CABLEVISION SYSTEMS CORP /NY - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended June 30, 2002

OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ___________to ___________

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) have been subject to
such filing requirements for the past 90 days.

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

Number of shares of common stock outstanding as of August 2, 2002:

Cablevision NY Group Class A Common Stock - 133,351,983
Cablevision NY Group Class B Common Stock - 42,145,986
Rainbow Media Group Class A Common Stock - 83,682,540
Rainbow Media Group Class B Common Stock - 21,072,993
CSC Holdings, Inc. Common Stock - 1,000

PART I. FINANCIAL INFORMATION

For information required by Item 1 and Item 2, refer to Index to Financial
Statements on page 7.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risks from changes in certain equity security
prices and interest rates. 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
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, from time to time the Company 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 Corp., Charter Communications, Inc., AT&T Wireless Services, Inc., and
Adelphia Communications Corporation common stock held by the Company. The
Company has entered into prepaid forward contracts to hedge its equity price
risk and to monetize the value of these securities. These contracts, at
maturity, are expected to offset negative changes in the fair value of these
securities, while allowing for certain upside appreciation potential. In the
event of an early termination of such contracts, however, the Company would be
obligated to repay the monetization indebtedness less the sum of the fair value
of the underlying stock and the fair value of the equity collar, calculated at
the termination date. (See Liquidity and Financial Resources - Obligations Under
Derivative Contracts for a discussion of the early termination of some of our
Adelphia Communications monetization contracts.) The underlying stock and equity
collars are carried at fair market value on the Company's consolidated balance
sheet and the monetization indebtedness is carried at its accreted value.

FAIR VALUE OF DEBT: Based on the level of interest rates prevailing at June 30,
2002, the carrying value of the Company's fixed rate debt and redeemable
preferred stock of $6,001.2 million exceeded its fair value of $4,575.3 million
by approximately $1,425.9 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 June 30, 2002 would
increase the estimated fair value of fixed rate debt and redeemable preferred
stock instruments by approximately $272.4 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 swap
contracts to the extent these securities are hedged.

2

INTEREST RATE DERIVATIVE CONTRACTS: As of June 30, 2002, the Company had
outstanding interest rate swap contracts to convert fixed rate debt to floating
rate debt covering a total notional principal amount of $1,055.0 million. As of
June 30, 2002, the fair market value of these interest rate swap contracts was
approximately $19.5 million, a net receivable position, as reflected under
derivative contracts in the Company's consolidated balance sheet. Assuming an
immediate and parallel shift in interest rates across the yield curve, a 100
basis point increase in interest rates from June 30, 2002 prevailing levels
would decrease the fair market value of these contracts by approximately $13.8
million to a net receivable position of $5.7 million.

In addition, the Company had outstanding prepaid interest rate swap contracts
with a notional value of $1,115.0 million entered into in connection with its
monetization transactions. As of June 30, 2002, such contracts had a fair market
value of $177.4 million, a net liability position, reflected as liabilities
under derivative contracts in the Company's consolidated balance sheet. Assuming
an immediate and parallel shift in interest rates across the yield curve, a 100
basis point increase in interest rates from June 30, 2002 prevailing levels
would decrease the fair market value of these contracts by approximately $34.5
million to a liability of $211.9 million.

EQUITY PRICE RISK: As of June 30, 2002, the fair market value and the carrying
value of the Company's holdings of AT&T, Charter Communications, AT&T Wireless
and Adelphia Communications common stock aggregated $602.5 million. Assuming a
10% change in price, the potential change in the fair value of these investments
would be approximately $60.3 million. As of June 30, 2002, 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, Charter
Communications, AT&T Wireless and Adelphia Communications aggregated $663.6
million, a net receivable position. The maturities of these prepaid forward
contracts, all of which were entered into in 2001, are summarized in the
following table:

3

PART II. OTHER INFORMATION

Item 1. 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 Corporation 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.

On April 29, 2002, Yankees Entertainment & Sports Network, LLC (the "YES
Network") filed a complaint against the Company in the United States District
Court, Southern District of New York. The complaint arises from the failure of
the YES Network and the Company to reach agreement on the carriage of
programming of the YES Network (primarily New York Yankees baseball games) on
the Company's cable television systems. The complaint alleges a variety of
anticompetitive acts. The complaint seeks declaratory judgments as to violations
of laws, treble damages and injunctive relief, including an injunction requiring
the Company to carry the YES Network on its cable television systems. The
Company believes that the claims set forth in the complaint are without merit
and intends to vigorously contest the lawsuit.

In August 2002, purported class actions naming as defendants the Company and
each of its directors were filed in the Delaware Chancery Court. The actions,
which allege breach of fiduciary duties and breach of contract with respect
to the exchange of the Rainbow Media Group tracking stock for Cablevision NY
Group common stock, were purportedly brought on behalf of all holders of
publicly traded shares of Rainbow Media Group tracking stock. The actions
seek to (i) enjoin the exchange of Rainbow Media Group tracking stock for
Cablevision NY Group common stock, (ii) enjoin any sales of "RMG assets", or,
in the alternative, award rescissory damages, (iii) if the exchange is
completed, rescind it or award rescissory damages, (iv) award compensatory
damages, and (v) award costs and disbursements. The Company believes the
claims are without merit and intends to vigorously contest the lawsuits.

Item 4. Submission of Matters to a Vote of Security Holders

The Company's Annual Meeting of Stockholders was held on June 4, 2002.

4

The following matters were voted upon at the Company's Annual Meeting of
Stockholders:

ELECTION OF DIRECTORS:

Class A Directors:
Charles D. Ferris: For: 112,532,957
Votes withheld: 1,983,975
Richard H. Hochman: For: 112,886,543
Votes withheld: 1,630,389
Victor Oristano: For: 112,868,297
Votes withheld: 1,648,635
Vincent Tese: For: 112,732,363
Votes withheld: 1,784,569

Class B Directors:
William J. Bell Thomas C. Dolan For: 526,824,825
Charles F. Dolan Robert S. Lemle Votes withheld: 0
James L. Dolan Sheila A. Mahony
Patrick F. Dolan John Tatta

Each nominee for election by the Class B common stockholders
received the same vote as indicated above.

RATIFICATION AND APPROVAL OF KPMG LLP

Class A Common Stock: For: 136,555,485
Against: 2,495,662
Abstain: 68,712

Class B Common Stock: For: 526,824,825
Against: 0
Abstain: 0

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

None.

(b) Reports on Form 8-K.

Cablevision Systems Corporation filed Current Reports on Form 8-K with the
Commission on May 1, 2002 and June 26, 2002.

CSC Holdings, Inc. filed Current Reports on Form 8-K with the Commission on
May 1, 2002 and June 26, 2002.

5

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.

CABLEVISION SYSTEMS CORPORATION
CSC HOLDINGS, INC

Date: August 14, 2002 By: /s/ William J. Bell
---------------------------------------
William J. Bell as Vice Chairman,
Director and Principal Financial
Officer of Cablevision Systems
Corporation and CSC Holdings, Inc.

