provided by operating activities consisted
primarily $1,376.0 million of income before depreciation and amortization,
partially offset by $1,086.3 million of non-cash items and a net decrease in
cash resulting from changes in assets and liabilities of $170.6 million.

Net cash provided by operating activities amounted to $245.5 million for the
year ended December 31, 1999. The 1999 cash provided by operating activities
consisted primarily of $193.1 million of income before depreciation and
amortization, $4.5 million of non-cash items and a net increase in cash
resulting from changes in assets and liabilities of $47.9 million.

INVESTING ACTIVITIES

Net cash used in investing activities for the year ended December 31, 2001 was
$1,116.9 million compared to $531.3 million for the year ended December 31,
2000. The 2001 investing activities consisted of $1,371.7 million of capital
expenditures and other net cash payments of $38.3 million, partially offset by
net cash proceeds of $293.1 million from the sale of cable assets and
programming interests.

Net cash used in investing activities for the year ended December 31, 2000 was
$531.3 million compared to $1,018.5 million for the year ended December 31,
1999. The 2000 investing activities consisted of $1,306.2 million of capital
expenditures, $128.8 million of payments for acquisitions and other net cash
payments of $78.5 million, partially offset by net proceeds of $982.2 million
from the sale of cable assets and programming interests.

Net cash used in investing activities for the year ended December 31, 1999 was
$1,018.5 million. The 1999 investing activities consisted of $858.5 million of
capital expenditures, $117.7 million of payments for acquisitions and other net
cash payments of $53.2 million, partially offset by net proceeds of $10.9
million from the sale of marketable securities.

FINANCING ACTIVITIES

Net cash provided by financing activities amounted to $803.9 million for the
year ended December 31, 2001 compared to $387.5 million for the year ended
December 31, 2000. In 2001, financing activities consisted primarily of $1,549.4
million of proceeds from collateralized indebtedness, $996.8 million from the
issuance of senior notes, $239.3 million of proceeds from prepaid interest
rate derivative contracts and other cash proceeds aggregating $12.5 million,
partially offset by net bank debt repayments of $1,279.1 million, payments
for the redemption of senior subordinated

(73)

notes of $466.7 million, preferred stock dividends paid of $174.5 million and
other net payments of $73.8 million.

Net cash provided by financing activities amounted to $387.5 million for the
year ended December 31, 2000 compared to $661.8 million for the year ended
December 31, 1999. In 2000, financing activities consisted primarily of $359.0
million from the net proceeds from bank debt and other net cash receipts
aggregating $28.5 million.

Net cash provided by financing activities amounted to $661.8 million for the
year ended December 31, 1999. In 1999, financing activities consisted primarily
of $497.7 million derived from the issuance of senior notes and debentures,
$125.0 million of capital contributions from Rainbow Media Group, and $89.0
million from the net proceeds from bank debt, partially offset by other net cash
payments aggregating $49.9 million.

(74)

LIQUIDITY AND CAPITAL RESOURCES - CABLEVISION SYSTEMS CORPORATION

Cablevision does not have any operations independent of its subsidiaries. In
addition, Cablevision has no borrowings and does not have any securities
outstanding other than its Cablevision NY Group Class A and Cablevision NY Group
Class B common stock and the Rainbow Media Group Class A tracking stock and
Rainbow Media Group Class B tracking stock. The Company does not intend to pay
any dividends on any of its common stock in the foreseeable future. Accordingly,
Cablevision does not currently have cash needs independent of the needs of its
subsidiaries.

Cablevision intends to maintain, wherever possible, separate financial
arrangements for the Cablevision NY Group and the Rainbow Media Group.

The Cablevision NY Group, which consists primarily of the Company's cable
television, telephony, and cable modem operations, its retail electronics and
theater operations, and the New York metropolitan area programming and
entertainment assets owned by Rainbow Media Holdings but not included as part of
Rainbow Media Group, including its interest in Madison Square Garden (referred
to as the "Rainbow NY Group"), is currently funded primarily through separate
financial arrangements made available to the Company's traditional "Restricted
Group" subsidiaries (as defined below), to Madison Square Garden, and to
Cablevision Electronics, as described in more detail below. In addition, during
2001 significant funding was provided through the Company's monetization of its
shares of stock of AT&T, AT&T Wireless, Adelphia Communications and Charter
Communications and the resulting collateralized indebtedness at certain of CSC
Holdings' unrestricted subsidiaries (described in more detail later in this
section).

The Rainbow Media Group is currently funded through cash on hand, a $400 million
credit facility made available to Rainbow Media Group, LLC and a $200 million
credit facility made available to American Movie Classics and Bravo, as
described in more detail later in this section.

The following table presents selected historical results of operations and other
financial information related to the captioned groups or entities as of and for
the year ended December 31, 2001 as attributed to Cablevision NY Group and
Rainbow Media Group.

- ----------
* For the Restricted Group, AOCF is as per the Restricted Group bank credit
agreement definition. For all other groups, AOCF is defined as operating
income (loss) before depreciation and amortization and excluding stock plan
income of $34,597 and $10,376, long-term incentive plan expenses of $3,352
and $2,992 and restructuring charges of $44,772 and $11,670 for Cablevision
NY Group and Rainbow Media Group, respectively.
** Consists of developmental telecommunications businesses, residential
telephone service, developing (non-Long Island) commercial telephone service,
cable modem service through December 31, 2001, and deferred revenue
amortization related to the At Home warrants.

(75)

LIQUIDITY AND CAPITAL RESOURCES - CABLEVISION NY GROUP

Funding for Cablevision NY Group's net cash requirements resulting from its
ongoing capital investments, operational needs and debt service requirements
is generally provided through separate financial arrangements made available
to the Restricted Group, Madison Square Garden and Cablevision Electronics.
In addition, during 2001 significant funding was provided through the
Company's monetization of its shares of stock of AT&T, AT&T Wireless,
Adelphia Communications and Charter Communications and the resulting
collateralized indebtedness at certain of CSC Holdings' unrestricted
subsidiaries (as described below). The following table summarizes the
outstanding debt, present value of capital leases and redeemable preferred
stock attributable to Cablevision NY Group as of December 31, 2001:

Total amounts payable by the Company and its subsidiaries in connection with its
outstanding obligations during the five years subsequent to December 31, 2001
and thereafter, including actual payments due under capital leases and the value
deliverable at maturity under monetization contracts, are as follows:

RESTRICTED GROUP

DEFINITION

As of December 31, 2001, Cablevision NY Group's Restricted Group consisted of:
CSC Holdings and all of its subsidiaries holding the Company's cable operations,
which encompassed approximately 3 million subscribers as of December 31, 2001 in
and around the New York City metropolitan area; the commercial telephone
operations of Lightpath on Long Island, New York;

(76)

and substantially all of the Company's consumer cable modem operations, which
encompassed approximately 506,700 subscribers as of December 31, 2001 in and
around the New York City metropolitan area. Subsidiaries of the Company holding
the cable modem operations which previously had been designated as unrestricted
subsidiaries were designated as part of the Restricted Group as of December 31,
2001 and results of these operations will be included in the Restricted Group
financial results beginning on January 1, 2002.

CAPITAL RESOURCES AND FUNDING REQUIREMENTS

The Restricted Group's primary sources of liquidity have been cash flow from
operations, its bank credit facility and its access to the capital markets as
evidenced by its outstanding senior, senior subordinated and redeemable
preferred stock issuances. In addition, during 2001, significant liquidity was
provided through the Company's stock monetization program. Over the course of
the year, the Company monetized and hedged the value of the stock it received in
connection with the sale of its Ohio, Massachusetts and Michigan cable systems
through the execution of prepaid forward contracts, which consist economically
of a loan collateralized by the respective underlying shares of stock and an
equity collar that protects the Company from reductions, and allows the Company
to benefit from increases, in the respective stock price to a certain level.

During 2001, the Company's monetization program generated $1,788.7 million in
cash proceeds. More detail on the Company's monetization activities is provided
in the section "Obligations Under Derivative Contracts."

Currently, the Restricted Group has a $2.4 billion revolving credit facility in
place with a group of banks. The facility matures on June 30, 2006, requires no
interim commitment reductions, and permits maximum leverage of 6.75 times cash
flow (as defined in the credit agreement) through March 31, 2004. As of March
25, 2002, the Restricted Group had outstanding borrowings under its credit
facility of $1,084.0 million and outstanding letters of credit of $51.4 million,
resulting in undrawn revolver commitments of $1,264.6 million. The Restricted
Group's revolver contains certain covenants that may limit its ability to
utilize all of the undrawn funds available thereunder, including covenants
requiring the Restricted Group to maintain certain financial ratios and
restricting the permitted use of borrowed funds.

The Restricted Group's plant upgrade, combined with additional amounts required
for the start up and operation of new businesses such as digital video services,
IP telephony, Lightpath's non-Long Island based commercial telephone business,
and business modem services create a net funding requirement. In addition, the
Company expects that the Restricted Group will fund certain cash requirements of
Cablevision Electronics and Rainbow NY Group, certain expenditures relating to
the construction and launch by March 2003 of a direct broadcast satellite, for
which R/L DBS plans to make additional payments in 2002 totaling approximately
$140 million, and certain investments in 2002 totaling approximately $75 million
in Northcoast Communications, a wireless personal communications services
business in which the Company has a 49.9% voting interest. The Company currently
expects that the net funding and investment requirements for 2002 will be met
with borrowings under the Restricted Group's existing bank credit facility and
that the Restricted Group's available borrowing capacity under that facility
will be sufficient to meet such requirements.

(77)

In 2003, the Company expects that the Restricted Group is likely to continue to
have a net funding deficit and will have limited capacity to increase leverage
under the existing bank credit facility leverage covenant. In addition,
depending on the scope of the Company's pursuit of a direct broadcast satellite
business (launch of service is required by December 29, 2003 under the FCC
license requirements) and on the amounts of any additional investments in
Northcoast Communications, significant additional funding may be required. The
Restricted Group has several options with respect to meeting its funding needs.
It can reduce capital expenditures or investments; it can pursue asset sales; it
can issue equity, debt, convertible debt or preferred stock securities; or it
can issue debt securities outside of the Restricted Group, proceeds of which may
be contributed to the Restricted Group in the form of equity. In order to issue
additional indebtedness at the Restricted Group, the Company would need to
either increase its cash flow to reduce its debt to cash flow ratio and increase
its resulting debt capacity or amend its existing credit agreement to increase
its permitted debt to cash flow covenant.

The Restricted Group's future access to the public debt markets and the cost of
any future debt issuances are influenced by its credit ratings, which are
provided by Moody's Investor Services and Standard & Poors. Moody's recently
downgraded the Company's credit ratings. Standard & Poors has announced that the
outlook for the Restricted Group's credit ratings is negative and that its
ratings of the Company could be lowered if leverage were to increase above
certain levels. Downgrades by either rating agency would further increase the
Restricted Group's interest rate on new debt issuances and could adversely
impact its ability to raise additional debt.

MADISON SQUARE GARDEN

CAPITAL RESOURCES AND FUNDING REQUIREMENTS

Madison Square Garden's primary source of liquidity has been cash flow from
operations and its $500 million revolving credit facility. This facility
currently matures on December 31, 2004, has no interim commitment reductions,
and permits a maximum leverage of 4.25 times cash flow (as defined in the credit
facility) through maturity. As of March 25, 2002, Madison Square Garden had
outstanding debt and letters of credit of $235.0 million and $12.5 million,
respectively, under this facility, resulting in undrawn funds of $252.5 million.
Madison Square Garden's revolver contains certain covenants that may limit its
ability to utilize all of the undrawn funds available thereunder, including
covenants requiring Madison Square Garden to maintain certain financial ratios
and restricting the permitted use of borrowed funds.

The Company believes that for 2002, internally generated funds and funds
available under Madison Square Garden's existing credit facility will be
sufficient to meet its projected funding requirement. In 2003, depending on the
scope of entertainment projects, potential sports player transactions, levels of
capital expenditures and cash flow from operations, Madison Square Garden may
need to obtain an amendment to existing financial covenants under its bank
credit facility, or, if such amendment could not be obtained, reduce
discretionary spending and capital expenditures, and/or seek funding from its
partners.

(78)

RETAIL ELECTRONICS

CAPITAL RESOURCES AND FUNDING REQUIREMENTS

Cablevision Electronics' primary sources of liquidity have been funds from its
bank credit facility and advances from CSC Holdings' Restricted Group.
Cablevision Electronics currently has a $130 million credit facility, which
matures in April 2003. Under the terms of the credit facility, the total amount
of borrowing available to Cablevision Electronics is subject to an availability
calculation based on a percentage of eligible inventory and compliance with all
loan agreement covenants, including a minimum net worth covenant. On March 25,
2002, total outstanding debt under the credit facility was $54.9 million with
additional available funds of $8.1 million based on eligible inventory. CSC
Holdings' cash investment, including intercompany advances, in Cablevision
Electronics was approximately $426.9 million at March 25, 2002. Through March
25, 2002, Cablevision Electronics received other financial support from CSC
Holdings in the form of guarantees and letters of credit of approximately $40.8
million.

The Company believes that Cablevision Electronics will require additional
financial support from CSC Holdings in respect of continued operating losses
(which are projected to total approximately $35 million in 2002) and capital
expenditures during 2002. The Company expects that funds available under
Cablevision Electronics' credit agreement, together with this additional
financial support from CSC Holdings, will be sufficient to meet its funding
requirements for the next twelve months.

OFF-BALANCE SHEET COMMITMENTS AND CONTINGENCIES

Off-balance sheet commitments and contingent obligations attributable to
Cablevision NY Group as of December 31, 2001 are summarized in the following
table:

- ----------
(1) Relates primarily to minimum purchase requirements of digital boxes.
(2) Approximately $14,646 and $8,108 of operating lease commitments for the
Restricted Group and Other Entities, respectively, have been accrued at
December 31, 2001 in connection with the restructuring announced in
December 2001.
(3) Approximately $63,014 of commitments relating to certain Knicks player
transactions have been accrued at December 31, 2001. Other amounts
consist primarily of professional sports teams rights payments and player
contracts of MSG.

(79)

RESTRICTED GROUP

The Restricted Group's guarantees outstanding of $36.6 million consists
primarily of guarantees of obligations of certain unrestricted subsidiaries
included in the Company's consolidated balance sheet, including: (i) guarantees
with respect to certain purchase obligations and certain capital leases of
Cablevision Electronics; and (ii) guarantees in favor of certain financial
institutions in respect of ongoing interest expense obligations and potential
early termination events in connection with the monetization of the Company's
holdings of Adelphia Communications and Charter Communications common stock.
Amounts payable under such monetization guarantees are estimated as of a
particular point in time by the financial institution counterparty and are based
upon the current price of the underlying common stock and various other
assumptions, including stock market volatility and prevailing interest rates.
Such guaranteed amounts approximate the net sum of the monetization indebtedness
less the fair value of the underlying stock less the fair value of the equity
collar as reflected in the Company's accompanying balance sheet.

Contractual commitments attributable to the Restricted Group in the table above
represent primarily minimum purchase requirements through 2004 of digital boxes
from a manufacturer used in connection with the Company's recently launched iO,
Interactive Optimum digital cable service. The Restricted Group's operating
lease minimum payments represent primarily future payment commitments resulting
from the Company's non-cancelable leases of certain office space and rental
space on utility poles, through 2006, used in its distribution of services.

OTHER CABLEVISION NY GROUP ENTITIES

Additional off balance sheet commitments identified in the table above consist
primarily of contractual commitments and operating leases. The dollar amounts
reflected under the heading contractual commitments consist primarily of the
following: (i) long-term rights agreements of Madison Square Garden which
provide Madison Square Garden with exclusive broadcast rights to certain live
sporting events in exchange for minimum contractual payments, (ii) certain
payment commitments associated with the construction of a new practice facility
by Madison Square Garden, and (iii) commitments under employment agreements with
professional sports team personnel of Madison Square Garden, which provide for
payments that are guaranteed regardless of employee injury or termination.
Certain of these payments are covered by disability insurance if certain
conditions are met. In addition, minimum contractual payment commitments of R/L
DBS to a satellite manufacturer in connection with the construction and launch
of a direct broadcast satellite by March 2003 are included in the table.

In addition to the above amounts, Madison Square Garden may also be obligated to
pay the National Basketball Association ("NBA") a luxury tax each year pursuant
to the NBA/NBPA Collective Bargaining Agreement (the "Agreement"), which is in
effect through June 30, 2004 and which may be extended for a term of one year by
the NBA. The ultimate calculation of any amounts due would be based on a formula
established by the Agreement. If the luxury tax is in effect for a given season,
to the extent the Knicks' salary (as defined) exceeds the luxury tax "trigger,"
a tax will be due to the NBA. The Company anticipates that a luxury tax will be
payable to the NBA for the year ended December 31, 2001.

Operating lease commitments represent primarily future minimum payment
obligations of

(80)

Cablevision Electronics and Clearview Cinemas for retail store and theatre
rental space, as well as future minimum rental commitments on various long-term,
noncancelable leases for office and storage space as well as for practice
facilities of Madison Square Garden and lease commitments of Radio City Music
Hall.

OBLIGATIONS UNDER DERIVATIVE CONTRACTS

To manage interest rate risk, the Company has from time to time entered into
interest rate swap contracts to adjust the proportion of total debt that is
subject to variable and fixed interest rates. Such contracts fix the borrowing
rates on floating rate debt to provide an economic hedge against the risk of
rising rates and/or convert fixed rate borrowings to variable rates to provide
an economic hedge against the risk of higher borrowing costs in a declining
interest rate environment. The Company does not enter into interest rate swap
contracts for speculative or trading purposes and has only entered into
transactions with counterparties that are investment grade rated. All of the
Company's interest rate derivative contracts are entered into by CSC Holdings
and are thus attributable to the Restricted Group; all such contracts are
carried at their current fair market values (based on dealer quotes) on the
Company's consolidated balance sheet with changes in value reflected in the
consolidated statement of operations.

As of December 31, 2001, the notional value of all such contracts was $980
million and the fair value of these derivative contracts was $17.3 million, a
net receivable position. For the year ended December 31, 2001, the Company
recorded a net gain on interest swap contracts of $28.8 million, as detailed in
the table below:

The Company has also entered into derivative contracts to hedge its equity price
risk and monetize the value of its shares of AT&T, AT&T Wireless, Adelphia
Communications and Charter Communications common stock. These contracts consist
primarily of a loan secured by the underlying common stock (reflected as
"collateralized indebtedness" on the consolidated balance sheet) and an equity
derivative which sets a floor and ceiling on the Company's participation in
changes in the underlying stock price, thereby eliminating downside exposure and
providing for upside appreciation potential to the contract's ceiling price. At
maturity, the contracts provide for the option to deliver cash or shares of
Charter Communications, Adelphia Communications, or AT&T Wireless stock (as the
case may be), with a value determined by reference to the applicable stock price
at maturity. The terms of the AT&T transactions require cash settlement in an
amount determined by reference to the AT&T stock price at maturity. The Company
currently intends to generate the cash settlement amount through a sale of the
underlying common shares at maturity.

(81)

These monetization transactions are obligations of wholly-owned subsidiaries
that are not part of the Restricted Group; however, in the Adelphia
Communications and Charter Communications transactions, CSC Holdings provided
guarantees of the subsidiaries' ongoing interest expense obligations and certain
other contingent obligations as described above. All of the Company's equity
derivative contracts are carried at their current fair market value on the
Company's consolidated balance sheet (based on dealer quotes) with changes in
value reflected in the consolidated statement of operations, and all of the
counterparties to such transactions currently carry investment grade credit
ratings. As of December 31, 2001, the fair value of the Company's equity
derivative contracts was $250.4 million, a net receivable position. For the year
ended December 31, 2001, the Company recorded a net unrealized gain on the
prepaid forward contracts of $250.4 million attributable to changes in market
conditions during the period. This gain on derivative contracts was partially
offset by a loss on the Company's holdings of the underlying stocks of $176.7
million, as shown in the following table:

In connection with the AT&T and AT&T Wireless monetization contracts, CSC
Holdings entered into prepaid interest rate swaps with a notional contract value
of $1.1 billion. These contracts require CSC Holdings to pay floating rates of
interest in exchange for receipt of fixed rate payments, the net present value
of which was paid to CSC Holdings at the inception of the transaction in a total
cash amount of $239.3 million. Combined, the prepaid equity forward and prepaid
interest rate swap transactions generated cash proceeds of approximately
$1,788.7 million and such amount was applied towards the repayment of
outstanding bank debt under CSC Holdings' revolving credit facility.

All of the Company's prepaid interest rate swaps are carried at their current
fair market values on the Company's consolidated balance sheet (based on dealer
quotes) with changes in value reflected in the consolidated statement of
operations, and all of the counterparties to such transactions currently carry
investment grade credit ratings. As of December 31, 2001, the fair value of the
Company's prepaid interest rate derivative contracts was $226.3 million, a net
liability position. For the year ended December 31, 2001, the Company recorded a
net gain on such derivative contracts of $2.6 million as detailed below:

(82)

LIQUIDITY AND CAPITAL RESOURCES - RAINBOW MEDIA GROUP

Outstanding debt attributable to Rainbow Media Group as of December 31, 2001
consisted solely of capital leases in an aggregate present value of $25.4
million. Actual amounts payable under such leases over the five years subsequent
to December 31, 2001 and thereafter are as follows:

CAPITAL RESOURCES AND FUNDING REQUIREMENTS

Financing for Rainbow Media Group, which consists primarily of the Company's
interest in five nationally distributed entertainment programming networks
(American Movie Classics, Bravo, The Independent Film Channel, WE: Women's
Entertainment (formerly Romance Classics), and MuchMusic), interests in certain
regional sports networks, and Sterling Digital, has historically been provided
by a combination of cash flow from operations, bank credit facilities,
intercompany borrowings, sales of interests in programming entities, and, from
time to time, by equity contributions from partners. The Rainbow Media Group is
currently funded through cash from operations, a $400 million credit facility
made available to Rainbow Media Group, LLC ("RMG LLC") and a $200 million credit
facility made available to American Movie Classics and Bravo Company.

The RMG LLC credit facility is a $400 million revolving credit facility that was
put in place on March 25, 2002 and matures on December 31, 2006 (in certain
limited circumstances the maturity date may be accelerated to November 1, 2005).
The facility requires commitment reductions beginning in the third quarter of
2004 and permits maximum leverage of 3.5 times cash flow (as defined based on
the cash flow of American Movie Classics, Bravo and The Independent Film
Channel) through September 30, 2004. As of March 25, 2002, Rainbow Media
Group had outstanding borrowings under its credit facility of $101.5 million,
resulting in undrawn revolver commitments of $298.5 million. The RMG LLC
facility contains certain covenants that may limit Rainbow Media Group's
ability to utilize all of the undrawn funds available thereunder, including
covenants requiring the maintenance of certain financial ratios and
restricting the permitted use of borrowed funds. Proceeds from the RMG LLC
credit facility are not permitted to be invested in the American Movie
Classics and/or Bravo partnerships.

The American Movie Classics/Bravo credit facility is a $200 million revolving
credit facility that was put in place on March 25, 2002 and matures on
December 31, 2006 (in certain limited circumstances the maturity date may be
accelerated to November 1, 2005). The facility requires commitment reductions
beginning in the third quarter of 2004 and permits maximum leverage of 2.0
times cash flow (as defined based on the cash flow of American Movie
Classics, Bravo and The Independent Film Channel) through maturity. The
facility amended and restated the previously existing American Movie Classics
$200 million revolving credit facility. As of March 25, 2002, there were no
outstanding borrowings under this credit facility. The revolver

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contains certain covenants that may limit American Movie Classics and Bravo's
ability to utilize all of the undrawn funds available thereunder, including
covenants requiring the maintenance of financial ratios and restricting the
permitted use of borrowed funds.