Date: August 14, 2002 By: /s/ Andrew B. Rosengard
---------------------------------------
Andrew B.Rosengard as
Executive Vice President, Finance and
Principal Accounting Officer of
Cablevision Systems Corporation and
CSC Holdings, Inc.

6

INDEX TO FINANCIAL STATEMENTS

7

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

See accompanying notes to condensed consolidated financial statements.

I-1

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(continued)

See accompanying notes to condensed consolidated financial statements.

I-2

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)

See accompanying notes to condensed consolidated financial statements.

I-3

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2002 and 2001
(Dollars in thousands)
(Unaudited)

See accompanying notes to condensed consolidated financial statements.

I-4

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of
Cablevision Systems Corporation and its majority owned subsidiaries (the
"Company" or "Cablevision") have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted.

NOTE 2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS

The financial statements as of and for the three and six months ended June 30,
2002 and 2001 presented in this Form 10-Q are unaudited; however, in the opinion
of management, such statements include all adjustments, consisting solely of
normal recurring adjustments, necessary for a fair presentation of the results
for the periods presented.

The interim financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the Company's
and CSC Holdings, Inc.'s Annual Report on Form 10-K for the year ended December
31, 2001.

The results of operations for the interim periods are not necessarily indicative
of the results that might be expected for future interim periods or for the full
year ending December 31, 2002.

NOTE 3. RECLASSIFICATIONS

Certain reclassifications have been made to the 2001 financial statements to
conform to the 2002 presentation.

NOTE 4. INCOME (LOSS) PER 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.

All per share amounts have been adjusted, for all years presented, to reflect
the tracking stock distribution in March 2001 as if it occurred on January 1,
2001. Per share information is presented individually for the Rainbow Media
Group ("RMG") common stock and the Cablevision NY Group ("CNYG") common stock.

I-5

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

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 CNYG and RMG excluding the net income or loss attributed to
parties other than Cablevision shareholders.

NOTE 5. 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 the six months ended June 30, 2002 and 2001, the Company's non-cash
investing and financing activities and other supplemental data were as follows:

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

I-6

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

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

NOTE 6. TRANSACTIONS

In March 2002, Rainbow Media Holdings, Inc., a subsidiary of the Company,
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 $33,000 payable only from a
percentage of 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's results are
consolidated with those of the Company as of the date of acquisition.

In 2002, NBC-Rainbow Holding, Inc. exchanged a 5.0% interest in Rainbow Media
Holdings equity securities for 9,968,988 shares of Rainbow Media Group Class A
common stock of Cablevision (valued at $98,514). The acquisition of the 5.0% and
the 3.1% minority interest in 2002 and 2001, respectively, was accounted for as
a purchase. The excess of the purchase price over the net book value of assets
acquired of approximately $118,911 was allocated to the specific assets
acquired, in 2002, based upon an independent appraisal as follows:

I-7

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

NOTE 7. RECENTLY ADOPTED ACCOUNTING STANDARDS

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets. Statement 142 requires
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 requires 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
connection with the adoption of Statement 142, the Company ceased the
amortization of goodwill and intangible assets that were determined to have an
indefinite useful life and that had been acquired in a purchase business
combination. The Company did not record any impairment charges in connection
with the implementation of Statement 142.

Summarized below is pro forma net income and basic and diluted earnings per
share for the three and six months ended June 30, 2001 for each of CNYG and RMG
as adjusted for amortization expense that is no longer recorded in accordance
with Statement 142.

I-8

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

The changes in the carrying amount of excess costs over the fair value of net
assets acquired for the six months ended June 30, 2002 are as follows:

I-10

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

NOTE 9. DEBT

In March 2002, Rainbow Media Group, LLC, a wholly owned subsidiary of Rainbow
Media Holdings, 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, American Movie Classics Company and Bravo Company, 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 amended and restated the previously
existing American Movie Classics $200,000 revolving credit facility. The
American Movie Classics/Bravo revolving credit facility contains certain
financial covenants that may limit the ability of American Movie Classics/Bravo
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.

NOTE 10. COLLATERALIZED INDEBTEDNESS AND DERIVATIVE CONTRACTS

In May 2002, due to certain events relating to Adelphia Communications
Corporation, the Company received early termination notices from its bank
counterparties pursuant to certain monetization contracts covering 9.79 million
shares of Adelphia Communications common stock. As a result, the Company was
required to repay the related collateralized indebtedness prior to maturity, net
of the benefit of the related prepaid equity forward contracts in a significant
gain position. The Company made cash payments aggregating $54,813, representing
the difference between the redemption value of the collateralized indebtedness
and the fair market value of the prepaid equity forward contracts as of the
early termination date, and 9.79 million shares of Adelphia Communications
common stock that were held as collateral were returned to the Company. In
connection with the early termination, the Company recognized a loss of $17,237,
representing the difference between the carrying value and the redemption value
of the

I-11

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

collateralized indebtedness, which is reflected as a loss on the early
extinguishment of debt in the accompanying consolidated statement of operations.

NOTE 11. INCOME TAXES

Prior to June 29, 2002, the operations of the businesses attributed to CNYG were
included in two consolidated federal income tax returns; one consolidated return
included the telecommunications and retail operations, and the second
consolidated return included all companies owned by Rainbow Media Holdings. The
operations of the businesses attributed to RMG were included in the consolidated
federal income tax return filed by Rainbow Media Holdings.

In connection with the exchange of equity securities by NBC described in Note 6,
the Company recorded a deferred tax liability of approximately $42,000 in
accordance with the purchase method of accounting. Pursuant to such exchange,
the Company will begin to file one consolidated federal income tax return
effective June 29, 2002. As a result of the consolidation of Rainbow Media
Holdings for federal tax purposes, the valuation allowance and excess costs over
fair value of net assets acquired were reduced by approximately $91,000.

Tax rules impose restrictions on the ability of the companies to utilize each
others' tax attributes. Management evaluates the realizability of the deferred
tax assets and the need for additional valuation allowances quarterly.

CNYG
The income tax benefit for the six months ended June 30, 2002 of $73,984 differs
from the income tax benefit derived from applying the statutory rate principally
due to an increase in the valuation allowance of approximately $74,850 taken
against deferred tax assets attributable to Cablevision's telecommunications and
retail operations. CNYG considers the ability to have a portion of its future
deductible temporary differences offset against future taxable temporary
differences of RMG as positive evidence of the realizability of the deferred tax
assets.

RMG
Income tax expense of $18,922 for the six months ended June 30, 2002 was a
direct result of pre-tax income, partially offset by the realization of a tax
attribute made possible by a recent federal law change.

NOTE 12. RESTRUCTURING

In December 2001, the Company recorded restructuring charges of $56,442 which
included 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) and
estimated expenses of approximately $35,424 associated

I-12

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

with facility realignment and other related costs. The following table
summarizes the accrued restructuring liability at June 30, 2002.