Developmental activities of certain of Rainbow Media Group's businesses,
including projected investments in new programming content and services such as
the digital video programming services being developed by Sterling Digital,
require funding. Such funding may be obtained through cash generated from other
Rainbow Media Group operations or through borrowings under the RMG LLC credit
facility. The Company believes that it has sufficient funding from these sources
to fund these activities for the next twelve months. In addition, the American
Movie Classics/Bravo credit facility, together with cash generated by these
partnerships, are expected to provide sufficient liquidity to American Movie
Classics/Bravo for the next twelve months, as these partnerships currently
generate net cash as a whole. Taken as a whole, the Rainbow Media Group
businesses are expected to generate net free cash flow. Under the terms of the
American Movie Classics/Bravo agreement with MGM, American Movie Classics/Bravo
are also required to distribute excess cash flow (as defined in the agreement),
if any, to their partners annually.

Beginning on December 18, 2002, Fox Sports Networks has the ability under
certain circumstances to exercise a right to put its 40% interest in Regional
Programming Partners, which includes Rainbow Media Group's regional sports
programming businesses as well as other operations attributable to Cablevision
NY Group, such as Madison Square Garden, Fox Sports Net New York and Metro
Channel, to Rainbow Regional Holdings. This right must be exercised within
thirty days and is not exercisable again until December 2005. Upon exercise,
Rainbow Media Holdings may elect to either conduct an initial public offering of
Regional Programming Partners which eliminates the put or purchase Fox Sports
Networks' 40% interest. Payment for the interest may be made via issuance of
marketable securities of Cablevision (which includes shares of Cablevision NY
Group common stock or Rainbow Media Group tracking stock) or Rainbow Media
Holdings, or with a three-year bullet promissory note bearing interest at Prime
plus 0.5% and secured by the Fox Sports Networks interest purchased. Exercise of
the put is within Fox Sports Networks' discretion and no assurances can be given
that it will or will not occur. The Company expects that if this exercise were
to occur, the payment obligation would be allocated between the Rainbow Media
Group and the Cablevision NY Group in proportion to their respective economic
interests in the businesses of Regional Programming Partners.

COMMITMENTS AND CONTINGENCIES

Off-balance sheet commitments and contingent obligations attributable to Rainbow
Media Group as of December 31, 2001 are summarized in the following table:

- ----------

(1) Represents primarily guarantees for professional sports teams rights
agreements of non-consolidated Fox Sports Net affiliates.
(2) Represents primarily professional sports teams rights payments of
consolidated Fox Sports Net businesses.
(3) Approximately $11,670 of operating lease commitments have been accrued at
December 31, 2001 in connection with the restructuring announced in
December 2001.

(84)

Guarantees identified in the table above attributable to Rainbow Media Group
represent obligations in respect of certain professional sports teams rights
agreements entered into by certain non-consolidated subsidiaries. The amounts
guaranteed represent Rainbow Media Group's proportionate interest in the payment
obligation based on its ownership interest in the subsidiary. These guarantees
are legal obligations of Rainbow Media Holdings (which is a subsidiary
attributed to the Cablevision NY Group) with a back-to-back reimbursement
agreement provided by RMG LLC and have therefore been directly attributed to
Rainbow Media Group.

Amounts payable under contractual commitments shown above represent primarily
future payments due under rights agreements which provide certain Rainbow Media
Group companies with the exclusive rights to air certain professional sports
team games. Operating lease future payments represent primarily non-cancelable
leases of office space. Certain lease obligations of Sterling Digital are
currently guaranteed by CSC Holdings (which is a subsidiary attributed to the
Cablevision NY Group and to the Restricted Group) with a back-to-back
reimbursement agreement provided by RMG LLC and have therefore been directly
attributed to Rainbow Media Group.

RELATED PARTY TRANSACTIONS

The Company holds a 49.9% voting interest and certain preferential distribution
rights in Northcoast Communications, a wireless personal communications services
("PCS") provider that holds licenses to provide service in certain markets
including Cleveland, New York City and Boston. Northcoast Communications
commenced commercial service in Cleveland in April 2001. Northcoast
Communications' operations are not consolidated with the Company. At December
31, 2001, Northcoast Communications' total outstanding debt was $131.0 million
which consisted primarily of $68.8 million in notes payable to the FCC for the
acquisition of PCS licenses acquired during 1997 and $62.0 million in vendor
financing outstanding under a $75 million facility obtained in connection with
its launch of commercial service in Cleveland. CSC Holdings has guaranteed the
payment of the FCC indebtedness of the Northcoast Communications subsidiary that
holds the Cleveland PCS license, which had an outstanding balance of $3.2
million as of December 31, 2001. As of December 31, 2001, the Company, through
the Restricted Group, had invested $152.8 million in Northcoast Communications
(either directly or through loans to Northcoast PCS, LLC, the other member in
Northcoast Communications).

The Company anticipates that it will invest up to $75 million in Northcoast
Communications during 2002, all of which will be used to fund the buildout of
Northcoast Communications' PCS licenses in accordance with FCC minimum buildout
requirements, FCC debt service and certain operating expenses. To avoid
forfeiture of its PCS licenses, Northcoast Communications must certify to the
FCC that it has met certain construction benchmarks by April 28, 2002 in certain
markets and by June 27, 2002 in other markets, including New York City. The
Company also provides certain management services to Northcoast Communications,
subject to the direction and control of Northcoast Communications, for which it
receives an annual fee plus reimbursement of costs and expenses. For the year
ended December 31, 2001, the Company recorded management fees of $13.6 million
which were unpaid as of March 25, 2002. Northcoast Communications is controlled
by John Dolan, a nephew of Charles F. Dolan and a cousin of James L. Dolan, the
Company's Chairman and Chief Executive Officer, respectively.

(85)

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In July 2001, the FASB issued Statement No. 141, Business Combinations, and
Statement No. 142, Goodwill and Other Intangible Assets. Statement 141 requires
that the purchase method of accounting be used for all business combinations.
Statement 141 also specifies criteria that intangible assets acquired in a
purchase method business combination must meet to be recognized and reported
separately from goodwill. Statement 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of Statement 142. Statement 142 will also require that intangible
assets with definite useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and reviewed for impairment in
accordance with Statement No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.

The Company adopted the provisions of Statement 141 effective July 1, 2001. The
adoption of Statement 141 had no effect on the financial position or results of
operations of the Company. Statement 142 is effective for the Company beginning
January 1, 2002. At that time, any goodwill and intangible assets determined to
have an indefinite useful life that were acquired in a purchase business
combination will not be amortized, but will be evaluated for impairment in
accordance with the provisions of Statement 142.

Statement 141 will require, upon adoption of Statement 142, that the Company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary reclassifications
in order to conform with the new criteria in Statement 141 for recognition apart
from goodwill. Upon adoption of Statement 142, the Company will be required to
reassess the useful lives and residual values of all intangible assets acquired
in purchase business combinations, and make any necessary amortization period
adjustments by the end of the first interim period after adoption. In addition,
to the extent an intangible asset is identified as having an indefinite useful
life, the Company will be required to test the intangible asset for impairment
in accordance with the provisions of Statement 142 within the first interim
period. Any impairment loss will be measured as of the date of adoption and
recognized as the cumulative effect of a change in accounting principle in the
first interim period.

The Company will adopt Statement 142 effective January 1, 2002 and is evaluating
the effect that such adoption may have on its consolidated results of operations
and financial position. As a result of adoption, a substantial amount of the
Company's intangible assets will no longer be amortized.

In August 2001, the FASB issued Statement No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which supersedes both Statement 121 and the
accounting and reporting provisions of APB Opinion No. 30, Reporting the Results
of Operations - Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and Transactions
(Opinion 30), for the disposal of a segment of a business (as previously defined
in that Opinion). Statement 144 retains the fundamental provisions in Statement
121 for recognizing and measuring impairment losses on long-lived assets held
for use and long-lived assets to be disposed of by sale, while also resolving
significant implementation issues associated with Statement 121. Statement 144
retains the basic provisions of Opinion 30 on how to present

(86)

discontinued operations in the income statement but broadens that presentation
to include a component of an entity (rather than a segment of a business).
Unlike Statement 121, an impairment assessment under Statement 144 will never
result in a write-down of goodwill. Rather, goodwill is evaluated for impairment
under Statement 142.

The Company is required to adopt Statement 144 on January 1, 2002. Management
does not expect the adoption of Statement 144 for long-lived assets held for use
to have a material impact on the Company's financial statements because the
impairment assessment under Statement 144 is largely unchanged from Statement
121. The provisions of Statement 144 generally are required to be applied
prospectively after the adoption date to newly initiated disposal activities.
Therefore, management cannot determine the potential effects that adoption of
Statement 144 will have on the Company's financial statements.

In November 2001, FASB's Emerging Issues Task Force issued EITF No. 01-09,
"Accounting for the Consideration Given by a Vendor to a Customer or a Reseller
of the Vendors' Products." EITF No. 01-09 stipulates the criteria to be met in
determining the financial statement classification of customer incentives (which
includes deferred carriage fees) as either a reduction of revenue or an
operating expense. As required, effective January 1, 2002, the Company will
generally reclassify the amortization of its deferred carriage fees as a
reduction to revenues, net. All comparative periods will be restated. The
amortization of deferred carriage fees shown on the balance sheet is currently
included in technical and operating expenses, which would correspondingly be
reduced such that operating income and net income would not be affected.

(87)

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is exposed to market risks from changes in interest rates and
certain equity security prices. The Company's exposure to interest rate
movements results from its use of floating and fixed rate debt to fund its
working capital, capital expenditures, and other operational and investment
requirements. To manage interest rate risk, the Company has entered into from
time to time interest rate swap contracts to adjust the proportion of total debt
that is subject to variable and fixed interest rates. Such contracts fix the
borrowing rates on floating rate debt to provide an economic hedge against the
risk of rising rates and/or convert fixed rate borrowings to variable rates to
provide an economic hedge against the risk of higher borrowing costs in a
declining interest rate environment. In addition, the Company from time to time
may utilize short-term interest rate lock agreements to hedge the risk that the
cost of a future issuance of fixed-rate debt may be adversely affected by
changes in interest rates. The Company does not enter into interest rate swap
contracts for speculative or trading purposes.

The Company's exposure to changes in equity security prices stems primarily from
the AT&T, Adelphia Communications, Charter Communications, and AT&T Wireless
common stock held by the Company. As of December 31, 2001, the Company had
hedged its equity price risk on all of these shares through the execution of
prepaid forward contracts. Such contracts set a floor and ceiling on the
Company's participation in changes in the underlying stock price, thereby
eliminating downside exposure and providing for upside appreciation potential to
the contract's ceiling price.

FAIR VALUE OF DEBT: Based on the level of interest rates prevailing at December
31, 2001, the fair value of the Company's fixed-rate debt and redeemable
preferred stock of $6,337.8 million exceeded its carrying cost by approximately
$178.3 million. The fair value of these financial instruments is estimated based
on reference to quoted market prices for these or comparable securities. The
Company's floating rate borrowings bear interest at current market rates and
thus approximate fair value. The effect of a hypothetical 100 basis point
decrease in interest rates prevailing at December 31, 2001 would increase the
estimated fair value of fixed-rate debt and redeemable preferred stock
instruments by approximately $299.6 million. This estimate is based on the
assumption of an immediate and parallel shift in interest rates across all
maturities. Changes in the fair value of these securities are expected to be
offset economically by changes in the fair value of the interest rate
derivative contracts.

INTEREST RATE HEDGE CONTRACTS: As of December 31, 2001, the Company had
outstanding interest rate swap contracts to convert fixed-rate debt to floating
rate debt covering a total notional principal amount of $980 million. As of
December 31, 2001, the fair market value of these interest rate hedge contracts
was approximately $17.3 million and are reflected as derivative contracts in the
Company's balance sheet. Assuming an immediate and parallel shift in interest
rates across the yield curve, a 100 basis point increase in interest rates from
December 31, 2001 prevailing levels would decrease the fair market value of all
hedge contracts by approximately $13.6 million to $3.7 million.

In addition, the Company had outstanding prepaid interest rate swap contracts
with a notional value of $1.1 billion entered into in connection with its
monetization transactions. As of December 31, 2001, such contracts had a fair
market value of $226.3 million, a net liability position reflected as
liabilities under derivative contracts in the Company's balance sheet.

(88)

Assuming an immediate and parallel shift in interest rates across the yield
curve, a 100 basis point increase in interest rates from December 31, 2001
prevailing levels would decrease the fair market value of these hedge contracts
to the Company by approximately $36.7 million to a liability of $263.0 million.

EQUITY PRICE RISK: As of December 31, 2001, the fair market value and the
carrying value of the Company's holdings of AT&T, Adelphia Communications,
Charter Communications, and AT&T Wireless common stock aggregated $1,527.9
million. Assuming a 10% change in price, the potential change in the fair value
of these investments would be approximately $152.8 million. Changes in the fair
value of these securities are expected to be offset significantly by changes in
the fair value of the equity collar used to hedge this market price risk. As of
December 31, 2001, the net fair value and the carrying value of the equity
collar component of the prepaid forward contracts entered into to hedge the
equity price risk of AT&T, Adelphia Communications, Charter Communications and
AT&T Wireless aggregated $250.4 million, a net receivable position. The
maturities of these prepaid forward contracts, all of which were entered into
2001, are summarized in the following table:

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

For information required by Item 8, refer to the Index to Financial Statements
on page 102.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

PART III

The information called for by Item 401 of Regulation S-K under Item 10,
Directors and Executive Officers of the Registrant, Item 11, Executive
Compensation, Item 12, Security Ownership of Certain Beneficial Owners and
Management and Item 13, Certain Relationships and Related Transactions, is
hereby incorporated by reference to Cablevision's definitive proxy statement for
its Annual Meeting of Shareholders anticipated to be held in June 2002 or if
such

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definitive proxy statement is not filed with the Commission prior to April 30,
2002, to an amendment to this report on Form 10-K filed under cover of Form
10-K/A.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934.

Pursuant to regulations promulgated by the Securities and Exchange Commission,
the Company is required to identify, based solely on a review of reports filed
under Section 16(a) of the Securities Exchange Act of 1934, each person who, at
any time during its fiscal year ended December 31, 2001, was a director, officer
or beneficial owner of more than ten percent of the Company's Class A Common
Stock that failed to file on a timely basis any such reports. Based on such
review, the Company is aware of no such failure.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULE, AND
REPORTS ON FORM 8-K.

(a) The following documents are filed as part of this report:
1. The financial statements as indicated in the index set forth on page
102.
2. Financial statement schedule:

Page No.
--------
Schedule supporting consolidated financial statements:
Schedule II - Valuation and Qualifying Accounts.............. 91

Schedules other than that listed above have been omitted, since they are either
not applicable, not required or the information is included elsewhere herein.

3. The Index to Exhibits is on page 94.

(b) Reports on Form 8-K:

Cablevision Systems Corporation filed a current report on Form 8-K with the
Commission on October 5, 2001.

CSC Holdings, Inc. filed a current report on Form 8-K with the Commission on
October 5, 2001.

(90)

SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(Dollars in thousands)

CABLEVISION SYSTEMS CORPORATION

CSC HOLDINGS, INC.

(91)

SIGNATURES
----------

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrants have duly caused this report to be signed on their
behalf by the undersigned, thereunto duly authorized on the 29th day of
March, 2002.

Cablevision Systems Corporation
CSC Holdings, Inc.

By: /s/ WILLIAM J. BELL
----------------------------
Name: William J. Bell
Title: Vice Chairman
(Cablevision Systems
Corporation and CSC
Holdings, Inc.)

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints William J. Bell and Robert S. Lemle, and each of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him in his name, place and stead, in any
and all capacities, to sign this report, and file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by the following persons in the capacities and
on the dates indicated on behalf of each of the Registrants.

(92)

SIGNATURES
----------
(continued)

(93)

INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- -----------

3.1 Amended and Restated Certificate of Incorporation of Cablevision Systems
Corporation (incorporated herein by reference to Annex II to Cablevision
Systems Corporation's Proxy Statement, dated October 10, 2000, as
supplemented, (the "2000 Proxy Statement")).

3.2 Bylaws of Cablevision Systems Corporation (incorporated herein by
reference to Exhibit 3.4 of the Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2001).

3.3 Certificate of Incorporation of CSC Holdings, Inc. (incorporated herein by
reference to Exhibits 3.1A(i) and 3.1A(ii) to CSC Holdings' Annual Report
on Form 10-K for the fiscal year ended December 31, 1989).

3.4 Bylaws of CSC Holdings, Inc. (incorporated herein by reference to
Exhibit 3.2 of the Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2001).

3.5 Certificate of Amendment of Certificate of Incorporation of CSC Holdings,
Inc., dated April 1, 1999 (incorporated herein by reference to Exhibit 3.1
of CSC Holdings' Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1999).

3.6 Certificate of Amendment of Certificate of Incorporation of CSC Holdings,
Inc., dated April 1, 1999 (incorporated herein by reference to Exhibit 3.2
of CSC Holdings' Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1999).

4.1 Certificate of Designations for CSC Holdings' Series H Redeemable
Exchangeable Preferred Stock (incorporated by reference to Exhibit 4.1E to
CSC Holdings' Registration Statement on Form S-4, Registration No.
33-63691).

4.2 Certificate of Designations for CSC Holdings' Series M Redeemable
Exchangeable Preferred Stock (incorporated by reference to Exhibit 4.1(f)
to CSC Holdings' Registration Statement on Form S-4, Registration No.
333-00527).

4.3 Indenture dated as of December 1, 1997 relating to CSC Holdings'
$500,000,000 7-7/8% Senior Notes due 2007 (incorporated by reference to
Exhibit 4.4 to Cablevision Systems Corporation's Registration Statement on
Form S-4, dated January 20, 1998, File No. 333-44547 (the "S-4")).

(94)

INDEX TO EXHIBITS
(continued)
EXHIBIT
NO. DESCRIPTION
- ------- -----------

4.4 Indenture dated as of February 15, 1993 relating to CSC Holdings'
$200,000,000 9-7/8% Senior Subordinated Debentures due 2013 (incorporated
herein by reference to Exhibit 4.3 to Cablevision Systems Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31, 1992
(the "1992 10-K")).

4.5 Indenture dated as of April 1, 1993 relating to CSC Holdings' $150,000,000
9-7/8% Senior Subordinated Debentures due 2023 (incorporated by reference
to CSC Holdings' Registration Statement on Form S-4, Registration No.
33-61814).

4.6 Supplemental Indenture dated as of November 1, 1995 between CSC Holdings
and the Bank of New York, Trustee to the Indenture dated November 1, 1995
(incorporated by reference to Exhibit 99.6 to CSC Holdings' Current Report
on Form 8-K, filed November 1, 1995).

4.7 Indenture dated as of November 1, 1995 relating to CSC Holdings'
$150,000,000 9-7/8% Senior Subordinated Notes due 2006, $300,000,000
9-1/4% Senior Subordinated Notes due 2005 and $250,000,000 10-1/2% Senior
Subordinated Debentures due 2016 (incorporated by reference to Exhibit
99.6 to CSC Holdings' Current Report on Form 8-K filed November 1, 1995).

4.8 Indenture dated August 15, 1997 relating to CSC Holdings' $400,000,000
8-1/8% Senior Debentures due 2009 (incorporated herein by reference to CSC
Holdings' Registration Statement on Form S-4, Registration No. 333-38013).

4.9 Senior Indenture (incorporated by reference to Exhibit 4.1 to CSC
Holdings' Registration Statement on Form S-3, Registration No. 333-57407).

4.10 Subordinated Indenture (incorporated by reference to Exhibit 4.2 to CSC
Holdings' Registration Statement on Form S-3, Registration No. 333-57407).

4.11 Indenture dated as of March 22, 2001 relating to CSC Holdings
$1,000,000,000 7-5/8% Senior Notes due 2011 (incorporated herein by
reference to Exhibit 4.11 to Cablevision Systems Corporation's Annual
Report of Form 10-K for the fiscal year ended December 31, 2000).

4.12 Indenture dated as of July 1, 1999 relating to CSC Holdings $500,000,000
8-1/8% Senior Notes due 2009 and 8-1/8% Series B Senior Notes due 2009
(incorporated by reference to Exhibit 4.2 to Registration Statement on
Form S-4 (Registration No. 333-84449).

10.1 Registration Rights Agreement between CSC Systems Company and CSC Holdings
(incorporated herein by reference to Exhibit 10.1 of CSC Holdings'
Registration Statement on Form S-1, Registration No. 033-01936 ("CSC
Holdings' Form S-1")).

(95)

INDEX TO EXHIBITS
(continued)
EXHIBIT
NO. DESCRIPTION
- ------- -----------

10.2 Registration Rights Agreement between Cablevision Company and CSC Holdings
(incorporated herein by reference to Exhibit 10.2 to CSC Holdings' Form
S-1).

10.3 Form of Right of First Refusal Agreement between Dolan and CSC Holdings
(incorporated herein by reference to Exhibit 10.4 to CSC Holdings' Form
S-1).

10.4 Supplemental Benefit Plan of CSC Holdings (incorporated herein by
reference to Exhibit 10.7 to CSC Holdings' Form S-1).

10.5 Employment Agreement between Charles F. Dolan and CSC Holdings dated
January 27, 1986 (incorporated herein by reference to Exhibit 10.9 to CSC
Holdings' Form S-1).

10.6 Employment Agreement, dated as of March 11, 1998, between CSC Holdings and
William J. Bell (incorporated herein by reference to Exhibit 10.09 to
Cablevision Systems Corporation's Annual Report of Form 10-K for the
fiscal year ended December 31, 2000).

10.7 Employment Agreement, dated as of March 11, 1998, between CSC Holdings and
Robert S. Lemle (incorporated herein by reference to Exhibit 10.10 to
Cablevision Systems Corporation's Annual Report of Form 10-K for the
fiscal year ended December 31, 2000).

10.8 Employment Agreement, dated as of January 1, 1999, between CSC Holdings
and James L. Dolan (incorporated herein by reference to Exhibit 10.11 to
Cablevision Systems Corporation's Annual Report of Form 10-K for the
fiscal year ended December 31, 2000).

10.9 Cablevision Systems Corporation Employee Stock Plan (incorporated herein
by reference to Annex III to the 2000 Proxy Statement).

10.10 Cablevision Systems Corporation Executive Performance Incentive Plan
(incorporated herein by reference to Cablevision Systems Corporation's
June 10, 1998 Proxy Statement).

10.11 Cablevision Systems Corporation Long-Term Incentive Plan (incorporated
herein by reference to Exhibit 10.41 to the S-4).

10.12 Cablevision Systems Corporation 1996 Non-Employee Directors Stock Option
Plan (incorporated by reference to CSC Holdings' 1996 Proxy Statement).

10.13 Amendment to Cablevision Systems Corporation 1996 Non-Employee Directors
Stock Option Plan (incorporated by reference to the 2000 Proxy Statement).

10.14 Form of Guarantee and Indemnification Agreement among Charles F. Dolan,
CSC Holdings and officers and directors of CSC Holdings (incorporated
herein by reference to Exhibit 28 to CSC Holdings' Form S-1).

(96)

INDEX TO EXHIBITS
(continued)
EXHIBIT
NO. DESCRIPTION
- ------- -----------

10.15 Amended and Restated Agreement of Limited Partnership of Madison Square
Garden, L.P., among MSG Eden Corporation, ITT MSG Inc. and Garden L.P.
Holding Corp., dated as of April 15, 1997. (incorporated by reference to
Exhibit 2(b) of the April 1997 8-K).

10.16 Formation Agreement, dated as of June 22, 1997, among Rainbow Media Sports
Holdings, Inc. and Fox Sports Net, LLC, attaching Partners) and Annex B
(Partnership Agreement of National Sports Partners) (incorporated by
reference to Exhibit 99.1 of the April 1997 8-K).

10.17 Lease Agreement between Nassau Cable Business Trust, as Landlord and CSC
Holdings, as Tenant, dated as of November 1, 1997 (incorporated by
reference to Exhibit 10.56 to the S-4).