I-13

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(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.

NOTE 14. LEGAL MATTERS

On April 29, 2002, Yankees Entertainment & Sports Network, LLC (the "YES
Network") filed a complaint against the Company in the United States District
Court, Southern District of New York. The complaint arises from the failure of
the YES Network and the Company to reach agreement on the carriage of
programming of the YES Network (primarily New York Yankees baseball games) on
the Company's cable television systems. The complaint alleges a variety of
anticompetitive acts. The complaint seeks declaratory judgments as to violations
of laws, treble

I-14

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

damages and injunctive relief, including an injunction requiring the Company to
carry the YES Network on its cable television systems. The Company believes that
the claims set forth in the complaint are without merit and intends to
vigorously contest the lawsuit.

In August 2002, purported class actions naming as defendants the Company and
each of its directors were filed in the Delaware Chancery Court. The actions,
which allege breach of fiduciary duties and breach of contract with respect
to the exchange of the Rainbow Media Group tracking stock for Cablevision NY
Group common stock, were purportedly brought on behalf of all holders of
publicly traded shares of Rainbow Media Group tracking stock. The actions
seek to (i) enjoin the exchange of Rainbow Media Group tracking stock for
Cablevision NY Group common stock, (ii) enjoin any sales of "RMG assets", or,
in the alternative, award rescissory damages, (iii) if the exchange is
completed, rescind it or award rescissory damages, (iv) award compensatory
damages, and (v) award costs and disbursements. The Company believes the
claims are without merit and intends to vigorously contest the lawsuits.

NOTE 15. 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, including Sterling Digital.

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);

I-15

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

SportsChannel Florida Associates (also known as Fox Sports Net Florida);
Rainbow Network Communications; and
Sterling Digital LLC (also known as Mag Rack).

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 data businesses, (ii) commercial telephone
and high-speed data operation businesses, (iii) retail electronics businesses,
(iv) 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) certain
direct broadcast satellite assets, (viii) equity interest in a wireless personal
communications business, and (vix) 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 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 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. Any such changes adopted by the board of directors
would be made based upon its good faith business

I-16

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

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.

In August 2002, Cablevision's board of directors approved the exchange of
Rainbow Media Group common stock for shares of Cablevision NY Group common stock
pursuant to the terms of Cablevision's certificate of incorporation. Each share
of Rainbow Media Group common stock will be exchanged for 1.19093 shares of
Cablevision NY Group common stock on August 20, 2002.

I-17

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

COMBINING CONDENSED BALANCE SHEET DATA
June 30, 2002

I-18

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

COMBINING CONDENSED BALANCE SHEET DATA (Cont'd)
June 30, 2002

I-19

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

COMBINING CONDENSED BALANCE SHEET DATA
December 31, 2001

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

COMBINING CONDENSED BALANCE SHEET DATA (Cont'd)
December 31, 2001

I-21

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

COMBINING RESULTS OF OPERATIONS DATA

I-22

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

COMBINING RESULTS OF OPERATIONS DATA

I-23

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

COMBINING CONDENSED CASH FLOW INFORMATION

NOTE 16. OTHER MATTERS

In January 2001, the Company completed the sale of its cable television systems
in Boston and eastern Massachusetts to AT&T Corporation in exchange for AT&T's
cable television systems in certain northern New York suburbs, shares of AT&T
common stock and a cash payment. The sales agreements with AT&T provided both
parties with certain post closing adjustments to the purchase price following
agreement on those adjustments between the parties, or, in the event no
agreement was reached, that the post closing adjustment issues would be resolved
by third party experts whose determination would be binding. The Company
believes the amount of any negotiated settlement or expert determination of the
parties' respective claims will not be material to the Company.

As of June 30, 2002, Northcoast Communications, LLC, a 49.9% owned
unconsolidated subsidiary of the Company, had $63,700 in notes payable to the
FCC for the acquisition of the PCS licenses acquired during 1997. In addition, a
wholly owned subsidiary of Northcoast Communications,

I-24

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

Cleveland PCS, LLC, had $68,400 in vendor financing outstanding under a
stand-alone $75,000 facility obtained in connection with the launch of
commercial service in Cleveland. Additional funding for Northcoast
Communications has been provided by the Company through the Restricted Group
which as of June 30, 2002 totaled $198,800 (comprised of contributions directly
to Northcoast Communications as well as loans to Northcoast PCS, LLC, the other
member in Northcoast Communications), in addition to certain unpaid general and
administrative charges from the Company amounting to approximately $4,100 at
June 30, 2002.

Vendor financing for Northcoast Communications' Cleveland operation consists of
the $75,000 credit facility at Cleveland PCS, LLC. This facility has no recourse
to Cablevision or to Northcoast Communications, other than pursuant to a pledge
by Northcoast Communications of the stock of Cleveland PCS and a guarantee of
the payment by Northcoast Communications and Cablevision of the FCC indebtedness
of the Cleveland PCS subsidiary which holds the Cleveland license which, as of
June 30, 2002, had an outstanding balance of $3,000. As of June 30, 2002,
Cleveland PCS was in default of the terms of this credit facility and had
received notice of commitment termination and acceleration from the lender.
Northcoast Communications has invested $3,645 of the $198,800 invested by
Cablevision in Northcoast Communications in Cleveland PCS at June 30, 2002 and
was owed $1,300 by Cleveland PCS for general and administrative charges at June
30, 2002.

NOTE 17. SUBSEQUENT EVENTS

In August 2002, Cablevision's board of directors approved the exchange of
Rainbow Media Group common stock for shares of Cablevision NY Group common stock
pursuant to the terms of Cablevision's certificate of incorporation. Each share
of Rainbow Media Group common stock will be exchanged for 1.19093 shares of
Cablevision NY Group common stock on August 20, 2002. Fractional shares will be
paid in cash. From and after the date of the exchange, all rights of holders of
shares of Rainbow Media Group common stock will cease except for the right, upon
surrender of the certificates representing their shares of Rainbow Media Group
common stock, to receive the shares of Cablevision NY Group common stock for
which their shares of Rainbow Media Group common stock were exchanged, together
with any fractional payment as provided above, without interest. As a result of
this exchange, the computation and presentation of earnings per share for future
periods will be impacted.

In August 2002, purported class actions naming as defendants the Company and
each of its directors were filed in the Delaware Chancery Court. The actions,
which allege breach of fiduciary duties and breach of contract with respect
to the exchange of the Rainbow Media Group tracking stock for Cablevision NY
Group common stock, were purportedly brought on behalf of all holders of
publicly traded shares of Rainbow Media Group tracking stock. The actions
seek to (i) enjoin the exchange of Rainbow Media Group tracking stock for
Cablevision NY Group common stock, (ii) enjoin any sales of "RMG assets", or,
in the alternative, award rescissory damages, (iii) if the exchange is
completed, rescind it or award rescissory damages, (iv) award compensatory
damages, and (v) award costs and disbursements. The Company believes the
claims are without merit and intends to vigorously contest the lawsuits.

I-25

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
(continued)

In August 2002, the Company announced its plans to dispose of the Company's
motion picture theater business, close 26 retail electronics store locations,
eliminate certain staff positions and reduce capital expenditures.
Additionally, the Company reached an agreement with its supplier of set top
boxes which reduced the Company's purchase commitments for set top boxes from
$378,500 in 2002, $378,500 in 2003, and $567,750 in 2004 to a total remaining
commitment of $87,500 in 2002 and nothing thereafter and requires the Company
to make certain other cash payments aggregating $50,000 plus interest on a
portion of such amount, with respect to, among other things, a license for
certain software. In connection with this agreement, CSC Holdings received a
waiver from the lenders under its $2.4 billion credit facility. In connection
with this plan, the Company expects that it will incur severance and related
costs and costs related to the agreement referred to above aggregating
approximately $80,000 in the third quarter of 2002.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

This Quarterly Report contains or incorporates by reference statements that
constitute forward looking information within the meaning of the Private
Securities Litigation Reform Act of 1995, including forecasted cost savings,
restructuring charges, availability under credit facilities, cash flow
growth, levels of capital expenditures, sources of funds and funding
requirements, among others. 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.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

CABLEVISION SYSTEMS CORPORATION

RECENT TRANSACTIONS - CABLEVISION NY GROUP

2002 TRANSACTION. In March 2002, Rainbow Media Holdings, Inc. acquired Loral
Space and Communications, Ltd.'s 50% interest in R/L DBS Company, LLC increasing
Rainbow Media Holdings' ownership of R/L DBS to 100%.

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

RECENT TRANSACTION - RAINBOW MEDIA GROUP

2001 TRANSACTION. In April 2001, Metro-Goldwyn-Mayer Inc. ("MGM") acquired a 20%
interest in certain national programming businesses of Rainbow Media Holdings
which are included in Rainbow Media Group.

The above transactions completed in 2002 and 2001 are collectively referred to
as the "Transactions."

I-28

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

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

I-29

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

STATEMENT OF OPERATIONS DATA (CONT'D)

I-30

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

COMPARISON OF THREE AND SIX MONTHS ENDED JUNE 30, 2002 VERSUS THREE AND SIX
MONTHS ENDED JUNE 30, 2001

CONSOLIDATED RESULTS - CABLEVISION SYSTEMS CORPORATION

REVENUES, NET for the three and six months ended June 30, 2002 increased $6.5
million (1%) and $62.7 million (3%), respectively, as compared to revenues for
the same periods in the prior year. The net increases are attributable to the
following:

- ----------
* Amounts exclude the effects of the increase in bad debt expense.

TECHNICAL AND OPERATING EXPENSES decreased $17.9 million (5%) for the three
months ended June 30, 2002 and increased $1.8 million for the six months ended
June 30, 2002 compared to the same periods in 2001. The net changes resulted
primarily from decreased costs at Madison Square Garden (see Madison Square
Garden discussion below), offset by increased costs directly associated with the
growth in revenues and subscribers referred to above. As a percentage of
revenues, technical and operating expenses decreased 2% and 1%, respectively,
during the 2002 periods as compared to the 2001 periods.

RETAIL ELECTRONICS COST OF SALES for the three and six months ended June 30,
2002 amounted to approximately $107.5 million and $221.0 million (each 81% of
retail electronics sales), respectively, compared to approximately $124.3
million and $245.4 million (each 80% of retail electronics sales) for the
comparable 2001 periods. 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. The increases in cost of sales, as a
percentage of revenues, is primarily attributable to the sale, at reduced
pricing, of certain inventory as a result of management's new merchandising
strategy.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES increased $1.9 million (1%) and
$6.7 million (1%) for the three and six months ended June 30, 2002,
respectively, as compared to the same periods in 2001. The net increases for the
2002 periods were comprised of increases of approximately

I-31

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

$6.1 million and $44.5 million, respectively, in additional sales and marketing,
customer service and administrative costs, partially offset by decreases of
$36.7 million in expenses related to the Company's stock plan for the six months
ended June 30, 2002 and decreases of $4.2 million and $1.1 million in costs
related to a long-term incentive plan for the three and six months ended June
30, 2002. As a percentage of revenues, selling, general and administrative
expenses remained relatively constant during the 2002 periods as compared to the
same periods in 2001. Excluding the effects of the stock plan and the long-term
incentive plan, as a percentage of revenues such costs increased 1% during the
2002 periods as compared to the same periods in 2001.

RESTRUCTURING CHARGES of $4.5 million for the three and six months ended June
30, 2002 represent employee severance payments made in excess of accrued
balances.

DEPRECIATION AND AMORTIZATION EXPENSE decreased $18.9 million (8%) and $55.8
million (11%) for the three and six months ended June 30, 2002, respectively, as
compared to the same periods in 2001. Decreases of approximately $58.0 million
and $132.6 million, respectively, resulted from the Company's adoption of
Statement of Financial Accounting Standards No. 142 ("Statement 142") as of
January 1, 2002 where certain intangible assets are no longer amortized.
Partially offsetting these decreases were net increases of approximately $39.1
million and $76.8 million, respectively, due primarily to depreciation of new
plant assets and amortization of acquired intangibles.

NET INTEREST EXPENSE decreased $4.2 million (3%) and $19.5 million (7%) during
the three and six months ended June 30, 2002, respectively, compared to the same
periods in 2001. The net decreases were primarily attributable to lower interest
rates and increases in interest income, partly offset by higher overall average
debt balances.

EQUITY IN NET LOSS OF AFFILIATES increased to $12.5 million and $22.2 million
for the three and six months ended June 30, 2002, respectively, from $6.3
million and $11.3 million for the three and six months ended June 30, 2001,
respectively. 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.

GAIN ON SALE OF CABLE ASSETS AND PROGRAMMING INTERESTS, NET for the three and
six months ended June 30, 2001 consists primarily of the gain recognized on the
disposition of the Company's cable television systems in Massachusetts and the
gain from the sale of a 20% minority interest in certain of the Company's
programming businesses.

WRITE-OFF OF DEFERRED FINANCING COSTS of $0.6 million for the six months ended
June 30, 2002, and $6.6 million and $13.0 million for the three and six months
ended June 30, 2001, respectively, consist principally of costs written off in
connection with amendments to, or termination of, certain of the Company's
credit agreements.

GAIN (LOSS) ON INVESTMENTS, NET for the three and six months ended June 30, 2002
and 2001 consists of the following:

I-32

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

GAIN ON DERIVATIVE CONTRACTS, NET for the three and six months ended June 30,
2002 and 2001 consists of the following:

LOSS ON EARLY EXTINGUISHMENT OF DEBT of $17.2 million for the three and six
months ended June 30, 2002 resulted from the settlement of the Company's
collateralized indebtedness relating to the monetization of its shares of
Adelphia Communications common stock.