10.18 Letter Agreement and Term Sheet, dated October 2, 1997 among CSC Holdings,
At Home Corporation ("At Home"), Comcast Corporation, Cox Enterprises,
Inc., Kleiner, Perkins, Caufield & Byers and Tele-Communications, Inc., as
amended October 10, 1997 (incorporated by reference to Exhibit 10.01 of
the Current Report on Form 8-K filed by At Home on October 22, 1997 (the
"At Home October 8-K")).

10.19 Warrant to purchase shares of Series A Common Stock of At Home issued to
CSC Holdings (incorporated by reference to Exhibit 10.03 of the At Home
October 8-K).

10.20 Contingent Warrant to purchase shares of Series A Common Stock of At Home
issued to CSC Holdings (incorporated by reference to Exhibit 10.04 of the
At Home October 8-K).

10.21 Warrant Purchase Agreement, dated October 10, 1997, between At Home and
CSC Holdings (incorporated by reference to Exhibit 10.02 of the At Home
October 8-K).

10.22 Amended and Restated Stockholders Agreement dated August 1, 1996, as
amended in May 1997 (incorporated by reference to Exhibit 4.04 of the
Registration Statement on Form S-1 of At Home (File No. 333-27323) (the
"At Home S-1")).

10.23 Letter Agreement dated May 15, 1997 among At Home and the parties thereto,
including as exhibits the Master Distribution Agreement Term Sheet and the
Term Sheet for Form of LCO Agreement (incorporated by reference to Exhibit
10.20 of the At Home S-1).

10.24 Credit Agreement, dated as of June 6, 1997, among Madison Square Garden,
L.P., the several lenders from time to time parties thereto, the Chase
Manhattan Bank, as Administrative Agent, Toronto Dominion (New York),
Inc., as Documentation Agent, and The Bank of Nova Scotia, as Syndication
Agent (incorporated by reference to Exhibit 10.63 to the S-4).

(97)

INDEX TO EXHIBITS
(continued)
EXHIBIT
NO. DESCRIPTION
- ------- -----------

10.25 First Amendment, dated November 5, 1997 to the Credit Agreement, dated as
of June 6, 1997, among Madison Square Garden, L.P., the several lenders
from time to time parties thereto, the Chase Manhattan Bank, as
Administrative Agent, Toronto Dominion (New York), Inc., as Documentation
Agent, and The Bank of Nova Scotia, as Syndication Agent (incorporated by
reference to Exhibit 10.66 to the S-4).

10.26 Second Amendment, dated December 10, 1997, to the Credit Agreement, dated
as of June 6, 1997, among Madison Square Garden, L.P., the several lenders
from time to time parties thereto, the Chase Manhattan Bank, as
Administrative Agent, Toronto Dominion (New York), Inc., as Documentation
Agent, and The Bank of Nova Scotia, as Syndication Agent (incorporated by
reference to Exhibit 10.67 to the Form S-4).

10.27 Third Amendment, dated July 28, 1999, to the Credit Agreement, dated as of
June 6, 1997, among Madison Square Garden, L.P., the several lenders from
time to time parties thereto, the Chase Manhattan Bank, as Administrative
Agent, Toronto Dominion (New York), Inc., as Documentation Agent, and The
Bank of Nova Scotia, as Syndication Agent.

10.28 Fourth Amendment, dated September 4, 2001, to the Credit Agreement, dated
as of June 6, 1997, among Madison Square Garden, L.P., the several lenders
from time to time parties thereto, the Chase Manhattan Bank, as
Administrative Agent, Toronto Dominion (New York), Inc., as Documentation
Agent, and The Bank of Nova Scotia, as Syndication Agent.

10.29 Fifth Amendment, dated November 13, 2001, to the Credit Agreement, dated
as of June 6, 1997, among Madison Square Garden, L.P., the several lenders
from time to time parties thereto, the Chase Manhattan Bank, as
Administrative Agent, Toronto Dominion (New York), Inc., as Documentation
Agent, and The Bank of Nova Scotia, as Syndication Agent.

10.30 Asset Purchase Agreement, dated as of January 29, 1998, between The Wiz,
Inc. and each of its subsidiaries and affiliates listed on the signature
pages thereto and Cablevision Electronics Investments, Inc. (incorporated
by reference to Exhibit 99.1 of CSC Holdings' report on Form 8-K dated
February 5, 1998).

10.31 Amended and Restated Contribution and Merger Agreement, dated as of June
6, 1997, among Cablevision Systems Corporation, CSC Holdings, CSC Merger
Corporation and TCI Communications, Inc. (incorporated herein by reference
to Exhibit 2.1 to the S-4).

10.32 Stockholders Agreement, dated as of March 4, 1998, by and among CSC
Holdings, Tele-Communications, Inc., a Delaware corporation, the Class B
Entities and the Investors (incorporated herein by reference to Exhibit
4.1 to CSC Holdings' Current Report on Form 8-K dated March 4, 1998).

(98)

INDEX TO EXHIBITS
(continued)
EXHIBIT
NO. DESCRIPTION
- ------- -----------

10.33 Seventh Amended and Restated Credit Agreement dated as of June 26, 2001,
among CSC Holdings, Inc., the Restricted Subsidiaries which are parties
thereto, the lenders that are parties thereto (the "Banks"), Toronto
Dominion (Texas), Inc., as Administrative Agent, TD Securities (USA) Inc.
and Banc of America Securities LLC, as Co-Lead Arrangers and Co-Book
Managers, Bank of America, N.A., as Syndication Agent, The Bank of New
York and The Bank of Nova Scotia, as Co-Documentation Agents and
Arrangers, The Chase Manhattan Bank, as Co-Documentation Agent, Fleet
National Bank, J.P. Morgan Securities Inc., Mizuho Financial Group and
Salomon Smith Barney Inc., as Arrangers, Bank of Montreal, Barclays Bank
PLC, BNP Paribas, Credit Lyonnais New York Branch, Dresdner Bank AG, New
York and Grand Cayman branches, First Union National Bank and Royal Bank
of Canada, as Managing Agents and Societe Generale and Suntrust Bank, as
Co-Agents.

10.34 Amendment No. 1, dated July 20, 2001, to Seventh Amended and Restated
Credit Agreement dated as of June 26, 2001, among CSC Holdings, Inc., the
Restricted Subsidiaries which are parties thereto, the banks that are
parties thereto and Toronto Dominion (Texas), Inc., as Administrative
Agent.

10.35 Amendment No. 2, dated November 19, 2001, to Seventh Amended and Restated
Credit Agreement dated as of June 26, 2001, among CSC Holdings, Inc., the
Restricted Subsidiaries which are parties thereto, the banks that are
parties thereto and Toronto Dominion (Texas), Inc., as Administrative
Agent.

10.36 First Amended and Restated Credit Agreement, dated as of May 28, 1998,
among Cablevision MFR, Inc., CSC Holdings, Inc., the Guarantors which are
parties thereto, the lenders which are parties thereto, Toronto Dominion
(Texas), Inc., as Arranging Agent and as Administrative Agent, The Bank of
New York, The Bank of Nova Scotia, The Canadian Imperial Bank of Commerce,
NationsBank, N.A., and The Chase Manhattan Bank, as Managing Agents, Bank
of Montreal, Chicago Branch, Barclays Bank, PLC, Fleet Bank, N.A., and
Royal Bank of Canada, as Agents, Banque Paribas, Credit Lyonnais,
BankBoston, N.A., The First National Bank of Chicago, Mellon Bank, N.A.
and Societe Generale, New York Branch, as Co-Agents, and The Bank of New
York and The Bank of Nova Scotia as Co Syndication Agents (incorporated
herein by reference to Exhibit 10.48 to the 1998 10-K).

(99)

INDEX TO EXHIBITS
(continued)
EXHIBIT
NO. DESCRIPTION
- ------- -----------

10.37 Asset Purchase Agreement, dated as of December 8, 1999, by and among
Telerama, Inc., Cablevision of Cleveland, L.P., and Adelphia
Communications Corporation (incorporated herein by reference to Exhibit
99.1 of Cablevision Systems Corporation's Current Report on Form 8-K filed
on December 17, 1999 (the "December 1999 8-K")).

10.38 Agreement and Plan of Reorganization, dated as of December 8, 1999, by and
among Cablevision of the Midwest, Inc., Cablevision of the Midwest Holding
Co., Inc., Adelphia General Holdings II, Inc. and Adelphia Communications
Corporation (incorporated herein by reference to Exhibit 99.2 of the
December 1999 8-K).

10.39 Agreement and Plan of Merger, dated as of April 18, 2000, by and among CSC
Holdings, Inc., Cablevision of Massachusetts, Inc., AT&T Corp. and AT&T
CSC, Inc. (incorporated herein by reference to Exhibit 99.1 of Cablevision
Systems Corporation's Current Report on Form 8-K filed on May 5, 2000 (the
"May 2000 8-K")).

10.40 Asset Exchange Agreement, dated as of April 18, 2000, by and among CSC
Holdings, Inc., Cablevision of Brookline, L.P., Cablevision of Boston,
Inc. and AT&T Corp. (incorporated herein by reference to Exhibit 99.2 of
the May 2000 8-K).

10.41 Letter Agreement dated January 31, 2001, among Cablevision Systems
Corporation, Rainbow Media Holdings, Inc., Metro-Goldwyn-Mayer Inc.,
American Movie Classics Holding Corporation, AMC II Holding Corporation,
Bravo Holding Corporation, and Bravo II Holding Corporation (incorporated
herein by reference to Exhibit 99.1 of Cablevision Systems Corporation's
Current Report on Form 8-K filed on February 5, 2001).

10.42 Stockholders Agreement, dated as of October 6, 2000, among Cablevision
Systems Corporation, CSC Holdings, Inc., National Broadcasting Company,
Inc., and NBC-Rainbow Holding, Inc. (incorporated herein by reference to
Exhibit 10.42 to Cablevision Systems Corporation's Annual Report of Form
10-K for the fiscal year ended December 31, 2000).

10.43 Registration Rights Agreement, dated as of October 6, 2000, between
Cablevision Systems Corporation and NBC-Rainbow Holding, Inc.
(incorporated herein by reference to Exhibit 10.43 to Cablevision Systems
Corporation's Annual Report of Form 10-K for the fiscal year ended
December 31, 2000).

10.44 Loan Agreement, dated as of March 25, 2002, among Rainbow Media Group,
LLC, as Borrower, the Guarantors party thereto, TD Securities (USA) Inc.
and Banc of America Securities LLC, as Co-Lead Arrangers and Co-Book
Runners, Bank Of America, N.A., as Syndication Agent, The Bank of Nova
Scotia, Barclays Bank PLC and Fleet National Bank, as Co-Documentation
Agents, Toronto Dominion (Texas), Inc., as Administrative Agent and the
other Credit Parties party thereto.

(100)

INDEX TO EXHIBITS
(continued)
EXHIBIT
NO. DESCRIPTION
- ------- -----------

10.45 Second Amended And Restated Loan Agreement, dated as of March 25, 2002,
among American Movie Classics Company and Bravo Company, as Borrowers, the
Guarantors party thereto, TD Securities (USA) Inc. and Banc of America
Securities LLC, as Co-Lead Arrangers and Co-Book Runners, Bank of America,
N.A., as Syndication Agent, Citicorp USA, Inc. and General Electric
Capital Corporation, as Co-Documentation Agents, Toronto Dominion (Texas),
Inc., as Administrative Agent and the other Credit Parties party thereto.

21 Subsidiaries of the Registrants.

23.1 Consent of Independent Auditors.

23.2 Consent of Independent Auditors.

(101)

INDEX TO FINANCIAL STATEMENTS

(102)

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Cablevision Systems Corporation

We have audited the accompanying consolidated balance sheets of Cablevision
Systems Corporation and subsidiaries as of December 31, 2001 and 2000, and the
related consolidated statements of operations, stockholders' deficiency and cash
flows for each of the years in the three-year period ended December 31, 2001. In
connection with our audits of the consolidated financial statements, we also
audited the financial statement schedule listed in Item 14(a)(2). These
consolidated financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and the financial statement
schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cablevision Systems
Corporation and subsidiaries at December 31, 2001 and 2000, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. Also, in our opinion, the
related financial statement schedule referred to above, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

Melville, New York
March 29, 2002

I-1

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2001 and 2000
(Dollars in thousands)

See accompanying notes to
consolidated financial statements.

I-2

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2001 and 2000
(Dollars in thousands, except per share amount)

See accompanying notes
to consolidated financial statements.

I-3

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December 31, 2001, 2000 and 1999
(Dollars in thousands, except per share amounts)

See accompanying notes
to consolidated financial statements.

I-4

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
Years ended December 31, 2001, 2000 and 1999
(Dollars in thousands)

- -----------------
* Represents the Company's Class A Common Stock and Class B Common Stock,
respectively, for periods prior to March 29, 2001.

See accompanying notes
to consolidated financial statements.

I-5

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2001, 2000 and 1999
(Dollars in thousands)

See accompanying notes
to consolidated financial statements.

I-6

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASHFLOWS
Years ended December 31, 2001, 2000 and 1999
(Dollars in thousands)
(continued)

See accompanying notes
to consolidated financial statements.

I-7

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

THE COMPANY AND RELATED MATTERS

Cablevision Systems Corporation and its majority-owned subsidiaries
("Cablevision" or the "Company") owns and operates cable television systems and
has ownership interests in companies that produce and distribute national and
regional entertainment and sports programming services, including Madison Square
Garden, L.P. ("MSG"). The Company also owns companies that provide advertising
sales services for the cable television industry, provide switched telephone
service, operate a retail electronics chain and operate motion picture theaters.
The Company classifies its business interests into four segments:
Telecommunication Services, consisting principally of its cable television,
telephone and cable modem services operations; Rainbow Media Group ("RMG"),
consisting principally of interests in national and regional cable television
programming networks; MSG, which owns and operates professional sports teams,
regional cable television networks, live productions and entertainment venues;
and Retail Electronics, which represents the operations of its retail
electronics stores.

In March 2001, the Company distributed a new series of common stock called
Rainbow Media Group tracking stock and redesignated its existing common stock as
Cablevision NY Group (CNYG) common stock (see Note 2). Included in the notes to
the consolidated financial statements is combined financial data for each of RMG
and CNYG. The combined financial data for each of RMG and CNYG is intended to
reflect the assets, liabilities, revenues and expenses that Cablevision has
attributed to each of those groups, as well as certain allocations deemed
reasonable by management, to present the combined financial position and results
of operations of RMG and CNYG as if each were a separate entity for all periods
presented. However, primarily as a result of allocations and inter-group related
party transactions, the financial information included herein may not
necessarily reflect the combined financial position and results of operations of
RMG or CNYG had it operated as a separate stand-alone entity during the periods
presented.

RMG represents a combination of certain assets, liabilities and businesses owned
by Cablevision, consisting of: (i) interests in five nationally-distributed
entertainment programming networks, (ii) interests in five regional Fox Sports
Net networks outside of the New York metropolitan area, (iii) an interest in
National Sports Partners, which owns and distributes Fox Sports Net, (iv) an
interest in National Advertising Partners, which provides advertising
representation services to all of the Fox Sports Net networks, (v) Rainbow
Network Communications, a full service network programming origination and
distribution company and (vi) certain developmental activities of Cablevision's
Rainbow Media Holdings, Inc. subsidiary.

CNYG represents a combination of assets, liabilities and businesses owned by
Cablevision which have not been attributed to RMG. These assets, liabilities and
businesses include: (i) cable television businesses, including Cablevision's
residential telephone and high-speed cable modem businesses, (ii) commercial
telephone and internet access businesses, (iii) retail

I-8

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

electronics businesses, (iv) Cablevision's interests in New York metropolitan
area sports and entertainment businesses including Madison Square Garden, Radio
City Music Hall, MSG Network, Fox Sports Net New York and professional sports
teams, (v) motion picture theater businesses, (vi) advertising sales
representation businesses, (vii) equity interests in certain direct broadcast
satellite assets and interests in a wireless personal communications business,
and (viii) certain marketable equity securities.

Even though Cablevision has attributed certain assets, liabilities, revenue and
cash flows to each of RMG and CNYG, that attribution does not change the legal
title to any assets or responsibility for any liabilities and does not affect
the rights of any creditors. Further, financial results of one group that affect
Cablevision's consolidated financial condition could affect the financial
position or results of operations of the other group. Any dividends or
distributions on, or repurchases of, Cablevision stock will reduce the assets of
Cablevision legally available for dividends on RMG and CNYG stock. Accordingly,
holders of CNYG common stock and RMG tracking stock will continue to be subject
to risks associated with an investment in a single corporation and in all of
Cablevision's businesses, assets and liabilities.

PRINCIPLES OF CONSOLIDATION AND INVESTMENTS IN AFFILIATES

The accompanying consolidated financial statements include the accounts of the
Company and its majority-owned subsidiaries. The Company's interests in less
than majority-owned entities are carried on the equity method. The Company would
recognize a loss where there existed an other than a temporary decline in the
value of the investment. All significant intercompany transactions and balances
are eliminated in consolidation.

REVENUE RECOGNITION

The Company recognizes cable television, internet access, telephony and
programming revenues as services are provided to subscribers. Advertising
revenues are recognized when commercials are telecast. Revenue from retail
electronic sales is recognized upon delivery, with an appropriate provision for
returned merchandise based upon historical experience. Revenues derived from
other sources are recognized when services are provided or events occur.

In the quarter ended December 31, 2000, the Company adopted Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). The
adoption of SAB 101 had an insignificant impact on the results of operations.

COSTS OF REVENUE

Costs of revenue related to the sale of retail electronics products are
classified in the accompanying statements of operations as "retail electronics
costs of sales". Costs of revenue related to sales of services are classified as
"technical and operating" expenses in the accompanying statements of operations.

I-9

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

INVESTMENTS IN MARKETABLE SECURITIES

The Company accounts for its investments in marketable securities in accordance
with Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." Investment securities
available-for-sale are stated at fair value, and unrealized holding gains and
losses are included in accumulated other comprehensive income as a separate
component of stockholders' deficiency. Investment securities pledged as
collateral are classified as trading securities and are stated at fair value
with unrealized holding gains and losses included in net income (loss).

LONG-LIVED ASSETS

Property, plant and equipment, including construction materials, are carried at
cost, and include all direct costs and certain indirect costs associated with
the construction of cable television transmission and distribution systems, and
the costs of new subscriber installations. Franchises are amortized on the
straight-line basis over the average remaining terms (7 to 15 years) of the
franchises at the time of acquisition. Broadcast rights and affiliation
agreements (primarily cable television system programming agreements) are
amortized on a straight-line basis over periods ranging from 6 to 40 years.
Other intangible assets are amortized on the straight-line basis over the
periods benefited (2 to 20 years), except that excess costs over fair value of
net assets acquired are being amortized on the straight-line basis over periods
ranging from 3 to 40 years.

The Company reviews its long-lived assets (property, plant and equipment, and
related intangible assets that arose from business combinations accounted for
under the purchase method) for impairment whenever events or circumstances
indicate that the carrying amount of an asset may not be recoverable. If the sum
of the expected cash flows, undiscounted and without interest, is less than the
carrying amount of the asset, an impairment loss is recognized as the amount by
which the carrying amount of the asset exceeds its fair value.

FEATURE FILM INVENTORY

Rights to feature film inventory acquired under license agreements along with
the related obligations are recorded at the contract value. Costs are amortized
to technical and operating expense on a straight-line basis over the respective
license periods. Amounts payable subsequent to December 31, 2001 related to
feature film telecast rights are as follows:

I-10

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

DEFERRED CARRIAGE FEES

Deferred carriage fees represent primarily payments to multiple cable system
operators to guarantee carriage of certain programming services and are
amortized to technical and operating expense over the period of guarantee (3 to
11 years).

INVENTORY

Carrying amounts of retail merchandise are determined on an average cost basis
and are stated at the lower of cost or market.

DEFERRED FINANCING COSTS

Costs incurred to obtain debt are deferred and amortized, on a straight-line
basis, over the life of the related debt.

INCOME TAXES

Income taxes are provided based upon the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes", which requires the
asset/liability method of accounting for deferred income taxes and permits the
recognition of deferred tax assets, subject to an ongoing assessment of
realizability.

INCOME (LOSS) PER COMMON SHARE

Basic and diluted net loss per common share are computed by dividing net loss by
the weighted average number of common shares outstanding. Potential dilutive
common shares are not included in the computation as their effect would be
antidilutive.

Basic net income per share is computed by dividing net income by the weighted
average common stock outstanding during the period. Diluted net income per share
is computed by dividing net income by the weighted average common stock and
common stock equivalents outstanding during the period.

A reconciliation of the numerator and denominator of the basic and diluted net
income (loss) per share calculation for the years ended December 31, 2001 and
2000 follows:

I-11

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

All per share amounts have been adjusted, for all years presented, to reflect
the tracking stock distribution described in Note 2 as if it occurred on January
1, 1999. Per share information is presented individually for the Rainbow Media
Group common stock and the Cablevision NY Group common stock.

Net income (loss) of Cablevision has been attributed to each class of common
stock based on the results of operations of the businesses and interests
attributed to Cablevision NY Group and Rainbow Media Group excluding the net
income or loss attributed to parties other than Cablevision shareholders.

RECLASSIFICATIONS

Certain reclassifications have been made in the 2000 and 1999 financial
statements to conform to the 2001 presentation.

CASH FLOWS

For purposes of the consolidated statements of cash flows, the Company considers
short-term investments with a maturity at date of purchase of three months or
less to be cash equivalents.

During 2001, 2000 and 1999, the Company's non-cash investing and financing
activities and other supplemental data were as follows:

I-12

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

CNYG's non-cash investing and financing activities and other supplemental data
are presented below:

I-13

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

RMG's non-cash investing and financing activities and other supplemental data
are presented below:

COMPREHENSIVE INCOME

Other comprehensive income for the year ended December 31, 2000 of $286,440
represents unrealized net gains on available-for-sale securities. During 2001,
these securities were reclassified to trading securities and the unrealized gain
was included in net income.

USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

I-14

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

COMMITMENTS AND CONTINGENCIES

Liabilities for loss contingencies arising from claims, assessments, litigation,
fines and penalties and other sources are recorded when it is probable that a
liability has been incurred and the amount of the assessment can be reasonably
estimated.

RECENTLY ISSUED ACCOUNTING STANDARDS

In July 2001, the FASB issued Statement No. 141, Business Combinations, and
Statement No. 142, Goodwill and Other Intangible Assets. Statement 141 requires
that the purchase method of accounting be used for all business combinations.
Statement 141 also specifies criteria that intangible assets acquired in a
purchase method business combination must meet to be recognized and reported
separately from goodwill. Statement 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of Statement 142. Statement 142 will also require that intangible
assets with definite useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and reviewed for impairment in
accordance with Statement No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.

The Company adopted the provisions of Statement 141 effective July 1, 2001. The
adoption of Statement 141 had no effect on the financial position or results of
operations of the Company. Statement 142 is effective for the Company beginning
January 1, 2002. At that time, any goodwill and intangible assets determined to
have an indefinite useful life that were acquired in a purchase business
combination will not be amortized, but will be evaluated for impairment in
accordance with the provisions of Statement 142.

Statement 141 will require, upon adoption of Statement 142, that the Company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary reclassifications
in order to conform with the new criteria in Statement 141 for recognition apart
from goodwill. Upon adoption of Statement 142, the Company will be required to
reassess the useful lives and residual values of all intangible assets acquired
in purchase business combinations, and make any necessary amortization period
adjustments by the end of the first interim period after adoption. In addition,
to the extent an intangible asset is identified as having an indefinite useful
life, the Company will be required to test the intangible asset for impairment
in accordance with the provisions of Statement 142 within the first interim
period. Any impairment loss will be measured as of the date of adoption and
recognized as the cumulative effect of a change in accounting principle in the
first interim period.

The Company will adopt Statement 142 effective January 1, 2002 and is evaluating
the effect that such adoption may have on its consolidated results of operations
and financial position. As

I-15

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

a result of adoption, a substantial amount of the Company's intangible assets
will no longer be amortized.