MINORITY INTERESTS for the three and six months ended June 30, 2002 and 2001
include CSC Holdings' preferred stock dividend requirements; Fox Sports
Networks, LLC's share of the net income or loss of Regional Programming
Partners; MGM's share of the net income or loss of American Movie Classics
Company, Bravo Company, The Independent Film Channel and WE: Women's
Entertainment; and National Broadcasting Company, Inc.'s ("NBC") share of the
net income or loss of Rainbow Media Holdings.

NET MISCELLANEOUS EXPENSE amounted to $3.7 million and $8.4 million for the
three and six months ended June 30, 2002, respectively, compared to $3.9 million
and $7.0 million for the

I-33

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

comparable periods in 2001. The increase for the six months ended June 30, 2002
was due primarily to increased losses on the disposal of fixed assets.

INCOME TAX BENEFIT amounted to $20.2 million and $55.1 million for the three and
six months ended June 30, 2002, respectively, compared to an income tax expense
of $90.0 million and $376.2 million for the three and six months ended June 30,
2001. The income tax benefit in the 2002 periods resulted from a pre-tax loss,
including a decrease in the valuation allowance of $4.8 million in the three
month period ended June 30, 2002 and offset by an increase in the valuation
allowance of $74.9 million in the six month period ended June 30, 2002. The
income tax expense in the 2001 periods resulted from the Transactions, partially
offset by reductions in the valuation allowance of $181.4 million and $416.0
million in the three and six month periods ended June 30, 2001, respectively. In
the 2001 period the Company did not reduce its entire valuation allowance due
to uncertainties regarding the realizability of its deferred tax assets.

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 high-speed data 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 Investments, Inc.'s 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 net revenues
for the Company's telecommunication services segment.

I-34

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

REVENUES for the three and six months ended June 30, 2002 increased $30.4
million (5%) and $80.5 million (7%), respectively, as compared to revenues for
the same periods in the prior year. The net increases are attributable to the
following:

TECHNICAL AND OPERATING EXPENSES for the three and six months ended June 30,
2002 increased $13.1 million (6%) and $35.3 million (8%), respectively, compared
to the same periods in 2001. The increases resulted from increased costs
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 the three and six months ended June 30, 2002 as
compared to the same 2001 periods.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased $2.5 million (2%) and
$2.2 million (1%) for the three and six months ended June 30, 2002,
respectively, as compared to the same periods

I-35

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

in 2001. The net decreases for the 2002 periods consisted of $0.8 million and
$21.9 million attributable to lower expenses relating to a stock plan and $2.6
million and $1.6 million relating to a long-term incentive plan. These decreases
were partially offset by increases in various costs aggregating $0.9 million and
$21.3 million, primarily attributable to deployment and support expenses related
to digital set top boxes. As a percentage of revenues, selling, general and
administrative expenses for the three and six months ended June 30, 2002
decreased 1% and 2%, respectively, compared to the same 2001 periods. Excluding
the effects of the stock plan and the long-term incentive plan, as a percentage
of revenues such costs decreased 1% for the three months ended June 30, 2002 and
increased 1% for the six months ended June 30, 2002 compared to the same periods
in 2001.

RESTRUCTURING CHARGES of $2.9 million for the three and six months ended June
30, 2002 represent employee severance payments made in excess of accrued
balances.

DEPRECIATION AND AMORTIZATION EXPENSE decreased $13.7 million (9%) and $50.5
million (15%) for the three and six months ended June 30, 2002, respectively, as
compared to the same periods in 2001. Decreases of approximately $45.5 million
and $107.8 million, respectively, resulted from the Company's adoption of
Statement 142 as of January 1, 2002. Partially offsetting these decreases were
net increases of approximately $31.8 million and $57.3 million, respectively,
due primarily to depreciation of new plant assets.

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 net revenues
for Madison Square Garden.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

REVENUES for the three and six months ended June 30, 2002 decreased $27.6
million (15%) and $37.4 million (9%), respectively, as compared to revenues for
the comparable periods in 2001. These declines were largely attributable to
lower revenues at MSG Networks resulting from lower affiliate fees, and a
decline in advertising revenues, as well as the absence of broadcast rights fees
for certain sports programming resulting primarily from the absence of the
telecast of New York Yankee games. In addition, the lower revenues reflect the
absence of Knicks playoffs revenues, the absence of a touring show which ended
in 2001, fewer events at Madison Square Garden, as well as the cancellation of
certain January performances of the Company's holiday show at Radio City Music
Hall resulting from a decline in New York City tourism. Partially offsetting
these declines were higher sales resulting from additional family shows at Radio
City Music Hall in the first quarter of 2002, as well as higher Knick regular
season revenues attributable to the team's share of higher league-wide
television revenue and ticket price increases.

TECHNICAL AND OPERATING EXPENSES for the three and six months ended June 30,
2002 decreased $29.3 million (30%) and $31.8 million (12%), respectively, over
the same 2001 periods. These declines are primarily attributable to lower
contractual rights expense as Madison Square Garden's rights to telecast New
York Yankee games ended at the conclusion of the 2001 baseball season and the
reversal of a $30.3 million provision for luxury tax for the 2001/2002 Knicks
season. Following the audit of all National Basketball Association (NBA) clubs,
the NBA announced that there would be no luxury tax assessment for the 2001/2002
season. Accordingly, a credit was recorded in the second quarter of 2002
reflecting the reversal of prior provisions that had been recorded in
anticipation of the tax assessment. These declines in technical and operating
expenses also reflect a provision recorded in the second quarter 2001 for
certain player transactions, lower Knicks team compensation, as well as a
decrease in costs directly associated with the changes in revenue discussed
above. These declines were partially offset by the absence of a $30 million
credit recorded in the second quarter of 2001 as a result of the settlement of
certain litigation with the New York Yankees, LP. Other items partially
offsetting the declines were higher Rangers team salaries and costs associated
with a new theatrical production currently in development.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES for the three and six months ended
June 30, 2002 decreased $9.4 million (24%) and $19.4 million (23%),
respectively, as compared to the same 2001 periods. Selling, general and
administrative expenses for the three months ended June 30, 2002 were lower
primarily due to the absence of a provision recorded in the second quarter of

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

2001 for severance, as well as a decline in legal and professional fees. For the
six months ended June 30, 2002, selling, general and administrative expenses
were lower primarily due to a $7.3 million decrease in Madison Square Garden's
proportionate share of the income/expense related to Cablevision's stock plan
and long-term incentive plan, in addition to the factors mentioned above for the
three month period.

RESTRUCTURING CHARGES of $0.6 million in 2002 represent employee severance
payments made in excess of accrued balances.

DEPRECIATION AND AMORTIZATION EXPENSE for the three and six months ended June
30, 2002 decreased $9.2 million (39%) and $18.8 million (40%), respectively, as
compared to the same periods in 2001 due primarily to lower amortization expense
relating to the implementation of Statement 142.