In August 2001, the FASB issued Statement No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which supersedes both Statement 121 and the
accounting and reporting provisions of APB Opinion No. 30, Reporting the Results
of Operations - Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and Transactions
(Opinion 30), for the disposal of a segment of a business (as previously defined
in that Opinion). Statement 144 retains the fundamental provisions in Statement
121 for recognizing and measuring impairment losses on long-lived assets held
for use and long-lived assets to be disposed of by sale, while also resolving
significant implementation issues associated with Statement 121. Statement 144
retains the basic provisions of Opinion 30 on how to present discontinued
operations in the income statement but broadens that presentation to include a
component of an entity (rather than a segment of a business). Unlike Statement
121, an impairment assessment under Statement 144 will never result in a
write-down of goodwill. Rather, goodwill is evaluated for impairment under
Statement 142.

The Company is required to adopt Statement 144 on January 1, 2002. Management
does not expect the adoption of Statement 144 for long-lived assets held for use
to have a material impact on the Company's financial statements because the
impairment assessment under Statement 144 is largely unchanged from Statement
121. The provisions of Statement 144 generally are required to be applied
prospectively after the adoption date to newly initiated disposal activities.
Therefore, management cannot determine the potential effects that adoption of
Statement 144 will have on the Company's financial statements.

In November 2001, FASB's Emerging Issues Task Force issued EITF No. 01-09,
"Accounting for the Consideration Given by a Vendor to a Customer or a Reseller
of the Vendors' Products." EITF No. 01-09 stipulates the criteria to be met in
determining the financial statement classification of customer incentives (which
includes deferred carriage fees) as either a reduction of revenue or an
operating expense. As required, effective January 1, 2002, the Company will
generally reclassify the amortization of its deferred carriage fees as a
reduction to revenues, net. All comparative periods will be restated. The
amortization of deferred carriage fees shown on the balance sheet is currently
included in technical and operating expenses, which would correspondingly be
reduced such that operating income and net income would not be affected.

NOTE 2. TRACKING STOCK

In March 2001, the Company amended and restated its Certificate of Incorporation
to increase the number of authorized shares of preferred stock from 10 million
to 50 million and to increase the number of authorized shares of common stock
from 560 million to 1.88 billion of which:

- 800 million are designated Cablevision NY Group Class A common stock,

- 320 million are designated Cablevision NY Group Class B common stock,

I-16

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

- 600 million are designated Rainbow Media Group Class A common stock, and

- 160 million are designated Rainbow Media Group Class B common stock.

On March 29, 2001, the Company distributed a new series of common stock called
Rainbow Media Group tracking stock. The new series is intended to track the
economic performance of the businesses and interests of Rainbow Media Group,
which are currently part, but not all, of the Company's Rainbow Media Holdings
subsidiary. The tracking stock was distributed to holders of the Company's
common stock at a ratio of one share of Rainbow Media Group for every two shares
of the Company's common stock held. The Company's existing common stock was
redesignated as Cablevision NY Group common stock.

In March 2001, the Company amended the employee stock plan to reflect the
redesignation of the Company's Class A common stock as Cablevision NY Group
Class A common stock, and reflect the distribution of Rainbow Media Group Class
A common stock. In addition, the number of shares available for issuance under
the employee stock plan was increased by 19,200,000, any or all of which may be
Cablevision NY Group common stock or Rainbow Media Group common stock.

NOTE 3. TRANSACTIONS

2001 TRANSACTIONS

In connection with the distribution of the Rainbow Media Group tracking stock,
NBC-Rainbow Holding, Inc., a subsidiary of National Broadcasting Company, is
required to exchange its 26% interest in Rainbow Media Holdings equity
securities over a period of up to 9 years for a 34% interest in Rainbow Media
Group tracking stock, based on the number of shares of Rainbow Media Group
tracking stock outstanding on the date of the tracking stock distribution.

Through December 31, 2001, NBC-Rainbow Holding has exchanged a 3.1% interest in
Rainbow Media Holdings equity securities for 6,966,484 shares of Rainbow Media
Group Class A common stock of Cablevision (valued at $138,597). These exchanges
are accounted for as acquisitions of minority interests and accounted for using
the purchase method. In connection with these transactions, the Company recorded
excess costs over fair value of net assets acquired of approximately $112,634
($28,258 has been attributed to CNYG and $84,376 has been attributed to RMG).
The purchase price will be allocated to the specific assets acquired when an
independent appraisal is obtained.

In April 2001, Metro-Goldwyn-Mayer Inc. ("MGM") acquired a 20% interest in
certain programming businesses of Rainbow Media Holdings for $825,000 in cash.
The Company recorded a gain of approximately $746,310 in connection with this
transaction.

In January 2001, the Company completed the sale of its cable systems in Boston
and eastern Massachusetts to AT&T Corp. in exchange for AT&T's cable systems in
certain northern New York suburbs, 44,260,932 shares of AT&T stock, valued at
approximately $893,500 at closing

I-17

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

based on the quoted market price, and approximately $293,200 in cash. The
Company recognized a net gain of approximately $1,441,699. In July 2001, AT&T
distributed to AT&T common shareholders 0.3218 share of AT&T Wireless Services,
Inc. common stock for each share of AT&T common stock held. In connection with
such distribution, Cablevision received 14,243,166 shares of AT&T Wireless
common stock as a result of its ownership of 44,260,932 shares of AT&T stock.

The acquisition of the cable systems from AT&T was accounted for as a purchase
with the operations of the acquired systems being consolidated with those of the
Company as of the acquisition date. The purchase price was allocated to the
specific assets acquired based on an independent appraisal as follows:

Property, plant and equipment, net......................... $ 96,852
Other assets............................................... 1,269
Liabilities................................................ (5,246)
Franchises................................................. 502,913
Excess costs over fair value of net assets acquired........ 14,609
--------------
$ 610,397
==============

The following unaudited pro forma condensed results of operations for the
Company and CNYG are presented for the year ended December 31, 2000 as if the
AT&T transaction described above had occurred on January 1, 2000.

The unaudited pro forma information presented above gives effect to certain
adjustments, including the amortization of acquired intangible assets. The pro
forma information has been prepared for comparative purposes only and does not
purport to indicate the results of operations which would actually have occurred
had the AT&T transaction been made at the beginning of the period indicated or
which will occur in the future.

2000 TRANSACTIONS

In November 2000, the Company completed the sale of its cable television systems
in the greater Cleveland, Ohio metropolitan area to Adelphia Communications
Corporation for $991,000 in cash and 10,800,000 shares of Adelphia
Communications Corporation common stock, valued at closing at $359,100 based on
the quoted market price. The Company recorded a gain of approximately $1,075,359
in connection with the transaction in 2000. In 2001, the Company recorded a loss
of $12,082 in connection with this transaction resulting from certain
adjustments to the purchase price.

I-18

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

In September 2000, the Company completed the sale of its cable television system
serving Kalamazoo, Michigan, for 11,173,376 shares of Charter Communications,
Inc.'s common stock, valued at approximately $165,500 at closing based on the
quoted market price, and recognized a gain of approximately $128,791.

In January 2000, Regional Programming Partners, a subsidiary of Rainbow Media
Holdings acquired the 70% interest in SportsChannel Florida Associates held by
Front Row Communications for approximately $130,600 (including the repayment of
$20,000 in debt) increasing its ownership to 100%. The acquisition was accounted
for as a purchase with the operations of the acquired business being
consolidated with those of the Company as of the acquisition date. The purchase
price was allocated to the specific assets acquired based upon an independent
appraisal as follows:

Property, plant and equipment................................... $ 2,200
Other assets.................................................... 26,400
Liabilities..................................................... (9,900)
Excess cost over fair value of net assets acquired.............. 111,900
------------
$ 130,600
============

The following unaudited pro forma condensed combined results of operations for
RMG are presented for the year ended December 31, 1999 as if the acquisition of
SportsChannel Florida Associates had occurred on January 1, 1999.

In December 1999, the Company acquired cable television systems with
approximately 4,500 subscribers located in the Port Jervis, New York area for
approximately $7,400, $7,300 of which was paid in shares of the Company's Class
A common stock.

In April 1999, ITT Corporation exercised its second put option for the remainder
of its interest in MSG and concurrently settled certain matters between the
parties for an aggregate payment of $87,000.

NOTE 4. RESTRUCTURING AND IMPAIRMENT CHARGES

RESTRUCTURING

In December 2001, the Company recorded restructuring charges of $56,442 which
include expenses of approximately $21,018 associated with the elimination of
approximately 600 positions, primarily in corporate, administrative and
infrastructure functions across various business units of the Company. In
addition to employee severance, the restructuring charges include estimated
expenses of approximately $35,424 associated with facility realignment and other
related costs.

IMPAIRMENT CHARGES

In 2001 and 2000, the Company recorded a loss on investments of approximately
$108,452 and $139,682, respectively, reflecting other-than-temporary declines in
the fair value of the Company's At Home Corporation warrants. The carrying value
of the warrants has been reduced to zero at December 31, 2001. See Note 12.

In December 2001 and December 2000, the Company recorded impairment losses of
approximately $99,900 and $47,500, respectively, included in depreciation and
amortization, representing the balance of unamortized goodwill related to
certain theaters in which the carrying value of the asset exceeded the estimated
fair value based on discounted estimated future cash flows. Current losses and
projected future operating losses caused the Company to reassess the
recoverability of the goodwill.

In December 1999, the Company recorded an impairment loss of $35,490, included
in depreciation and amortization, representing the balance of unamortized
goodwill recorded on the

I-20

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

acquisition of assets associated with The WIZ consumer electronics store
locations. Current losses and projected future operating losses caused the
Company to reassess the recoverability of the goodwill. The impairment loss
resulted from the carrying amount of this asset exceeding its estimated fair
value based on discounted estimated future cash flows.

NOTE 5. NET ASSETS HELD FOR SALE

The Company had entered into definitive agreements covering the sale of certain
cable television systems as of December 31, 2000.

For financial reporting purposes, the assets and liabilities attributable to
cable systems whose sale or transfer was pending at December 31, 2000 have been
classified in the consolidated balance sheets as net assets held for sale and
are included in the telecommunications segment. Such net assets consist of the
following:

The accompanying consolidated statements of operations for the years ended
December 31, 2000, and 1999 include net revenues aggregating approximately
$190,449 and $177,904 and net income (loss) aggregating approximately $6,140 and
$(4,109), respectively, relating to the cable systems held for sale.

The net assets held for sale as of December 31, 2000 were disposed of in January
2001. See Note 3.

I-21

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

NOTE 6. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following assets, which are
depreciated or amortized primarily on a straight-line basis over the estimated
useful lives shown below:

I-22

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

At December 31, 2001 and 2000, the gross amount of equipment and related
accumulated amortization recorded under capital leases were as follows:

NOTE 7. DEBT

BANK DEBT

RESTRICTED GROUP

For financing purposes, CSC Holdings, Inc. (a wholly-owned subsidiary of
Cablevision) and certain of its subsidiaries are collectively referred to as the
"Restricted Group." The Restricted Group has a $2.4 billion reducing revolving
credit facility (the "Credit Agreement") with a group of banks led by
Toronto-Dominion (Texas), Inc., TD Securities (USA) Inc. and Banc Of America
Securities LLC, as co-lead arrangers and co-book managers. The credit facility
matures on June 30, 2006. This facility was used to repay the outstanding
balance under the previous $2.2 billion reducing revolving credit facility.

The total amount of bank debt outstanding under the Restricted Group credit
facility at December 31, 2001 and 2000 was $771,694 and $1,942,759 (including
$3,694 and $16,259, respectively, outstanding under a separate overdraft
facility), respectively. As of December 31, 2001, approximately $54,547 was
restricted for certain letters of credit issued on behalf of CSC Holdings.
Interest on outstanding amounts may be paid, at the option of the Company, based
on the prime rate or a Eurodollar rate plus a margin which varies based on the
Restricted Group's leverage ratio (as defined in the Credit Agreement).

Undrawn funds available to the Restricted Group under the Credit Agreement
amounted to approximately $1,577,453 at December 31, 2001. The Credit Agreement
contains certain financial covenants that may limit the Restricted Group's
ability to utilize all of the undrawn funds available thereunder. The Credit
Agreement contains various restrictive covenants, among which are the
maintenance of various financial ratios and tests, and limitations on various
payments, including preferred dividends and dividends on its common stock. The
Company was in compliance with the covenants of its Credit Agreement at December
31, 2001.

I-23

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The weighted average interest rate on all bank borrowings of the Restricted
Group was 3.55% and 8.00% on December 31, 2001 and 2000, respectively. The
Company is also obligated to pay fees ranging from .375% to .75% per annum on
the unused loan commitment and from .875% to 1.75% per annum on letters of
credit issued under the Credit Agreement.

UNRESTRICTED GROUP

RAINBOW MEDIA HOLDINGS

Rainbow Media Holdings had a $300,000, three year credit facility which was
repaid on December 22, 2000 with funds borrowed from CSC Holdings. Rainbow Media
Holdings also had $4,449 outstanding under an overdraft facility with a bank at
December 31, 2000.

AMERICAN MOVIE CLASSICS COMPANY

American Movie Classics Company ("AMC"), a subsidiary of Rainbow Media Holdings,
had a $425,000 credit facility consisting of a $200,000 reducing revolving
credit facility and a $225,000 amortizing term loan. Borrowings under the AMC
credit facility bore interest at current market rates plus a margin based on the
ratio of debt to cash flow, as defined in the AMC credit facility. At December
31, 2000, the weighted average interest rate on bank indebtedness was 7.97%. As
of December 31, 2000, AMC had outstanding borrowings of $359,322 (including
$4,322 outstanding under a separate overdraft facility).

In April 2001, AMC repaid the balance outstanding under the AMC credit facility
of $365,000 with proceeds from the MGM transaction and terminated the term loan
facility, reducing its credit facility solely to the $200,000 revolver.

MADISON SQUARE GARDEN

MSG, a subsidiary of Rainbow Media Holdings, has a $500,000 revolving credit
facility with a group of banks led by Chase Manhattan Bank, as agent, which
expires on December 31, 2004. Loans under the MSG credit facility bear interest
at current market rates plus a margin based upon MSG's consolidated leverage
ratio. At December 31, 2001 and 2000, loans outstanding amounted to $235,000 and
$310,000, respectively, and bore interest at a weighted average rate of 2.66%
and 7.23%, respectively. The MSG credit facility contains certain covenants that
may limit MSG's ability to utilize all of the undrawn funds available
thereunder. Undrawn funds available under the MSG credit facility amounted to
approximately $252,543 at December 31, 2001. The MSG credit facility contains
certain financial covenants with which MSG was in compliance at December 31,
2001.

In July 1997, a wholly-owned subsidiary of MSG borrowed $20,000 under promissory
notes with various lending institutions which bore interest at LIBOR plus a
margin and matured in July

I-24

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

2002. In September 2000, these notes were repaid with borrowings under the MSG
credit facility.

CABLEVISION ELECTRONICS

Cablevision Electronics Investments, Inc., a wholly-owned subsidiary of CSC
Holdings, has a $130,000 revolving credit facility maturing in April 2003, as
amended. Under the terms of the credit facility, the total amount of borrowings
available to Cablevision Electronics is subject to an availability calculation
based on a percentage of eligible inventory. The total amount outstanding under
the credit agreement at December 31, 2001 and 2000 was approximately $38,347 and
$66,902, respectively, and bore interest at 5.25% and 8.62%, respectively. As of
December 31, 2001, $3,513 was restricted for certain letters of credit issued on
behalf of Cablevision Electronics. Undrawn funds available amounted to $41,604
on December 31, 2001 based on the level of inventory as of that date.

Borrowings under the credit agreement are secured by Cablevision Electronics'
assets. The credit agreement contains various restrictive covenants with which
Cablevision Electronics was in compliance at December 31, 2001.

CCG HOLDINGS, INC.

CCG Holdings, Inc., a wholly-owned subsidiary of CSC Holdings, had a $15,000
revolving credit bank facility maturing on June 30, 2003 which was repaid and
retired in September 2000 with funds made available by CSC Holdings.

I-25

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

SENIOR NOTES AND DEBENTURES

The following table summarizes CSC Holdings' senior notes and debentures:

In March 2001, CSC Holdings issued $1,000,000 face amount of 7-5/8% senior notes
due 2011. The notes were issued at a discount of $3,210. The net proceeds were
used to reduce bank debt outstanding.

The senior notes and debentures are not redeemable by CSC Holdings prior to
maturity. The indentures under which the senior notes and debentures were issued
contain various covenants, which are generally less restrictive than those
contained in the Company's Credit Agreement, and with which the Company was in
compliance at December 31, 2001.

I-26

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

SUBORDINATED NOTES AND DEBENTURES

The following table summarizes CSC Holdings' senior subordinated notes and
debentures:

- ----------------------
* The notes/debentures are redeemable, at CSC Holdings' option, in whole or
in part, on the redemption dates listed at the respective percentage of
the principal amount and thereafter at 100% of the aggregate principal
amount, in each case together with accrued interest to the redemption
date.
** The debentures are redeemable, at CSC Holdings' option, on and after
April 1, 2003 at the redemption price of 104.938% reducing ratably to
100% of the principal amount on and after April 1, 2010, in each case
together with accrued interest to the redemption date.

On November 1, 2001, CSC Holdings redeemed its $300,000 face value 9-1/4% senior
subordinated notes due 2005 at a redemption price of 103.1%, plus accrued
interest and its $150,000 face value 9-7/8% senior subordinated notes due 2006
at a redemption price of 104.938%, plus accrued interest. In connection with the
redemption, the Company recognized a loss of $15,348.

I-27

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The indentures under which the subordinated notes and debentures were issued
contain various covenants, which are generally less restrictive than those
contained in the Company's Credit Agreement and with which the Company was in
compliance at December 31, 2001.

SUMMARY OF FIVE YEAR DEBT MATURITIES

Total amounts payable by the Company and its subsidiaries under its various debt
obligations outstanding as of December 31, 2001, including capital leases,
during the five years subsequent to December 31, 2001 are as follows:

NOTE 8. PREFERRED STOCK OF CSC HOLDINGS, INC.

The following summarizes the changes in each series of CSC Holdings' preferred
stock:

In September 1999, CSC Holdings exercised its right to redeem all of its
outstanding shares of 8-1/2% Series I Cumulative Convertible Exchangeable
Preferred Stock ("Series I Preferred"). The redemption occurred on November 2,
1999, at a price equal to 102.8% of the liquidation preference, plus accrued
dividends. Investors held the Series I Preferred through interests in depositary
shares (each of which represented a 1/10th interest in a share of the Series I
Preferred) which were redeemable simultaneously. Each depositary share was
convertible into approximately 1.4828 shares of the Company's Class A common
stock. As of December 31, 1999, 13,797,625 depositary shares out of 13,800,000
depositary shares outstanding had been converted into 20,458,925 shares of the
Company's Class A common stock, with the remaining 2,375 depositary shares being
redeemed for cash. CSC Holdings paid cash dividends on the Series I Preferred of
approximately $21,898 in 1999.

I-28

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

In February 1996, CSC Holdings issued 6,500,000 depositary shares, representing
65,000 shares of 11-1/8% Series L Redeemable Exchangeable Preferred Stock (the
"Series L Preferred Stock"), which were subsequently exchanged for Series M
Redeemable Exchangeable Preferred Stock (the "Series M Preferred Stock") in
August 1996 with terms identical to the Series L Preferred Stock. The depositary
shares are exchangeable, in whole but not in part, at the option of CSC
Holdings, for CSC Holdings' 11-1/8% Senior Subordinated Debentures due 2008. CSC
Holdings is required to redeem the Series M Preferred Stock on April 1, 2008 at
a redemption price equal to the liquidation preference of $10,000 per share plus
accumulated and unpaid dividends. The Series M Preferred Stock is redeemable at
various redemption prices beginning at 105.563% at any time on or after April 1,
2003, at the option of CSC Holdings, with accumulated and unpaid dividends
thereon to the date of redemption. Before April 1, 2001, dividends could, at the
option of CSC Holdings, be paid in cash or by issuing fully paid and
nonassessable shares of Series M Preferred Stock with an aggregate liquidation
preference equal to the amount of such dividends. On and after April 1, 2001,
dividends must be paid in cash. CSC Holdings paid cash dividends on the Series M
Preferred Stock of approximately $123,500 in 2001.

In September 1995, CSC Holdings issued 2,500,000 shares of its $.01 par value
11-3/4% Series H Redeemable Exchangeable Preferred Stock (the "Series H
Preferred Stock") with an aggregate liquidation preference of $100 per share.
CSC Holdings is required to redeem the Series H Preferred Stock on October 1,
2007 at a redemption price per share equal to the liquidation preference of $100
per share, plus accrued and unpaid dividends thereon. Before October 1, 2000,
dividends could, at the option of CSC Holdings, be paid in cash or by issuing
fully paid and nonassessable shares of Series H Preferred Stock with an
aggregate liquidation preference equal to the amount of such dividends. On and
after October 1, 2000, dividends must be paid in cash. The terms of the Series H
Preferred Stock permit CSC Holdings, at its option, to exchange the Series H
Preferred Stock for CSC Holdings' 11-3/4% Senior Subordinated Debentures due
2007 in an aggregate principal amount equal to the aggregate liquidation
preference of the shares of Series H Preferred Stock. CSC Holdings paid cash
dividends on the Series H Preferred Stock of approximately $51,016 and $25,511
in 2001 and 2000, respectively.

Preferred stock dividend requirements of CSC Holdings are included in minority
interests in the accompanying consolidated statements of operations.

NOTE 9. INCOME TAXES

The Company files a consolidated federal income tax return with its 80% or more
owned subsidiaries. Rainbow Media Holdings files a separate consolidated federal
income tax return with its 80% or more owned subsidiaries. The operations of the
businesses attributed to CNYG are included in two consolidated federal income
tax returns; one consolidated return includes the telecommunications and retail
electronics companies (Cablevision), and the second consolidated return includes
the Rainbow Media Holdings companies. The operations of the businesses

I-29

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

attributed to RMG are included in the consolidated federal income tax returns
filed by Rainbow Media Holdings.

Income tax expense for the Company consists of the following components:

The tax provision for 2001 excludes deferred federal and state tax benefits of
$97,034 resulting from the exercise of stock options, which proportionate share
was credited directly to paid-in capital.

Income tax expense (benefit) for CNYG consists of the following components:

The tax provision for 2001 excludes deferred federal and state tax benefits of
$87,085 resulting from the exercise of stock options, which were credited
directly to attributed net deficiency.

I-30

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)
Income tax expense for RMG consists of the following components:

The tax provision for 2001 excludes deferred federal and state tax benefits of
$9,949 resulting from the exercise of stock options, which were credited
directly to attributed net deficiency.

The tax provisions for CNYG and RMG are calculated as though each group were a
separate company. However, since the operations of RMG are included in the
consolidated tax return filed by Rainbow Media Holdings, RMG is able to utilize
a portion of CNYG's loss carry forwards. RMG's current tax provision includes
$55,614 that would be owed on a separate company basis, but which will be offset
by CNYG's loss carry forwards. CNYG has recorded $55,614 of tax benefit for
RMG's utilization of these loss carry forwards.

The effective tax expense of the Company differs from the statutory amount
because of the effect of the following items:

The effective tax expense (benefit) of CNYG differs from the statutory amount
because of the effect of the following items:

I-31

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The effective tax expense of RMG differs from the statutory amount because of
the effect of the following items:

At December 31, 2001, Cablevision had consolidated net operating loss carry
forwards of approximately $1,670,145 and Rainbow Media Holdings had consolidated
federal net operating loss carry forwards of approximately $476,956 expiring on
various dates through 2021. The Company also has alternative minimum tax credit
carry forwards of approximately $8,727 which do not expire. All of these losses
are attributed to CNYG. As a result of certain ownership changes, a portion of
Rainbow Media Holdings' pre-1999 loss carry forwards may be subject to annual
limitations on deductions.

The Company's net operating loss carry forwards expire as follows:

I-32

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The tax effects of temporary differ ences which give rise to significant
portions of deferred tax assets or liabilities and the corresponding valuation
allowance at December 31, 2001 and 2000 are as follows:

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
asset will be realized. The ultimate realization of the deferred tax asset is
dependent upon the generation of future taxable income during the periods in
which temporary differences or net operating loss carry forwards become
deductible. Management considered the Company's history of generating taxable
losses and its accumulated deficit as significant negative evidence as to the
realizability of the deferred tax asset. The Company considered the gain on the
sale of its Massachusetts cable television systems, which closed in the first
quarter of 2001, and the gain on the sale of an interest in certain programming
operations, which closed in the second quarter of 2001, as positive evidence of
the realizability of the deferred tax assets. In addition, CNYG considers the
ability to have a portion of its loss carry forwards utilized by RMG, and be
compensated for such use, as positive evidence of the realizability of the
deferred tax assets.

I-33

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

NOTE 10. DERIVATIVES

Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities", as amended, ("SFAS 133"). The statement requires that all
derivative financial instruments be recognized in the financial statements and
measured at fair value regardless of the purpose or intent for holding them. If
the derivative is designated as a hedge, depending on the nature of the hedge,
changes in the fair value of the derivative will either be offset against the
change in fair value of the hedged assets, liabilities or firm commitments
through earnings or recognized as a component of comprehensive income until the
hedged item is recognized in earnings. The ineffective portion of a derivative's
change in fair value will be immediately recognized in earnings.

To manage interest rate risk, the Company has from time to time entered into
interest rate swap contracts to adjust the proportion of total debt that is
subject to variable and fixed interest rates. Such contracts fix the borrowing
rates on floating rate debt to provide an economic hedge against the risk of
rising rates and/or convert fixed rate borrowings to variable rates to provide
an economic hedge against the risk of higher borrowing costs in a declining
interest rate environment. As of December 31, 2001, the Company was a party to
interest rate swap agreements to pay floating rates of interest with a total
notional value of $980,000 and a fair value of approximately $17,319. These
agreements have not been designated as hedges for accounting purposes.

In addition, the Company has entered into prepaid interest rate swap agreements
in connection with its monetization of certain of its stock holdings, discussed
below. These contracts require the Company to pay a floating rate of interest in
exchange for fixed rate interest payments, the net present value of which was
paid to the Company at the contract's inception in a total amount of $239,270.
As of December 31, 2001, the total notional value of such contracts was
$1,115,045 and the fair value of such contracts was $226,295, in a net payable
position. These agreements have not been designated as hedges for accounting
purposes.

The increase in the fair value of the Company's swap agreements and the net
realized gain as a result of net cash interest income for the year ended
December 31, 2001 aggregating approximately $31,376 is reflected in gain on
derivative contracts in the accompanying consolidated statements of operations.

The Company has also entered into various transactions to provide an economic
hedge against equity price risk on certain of its stock holdings. As of December
31, 2001, the Company had monetized all of its stock holdings in Charter
Communications, Adelphia Communications, AT&T and AT&T Wireless through the
execution of prepaid forward contracts, collateralized by an equivalent amount
of the respective underlying stock. Such contracts set a floor and ceiling on
the Company's participation in changes in the underlying stock prices, thus
eliminating downside exposure to market risk while providing for upside
appreciation potential to the respective ceiling price. At maturity, the
contracts provide for the option to deliver cash or

I-34

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

shares of Charter Communications, Adelphia Communications, or AT&T Wireless
stock (as the case may be) with a value determined by reference to the
applicable stock price at maturity. The terms of the AT&T transactions require
cash settlement in an amount determined by reference to the AT&T stock price at
maturity.

The Company received cash proceeds of $1,549,411 upon execution of the prepaid
forward contracts. Such contracts have not been designated as hedges for
accounting purposes. Therefore, the fair values of the equity forward contracts
have been reflected in the accompanying consolidated balance sheets and the net
increase in the fair value of the equity derivative component of the prepaid
forward contracts of $250,376 is included in gain on derivative contracts in the
accompanying consolidated statements of operations. With the adoption of SFAS
133, the shares of Charter Communications and Adelphia Communications were
reclassified from securities available-for-sale to trading securities. As a
result, the Company recorded a gain on investments of $286,440 representing the
accumulated unrealized gains as of January 1, 2001. For the year ended December
31, 2001, the Company recorded a loss on investments of $176,673 representing
the net decrease in the fair value of all monetized securities for the period.

NOTE 11. OPERATING LEASES

The Company leases certain office, production, transmission, theater, event, and
retail store facilities under terms of leases expiring at various dates through
2027. The leases generally provide for fixed annual rentals plus certain real
estate taxes and other costs. Rent expense for the years ended December 31,
2001, 2000 and 1999 was as follows:

In addition, the Company rents space on utility poles for its operations. The
Company's pole rental agreements are for varying terms, and management
anticipates renewals as they expire. Pole rental expense for the years ended
December 31, 2001, 2000 and 1999, which is attributed to CNYG, amounted to
approximately $12,419, $12,237 and $13,081, respectively.

The minimum future annual rentals for all operating leases during the next five
years, including pole rentals from January 1, 2002 through December 31, 2006,
and thereafter, at rates now in force are as follows:

I-35

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

At December 31, 2001, approximately $22,754 and $11,670 has been accrued by CNYG
and RMG, respectively, relating to certain of these operating leases in
connection with the restructuring described in Note 4.

NOTE 12. AFFILIATE TRANSACTIONS

EQUITY METHOD INVESTMENTS

The following table reflects Cablevision's effective ownership percentages and
balances of equity method investments attributed to RMG and CNYG as of December
31, 2001 and 2000:

I-36

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The following table includes certain unaudited financial information for equity
method investments attributed to RMG and CNYG:

* The advances at December 31, 2001 include $101,145 due from R/L DBS and
$110,161 due from Northcoast Communications.
** The advances at December 31, 2000 include $68,150 due from Northcoast
Communications.

CNYG's share of the net loss of these affiliates for the years ended December
31, 2001, 2000 and 1999 amounted to $62,775, $724 and $11,560, respectively
(including net losses of $42,957, $2,524 and $7,916, respectively, related to
Northcoast Communications). Costs incurred by CNYG for programming and
entertainment services provided by these affiliates and included in operating
expenses for the years ended December 31, 2001, 2000 and 1999 amounted to $148,
$2,320 and $4,691, respectively.

RMG's share of the net loss of these affiliates for the years ended December 31,
2001, 2000 and 1999 amounted to $5,221, $15,961 and $7,674, respectively. RMG
provides certain transmission and production services to certain of these
affiliates. For the years ended December 31, 2001,

I-37

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

2000 and 1999, approximately $3,686, $3,714 and $7,194, respectively, of
revenues were earned from services provided to these entities.

Rainbow Media Holdings has guaranteed certain obligations in respect of certain
professional sports teams rights agreements entered into by certain equity
method investees. The amounts guaranteed represent Rainbow Media Holdings'
proportionate interest in the payment obligation based on its ownership interest
in the investee. These guarantees are attributable to Rainbow Media Group.

NORTHCOAST COMMUNICATIONS

In August 1996, the Company entered into an agreement with Northcoast PCS, LLC
and certain of its affiliates, to form a limited liability company, Northcoast
Communications, LLC, to participate in the auctions conducted by the Federal
Communications Commission ("FCC") for certain licenses to conduct a personal
communications service ("PCS") business. The Company has contributed an
aggregate of approximately $152,760 to Northcoast Communications (either
directly or through loans to Northcoast PCS) and holds a 49.9% interest in
Northcoast Communications and certain preferential distribution rights. Loans to
Northcoast PCS bear interest at 12%.

At December 31, 2001, Northcoast Communications' total outstanding debt to third
parties was approximately $131,000. CSC Holdings has guaranteed the payment of
FCC indebtedness (which had an outstanding balance of $3,212 at December 31,
2001) of a subsidiary of Northcoast Communications which holds the Cleveland PCS
license.

Under a contractual agreement, Cablevision provides Northcoast Communications
certain management services. Pursuant to this agreement, Cablevision recorded
management fees of $13,584 and $371 in 2001 and 2000, respectively. Northcoast
Communications is a Delaware corporation controlled by John Dolan, who is a
nephew of Charles F. Dolan and a cousin of James L. Dolan, the Company's
Chairman and Chief Executive Officer, respectively.

R/L DBS

In 1996, Rainbow Media Holdings invested in a joint venture (R/L DBS Company
LLC) formed with a subsidiary of Loral Space and Communications, Ltd. for the
purpose of exploiting certain direct broadcast satellite ("DBS") frequencies.
Rainbow Media Holdings also contributed to the joint venture its interest in
certain agreements with the licensee of such frequencies. The FCC's construction
permit relating to the DBS frequencies was originally scheduled to expire in
August 1999. As it was not possible for the Company to construct and launch a
satellite before such date due to evolving technology and regulatory issues, the
Company determined that it could no longer recover its initial investment in the
joint venture and wrote down this investment by $15,100 in the first quarter of
1999. No steps were taken by the Company to obtain an FCC extension prior to the
write-off of the Company's initial investment because the Company

I-38

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

believed the technology was not then available to allow the Company to
successfully exploit the asset in a competitive environment. Thereafter,
technological improvements, particularly in compression technology, resulting in
greater channel capacity without degrading picture quality, and in satellite
technology, resulting in greater use of spot beams to direct programming on a
localized basis, led the Company to apply for an FCC extension in the third
quarter of 1999. Based upon communications with the FCC, management considered
the receipt of such extension to be likely and as a result additional
investments in the joint venture were deemed recoverable.

In December 2000, the FCC granted an extension to R/L DBS' construction permit
relating to the DBS frequencies held by R/L DBS. The extension requires the
launch of a satellite by March 29, 2003 and commencement of service offerings by
not later than December 29, 2003, with specified six month interim construction
milestones, non-compliance with which would result in the forfeiture of the
construction permit. R/L DBS has entered into an agreement with a satellite
manufacturer for the construction of a satellite scheduled to be delivered in
March 2003. R/L DBS plans to make additional progress payments to the
manufacturer aggregating approximately $140,000 in the year ending December 31,
2002. Cablevision continues to evaluate the scope of its pursuit of a direct
broadcast satellite business, including exploring opportunities for strategic
partnerships for R/L DBS. The contract with the manufacturer permits R/L DBS to
terminate the contract at its option prior to May 2003 and receive a refund of a
portion of amounts paid through the date of such termination. At December 31,
2001, the Company has outstanding advances to R/L DBS aggregating $101,145 which
are included in advances to affiliates.

In March 2001, subject to the receipt of regulatory and other necessary
approvals, Rainbow Media Holdings and Loral entered into an agreement for
Rainbow Media Holdings to acquire Loral's 50% interest in R/L DBS for a purchase
price of up to a present value of $33,000 payable only from revenues of R/L DBS'
business, if any, or from any future sale of all or part of the interests in or
assets of R/L DBS. The acquisition was completed in March 2002. See Note 21.

OTHER AFFILIATES

On March 28, 2001, Rainbow Media Holdings acquired Sterling Digital, LLC from
Cablevision for its net cash investment plus interest at Cablevision's borrowing
rate. Cablevision had acquired Sterling Digital from Charles F. Dolan on August
31, 2000 for his net investment together with interest thereon amounting to
$4,633. The difference between the amount paid and the book value of the net
assets acquired of $4,083 was reflected as a distribution to shareholder in the
consolidated statements of stockholders' deficiency.

During 2001, 2000 and 1999, the Company provided programming services to or
incurred costs on behalf of other affiliates engaged in providing cable
television, cable television programming, and related services. Aggregate
amounts due from and due to these affiliates at December 31, 2001 and 2000
are summarized below:

I-39

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

Advances to affiliates at December 31, 2000 include trade accounts receivable
from AT&T. At December 31, 2001, trade accounts receivable from AT&T are
reflected in accounts receivable trade in the accompanying balance sheet.

AT HOME

In October 1997, the Company entered into an agreement with At Home and certain
of its shareholders, pursuant to which the Company agreed to enter into
agreements for the distribution of the At Home service over certain of the
Company's cable television systems on the same terms and conditions as At Home's
founding partners, TCI, Comcast Corporation and Cox Communications, Inc. The
Company received a warrant to purchase 15,751,568 shares of At Home's Series A
common stock at an exercise price of $.25 per share. Additionally, in 1998 a
warrant to purchase 4,711,028 shares of At Home's Series A common stock at $.25
per share was received in connection with the acquisition of certain cable
television systems from TCI Communications, Inc. The At Home network distributed
high-speed interactive services to residences and businesses using its own
network architecture and a variety of transport options, including the cable
industry's hybrid fiber coaxial infrastructure.

The original aggregate fair market value of the warrants received of $248,134,
as determined by independent appraisals, was recorded in other investments in
the accompanying consolidated balance sheets and was accounted for under the
cost method. The fair market value of the warrants was recorded as deferred
revenue and was being amortized to income over the period in which the Company
was obligated to provide the necessary services to At Home.

In April 2001, At Home announced it had decided to terminate its relationship
with the Company and that it would seek to recover the At Home warrants
previously issued to the Company. On April 25, 2001, At Home commenced a lawsuit
in the Court of Chancery of the State of Delaware alleging that Cablevision had
breached its obligations under certain agreements with At Home. The suit seeks a
variety of remedies including: recision of the agreements between At Home and
Cablevision and cancellation of all warrants currently held by Cablevision,
damages,

I-40

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

and/or an order prohibiting Cablevision from continuing to offer its Optimum
Online service and requiring it to convert its Optimum Online customers to the
Optimum@Home service and to roll out the Optimum@Home service. Cablevision has
filed an answer to the complaint denying the material allegations and asserting
various affirmative defenses. On September 28, 2001, At Home filed a petition
for reorganization in federal bankruptcy court.

On January 8, 2002, At Home terminated its At Home service to all of
Cablevision's Optimum@Home subscribers. In a letter dated January 9, 2002,
Cablevision advised At Home that such termination of service constituted an
election by At Home to terminate the existing master distribution agreement
entered into by and between Cablevision and At Home and all other related
agreements.

In 2001, 2000 and 1999 the Company recorded $66,872, $60,000 and $50,136,
respectively, of revenue relating to this transaction. In 2001 and 2000, the
Company recognized a loss on investments of approximately $108,452 and
$139,682, respectively, reflecting the decline in the fair value of the
warrants which reduced the carrying value of the warrants to zero at December
31, 2001. In 2001, the Company recorded a gain of $25,190, representing
primarily the recognition of the remaining unamortized portion of deferred
revenue at December 31, 2001.

TRANSACTIONS BETWEEN CNYG AND RMG

As described below, CNYG provides services to and receives services from RMG. As
many of these transactions are conducted between subsidiaries under common
control of Cablevision, amounts charged for these services have not necessarily
been based upon arm's length negotiations. However, it is not practicable to
determine whether the amounts charged represent amounts that might have been
incurred on a stand-alone basis. These transactions eliminate in consolidation.

Members of CNYG and RMG may enter into agreements with third party service
providers in which the amounts paid by CNYG or RMG may differ from the amounts
that CNYG or RMG would otherwise pay if such arrangements were on an
arm's-length basis. These arrangements are in return for the service provider's
or its affiliate's agreement to make payments or provide services to members of
CNYG or RMG on a basis more or less favorable than either group would otherwise
obtain. Where RMG has received the benefit of CNYG's negotiations in the form of
increased affiliation payments or discounted license fees, CNYG charges RMG the
amount of the benefit. In respect of two such agreements, RMG has recorded
charges from CNYG amounting to $15,622, $15,622 and $15,081 in 2001, 2000 and
1999, respectively, of which $14,000 in each of the three years has been
reflected as a reduction of RMG's affiliation revenue and $1,622, $1,622 and
$1,081 in 2001, 2000 and 1999, respectively, has been reflected as increased
film licensing costs.

I-41

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

RMG provides programming to cable television systems attributed to CNYG under
contracts called affiliation agreements. Affiliate revenues earned by RMG from
services provided to CNYG amounted to approximately $11,610, $14,874 and
$14,893, for the years ended December 31, 2001, 2000 and 1999, respectively.

RMG provides certain transmission and production services to programming
entities attributed to CNYG. For the years ended December 31, 2001, 2000 and
1999, approximately $5,440, $5,431 and $5,633, respectively, of revenues was
earned from services provided to these entities.

Under a contractual agreement, CSC Holdings provides certain consulting services
to AMC and WE: Women's Entertainment. This agreement provides for payment, in
addition to expense reimbursement, of an aggregate fee of 3.5% of the
businesses' gross revenues, as defined. The agreement is automatically renewable
every five years at the option of CSC Holdings. Pursuant to the terms of this
agreement, RMG was charged consulting fees of $9,207, $7,699 and $6,832 in 2001,
2000 and 1999, respectively.

As of December 31, 2000, AMC had outstanding an interest exchange (cap)
agreement with CSC Holdings with a total notional value of $105,000 maturing on
May 13, 2002. The agreement capped AMC's floating rate of interest based on
LIBOR at 7% through May 2001 and at 7.5% from May 2001 through May 2002. AMC
entered into this cap agreement to hedge against interest rate risk and
accounted for this agreement as a hedge whereby interest expense was recorded
using the revised rate with any fees amortized as a yield adjustment. The
interest exchange (cap) agreement was terminated in April 2001.

At December 31, 2000, Rainbow Media Holdings had $270,475 (including accrued
interest of $631) outstanding pursuant to a demand note payable (attributed to
RMG) to CSC Holdings (CNYG) which bore interest at three month LIBOR plus 2.25%.
The interest rate on the demand note was 8.75% at December 31, 2000 and interest
expense for the years ended December 31, 2001 and 2000 amounted to $5,693 and
$631, respectively. The note payable was repaid in April 2001 with proceeds from
the MGM transaction.

Summarized below are the advances to affiliates and accounts payables to
affiliates included on the respective balance sheets of CNYG and RMG as a result
of the transactions described above and the intercompany allocations discussed
in Note 20:

I-42

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

NOTE 13. BENEFIT PLANS

The Company has a Cash Balance Retirement Plan (the "Retirement Plan") for the
benefit of employees other than those of Cablevision Electronics and CCG
Holdings. Under the Retirement Plan, the Company will credit a certain
percentage of eligible base pay into an account established for each participant
which will earn a market based rate of return annually. Net periodic pension
cost for the years ended December 31, 2001, 2000 and 1999 amounted to $26,648,
$8,008 and $6,218, respectively. At December 31, 2001 and 2000, the accumulated
benefit obligation amounted to $39,143 and $22,092, respectively.

The Company also maintains 401(k) savings plans, pursuant to which an employee
can contribute a percentage of eligible annual compensation, as defined. The
Company also makes matching cash contributions for a portion of employee
contributions to the 401(k) savings plans. The cost associated with the 401(k)
savings plans was approximately $12,391, $7,932 and $6,102 for the years ended
December 31, 2001, 2000 and 1999, respectively.

The Company maintains the CSSC Supplemental Benefit Plan (the "Supplemental
Plan") for the benefit of certain officers and employees of the Company. As part
of the Supplemental Plan, the Company established a nonqualified defined benefit
pension plan, which provides that, upon attaining normal retirement age, a
participant will receive a benefit equal to a specified percentage of the
participant's average compensation, as defined. All participants are 100% vested
in the Supplemental Plan. Net periodic pension cost was $200 for the year ended
December 31, 2001. Net periodic pension cost for the years ended December 31,
2000 and 1999 was negligible. At December 31, 2001 and 2000, the fair value of
Supplemental Plan assets exceeded the projected benefit obligation by
approximately $388 and $1,707, respectively.

MSG sponsors several non-contributory pension plans covering MSG's employees.
Benefits payable to retirees under these plans are based upon years of service
and participants' compensation and are funded through trusts established under
the plans. Plan assets are invested primarily in common stocks, bonds, United
States government securities and cash. At December 31, 2001 and 2000, the
accrued benefit cost amounted to $11,932 and $11,363, respectively, and for the
years ended December 31, 2001, 2000 and 1999, net periodic pension cost amounted
to $2,445, $2,227 and $2,611, respectively.

In addition, MSG contributes to various multiemployer defined benefit pension
plans. Pension expense recognized for these multiemployer plans for the years
ended December 31, 2001, 2000 and 1999 amounted to $3,307, $3,266 and $2,784,
respectively.

MSG also sponsors a welfare plan which provides certain postretirement health
care and life insurance benefits to certain employees and their dependents who
are eligible for early or normal retirement under MSG's retirement plan. The
welfare plan is insured through a managed care provider and MSG funds these
benefits with premium payments. For the years ended December 31, 2001, 2000 and
1999, the periodic postretirement benefit cost amounted to $169,

I-43

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

$187 and $204, respectively, and as of December 31, 2001 and 2000, the accrued
benefit cost amounted to $6,290 and $6,257, respectively.

NOTE 14. STOCK BENEFIT AND LONG-TERM INCENTIVE PLANS

STOCK BENEFIT PLANS

The Company has an Employee Stock Plan (the "1985 Stock Plan") under which the
Company is authorized to issue a maximum of 14,000,000 shares. Pursuant to its
terms, no awards could be granted under the 1985 Stock Plan after December 5,
1995. Under the 1985 Stock Plan, the Company granted incentive stock options,
nonqualified stock options, restricted stock, stock appreciation rights, stock
grants and stock bonus awards. The exercise price of stock options could not be
less than the fair market value per share of Class A common stock on the date
the option was granted and the options could expire no longer than ten years
from date of grant. Stock appreciation rights provide for the employee to
receive a cash payment in an amount equal to the difference between the fair
market value of the stock as of the date the right is exercised, and the
exercise price.

The Company also has an Employee Stock Plan (the "Employee Stock Plan"), under
which the Company is authorized to issue a maximum of 13,000,000 shares of CNYG
common stock, 6,500,000 shares of RMG common stock and 19,200,000 shares of
either CNYG or RMG common stock. As of December 31, 2001, 1,185,017 shares of
CNYG common stock, 2,166,846 shares of RMG common stock and 19,200,000 shares of
either CNYG and RMG common stock were available for future grant under the
Employee Stock Plan. Under the Employee Stock Plan, the Company is able to grant
incentive stock options, nonqualified stock options, restricted stock,
conjunctive and alternative stock appreciation rights, stock grants and stock
bonus awards. The other terms of the Employee Stock Plan are substantially
identical to those of the 1985 Stock Plan, except that under the Employee Stock
Plan, the Compensation Committee has the authority, in its discretion, to add
performance criteria as a condition to any employee's exercise of an award
granted under the Employee Stock Plan. Options and stock appreciation rights
granted in 2001, 2000 and 1999 vest in 33-1/3 annual increments beginning one
year from the date of grant.

As a result of stock awards, bonus awards, stock appreciation rights and the
expensing of the cash payment made for certain executive stock options, the
Company recorded expense (income), reflecting vesting schedules for applicable
grants as well as fluctuations in the market price of the underlying stock, as
follows:

I-44

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The Company applies APB 25 and related interpretations in accounting for its
stock option plans. The table below sets forth the pro forma net income (loss)
as if compensation cost was determined in accordance with Statement of Financial
Accounting Standards No. 123 for options granted in 1995 through 2001:

The Company estimated the fair value of each option grant using the
Black-Scholes option pricing model. The following assumptions were used in
calculating these fair values:

I-45

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

Stock transactions under the 1985 Stock Plan and the Employee Stock Plan are as
follows:

CABLEVISION COMMON STOCK OPTIONS

- ----------
* includes stock awards paid in cash.