RETAIL ELECTRONICS

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

REVENUES for the three and six months ended June 30, 2002 decreased $24.1
million (15%) and $35.4 million (12%) to approximately $132.1 million and $271.7
million, respectively, compared to revenues of approximately $156.2 million and
$307.1 million for the three and six months ended June 30, 2001, respectively.
Comparable store sales accounted for $24.2 million and $37.7 million of the
decreases, partially offset by increases in sales in new and relocated stores of
$0.1 million and $2.3 million.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

COST OF SALES for the three and six months ended June 30, 2002 amounted to
approximately $107.5 million and $221.0 million (each 81% of revenues),
respectively, compared to cost of sales of $124.3 million and $245.4 million
(each 80% of revenues) for the three and six months ended June 30, 2001,
respectively. Such costs include the cost of merchandise sold, including freight
costs incurred as well as certain occupancy and buying costs. The increases in
cost of sales, as a percentage of revenues, is primarily attributable to the
sale, at reduced pricing, of certain inventory as a result of management's new
merchandising strategy.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES amounted to approximately $43.5
million and $90.3 million (each 33% of revenues) for the three and six months
ended June 30, 2002, respectively, and $46.0 million and $93.3 million (29% and
30% of revenues) for the three and six months ended June 30, 2001. 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.

DEPRECIATION AND AMORTIZATION EXPENSE amounted to approximately $5.3 million and
$10.9 million (each 4% of revenues) for the three and six months ended June 30,
2002, respectively, and $7.6 million and $15.1 million (each 5% of revenues) for
the three and six months ended June 30, 2001. The decreases in 2002 are the
result of certain software costs becoming fully depreciated in 2001.

CABLEVISION SYSTEMS CORPORATION

OPERATING ACTIVITIES

Net cash used in operating activities amounted to $35.4 million for the six
months ended June 30, 2002 compared to $238.5 million for the six months ended
June 30, 2001. The 2002 net cash used in operating activities consisted
primarily of a net decrease in cash of $345.2 million resulting from changes in
assets and liabilities, partially offset by a net increase in cash of $309.8
million resulting from net income before depreciation, amortization and other
non-cash items.

The 2001 net cash used in operating activities consisted primarily of a net
decrease in cash of $157.0 million resulting from a net loss before
depreciation, amortization and other non-cash items and a decrease in cash
resulting from changes in assets and liabilities of $81.5 million.

INVESTING ACTIVITIES

Net cash used in investing activities for the six months ended June 30, 2002 was
$576.7 million compared to net cash provided by investing activities of $425.6
million for the six months ended June 30, 2001. The 2002 investing activities
consisted of $559.7 million of capital expenditures and other net cash payments
of $17.0 million.

The 2001 investing activities consisted of net proceeds from the sale of cable
assets and programming interests of $1,118.2 million, partially offset by $660.3
million of capital expenditures and other net cash payments of $32.3 million.

I-39

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

FINANCING ACTIVITIES

Net cash provided by financing activities amounted to $729.0 million for the six
months ended June 30, 2002 compared to $18.2 million for the six months ended
June 30, 2001. In 2002, the Company's financing activities consisted primarily
of net proceeds from bank debt of $808.5 million, partially offset by net
repayments of collateralized indebtedness of $54.8 million and other net cash
payments of $24.7 million.

In 2001, the Company's financing activities consisted primarily of $996.8
million from the issuance of senior notes, $673.6 million of proceeds from
collateralized indebtedness, partially offset by net bank debt repayments of
$1,593.9 million and other net cash payments of $58.3 million.

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.

See Note 17 of the consolidated financial statements for a discussion of the
exchange of Rainbow Media Group common stock for shares of Cablevision NY Group
common stock announced by the Company in August 2002.

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.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

STATEMENT OF OPERATIONS DATA

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

COMPARISON OF THREE AND SIX MONTHS ENDED JUNE 30, 2002 VERSUS THREE AND SIX
MONTHS ENDED JUNE 30, 2001

RAINBOW MEDIA GROUP

REVENUES for the three and six months ended June 30, 2002 increased $14.4
million (10%) and $42.3 million (15%), respectively, as compared to revenues for
the same periods in the prior year. Increases of $23.3 million and $45.6
million, respectively, were attributed to growth in programming network
subscribers and rate increases and increases of approximately $8.0 million and
$14.8 million were due to higher advertising revenue. Partially offsetting these
increases were decreases of $16.9 million and $18.1 million in the three and six
month periods, respectively, resulting from bad debt expense recognition
associated with the bankruptcy of Adelphia Communications.

TECHNICAL AND OPERATING EXPENSES for the three and six months ended June 30,
2002 increased $5.4 million (9%) and $15.5 million (14%), respectively, compared
to the same periods in 2001. The increased costs are directly associated with
the net increases in revenues discussed above. As a percentage of revenues, such
costs remained relatively constant during the three month period in 2002 and
decreased 1% during the six month period in 2002 as compared to the same 2001
period.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES increased $1.3 million (3%) and
$7.1 million (7%) for the three and six months ended June 30, 2002,
respectively, compared to the same periods in 2001. For the three month period,
an increase of approximately $2.1 million resulted from higher sales, marketing,
advertising and other general cost increases and an increase of $0.4 million was
due to charges attributed to Rainbow Media Group related to a Cablevision stock
plan. These increases were partially offset by a decrease of $1.2 million in
charges attributed to Rainbow Media Group related to a Cablevision long-term
incentive plan. For the six month period, the net increase was comprised of an
increase of approximately $11.2 million due to higher sales, marketing,
advertising and other general cost increases, partially offset by a decrease of
$4.1 million in charges attributed to Rainbow Media Group related to a
Cablevision stock plan. As a percentage of revenues, selling, general and
administrative expenses decreased 2% during the three month period in 2002 and
decreased 3% during the six month period in 2002 as compared to the same periods
in 2001. Excluding the effects of the stock plan and the long-term incentive
plan, as a percentage of revenue, such expenses decreased 2% in both periods.

DEPRECIATION AND AMORTIZATION EXPENSE increased $1.6 million and $4.7 million
for the three and six months ended June 30, 2002, respectively, as compared to
the same periods in 2001. These increases were primarily due to higher
amortization expense associated with increases in intangible assets, attributed
to RMG, resulting from the acquisition of certain minority interests held by
NBC, and depreciation on new plant assets. Partially offsetting these increases
were decreases of $0.6 million and $1.2 million, respectively resulting from the
Company's adoption of Statement 142 as of January 1, 2002.

NET INTEREST EXPENSE amounted to $2.4 million for the three months ended June
30, 2002 compared to net interest income of $0.6 million for the three months
ended June 30, 2001. The

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

net increase is primarily attributable to higher debt balances and a decrease in
interest income. For the six months ended June 30, 2002, net interest expense
amounted to $3.1 million compared to $12.4 million for the same period in 2001.
The net decrease is primarily attributable to lower debt balances during the
period.

EQUITY IN NET INCOME OF AFFILIATES increased to $5.7 million and $4.0 million
for three and six months ended June 30, 2002, respectively, from $4.5 million
and $3.0 million in the same 2001 periods. 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.

WRITE-OFF OF DEFERRED FINANCING COSTS of $0.6 million for the six months ended
June 30, 2002 and $6.4 million for the six months ended June 30, 2001 consists
principally of costs written off in connection with amendments to, or
termination of, certain credit agreements.

INCOME TAX EXPENSE amounted to $17.6 million and $18.9 million for the three and
six months ended June 30, 2002, respectively, compared to an income tax expense
of $216.6 million for the three and six months ended June 30, 2001. The income
tax expense in the 2002 periods was a direct result of pre-tax income, partially
offset by the realization of a tax attribute made possible by a recent federal
law change. The income tax expense in the 2001 periods was a direct result of
pre-tax income, including gains on the Transactions, partially offset by a
reduction in the valuation allowance of $106.4 million.

RAINBOW MEDIA GROUP

OPERATING ACTIVITIES

Net cash provided by operating activities amounted to $32.9 million for the six
months ended June 30, 2002 compared to $17.5 million for the six months ended
June 30, 2001. The 2002 net cash provided by operating activities consisted of
net income of $61.0 million before depreciation, amortization and other non-cash
items, partially offset by a net decrease in cash resulting from changes in
assets and liabilities of $28.1 million.

The 2001 net cash provided by operating activities consisted of a net increase
in cash resulting from changes in assets and liabilities of $164.4 million,
partially offset by a net loss of $146.9 million before depreciation,
amortization and other non-cash items.

INVESTING ACTIVITIES

The 2002 net cash provided by investing activities consisted of capital
expenditures of $4.0 million, offset by other net cash proceeds of $4.0 million.

Net cash provided by investing activities of $820.5 million for the six months
ended June 30, 2001 consisted of proceeds from the sale of certain programming
interests of $825.0 million and other net proceeds of $1.1 million, partially
offset by capital expenditures of $5.6 million.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

FINANCING ACTIVITIES

Net cash provided by financing activities amounted to $102.4 million for the six
months ended June 30, 2002 compared to net cash used in financing activities of
$647.1 million for the six months ended June 30, 2001. In 2002, financing
activities consisted of net proceeds from bank debt of $114.0 million, partially
offset by additions to deferred financing costs of $8.8 million and other net
cash payments aggregating $2.8 million.

In 2001, financing activities consisted principally of net repayments of bank
debt and a note aggregating $654.8 million and other net cash payments of $4.2
million, partially offset by contributions from Cablevision NY Group of $11.9
million.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

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

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

STATEMENT OF OPERATIONS DATA (CONT'D)

I-46

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

COMPARISON OF THREE AND SIX MONTHS ENDED JUNE 30, 2002 VERSUS THREE AND SIX
MONTHS ENDED JUNE 30, 2001

CABLEVISION NY GROUP

REVENUES decreased $7.1 million (1%) for the three months ended June 30, 2002
and increased $21.0 million (1%) for the six months ended June 30, 2002 as
compared to revenues for the same periods in the prior year. The net increase
(decrease) was attributable to the following:

TECHNICAL AND OPERATING EXPENSES decreased $22.6 million (7%) and $13.1 million
(2%) for the three and six months ended June 30, 2002, respectively, compared to
the same periods in 2001. The net decreases resulted primarily from decreased
costs at Madison Square Garden (see discussion above), partially offset by
increased costs directly associated with the growth in revenues and subscribers
referred to above. As a percentage of revenues, technical and operating expenses
decreased 3% and 1% during the 2002 periods as compared to the 2001 periods.

RETAIL ELECTRONICS COST OF SALES for the three and six months ended June 30,
2002 amounted to approximately $107.5 million and $221.0 million (each 81% of
retail electronics sales), respectively, compared to approximately $124.3
million and $245.4 million (each 80% of retail electronics sales), respectively,
for the comparable 2001 periods. 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. The increases in cost of sales, as
a percentage of revenues, is primarily attributable to the sale, at reduced
pricing, of certain inventory as a result of management's new merchandising
strategy.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES increased $0.5 million and
decreased $0.4 million for the three and six months ended June 30, 2002,
respectively, as compared to the same periods in 2001. The net increase for the
three months ended June 30, 2002 was comprised of an increase of approximately
$3.7 million in administrative, sales and marketing and customer service costs,
partially offset by a decrease of $0.2 million in charges attributed to
Cablevision NY Group related to a Cablevision stock plan and a decrease of $3.0
million in charges attributed to Cablevision NY Group related to a Cablevision
long-term incentive plan. The net decrease for six months ended June 30, 2002
was comprised of a decrease of $32.7 million in charges attributed to
Cablevision NY Group related to the Cablevision stock plan and a decrease of
$1.2 million in charges attributed to

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

Cablevision NY Group related to the Cablevision long-term incentive plan, offset
by an increase of approximately $33.5 million in sales and marketing, customer
service and administrative costs. As a percentage of revenues, selling, general
and administrative expenses for the three months ended June 30, 2002 remained
relatively constant and for the six months ended June 30, 2002 decreased 1%
compared to the same 2001 periods. Excluding the effects of the stock plan and
the long-term incentive plan, as a percentage of revenues such costs increased
1% and 2% during the 2002 periods as compared to the 2001 periods.

RESTRUCTURING CHARGES of $4.5 million for the three and six months ended June
30, 2002 represent employee severance payments made in excess of accrued
balances.

DEPRECIATION AND AMORTIZATION EXPENSE decreased $20.6 million (9%) and $60.5
million (13%) for the three and six months ended June 30, 2002, respectively, as
compared to the same periods in 2001. Decreases of $57.4 million and $131.3
million resulted from the adoption of Statement 142 as of January 1, 2002.
Partially offsetting these decreases were net increases of approximately $36.8
million and $70.8 million, respectively, due primarily to depreciation of new
plant assets and amortization of acquired intangibles.

NET INTEREST EXPENSE decreased $7.2 million (6%) and $10.2 million (4%) for the
three and six months ended June 30, 2002, respectively, compared to the same
periods in 2001. The net decreases were attributable primarily to lower interest
rates and higher interest income, partially offset by higher average debt
balances.

EQUITY IN NET LOSS OF AFFILIATES increased to $18.3 million and $26.2 million
for the three and six months ended June 30, 2002, respectively, from $10.8
million and $14.3 million for the comparable periods in 2001. 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.

GAIN ON SALE OF CABLE ASSETS, NET for the six months ended June 30, 2001
consists primarily of the gain recognized on the disposition of Cablevision's
cable television systems in Massachusetts.

WRITE-OFF OF DEFERRED FINANCING COSTS of $6.6 million for the three and six
months ended June 30, 2001 consists principally of costs written off in
connection with amendments to CSC Holdings' credit agreements.