CNYG COMMON STOCK OPTIONS

I-46

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

RMG COMMON STOCK OPTIONS

The following tables summarize significant ranges of outstanding and exercisable
options at December 31, 2001:

CNYG COMMON STOCK OPTIONS

RMG COMMON STOCK OPTIONS

I-47

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

LONG-TERM INCENTIVE PLAN

Pursuant to the Company's Long-Term Incentive Plan, the Company has granted cash
awards to senior executives that vest over varying periods, some of which are
performance based. Certain senior executives have also received performance
retention awards under the plan, vesting over 7 years, aggregating $111,000. The
terms of the award provide that the executive may request a loan from the
Company in the amount of the award prior to its vesting, subject to certain
limitations, provided that such loan is secured by a lien in favor of the
Company on property owned by the executive. As of December 31, 2001, $28,294 had
been advanced in respect of this plan. In connection with this plan, the Company
has recorded expense as follows:

NOTE 15. COMMITMENTS AND CONTINGENCIES

The Company, through Rainbow Media Holdings, has entered into several contracts,
including rights agreements, with professional sports teams and others relating
to cable television programming. In addition, Rainbow Media Holdings, through
MSG, has employment agreements with players, general managers and coaches of its
professional sports teams. The contracts provide for payments which are
guaranteed regardless of injury or termination. Certain of these contracts are
covered by disability insurance if certain conditions are met. The future cash
payments reflected below do not include the impact of potential insurance
recoveries. The Company also has certain payment commitments associated with the
construction of a new practice facility by MSG.

In addition, the table below includes the Company's minimum purchase commitments
for digital boxes (approximately $1,325,000 through 2004), minimum contractual
payment commitments to a satellite manufacturer in connection with the
construction and launch of a direct broadcast satellite and certain other
obligations pursuant to contracts entered into in the normal course of business.

Future cash payments required under these contracts as of December 31, 2001 are
as follows:

I-48

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

At December 31, 2001, approximately $63,014 of commitments, included in the
table above, relating to player contracts have been accrued and are reflected in
the accompanying consolidated balance sheets.

In addition to the above amounts, the Company may also be obligated to pay the
National Basketball Association ("NBA") a luxury tax in each year pursuant to
the NBA/NBPA collective bargaining agreement, which is in effect through June
30, 2004 and which may be extended for one year by the NBA. The ultimate
calculation of any amount due would be based on a formula established by the
agreement. The tax is based on the amount by which the team's salary, as defined
in the agreement, exceeds a luxury tax "trigger."

During 2001, businesses attributed to RMG secured carriage commitments with
certain multiple system operators under long-term affiliation agreements, in
exchange for which such businesses agreed to make payments when certain launch
thresholds are met conditioned upon continued carriage. These businesses are
contingently liable through 2003 for additional payments of up to $12,850.

NOTE 16. OTHER MATTERS

The Company is party to various lawsuits, some involving substantial amounts.
Management does not believe that the resolution of these lawsuits will have a
material adverse impact on the financial position of the Company. See Note 12
regarding the At Home litigation.

NOTE 17. DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS

CASH AND CASH EQUIVALENTS, ACCOUNTS RECEIVABLE TRADE, NOTES AND OTHER
RECEIVABLES, PREPAID EXPENSES AND OTHER ASSETS, ADVANCES TO AFFILIATES, ACCOUNTS
PAYABLE AND ACCRUED LIABILITIES.

The carrying amount approximates fair value due to the short maturity of these
instruments.

DERIVATIVE CONTRACTS AND LIABILITIES UNDER DERIVATIVE CONTRACTS

Derivative contracts are carried at fair value based on dealer quotes.

AT HOME WARRANTS

The fair value of the At Home warrants at December 31, 2000 is based upon the
Black-Scholes pricing model.

INVESTMENT SECURITIES AVAILABLE-FOR-SALE AND INVESTMENT SECURITIES PLEDGED AS
COLLATERAL

Marketable securities are carried at their fair value based upon quoted market
prices.

I-49

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

BANK DEBT, COLLATERALIZED INDEBTEDNESS, SENIOR NOTES AND DEBENTURES,
SUBORDINATED NOTES AND DEBENTURES AND REDEEMABLE EXCHANGEABLE PREFERRED STOCK OF
CSC HOLDINGS

The fair values of each of the Company's debt instruments and redeemable
preferred stock of CSC Holdings are based on quoted market prices for the same
or similar issues or on the current rates offered to the Company for instruments
of the same remaining maturities.

INTEREST RATE SWAP AGREEMENTS

Interest rate swap agreements in 2001 are carried at fair value based on dealer
quotes. These values represent the estimated amount the Company would receive or
pay to terminate agreements, taking into consideration current interest rates
and the current creditworthiness of the counterparties.

The fair value of the Company's financial instruments are summarized as follows:

I-50

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision. Changes
in assumptions could significantly affect the estimates.

NOTE 18. SEGMENT INFORMATION

The Company classifies its business interests into four segments:
Telecommunication Services, consisting principally of its cable television,
telephone and cable modem services operations; Rainbow Media Group, consisting
principally of interests in national and regional cable television programming
networks; MSG, which owns and operates professional sports teams, regional cable
television networks, live productions and entertainment venues; and Retail
Electronics, which represents the operations of Cablevision Electronics' retail
electronics stores.

The Company's reportable segments are strategic business units that are managed
separately. The Company evaluates segment performance based on several factors,
of which the primary financial measure is business segment adjusted operating
cash flow (defined as operating income (loss) before depreciation and
amortization, stock plan and long-term incentive plan expenses, restructuring
charges, and the costs of year 2000 remediation). The accounting policies of the
segments are the same as those described in the summary of significant
accounting policies. Information as to the operations of the Company's business
segments is set forth below.

I-51

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

A reconciliation of reportable segment amounts to the Company's consolidated
balances is as follows:

Substantially all revenues and assets of the Company's reportable segments are
attributed to or located in the United States.

I-52

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The Company does not have a single external customer which represents 10 percent
or more of its consolidated revenues.

NOTE 19. INTERIM FINANCIAL INFORMATION (UNAUDITED)

The following is a summary of selected quarterly financial data for the years
ended December 31, 2001 and 2000.

I-53

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

Net income (loss) per share amounts for each quarter are required to be computed
independently. As a result, their sum may not equal the total year net income
(loss) per share.

NOTE 20. COMBINING FINANCIAL INFORMATION

Presented below are combining financial information schedules for Cablevision.
The combined financial data for each of RMG and CNYG is intended to reflect the
assets, liabilities, revenues and expenses that Cablevision has attributed to
each of those groups, as well as certain allocations deemed reasonable by
management, to present the combined financial position and results of operations
of RMG and CNYG as if each were a separate entity for all periods presented.
However, primarily as a result of allocations and inter-group related party
transactions, the financial information included herein may not necessarily
reflect the combined financial position and results of operations of RMG or CNYG
had it operated as a separate stand-alone entity during the periods presented.

RMG represents a combination of certain assets, liabilities and businesses owned
by Cablevision, consisting of: (i) interests in five nationally-distributed
entertainment programming networks, (ii) interests in five regional Fox Sports
Net networks outside of the New York metropolitan area, (iii) an interest in
National Sports Partners, which owns and distributes Fox Sports Net, (iv) an
interest in National Advertising Partners, which provides advertising
representation services to all of the Fox Sports Net networks, (v) Rainbow
Network Communications, a full service network programming origination and
distribution company and (vi) certain developmental activities of Cablevision's
Rainbow Media Holdings subsidiary.

I-54

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The combined financial statements of RMG include the accounts of the following
consolidated subsidiaries of Cablevision:

American Movie Classics Company
AMC includes the American Movie Classics and WE: Women's Entertainment
programming services;
Bravo Company
Bravo includes the Bravo and Independent Film Channel programming
services;
MuchMusic USA Venture;
SportsChannel Ohio Associates (also known as Fox Sports Net Ohio);
SportsChannel Florida Associates (also known as Fox Sports Net Florida);
Rainbow Network Communications; and
Sterling Digital LLC.

All significant intra-group transactions and balances have been eliminated in
combination.

CNYG represents a combination of assets, liabilities and businesses owned by
Cablevision which have not been attributed to RMG. These assets, liabilities and
businesses include: (i) cable television businesses, including Cablevision's
residential telephone and high-speed cable modem businesses, (ii) commercial
telephone and internet operation businesses, (iii) retail electronics
businesses, (iv) Cablevision's interests in New York metropolitan area sports
and entertainment businesses including Madison Square Garden, Radio City Music
Hall, MSG Network, Fox Sports Net New York and professional sports teams, (v)
motion picture theater businesses, (vi) advertising sales representation
businesses, (vii) equity interests in certain direct broadcast satellite assets
and interests in a wireless personal communications business, and (viii) certain
marketable equity securities.

The combined financial statements of CNYG include the accounts of all
consolidated subsidiaries of Cablevision that have not been attributed to RMG.
All significant intra-group transactions and balances have been eliminated in
combination. Cablevision's interests in less than majority-owned entities are
carried on the equity method.

Even though Cablevision has attributed certain assets, liabilities, revenue and
cash flows to each of RMG and CNYG, that attribution does not change the legal
title to any assets or responsibility for any liabilities and does not affect
the rights of any creditors. Further, financial results of one group that affect
Cablevision's consolidated financial condition could affect the financial
position or results of operations of the other group. Any dividends or
distributions on, or repurchases of, Cablevision stock will reduce the assets of
Cablevision legally available for dividends on RMG and CNYG stock. Accordingly,
holders of CNYG common stock and RMG tracking stock will continue to be subject
to risks associated with an investment in a single corporation and in all of
Cablevision's businesses, assets and liabilities.

Amounts in the combined financial statements of CNYG and RMG presented below
reflect Cablevision's basis in the net assets of the combined businesses.
However, minority interests in the net assets and in the results of operations
of these businesses are not reflected. Such minority

I-55

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

interests are recorded in the consolidated financial statements of Cablevision.

However, the combined statements of operations of CNYG and RMG presented below
include the amount of net income or loss attributable to parties other than the
Cablevision shareholders. Such amounts represent the allocation of minority
interests which are presented in Cablevision's consolidated financial
statements, in the net income or loss of CNYG and RMG.

The combined financial data of RMG and CNYG reflects the application of certain
allocation and cash management policies of Cablevision. Cablevision's board of
directors may modify or rescind any of these allocation policies without the
approval of the stockholders, although no such changes have been made or are
currently contemplated. Any such changes adopted by the board of directors would
be made based upon its good faith business judgment of Cablevision's best
interests, taking into consideration the best interests of all Cablevision
shareholders. Management believes that these allocations have been made on a
reasonable basis. However, it is not practicable to determine whether the
allocated amounts represent amounts that might have been incurred on a
stand-alone basis, as there are no company-specific or comparable industry
benchmarks with which to make such estimates.

Cablevision attributes general and administrative costs to RMG and CNYG as
follows:

- The costs of maintaining corporate headquarters and facilities are
allocated based upon specific usage measured by proportionate square
footage.

- Certain employee benefit costs and utilities are allocated based upon
proportionate headcount.

- Costs of common support functions (such as human resources, legal,
accounting, tax, audit, treasury, strategic planning, investor
relations, information technology, etc.) have been allocated to the
groups based on their actual usage of those services, to the extent
actual usage is determinable.

- The costs of common support functions not allocated based on actual
usage, principally salaries of corporate executives, are allocated
based upon management's estimate of the level of effort expended on
each business unit based on historical trends.

- In addition, Cablevision charges the businesses attributed to RMG and
CNYG their proportionate share of the expense or benefit related to
Cablevision's stock plan and Cablevision's long-term incentive plan.
Such charges are based upon the cost directly attributed to the
specific employees of the business units together with an allocation
of the expense or benefit related to corporate executives based upon
management's estimate of the level of effort expended on each
business unit. Amounts accrued for the stock plan and long-term
incentive plan as of December 31, 2001 and 2000, respectively, and
included in accrued employee related costs in the accompanying
combined balance sheets are as follows:

I-56

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

Indebtedness for each group reflects the indebtedness of the businesses
attributed to each group. Borrowings and related interest under the Rainbow
Media Holdings credit facility were attributed to RMG since such borrowings were
used primarily to fund the development and the support of businesses attributed
to RMG.

To the extent that federal and state income taxes are determined on a basis that
includes operations of both CNYG and RMG, such taxes are allocated to each
group, and reflected in their respective financial statements, in accordance
with Cablevision's tax allocation policy. In general, this policy provides that
the consolidated tax provision, and related tax payments or refunds, will be
allocated between the groups based principally upon the financial income,
taxable income, credits and other amounts directly related to the respective
groups. Under the policy, the amount of taxes payable or refundable which are
allocated to each group will generally be comparable to those that would have
resulted if the groups had filed separate tax returns.

Further, RMG is responsible to CNYG for its share of any consolidated income tax
liabilities determined in accordance with the policy. RMG's share of such
liabilities is generally determined by reference to the amount of tax that RMG
would owe on a separately filed tax return. Accordingly, CNYG and RMG will
realize the benefits of their respective tax attributes when they generate
sufficient taxable income to utilize such attributes.

Corporate costs allocated to CNYG and RMG are as follows:

I-57

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

COMBINING BALANCE SHEET DATA
December 31, 2001

I-58

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

COMBINING BALANCE SHEET DATA (cont'd)
December 31, 2001

I-59

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

COMBINING BALANCE SHEET DATA
December 31, 2000

I-60

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

COMBINING BALANCE SHEET DATA (Cont'd)
December 31, 2000

I-61

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

COMBINING RESULTS OF OPERATIONS DATA

I-62

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued).

COMBINING CASH FLOW INFORMATION

I-63

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued).

NOTE 21. SUBSEQUENT EVENTS

In March 2002, Rainbow Media Group entered into a $400,000 revolving credit
facility with a group of banks which matures on December 31, 2006 (in certain
limited circumstances the maturity date may be accelerated to November 1,
2005). The facility requires commitment reductions beginning in the third
quarter of 2004. This revolving credit facility contains certain financial
covenants that may limit Rainbow Media Group's ability to utilize all of the
undrawn funds available thereunder, including covenants requiring the
maintenance of certain financial ratios and restricting the permitted uses of
borrowed funds.

In March, 2002, AMC and Bravo, subsidiaries of Rainbow Media Holdings
attributed to the Rainbow Media Group, entered into a $200,000 revolving
credit facility with a group of banks. The facility matures on December 31,
2006 (in certain limited circumstances the maturity date may be accelerated
to November 1, 2005) and requires commitment reductions beginning in the
third quarter of 2004. The facility replaced the previously existing AMC
$200,000 revolving credit facility. The AMC/Bravo revolving credit facility
contains certain financial covenants that may limit the ability to utilize
all of the undrawn funds available thereunder, including covenants requiring
the maintenance of certain financial ratios and restricting the permitted
uses of borrowed funds.

In March 2002, Rainbow Media Holdings acquired Loral's 50% interest in R/L DBS
for a purchase price of up to a present value of $33,000 payable only from
revenues of R/L DBS' business, if any, or from any future sale of all or part of
the interests in or assets of R/L DBS. This purchase increased Rainbow Media
Holdings' ownership of R/L DBS to 100%.

In March 2002, NBC-Rainbow Holding exchanged a .4% interest in Rainbow Media
Holdings equity securities for 708,456 shares of Rainbow Media Group Class A
common stock of Cablevision. This exchange will be accounted for as an
acquisition of minority interests and accounted for using the purchase
method. The purchase price will be allocated to the specific assets acquired
when an independent appraisal is obtained.

I-64

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholder
CSC Holdings, Inc.

We have audited the accompanying consolidated balance sheets of CSC Holdings,
Inc. and subsidiaries as of December 31, 2001 and 2000, and the related
consolidated statements of operations, stockholder's deficiency and cash flows
for each of the years in the three-year period ended December 31, 2001. In
connection with our audits of the consolidated financial statements, we also
audited the financial statement schedule listed in Item 14(a)(2). These
consolidated financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and the financial statement
schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CSC Holdings, Inc.
and subsidiaries at December 31, 2001 and 2000, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America. Also, in our opinion, the related
financial statement schedule referred to above, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly,
in all material respects, the information set forth therein.

/s/ KPMG LLP

Melville, New York
March 29, 2002

II-1

CSC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2001 and 2000
(Dollars in thousands)

See accompanying notes to
consolidated financial statements.

II-2

CSC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2001 and 2000
(Dollars in thousands, except per share amounts)

See accompanying notes
to consolidated financial statements.

II-3

CSC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December 31, 2001, 2000 and 1999
(Dollars in thousands, except per share amounts)

See accompanying notes
to consolidated financial statements.

II-4

CSC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIENCY
Years ended December 31, 2001, 2000 and 1999
(Dollars in thousands)

See accompanying notes to
consolidated financial statements.

II-5

CSC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2001, 2000 and 1999
(Dollars in thousands)

See accompanying notes
to consolidated financial statements.

II-6

CSC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2001, 2000 and 1999
(Dollars in thousands)
(continued)

See accompanying notes
to consolidated financial statements.

II-7

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

THE COMPANY AND RELATED MATTERS

CSC Holdings, Inc. (the "Company"), is a wholly-owned subsidiary of Cablevision
Systems Corporation ("Cablevision"). The Company and its majority-owned
subsidiaries own and operate cable television systems and have ownership
interests in companies that produce and distribute national and regional
entertainment and sports programming services, including Madison Square Garden,
L.P. ("MSG"). The Company also owns companies that provide advertising sales
services for the cable television industry, provide switched telephone service,
operate a retail electronics chain and operate motion picture theaters. The
Company classifies its business interests into four segments: Telecommunication
Services, consisting principally of its cable television, telephone and cable
modem services operations; Rainbow Media Group ("RMG"), consisting principally
of interests in national and regional cable television programming networks;
MSG, which owns and operates professional sports teams, regional cable
television networks, live productions and entertainment venues; and Retail
Electronics, which represents the operations of its retail electronics stores.

In April 1999, Cablevision contributed certain cable television systems acquired
from TCI Communications, Inc. (the "TCI Systems") on March 4, 1998 to the
Company. This transaction was accounted for in a manner similar to a pooling of
interests, whereby the assets and liabilities of the TCI Systems were recorded
at historical book value (net assets of $509,574). Prior period consolidated
financial statements of the Company have been restated to include the financial
position and results of operations of the TCI Systems from March 4, 1998.

PRINCIPLES OF CONSOLIDATION AND INVESTMENTS IN AFFILIATES

The accompanying consolidated financial statements include the accounts of the
Company and its majority-owned subsidiaries. The Company's interests in less
than majority-owned entities are carried on the equity method. The Company would
recognize a loss where there existed an other than a temporary decline in the
value of the investment. All significant intercompany transactions and balances
are eliminated in consolidation.

REVENUE RECOGNITION

The Company recognizes cable television, internet access, telephony and
programming revenues as services are provided to subscribers. Advertising
revenues are recognized when commercials are telecast. Revenue from retail
electronic sales is recognized upon delivery, with an appropriate provision for
returned merchandise based upon historical experience. Revenues derived from
other sources are recognized when services are provided or events occur.

II-8

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

In the quarter ended December 31, 2000, the Company adopted Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). The
adoption of SAB 101 had an insignificant impact on the results of operations.

COSTS OF REVENUE

Costs of revenue related to the sale of retail electronics products are
classified in the accompanying statements of operations as "retail electronics
costs of sales". Costs of revenue related to sales of services are classified as
"technical and operating" expenses in the accompanying statements of operations.

INVESTMENTS IN MARKETABLE SECURITIES

The Company accounts for its investments in marketable securities in accordance
with Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." Investment securities
available-for-sale are stated at fair value, and unrealized holding gains and
losses are included in accumulated other comprehensive income as a separate
component of stockholder's deficiency. Investment securities pledged as
collateral are classified as trading securities and are stated at fair value
with unrealized holding gains and losses included in net income (loss).

LONG-LIVED ASSETS

Property, plant and equipment, including construction materials, are carried at
cost, and include all direct costs and certain indirect costs associated with
the construction of cable television transmission and distribution systems, and
the costs of new subscriber installations. Franchises are amortized on the
straight-line basis over the average remaining terms (7 to 15 years) of the
franchises at the time of acquisition. Broadcast rights and affiliation
agreements (primarily cable television system programming agreements) are
amortized on a straight-line basis over periods ranging from 6 to 40 years.
Other intangible assets are amortized on the straight-line basis over the
periods benefited (2 to 20 years), except that excess costs over fair value of
net assets acquired are being amortized on the straight-line basis over periods
ranging from 3 to 40 years.

The Company reviews its long-lived assets (property, plant and equipment, and
related intangible assets that arose from business combinations accounted for
under the purchase method) for impairment whenever events or circumstances
indicate that the carrying amount of an asset may not be recoverable. If the sum
of the expected cash flows, undiscounted and without interest, is less than the
carrying amount of the asset, an impairment loss is recognized as the amount by
which the carrying amount of the asset exceeds its fair value.

II-9

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

FEATURE FILM INVENTORY

Rights to feature film inventory acquired under license agreements along with
the related obligations are recorded at the contract value. Costs are amortized
to technical and operating expense on a straight-line basis over the respective
license periods. Amounts payable subsequent to December 31, 2001 related to
feature film telecast rights are $58,443 in 2002, $58,233 in 2003, $58,499 in
2004, $41,481 in 2005, $32,460 in 2006 and $60,699 thereafter.

DEFERRED CARRIAGE FEES

Deferred carriage fees represent primarily payments to multiple cable systems
operators to guarantee carriage of certain programming services and are
amortized to technical and operating expense over the period of guarantee (3 to
11 years).

INVENTORY

Carrying amounts of retail merchandise are determined on an average cost basis
and are stated at the lower of cost or market.

DEFERRED FINANCING COSTS

Costs incurred to obtain debt are deferred and amortized, on a straight-line
basis, over the life of the related debt.

INCOME TAXES

Income taxes are provided based upon the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes", which requires the
asset/liability method of accounting for deferred income taxes and permits the
recognition of deferred tax assets, subject to an ongoing assessment of
realizability.

INCOME (LOSS) PER COMMON SHARE

Basic and diluted net income (loss) per common share are not presented since the
Company is a wholly-owned subsidiary of Cablevision.

RECLASSIFICATIONS

Certain reclassifications have been made in the 2000 and 1999 financial
statements to conform to the 2001 presentation.

II-10

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

CASH FLOWS

For purposes of the consolidated statements of cash flows, the Company considers
short-term investments with a maturity at date of purchase of three months or
less to be cash equivalents.

During 2001, 2000 and 1999, the Company's non-cash investing and financing
activities and other supplemental data were as follows:

COMPREHENSIVE INCOME

Other comprehensive income for the year ended December 31, 2000 of $286,440
represents unrealized net gains on available-for-sale securities. During 2001,
these securities were reclassified to trading securities and the unrealized gain
was included in net income.

USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

COMMITMENTS AND CONTINGENCIES

Liabilities for loss contingencies arising from claims, assessments, litigation,
fines and penalties and other sources are recorded when it is probable that a
liability has been incurred and the amount of the assessment can be reasonably
estimated.

II-11

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

RECENTLY ISSUED ACCOUNTING STANDARDS

In July 2001, the FASB issued Statement No. 141, Business Combinations, and
Statement No. 142, Goodwill and Other Intangible Assets. Statement 141 requires
that the purchase method of accounting be used for all business combinations.
Statement 141 also specifies criteria that intangible assets acquired in a
purchase method business combination must meet to be recognized and reported
separately from goodwill. Statement 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of Statement 142. Statement 142 will also require that intangible
assets with definite useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and reviewed for impairment in
accordance with Statement No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.

The Company adopted the provisions of Statement 141 effective July 1, 2001. The
adoption of Statement 141 had no effect on the financial position or results of
operations of the Company. Statement 142 is effective for the Company beginning
January 1, 2002. At that time, any goodwill and intangible assets determined to
have an indefinite useful life that were acquired in a purchase business
combination will not be amortized, but will be evaluated for impairment in
accordance with the provisions of Statement 142.

Statement 141 will require, upon adoption of Statement 142, that the Company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary reclassifications
in order to conform with the new criteria in Statement 141 for recognition apart
from goodwill. Upon adoption of Statement 142, the Company will be required to
reassess the useful lives and residual values of all intangible assets acquired
in purchase business combinations, and make any necessary amortization period
adjustments by the end of the first interim period after adoption. In addition,
to the extent an intangible asset is identified as having an indefinite useful
life, the Company will be required to test the intangible asset for impairment
in accordance with the provisions of Statement 142 within the first interim
period. Any impairment loss will be measured as of the date of adoption and
recognized as the cumulative effect of a change in accounting principle in the
first interim period.

The Company will adopt Statement 142 effective January 1, 2002 and is evaluating
the effect that such adoption may have on its consolidated results of operations
and financial position. As a result of adoption, a substantial amount of the
Company's intangible assets will no longer be amortized.

In August 2001, the FASB issued Statement No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which supersedes both Statement 121 and the
accounting and reporting provisions of APB Opinion No. 30, Reporting the Results
of Operations - Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring

II-12

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

Events and Transactions (Opinion 30), for the disposal of a segment of a
business (as previously defined in that Opinion). Statement 144 retains the
fundamental provisions in Statement 121 for recognizing and measuring impairment
losses on long-lived assets held for use and long-lived assets to be disposed of
by sale, while also resolving significant implementation issues associated with
Statement 121. Statement 144 retains the basic provisions of Opinion 30 on how
to present discontinued operations in the income statement but broadens that
presentation to include a component of an entity (rather than a segment of a
business). Unlike Statement 121, an impairment assessment under Statement 144
will never result in a write-down of goodwill. Rather, goodwill is evaluated for
impairment under Statement 142.

The Company is required to adopt Statement 144 on January 1, 2002. Management
does not expect the adoption of Statement 144 for long-lived assets held for use
to have a material impact on the Company's financial statements because the
impairment assessment under Statement 144 is largely unchanged from Statement
121. The provisions of Statement 144 generally are required to be applied
prospectively after the adoption date to newly initiated disposal activities.
Therefore, management cannot determine the potential effects that adoption of
Statement 144 will have on the Company's financial statements.

In November 2001, FASB's Emerging Issues Task Force issued EITF No. 01-09,
"Accounting for the Consideration Given by a Vendor to a Customer or a Reseller
of the Vendors' Products." EITF No. 01-09 stipulates the criteria to be met in
determining the financial statement classification of customer incentives (which
includes deferred carriage fees) as either a reduction of revenue or an
operating expense. As required, effective January 1, 2002, the Company will
generally reclassify the amortization of its deferred carriage fees as a
reduction to revenues, net. All comparative periods will be restated. The
amortization of deferred carriage fees shown on the balance sheet is currently
included in technical and operating expenses, which would correspondingly be
reduced such that operating income and net income would not be affected.

NOTE 2. TRANSACTIONS

2001 TRANSACTIONS

In connection with the distribution of the Rainbow Media Group tracking stock by
Cablevision, NBC-Rainbow Holding, Inc., a subsidiary of National Broadcasting
Company, is required to exchange its 26% interest in Rainbow Media Holdings
Inc., a subsidiary of the Company, equity securities over a period of up to 9
years for a 34% interest in Rainbow Media Group tracking stock, based on the
number of shares of Rainbow Media Group tracking stock outstanding on the date
of the tracking stock distribution.

Through December 31, 2001, NBC-Rainbow Holding has exchanged a 3.1% interest in
Rainbow Media Holdings equity securities for 6,966,484 shares of Rainbow Media
Group Class A common stock of Cablevision (valued at $138,597). These exchanges
are accounted for as acquisitions of minority interests and are accounted for
using the purchase method. In

II-13

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

connection with these transactions, the Company recorded excess costs over fair
value of net assets acquired of approximately $112,634. The purchase price will
be allocated to the specific assets acquired when an independent appraisal is
obtained.

In April 2001, Metro-Goldwyn-Mayer Inc. ("MGM") acquired a 20% interest in
certain programming businesses of Rainbow Media Holdings for $825,000 in cash.
The Company recorded a gain of approximately $746,310 in connection with this
transaction.

In January 2001, the Company completed the sale of its cable systems in Boston
and eastern Massachusetts to AT&T Corp. in exchange for AT&T's cable systems in
certain northern New York suburbs, 44,260,932 shares of AT&T stock, valued at
approximately $893,500 at closing based on the quoted market price, and
approximately $293,200 in cash. The Company recognized a net gain of
approximately $1,441,699. In July 2001, AT&T distributed to AT&T common
shareholders 0.3218 share of AT&T Wireless Services, Inc. common stock for each
share of AT&T common stock held. In connection with such distribution, the
Company received 14,243,166 shares of AT&T Wireless common stock as a result of
its ownership of 44,260,932 shares of AT&T stock.

The acquisition of the cable systems from AT&T was accounted for as a purchase
with the operations of the acquired systems being consolidated with those of the
Company as of the acquisition date. The purchase price was allocated to the
specific assets acquired based on an independent appraisal as follows:

Property, plant and equipment, net........................... $ 96,852
Other assets................................................. 1,269
Liabilities.................................................. (5,246)
Franchises................................................... 502,913
Excess costs over fair value of net assets acquired.......... 14,609
--------
$610,397
========

The following unaudited pro forma condensed consolidated results of operations
for the Company are presented for the year ended December 31, 2000 as if the
AT&T transaction described above had occurred on January 1, 2000.

The unaudited pro forma information presented above gives effect to certain
adjustments, including the amortization of acquired intangible assets. The pro
forma information has been prepared for comparative purposes only and does not
purport to indicate the results of operations

II-14

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

which would actually have occurred had the AT&T transaction been made at the
beginning of the period indicated or which will occur in the future.

2000 TRANSACTIONS

In November 2000, the Company completed the sale of its cable television systems
in the greater Cleveland, Ohio metropolitan area to Adelphia Communications
Corporation for $991,000 in cash and 10,800,000 shares of Adelphia
Communications common stock, valued at closing at $359,100 based on the quoted
market price. The Company recorded a gain of approximately $1,075,359 in
connection with the transaction in 2000. In 2001, the Company recorded a loss of
$12,082 in connection with this transaction resulting from certain adjustments
to the purchase price.

In September 2000, the Company completed the sale of its cable television system
serving Kalamazoo, Michigan, for 11,173,376 shares of Charter Communications,
Inc.'s common stock, valued at approximately $165,500 at closing based on the
quoted marked price, and recognized a gain of approximately $128,791.

In January 2000, Regional Programming Partners, a subsidiary of Rainbow Media
Holdings, acquired the 70% interest in SportsChannel Florida Associates held by
Front Row Communications for approximately $130,600 (including the repayment of
$20,000 in debt) increasing its ownership to 100%. The acquisition was accounted
for as a purchase with the operations of the acquired business being
consolidated with those of the Company as of the acquisition date. The purchase
price was allocated to the specific assets acquired based upon an independent
appraisal as follows:

Property, plant and equipment............................... $ 2,200
Other assets................................................ 26,400
Liabilities................................................. (9,900)
Excess cost over fair value of net assets acquired.......... 111,900
----------
$ 130,600
==========

In 2000, the Company recognized a gain of approximately $5,715 in connection
with the sale of certain programming assets held by Rainbow Media Holdings.

1999 TRANSACTIONS

At various times during 1999, the Company acquired interests in the real
property and assets related to certain movie theaters for an aggregate purchase
price of approximately $29,700. The acquisitions were accounted for as purchases
with the operations of the acquired theaters being consolidated with those of
the Company as of the acquisition dates. The purchase price was allocated to the
specific assets acquired based upon an independent appraisal as follows:

II-15

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

Property, plant and equipment............................. $ 13,700
Other assets.............................................. 200
Liabilities............................................... (2,500)
Excess cost over fair value of net assets acquired........ 18,300
---------
$ 29,700
=========

In December 1999, Cablevision acquired cable television systems with
approximately 4,500 subscribers located in the Port Jervis, New York area for
approximately $7,400, $7,300 of which was paid in shares of Cablevision's Class
A common stock. Concurrent with the acquisition, the acquired assets were
contributed to the Company.

In April 1999, ITT Corporation exercised its second put option for the remainder
of its interest in MSG and concurrently settled certain matters between the
parties for an aggregate payment of $87,000.

NOTE 3. RESTRUCTURING AND IMPAIRMENT CHARGES

RESTRUCTURING

In December 2001, the Company recorded restructuring charges of $56,442 which
include expenses of approximately $21,018 associated with the elimination of
approximately 600 positions, primarily in corporate, administrative and
infrastructure functions across various business units of the Company. In
addition to employee severance, the restructuring charges include estimated
expenses of approximately $35,424 associated with facility realignment and other
related costs.

IMPAIRMENT CHARGES

In 2001 and 2000, the Company recorded a loss on investments of approximately
$108,452 and $139,682, respectively, reflecting other-than-temporary declines in
the fair value of the Company's At Home Corporation warrants. The carrying value
of the warrants has been reduced to zero at December 31, 2001. See Note 11.

In December 2001 and December 2000, the Company recorded impairment losses of
approximately $99,900 and $47,500, respectively, included in depreciation and
amortization, representing the balance of unamortized goodwill related to
certain theaters in which the carrying value of the asset exceeded the estimated
fair value based on discounted estimated future cash flows. Current losses and
projected future operating losses caused the Company to reassess the
recoverability of the goodwill.

In December 1999, the Company recorded an impairment loss of $35,490, included
in depreciation and amortization, representing the balance of unamortized
goodwill recorded on the acquisition of assets associated with The WIZ consumer
electronics store locations. Current

II-16

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

losses and projected future operating losses caused the Company to reassess the
recoverability of the goodwill. The impairment loss resulted from the carrying
amount of this asset exceeding its estimated fair value based on discounted
estimated future cash flows.

NOTE 4. NET ASSETS HELD FOR SALE

The Company had entered into definitive agreements covering the sale of certain
cable television systems as of December 31, 2000.

For financial reporting purposes, the assets and liabilities attributable to
cable systems whose sale or transfer was pending at December 31, 2000 have been
classified in the consolidated balance sheets as net assets held for sale and
are included in the telecommunications segment. Such net assets consist of the
following:

The accompanying consolidated statements of operations for the years ended
December 31, 2000 and 1999 include net revenues aggregating approximately
$190,449 and $177,904, respectively, and net income (loss) aggregating
approximately $6,140 and $(4,109), respectively, relating to the cable systems
held for sale.

The net assets held for sale as of December 31, 2000 were disposed of in January
2001. See Note 2.

II-17

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

NOTE 5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following assets, which are
depreciated or amortized primarily on a straight-line basis over the estimated
useful lives shown below:

At December 31, 2001 and 2000, the gross amount of equipment and related
accumulated amortization recorded under capital leases were as follows:

NOTE 6. DEBT

BANK DEBT

RESTRICTED GROUP

For financing purposes, the Company and certain of its subsidiaries are
collectively referred to as the "Restricted Group." The Restricted Group has a
$2.4 billion reducing revolving credit facility (the "Credit Agreement") with a
group of banks led by Toronto-Dominion (Texas), Inc., TD Securities (USA) Inc.
and Banc Of America Securities LLC, as co-lead arrangers and co-book managers.
The credit facility matures on June 30, 2006. This facility was used to repay
the outstanding balance under the previous $2.2 billion reducing revolving
credit facility.

II-18

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The total amount of bank debt outstanding under the Restricted Group credit
facility at December 31, 2001 and 2000 was $771,694 and $1,942,759 (including
$3,694 and $16,259, respectively, outstanding under a separate overdraft
facility), respectively. As of December 31, 2001, approximately $54,547 was
restricted for certain letters of credit issued on behalf of the Company.
Interest on outstanding amounts may be paid, at the option of the Company, based
on the prime rate or a Eurodollar rate plus a margin which varies based on the
Restricted Group's leverage ratio (as defined in the Credit Agreement).

Undrawn funds available to the Restricted Group under the Credit Agreement
amounted to approximately $1,577,453 at December 31, 2001. The Credit Agreement
contains certain financial covenants that may limit the Restricted Group's
ability to utilize all of the undrawn funds available thereunder. The Credit
Agreement contains various restrictive covenants, among which are the
maintenance of various financial ratios and tests, and limitations on various
payments, including preferred dividends and dividends on its common stock. The
Company was in compliance with the covenants of its Credit Agreement at December
31, 2001.

The weighted average interest rate on all bank borrowings of the Restricted
Group was 3.55% and 8.00% on December 31, 2001 and 2000, respectively. The
Company is also obligated to pay fees ranging from .375% to .75% per annum on
the unused loan commitment and from .875% to 1.75% per annum on letters of
credit issued under the Credit Agreement.

UNRESTRICTED GROUP

RAINBOW MEDIA HOLDINGS

Rainbow Media Holdings had a $300,000, three year credit facility which was
repaid on December 22, 2000 with funds borrowed from the Company. Rainbow Media
Holdings also had $4,449 outstanding under an overdraft facility with a bank at
December 31, 2000.

AMERICAN MOVIE CLASSICS COMPANY

American Movie Classics Company ("AMC"), a subsidiary of Rainbow Media Holdings,
had a $425,000 credit facility consisting of a $200,000 reducing revolving
credit facility and a $225,000 amortizing term loan. Borrowings under the AMC
credit facility bore interest at current market rates plus a margin based on the
ratio of debt to cash flow, as defined in the AMC credit facility. At December
31, 2000, the weighted average interest rate on bank indebtedness was 7.97%. As
of December 31, 2000, AMC had outstanding borrowings of $359,322 (including
$4,322 outstanding under a separate overdraft facility).

In April 2001, AMC repaid the balance outstanding under the AMC credit facility
of $365,000 with proceeds from the MGM transaction and terminated the term loan
facility, reducing the credit facility solely to the $200,000 revolver.

II-19

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

MADISON SQUARE GARDEN

MSG, a subsidiary of Rainbow Media Holdings, has a $500,000 revolving credit
facility with a group of banks led by Chase Manhattan Bank, as agent, which
expires on December 31, 2004. Loans under the MSG credit facility bear interest
at current market rates plus a margin based upon MSG's consolidated leverage
ratio. At December 31, 2001 and 2000, loans outstanding amounted to $235,000 and
$310,000, respectively, and bore interest at a weighted average rate of 2.66%
and 7.23%, respectively. The MSG credit facility contains certain covenants that
may limit MSG's ability to utilize all of the undrawn funds available
thereunder. Undrawn funds available under the MSG credit facility amounted to
approximately $252,543 at December 31, 2001. The MSG credit facility contains
certain financial covenants with which MSG was in compliance at December 31,
2001.

In July 1997, a wholly-owned subsidiary of MSG borrowed $20,000 under promissory
notes with various lending institutions which bore interest at LIBOR plus a
margin and matured in July 2002. In September 2000, these notes were repaid with
borrowings under the MSG credit facility.

CABLEVISION ELECTRONICS

Cablevision Electronics Investments, Inc., a wholly-owned subsidiary of the
Company, has a $130,000 revolving credit facility maturing in April 2003, as
amended. Under the terms of the credit facility, the total amount of borrowings
available to Cablevision Electronics is subject to an availability calculation
based on a percentage of eligible inventory. The total amount outstanding under
the credit agreement at December 31, 2001 and 2000 was approximately $38,347 and
$66,902, respectively and bore interest at 5.25% and 8.62%, respectively. As of
December 31, 2001, $3,513 was restricted for certain letters of credit issued on
behalf of Cablevision Electronics. Undrawn funds available amounted to $41,604
on December 31, 2001 based on the level of inventory as of that date.

Borrowings under the credit agreement are secured by Cablevision Electronics'
assets. The credit agreement contains various restrictive covenants with which
Cablevision Electronics was in compliance at December 31, 2001.

CCG HOLDINGS, INC.

CCG Holdings, Inc., a wholly-owned subsidiary of the Company, had a $15,000
revolving credit bank facility maturing on June 30, 2003 which was repaid and
retired in September 2000 with funds made available by the Company.

II-20

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

SENIOR NOTES AND DEBENTURES

The following table summarizes the Company's senior notes and debentures:

In March 2001, the Company issued $1,000,000 face amount of 7-5/8% senior notes
due 2011. The notes were issued at a discount of $3,210. The net proceeds were
used to reduce bank debt outstanding.

The senior notes and debentures are not redeemable by the Company prior to
maturity. The indentures under which the senior notes and debentures were issued
contain various covenants, which are generally less restrictive than those
contained in the Company's Credit Agreement, and with which the Company was in
compliance at December 31, 2001.

II-21

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

SUBORDINATED NOTES AND DEBENTURES

The following table summarizes the Company's senior subordinated notes and
debentures:

- ----------
* The notes/debentures are redeemable, at the Company's option, in whole or
in part, on the redemption dates listed at the respective percentage of
the principal amount and thereafter at 100% of the aggregate principal
amount, in each case together with accrued interest to the redemption
date.

** The debentures are redeemable, at the Company's option, on and after
April 1, 2003 at the redemption price of 104.938% reducing ratably to
100% of the principal amount on and after April 1, 2010, in each case
together with accrued interest to the redemption date.

On November 1, 2001, the Company redeemed its $300,000 face value 9-1/4% senior
subordinated notes due 2005 at a redemption price of 103.1%, plus accrued
interest and its $150,000 face value 9-7/8% senior subordinated notes due 2006
at a redemption price of 104.938%, plus accrued interest. In connection with the
redemption, the Company recognized a loss of $15,348.

The indentures under which the subordinated notes and debentures were issued
contain various covenants, which are generally less restrictive than those
contained in the Company's Credit Agreement and with which the Company was in
compliance at December 31, 2001.

II-22

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

SUMMARY OF FIVE YEAR DEBT MATURITIES

Total amounts payable by the Company and its subsidiaries under its various debt
obligations outstanding as of December 31, 2001, including capital leases,
during the five years subsequent to December 31, 2001 are as follows:

2002 $ 40,144
2003 59,292
2004 371,699
2005 732,221
2006 1,671,100

NOTE 7. PREFERRED STOCK

The following summarizes the changes in each series of the Company's preferred
stock:

In September 1999, the Company exercised its right to redeem all of its
outstanding shares of 8-1/2% Series I Cumulative Convertible Exchangeable
Preferred Stock ("Series I Preferred"). The redemption occurred on November 2,
1999, at a price equal to 102.8% of the liquidation preference, plus accrued
dividends. Investors held the Series I Preferred through interests in depositary
shares (each of which represented a 1/10th interest in a share of the Series I
Preferred) which were redeemable simultaneously. Each depositary share was
convertible into approximately 1.4828 shares of Cablevision's Class A common
stock. As of December 31, 1999, 13,797,625 depositary shares out of 13,800,000
depositary shares outstanding had been converted into 20,458,925 shares of
Cablevision's Class A common stock, with the remaining 2,375 depositary shares
being redeemed for cash. The Company paid cash dividends on the Series I
Preferred of approximately $21,898 in 1999.

In February 1996, the Company issued 6,500,000 depositary shares, representing
65,000 shares of 11-1/8% Series L Redeemable Exchangeable Preferred Stock (the
"Series L Preferred Stock"), which were subsequently exchanged for Series M
Redeemable Exchangeable Preferred Stock (the "Series M Preferred Stock") in
August 1996 with terms identical to the Series L Preferred Stock. The depositary
shares are exchangeable, in whole but not in part, at the option of the

II-23

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

Company, for the Company's 11-1/8% Senior Subordinated Debentures due 2008. The
Company is required to redeem the Series M Preferred Stock on April 1, 2008 at a
redemption price equal to the liquidation preference of $10,000 per share plus
accumulated and unpaid dividends. The Series M Preferred Stock is redeemable at
various redemption prices beginning at 105.563% at any time on or after April 1,
2003, at the option of the Company, with accumulated and unpaid dividends
thereon to the date of redemption. Before April 1, 2001, dividends could, at the
option of the Company, be paid in cash or by issuing fully paid and
nonassessable shares of Series M Preferred Stock with an aggregate liquidation
preference equal to the amount of such dividends. On and after April 1, 2001,
dividends must be paid in cash. The Company paid cash dividends on the Series M
Preferred Stock of approximately $123,500 in 2001.

In September 1995, the Company issued 2,500,000 shares of its $.01 par value
11-3/4% Series H Redeemable Exchangeable Preferred Stock (the "Series H
Preferred Stock") with an aggregate liquidation preference of $100 per share.
The Company is required to redeem the Series H Preferred Stock on October 1,
2007 at a redemption price per share equal to the liquidation preference of $100
per share, plus accrued and unpaid dividends thereon. Before October 1, 2000,
dividends could, at the option of the Company, be paid in cash or by issuing
fully paid and nonassessable shares of Series H Preferred Stock with an
aggregate liquidation preference equal to the amount of such dividends. On and
after October 1, 2000, dividends must be paid in cash. The terms of the Series H
Preferred Stock permit the Company, at its option, to exchange the Series H
Preferred Stock for the Company's 11-3/4% Senior Subordinated Debentures due
2007 in an aggregate principal amount equal to the aggregate liquidation
preference of the shares of Series H Preferred Stock. The Company paid cash
dividends on the Series H Preferred Stock of approximately $51,016 and $25,511
in 2001 and 2000, respectively.

NOTE 8. INCOME TAXES

The Company files a consolidated federal income tax return with its 80% or more
owned subsidiaries. Rainbow Media Holdings files a separate consolidated federal
income tax return with its 80% or more owned subsidiaries.

II-24

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

Income tax expense for the Company consists of the following components:

The tax provision for 2001 excludes deferred federal and state tax benefits of
$97,034 resulting from the exercise of stock options, which proportionate share
was credited directly to paid-in capital.

The effective tax expense of the Company differs from the statutory amount
because of the effect of the following items:

At December 31, 2001, the Company had consolidated net operating loss carry
forwards of approximately $1,670,145 and Rainbow Media Holdings had consolidated
federal net operating loss carry forwards of approximately $476,956 expiring on
various dates through 2021. The Company also has alternative minimum tax credit
carry forwards of approximately $8,727 which do not expire. As a result of
certain ownership changes, a portion of Rainbow Media Holdings' pre-1999 loss
carry forwards may be subject to annual limitations on deductions.

II-25

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The Company's net operating loss carry forwards expire as follows:

The tax effects of temporary differences which give rise to significant portions
of deferred tax assets or liabilities and the corresponding valuation allowance
at December 31, 2001 and 2000 are as follows:

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
asset will be realized. The ultimate realization of the deferred tax asset is
dependent upon the generation of future taxable income during the periods in
which temporary differences or net operating loss carry forwards become
deductible. Management considered the Company's history of generating taxable
losses and its accumulated deficit as significant negative evidence as to the
realizability of the deferred tax asset. The Company considered the gain on the
sale of its Massachusetts cable television systems, which closed in the first
quarter of 2001, and the gain on the sale of an interest in certain programming
operations, which closed in the second quarter of 2001, as positive evidence of
the realizability of the deferred tax assets.

II-26

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

NOTE 9. DERIVATIVES

Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities", as amended, ("SFAS 133"). The statement requires that all
derivative financial instruments be recognized in the financial statements and
measured at fair value regardless of the purpose or intent for holding them. If
the derivative is designated as a hedge, depending on the nature of the hedge,
changes in the fair value of the derivative will either be offset against the
change in fair value of the hedged assets, liabilities or firm commitments
through earnings or recognized as a component of comprehensive income until the
hedged item is recognized in earnings. The ineffective portion of a derivative's
change in fair value will be immediately recognized in earnings.

To manage interest rate risk, the Company has from time to time entered into
interest rate swap contracts to adjust the proportion of total debt that is
subject to variable and fixed interest rates. Such contracts fix the borrowing
rates on floating rate debt to provide an economic hedge against the risk of
rising rates and/or convert fixed rate borrowings to variable rates to provide
an economic hedge against the risk of higher borrowing costs in a declining
interest rate environment. As of December 31, 2001, the Company was a party to
interest rate swap agreements to pay floating rates of interest with a total
notional value of $980,000 and a fair value of approximately $17,319. These
agreements have not been designated as hedges for accounting purposes.

In addition, the Company has entered into prepaid interest rate swap agreements
in connection with its monetization of certain of its stock holdings, discussed
below. These contracts require the Company to pay a floating rate of interest in
exchange for fixed rate interest payments, the net present value of which was
paid to the Company at the contract's inception in a total amount of $239,270.
As of December 31, 2001, the total notional value of such contracts was
$1,115,045 and the fair value of such contracts was $226,295, in a net payable
position. These agreements have not been designated as hedges for accounting
purposes.

The increase in the fair value of the Company's swap agreements and the net
realized gain as a result of net cash interest income for the year ended
December 31, 2001 aggregating approximately $31,376 is reflected in gain on
derivative contracts in the accompanying consolidated statements of operations.

The Company has also entered into various transactions to provide an economic
hedge against equity price risk on certain of its stock holdings. As of December
31, 2001, the Company had monetized all of its stock holdings in Charter
Communications, Adelphia Communications, AT&T and AT&T Wireless through the
execution of prepaid forward contracts, collateralized by an equivalent amount
of the respective underlying stock. Such contracts set a floor and ceiling on
the Company's participation in changes in the underlying stock prices, thus
eliminating downside exposure to market risk while providing for upside
appreciation potential to the respective ceiling price. At maturity, the
contracts provide for the option to deliver cash or

II-27

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

shares of Charter Communications, Adelphia Communications, or AT&T Wireless
stock (as the case may be) with a value determined by reference to the
applicable stock price at maturity. The terms of the AT&T transactions require
cash settlement in an amount determined by reference to the AT&T stock price at
maturity.

The Company received cash proceeds of $1,549,411 upon execution of the prepaid
forward contracts. Such contracts have not been designated as hedges for
accounting purposes. Therefore, the fair values of the equity forward contracts
have been reflected in the accompanying consolidated balance sheets and the net
increase in the fair value of the equity derivative component of the prepaid
forward contracts of $250,376 is included in gain on derivative contracts in the
accompanying consolidated statements of operations. With the adoption of SFAS
133, the shares of Charter Communications and Adelphia Communications were
reclassified from securities available-for-sale to trading securities. As a
result, the Company recorded a gain on investments of $286,440 representing the
accumulated unrealized gains as of January 1, 2001. For the year ended December
31, 2001, the Company recorded a loss on investments of $176,673 representing
the net decrease in the fair value of all monetized securities for the period.

NOTE 10. OPERATING LEASES

The Company leases certain office, production, transmission, theater, event, and
retail store facilities under terms of leases expiring at various dates through
2027. The leases generally provide for fixed annual rentals plus certain real
estate taxes and other costs. Rent expense for the years ended December 31,
2001, 2000 and 1999 amounted to $103,545, $99,638 and $97,300, respectively.

In addition, the Company rents space on utility poles for its operations. The
Company's pole rental agreements are for varying terms, and management
anticipates renewals as they expire. Pole rental expense for the years ended
December 31, 2001, 2000 and 1999 amounted to approximately $12,419, $12,237 and
$13,081, respectively.

The minimum future annual rentals for all operating leases during the next five
years, including pole rentals from January 1, 2002 through December 31, 2006,
and thereafter, at rates now in force are approximately: 2002, $117,836; 2003,
$115,931; 2004, $113,484; 2005, $104,964; 2006, $101,896; thereafter, $646,263.

At December 31, 2001, approximately $34,424 relating to certain of these
operating leases has been accrued in connection with the restructuring described
in Note 3.

II-28

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

NOTE 11. AFFILIATE TRANSACTIONS

EQUITY METHOD INVESTMENTS

The following table reflects the Company's effective ownership percentages and
balances of the Company's equity method investments as of December 31, 2001 and
2000:

The following table includes certain unaudited financial information for equity
method investments:

- ----------
* Includes long-term indebtedness and amounts due to the Company referred to
below.

Aggregate amounts due from and due to these affiliates at December 31, 2001
and 2000 are summarized below:

II-29

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

* The advances at December 31, 2001 include $101,145 due from R/L DBS and
$110,161 due from Northcoast Communications. The advances at December 31,
2000 include $68,150 due from Northcoast Communications.

The Company's share of the net loss of these affiliates for the years ended
December 31, 2001, 2000 and 1999 amounted to $67,996, $16,685 and $19,234,
respectively. The Company provides certain transmission and production services
to certain of these affiliates. For the years ended December 31, 2001, 2000 and
1999, approximately $3,686, $3,714 and $7,194 respectively, of revenues were
earned from services provided to these entities.

Costs incurred by the Company for programming and entertainment services
provided by these affiliates and included in operating expenses for the years
ended December 31, 2001, 2000 and 1999 amounted to $148, $2,320 and $4,691,
respectively.

Rainbow Media Holdings has guaranteed certain obligations in respect of certain
professional sports teams rights agreements entered into by certain equity
method investees. The amounts guaranteed represent Rainbow Media Holdings'
proportionate interest in the payment obligation based on its ownership interest
in the investee. These guarantees are attributable to Rainbow Media Group.

NORTHCOAST COMMUNICATIONS

In August 1996, the Company entered into an agreement with Northcoast PCS, LLC
and certain of its affiliates, to form a limited liability company, Northcoast
Communications, LLC, to participate in the auctions conducted by the Federal
Communications Commission ("FCC") for certain licenses to conduct a personal
communications service ("PCS") business. The Company has contributed an
aggregate of approximately $152,760 to Northcoast Communications (either
directly or through loans to Northcoast PCS) and holds a 49.9% interest in
Northcoast Communications and certain preferential distribution rights. Loans to
Northcoast PCS bear interest at 12%.

At December 31, 2001, Northcoast Communications' total outstanding debt to third
parties was approximately $131,000. CSC Holdings has guaranteed the payment of
FCC indebtedness (which had an outstanding balance of $3,212 at December 31,
2001) of a subsidiary of Northcoast Communications which holds the Cleveland PCS
license.

Under a contractual agreement, Cablevision provides Northcoast Communications
certain management services. Pursuant to this agreement, Cablevision recorded
management fees of

II-30

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

$13,584 and $371 in 2001 and 2000, respectively. Northcoast Communications is a
Delaware corporation controlled by John Dolan, who is a nephew of Charles F.
Dolan and a cousin of James L. Dolan, the Company's Chairman and Chief Executive
Officer, respectively.

R/L DBS

In 1996, Rainbow Media Holdings invested in a joint venture (R/L DBS Company
LLC) formed with a subsidiary of Loral Space and Communications, Ltd. for the
purpose of exploiting certain direct broadcast satellite ("DBS") frequencies.
Rainbow Media Holdings also contributed to the joint venture its interest in
certain agreements with the licensee of such frequencies. The FCC construction
permit relating to the DBS frequencies was originally scheduled to expire in
August 1999. As it was not possible for the Company to construct and launch a
satellite before such date due to evolving technology and regulatory issues, the
Company determined that it could no longer recover its initial investment in the
joint venture and wrote down this investment by $15,100 in the first quarter of
1999. No steps were taken by the Company to obtain an FCC extension prior to the
write-off of the Company's initial investment because the Company believed the
technology was not then available to allow the Company to successfully exploit
the asset in a competitive environment. Thereafter, technological improvements,
particularly in compression technology, resulting in greater channel capacity
without degrading picture quality, and in satellite technology, resulting in
greater use of spot beams to direct programming on a localized basis, led the
Company to apply for an FCC extension in the third quarter of 1999. Based upon
communications with the FCC, management considered the receipt of such extension
to be likely and as a result additional investments in the joint venture were
deemed recoverable.

In December 2000, the FCC granted an extension to R/L DBS' construction permit
relating to the DBS frequencies held by R/L DBS. The extension requires the
launch of a satellite by March 29, 2003 and commencement of service offerings by
not later than December 29, 2003, with specified six month interim construction
milestones, non-compliance with which would result in the forfeiture of the
construction permit. R/L DBS has entered into an agreement with a satellite
manufacturer for the construction of a satellite scheduled to be delivered in
March 2003. R/L DBS plans to make additional progress payments to the
manufacturer aggregating approximately $140,000 in the year ending December 31,
2002. The Company continues to evaluate the scope of its pursuit of a direct
broadcast satellite business, including exploring opportunities for strategic
partnerships for R/L DBS. The contract with the manufacturer permits R/L DBS to
terminate the contract at its option prior to May 2003 and receive a refund of a
portion of amounts paid through the date of such termination. At December 31,
2001, the Company has outstanding advances to R/L DBS aggregating $101,145 which
are included in advances to affiliates.

In March 2001, subject to the receipt of regulatory and other necessary
approvals, Rainbow Media Holdings and Loral entered into an agreement for
Rainbow Media Holdings to acquire Loral's 50% interest in R/L DBS for a purchase
price of up to a present value of $33,000 payable

II-31

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

only from revenues of R/L DBS' business, if any, or from any future sale of all
or part of the interests in or assets of R/L DBS. The acquisition was completed
in March 2002. See Note 18.

OTHER AFFILIATES

The Company acquired Sterling Digital, LLC from Charles F. Dolan on August 31,
2000 for his net investment together with interest thereon amounting to $4,633.
The difference between the amount paid and the book value of the net assets
acquired of $4,083 was reflected as a distribution to shareholder in the
consolidated statements of stockholder's deficiency.

During 2001, 2000 and 1999, the Company provided programming services to or
incurred costs on behalf of other affiliates engaged in providing cable
television, cable television programming, and related services. Aggregate
amounts due from and due to these affiliates at December 31, 2001 and 2000
are summarized below:

Advances to affiliates at December 31, 2000 include trade accounts receivable
from AT&T. At December 31, 2001, trade accounts receivable from AT&T are
reflected in accounts receivable trade in the accompanying balance sheet.

AT HOME

In October 1997, the Company entered into an agreement with At Home and certain
of its shareholders, pursuant to which the Company agreed to enter into
agreements for the distribution of the At Home service over certain of the
Company's cable television systems on the same terms and conditions as At Home's
founding partners, TCI, Comcast Corporation and Cox Communications, Inc. The
Company received a warrant to purchase 15,751,568 shares of At Home's Series A
common stock at an exercise price of $.25 per share. Additionally, in 1998 a
warrant to purchase 4,711,028 shares of At Home's Series A common stock at $.25
per share was received in connection with the acquisition of certain cable
television systems from TCI Communications, Inc. The At Home network distributed
high-speed interactive services to residences and businesses using its own
network architecture and a variety of transport options, including the cable
industry's hybrid fiber coaxial infrastructure.

The original aggregate fair market value of the warrants received of $248,134,
as determined by independent appraisals, was recorded in other investments in
the accompanying consolidated balance sheets and was accounted for under the
cost method. The fair market value of the warrants was recorded as deferred
revenue and was being amortized to income over the period in which the Company
was obligated to provide the necessary services to At Home.

II-32

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

In April 2001, At Home announced it had decided to terminate its relationship
with the Company and that it would seek to recover the At Home warrants
previously issued to the Company. On April 25, 2001, At Home commenced a lawsuit
in the Court of Chancery of the State of Delaware alleging that Cablevision had
breached its obligations under certain agreements with At Home. The suit seeks a
variety of remedies including: recision of the agreements between At Home and
Cablevision and cancellation of all warrants currently held by Cablevision,
damages, and/or an order prohibiting Cablevision from continuing to offer its
Optimum Online service and requiring it to convert its Optimum Online customers
to the Optimum@Home service and to roll out the Optimum@Home service.
Cablevision has filed an answer to the complaint denying the material
allegations and asserting various affirmative defenses. On September 28, 2001,
At Home filed a petition for reorganization in federal bankruptcy court.

On January 8, 2002, At Home terminated its At Home service to all of
Cablevision's Optimum@Home subscribers. In a letter dated January 9, 2002,
Cablevision advised At Home that such termination of service constituted an
election by At Home to terminate the existing master distribution agreement
entered into by and between Cablevision and At Home and all other related
agreements.

In 2001, 2000 and 1999 the Company recorded $66,872, $60,000 and $50,136,
respectively, of revenue relating to this transaction. In 2001 and 2000, the
Company recognized a loss on investments of approximately $108,452 and $139,682,
respectively, reflecting the decline in the fair value of the warrants which
reduced the carrying value of the warrants to zero at December 31, 2001. In
2001, the Company recorded a gain of $25,190, representing primarily the
recognition of the remaining unamortized portion of deferred revenue at
December 31, 2001.

NOTE 12. BENEFIT PLANS

The Company has a Cash Balance Retirement Plan (the "Retirement Plan") for the
benefit of employees other than those of Cablevision Electronics and CCG
Holdings. Under the Retirement Plan, the Company will credit a certain
percentage of eligible base pay into an account established for each participant
which will earn a market based rate of return annually. Net periodic pension
cost for the years ended December 31, 2001, 2000 and 1999 amounted to $26,648,
$8,008 and $6,218, respectively. At December 31, 2001 and 2000, the accumulated
benefit obligation amounted to $39,143 and $22,092, respectively.

The Company also maintains 401(k) savings plans, pursuant to which an employee
can contribute a percentage of eligible annual compensation, as defined. The
Company also makes matching cash contributions for a portion of employee
contributions to the 401(k) savings plans. The cost associated with the 401(k)
savings plans was approximately $12,391, $7,932 and $6,102 for the years ended
December 31, 2001, 2000 and 1999, respectively.

II-33

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

The Company maintains the CSSC Supplemental Benefit Plan (the "Supplemental
Plan") for the benefit of certain officers and employees of the Company. As part
of the Supplemental Plan, the Company established a nonqualified defined benefit
pension plan, which provides that, upon attaining normal retirement age, a
participant will receive a benefit equal to a specified percentage of the
participant's average compensation, as defined. All participants are 100% vested
in the Supplemental Plan. Net periodic pension cost was $200 for the year ended
December 31, 2001. Net periodic pension cost for the years ended December 31,
2000 and 1999 was negligible. At December 31, 2001 and 2000, the fair value of
Supplemental Plan assets exceeded the projected benefit obligation by
approximately $388 and $1,707, respectively.

MSG sponsors several non-contributory pension plans covering MSG's employees.
Benefits payable to retirees under these plans are based upon years of service
and participants' compensation and are funded through trusts established under
the plans. Plan assets are invested primarily in common stocks, bonds, United
States government securities and cash. At December 31, 2001 and 2000, the
accrued benefit cost amounted to $11,932 and $11,363, respectively, and for the
years ended December 31, 2001, 2000 and 1999, net periodic pension cost amounted
to $2,445, $2,227 and $2,611, respectively.

In addition, MSG contributes to various multiemployer defined benefit pension
plans. Pension expense recognized for these multiemployer plans for the years
ended December 31, 2001, 2000 and 1999 amounted to $3,307, $3,266 and $2,784,
respectively.

MSG also sponsors a welfare plan which provides certain postretirement health
care and life insurance benefits to certain employees and their dependents who
are eligible for early or normal retirement under MSG's retirement plan. The
welfare plan is insured through a managed care provider and MSG funds these
benefits with premium payments. For the years ended December 31, 2001, 2000 and
1999, the periodic postretirement benefit cost amounted to $169, $187 and $204,
respectively, and as of December 31, 2001 and 2000, the accrued benefit cost
amounted to $6,290 and $6,257, respectively.

NOTE 13. STOCK BENEFIT AND LONG-TERM INCENTIVE PLANS

STOCK BENEFIT PLANS

Cablevision has employee stock plans under which it is authorized to issue
incentive stock options, nonqualified stock options, restricted stock, stock
appreciation rights, stock grants and stock bonus awards. Stock appreciation
rights provide for the employee to receive a cash payment in an amount equal to
the difference between the fair market value of the stock as of the date the
right is exercised, and the exercise price. Under the employee stock plans,
employees of the Company have received stock awards, bonus awards, stock
appreciation rights and cash payments for certain executive stock options. As a
result, the Company recorded income of approximately $44,973 for 2001 and
expense of approximately $67,516 and $225,617 in 2000

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CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

and 1999, respectively. These amounts reflect vesting schedules for applicable
grants as well as fluctuations in the market price of the underlying Cablevision
common stock.

LONG-TERM INCENTIVE PLAN

Pursuant to Cablevision's Long-Term Incentive Plan, senior executives of the
Company have been granted cash awards that vest over varying periods, some of
which are performance based. Certain senior executives have also received
performance retention awards under the plan, vesting over 7 years,
aggregating $111,000. The terms of the award provide that the executive may
request a loan from the Company in the amount of the award prior to its
vesting, subject to certain limitations, provided that such loan is secured
by a lien in favor of the Company on property owned by the executive. As of
December 31, 2001, $28,294 had been advanced in respect of this plan. In
connection with this plan, the Company has recorded expense of $6,344,
$16,679 and $30,172 for the years ended December 31, 2001, 2000 and 1999,
respectively.

NOTE 14. COMMITMENTS AND CONTINGENCIES

The Company, through Rainbow Media Holdings, has entered into several contracts,
including rights agreements, with professional sports teams and others relating
to cable television programming. In addition, Rainbow Media Holdings, through
MSG, has employment agreements with players, general managers and coaches of its
professional sports teams. The contracts provide for payments which are
guaranteed regardless of injury or termination. Certain of these contracts are
covered by disability insurance if certain conditions are met. The future cash
payments reflected below do not include the impact of potential insurance
recoveries. The Company also has certain payment commitments associated with the
construction of a new practice facility by MSG.

In addition, the table below includes the Company's minimum purchase commitments
for digital boxes (approximately $1,325,000 through 2004), minimum contractual
payment commitments to a satellite manufacturer in connection with the
construction and launch of a direct broadcast satellite and certain other
obligations pursuant to contracts entered into in the normal course of business.
Future cash payments required under these contracts as of December 31, 2001 are
as follows:

2002 $ 822,417
2003 644,869
2004 796,081
2005 161,305
2006 148,330
Thereafter 1,100,101
----------
Total $3,673,103
==========

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CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

At December 31, 2001, approximately $63,014 of commitments, included in the
table above, relating to player contracts have been accrued and are reflected in
the accompanying consolidated balance sheets.

In addition to the above amounts, the Company may also be obligated to pay the
National Basketball Association ("NBA") a luxury tax in each year pursuant to
the NBA/NBPA collective bargaining agreement, which is in effect through June
30, 2004 and which may be extended for one year by the NBA. The ultimate
calculation of any amount due would be based on a formula established by the
agreement. The tax is based on the amount by which the team's salary, as defined
in the agreement, exceeds a luxury tax "trigger."

During 2001, subsidiaries of Rainbow Media Holdings secured carriage commitments
with certain multiple system operators under long-term affiliation agreements,
in exchange for which such subsidiaries agreed to make payments when certain
launch thresholds are met conditioned upon continued carriage. These
subsidiaries are contingently liable through 2003 for additional payments of up
to $12,850.

NOTE 15. OTHER MATTERS

The Company is party to various lawsuits, some involving substantial amounts.
Management does not believe that the resolution of these lawsuits will have a
material adverse impact on the financial position of the Company. See Note 11
regarding the At Home litigation.

NOTE 16. DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS

CASH AND CASH EQUIVALENTS, ACCOUNTS RECEIVABLE TRADE, NOTES AND OTHER
RECEIVABLES, PREPAID EXPENSES AND OTHER ASSETS, ADVANCES TO AFFILIATES, ACCOUNTS
PAYABLE, ACCOUNTS PAYABLE-AFFILIATES, AND ACCRUED LIABILITIES.

The carrying amount approximates fair value due to the short maturity of these
instruments.

DERIVATIVE CONTRACTS AND LIABILITIES UNDER DERIVATIVE CONTRACTS

Derivative contracts are carried at fair value based on dealer quotes.

AT HOME WARRANTS

The fair value of the At Home warrants at December 31, 2000 is based upon the
Black-Scholes pricing model.

II-36

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

INVESTMENTS SECURITIES AVAILABLE-FOR-SALE AND INVESTMENTS SECURITIES PLEDGED AS
COLLATERAL

Marketable securities are carried at their fair value based upon quoted market
prices.

BANK DEBT, COLLATERALIZED INDEBTEDNESS, SENIOR NOTES AND DEBENTURES,
SUBORDINATED NOTES AND DEBENTURES AND REDEEMABLE EXCHANGEABLE PREFERRED STOCK

The fair values of each of the Company's debt instruments and redeemable
preferred stock are based on quoted market prices for the same or similar issues
or on the current rates offered to the Company for instruments of the same
remaining maturities.

INTEREST RATE SWAP AGREEMENTS

Interest rate swap agreements in 2001 are carried at fair value based on dealer
quotes. These values represent the estimated amount the Company would receive or
pay to terminate agreements, taking into consideration current interest rates
and the current creditworthiness of the counterparties.

The fair value of the Company's financial instruments are summarized as follows:

II-37

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision. Changes
in assumptions could significantly affect the estimates.

NOTE 17. SEGMENT INFORMATION

The Company classifies its business interests into four segments:
Telecommunication Services, consisting principally of its cable television,
telephone and cable modem services operations; Rainbow Media Group, consisting
principally of interests in national and regional cable television programming
networks; MSG, which owns and operates professional sports teams, regional cable
television networks, live productions and entertainment venues; and Retail
Electronics, which represents the operations of Cablevision Electronics' retail
electronics stores.

The Company's reportable segments are strategic business units that are managed
separately. The Company evaluates segment performance based on several factors,
of which the primary financial measure is business segment adjusted operating
cash flow (defined as operating income (loss) before depreciation and
amortization, stock plan and long-term incentive plan expenses, restructuring
charges, and the costs of year 2000 remediation). The accounting policies of the
segments are the same as those described in the summary of significant
accounting policies. Information as to the operations of the Company's business
segments is set forth below.

II-38

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

A reconciliation of reportable segment amounts to the Company's consolidated
balances is as follows:

Substantially all revenues and assets of the Company's reportable segments are
attributed to or located in the United States.

The Company does not have a single external customer which represents 10 percent
or more of its consolidated revenues.

II-39

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

NOTE 18. SUBSEQUENT EVENTS

In March 2002, Rainbow Media Group entered into a $400,000 revolving credit
facility with a group of banks which matures on December 31, 2006 (in certain
limited circumstances the maturity date may be accelerated to November 1,
2005). The facility requires commitment reductions beginning in the third
quarter of 2004. This revolving credit facility contains certain financial
covenants that may limit Rainbow Media Group's ability to utilize all of the
undrawn funds available thereunder, including covenants requiring the
maintenance of certain financial ratios and restricting the permitted uses of
borrowed funds.

In March, 2002, AMC and Bravo, subsidiaries of Rainbow Media Holdings,
entered into a $200,000 revolving credit facility with a group of banks. The
facility matures on December 31, 2006 (in certain limited circumstances the
maturity date may be accelerated to November 1, 2005) and requires commitment
reductions beginning in the third quarter of 2004. The facility replaced the
previously existing AMC $200,000 revolving credit facility. The AMC/Bravo
revolving credit facility contains certain financial covenants that may limit
the ability to utilize all of the undrawn funds available thereunder,
including covenants requiring the maintenance of certain financial ratios and
restricting the permitted uses of borrowed funds.

In March 2002, Rainbow Media Holdings acquired Loral's 50% interest in R/L DBS
for a purchase price of up to a present value of $33,000 payable only from
revenues of R/L DBS' business, if any, or from any future sale of all or part of
the interests in or assets of R/L DBS. This purchase increased Rainbow Media
Holdings' ownership of R/L DBS to 100%.

In March 2002, NBC-Rainbow Holding exchanged a .4% interest in Rainbow Media
Holdings equity securities for 708,456 shares of Rainbow Media Group Class A
common stock of Cablevision. This exchange will be accounted for as an
acquisition of minority interests and accounted for using the purchase
method. The purchase price will be allocated to the specific assets acquired
when an independent appraisal is obtained.

II-40

CSC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(continued)

NOTE 19. INTERIM FINANCIAL INFORMATION (UNAUDITED)

The following is a summary of selected quarterly financial data for the years
ended December 31, 2001 and 2000.

II-41