GAIN (LOSS) ON INVESTMENTS, NET for the three and six months ended June 30, 2002
and 2001 consists of the following:

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

GAIN ON DERIVATIVE CONTRACTS, NET for the three and six months ended June 30,
2002 and 2001 consists of the following:

LOSS ON EARLY EXTINGUISHMENT OF DEBT of $17.2 million for the three and six
months ended June 30, 2002 resulted from the settlement of CSC Holdings'
collateralized indebtedness relating to the monetization of its shares of
Adelphia Communications common stock.

NET MISCELLANEOUS EXPENSE amounted to $3.8 million and $8.3 million for the
three and six months ended June 30, 2002, respectively, compared to $3.9 million
and $7.1 million for the same periods in 2001. The increase for the six months
ended June 30, 2002 was due primarily to increased losses on the disposal of
certain fixed assets.

INCOME TAX BENEFIT amounted to $37.9 million and $74.0 million for the three and
six months ended June 30, 2002, respectively, compared to an income tax benefit
of $126.6 million in the three month period ended June 30, 2001 and an income
tax expense of $159.6 million in the six month period ended June 30, 2001. The
income tax benefit in the 2002 periods resulted from a pre-tax loss, including a
decrease in the valuation allowance of $4.8 million in the three month

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

period ended June 30, 2002 and offset by an increase in the valuation allowance
of $74.9 million in the six month period ended June 30, 2002. The income tax
benefit for the three months ended June 30, 2001 resulted from a pre-tax loss,
adjusted for a reduction in the valuation allowance of $75.0 million. The income
tax expense for the six months ended June 30, 2001 resulted from the
Transactions, partially offset by a reduction in the valuation allowance of
$309.6 million. In the 2001 period, the Company did not reduce its entire
valuation allowance due to uncertainties regarding the realizability of its
deferred tax assets.

BUSINESS SEGMENTS RESULTS - CABLEVISION NY GROUP

CNYG classifies its business interests into three segments:

- Telecommunication Services, consisting principally of its cable
television, telephone and high-speed data 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.

CABLEVISION NY GROUP

OPERATING ACTIVITIES

Net cash provided by operating activities amounted to $21.3 million for the six
months ended June 30, 2002 compared to $129.8 million for the six months ended
June 30, 2001. The 2002 net cash provided by operating activities consisted
primarily of net income before depreciation,

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

amortization and other non-cash items of $336.1 million, partially offset by a
net decrease in cash resulting from changes in assets and liabilities of $314.8
million.

The 2001 net cash provided by operating activities consisted primarily of net
income before depreciation, amortization and other non-cash items of $81.1
million and a net increase in cash resulting from changes in assets and
liabilities of $48.7 million.

INVESTING ACTIVITIES

Net cash used in investing activities for the six months ended June 30, 2002 was
$579.1 million compared to $397.9 million for the six months ended June 30,
2001. The 2002 investing activities consisted of $555.7 million of capital
expenditures and other net cash payments of $23.4 million.

The 2001 investing activities consisted of $654.6 million of capital
expenditures and other net cash payments of $36.5 million, partially offset by
net proceeds of $293.2 million from the sale of cable assets.

FINANCING ACTIVITIES

Net cash provided by financing activities amounted to $539.3 million for the six
months ended June 30, 2002 compared to $282.6 million for the six months ended
June 30, 2001. In 2002, financing activities consisted primarily of net proceeds
from bank debt of $694.5 million, partially offset by net repayments of
collateralized indebtedness of $54.8 million and other net cash payments
aggregating $100.4 million.

In 2001, financing activities consisted primarily of $996.8 million from the
issuance of senior notes, $673.6 million of proceeds from collateralized
indebtedness, partially offset by net repayments of bank debt of $1,234.6
million and other net cash payments aggregating $153.2 million.

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 and Rainbow Media Group
Class B tracking stock, which, upon the effective date of the exchange, will
convert to Cablevision common stock. The Company does not intend to pay
dividends on any of its common stock in the foreseeable future. Accordingly,
Cablevision does not have cash needs independent of the needs of its
subsidiaries.

Cablevision expects to maintain, wherever practicable, separate financial
arrangements for the Restricted Group, Rainbow Media Group, Madison Square
Garden and Cablevision Electronics.

The Cablevision NY Group, which consists primarily of the Company's cable
television, telephony, and high-speed data operations, its retail electronics
and theater operations, and the

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

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 Company and Bravo Company, 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 financing groups or entities as
of and for the six months ended June 30, 2002 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
restructuring charges of $4,465 for Cablevision NY Group, stock plan
income of $47,204 and $9,633 and long-term incentive plan expenses of
$8,684 and $3,397 for Cablevision NY Group and Rainbow Media Group,
respectively.

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, Charter
Communications and Adelphia 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 June 30, 2002:

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

RESTRICTED GROUP

DEFINITION

As of June 30, 2002, 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; the commercial telephone
operations of Lightpath on Long Island, New York; and substantially all of the
Company's consumer high-speed data operations, which encompassed approximately
611,000 subscribers as of June 30, 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, which 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 July 30,
2002, the Restricted Group had outstanding borrowings under its credit facility
of $1,548.0 million and outstanding letters of credit of $48.9 million,
resulting in undrawn revolver commitments of $803.1 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 high-speed data services create a net funding requirement. In
addition, the Company expects that the Restricted Group will fund

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

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 vendor payments in
2002 totaling approximately $140 million, and certain investments in 2002
totaling approximately $100 million in Northcoast Communications, LLC, 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.

In August 2002, the Company announced a major restructuring designed to
reduce expenses and improve overall liquidity. Under the plan, the Company
would dispose of its motion picture theater business, close 26 retail
electronics store locations, substantially reduce corporate overhead and
divisional expense primarily through the elimination of certain staff
positions, and reduce capital expenditures, including a significant reduction
in required digital set top box commitments. In connection with this plan,
the Company expects that it will record a restructuring charge in the third
quarter of 2002 of approximately $80 million.

The Company currently projects Telecommunications Services segment funding
requirements and availability resulting from the restructuring plan to be as
follows:

Notes:
(1) Does not include estimated 2002 restructuring charge; estimated cash
payments related to this charge included in "Uses of funds: Other,"
below.
(2) Projected capital expenditures for 2003 is the midpoint of an estimated
$670 million to $780 million range.
(3) In 2003, represents minimum payment requirements for license
maintenance and protection.
(4) For 2002, consists of the cash payment of the present value of interest
payable related to the early termination of Adelphia Communications
monetization contracts; the estimated cash impact of the 2001 and
estimated 2002 restructuring charges; initial payment under the August
2002 set top box vendor agreement; and miscellaneous and working
capital requirements. For 2003, consists of the estimated proceeds from
the sale of the Clearview theaters offset by miscellaneous and working
capital requirements.

The following chart presents the Company's Telecommunications Services segment's
and corporate projected capital expenditures for 2002 and 2003:

The projected 2002 and 2003 capital expenditures, sources of funds and uses
of funds may differ materially from the levels and amounts referred to above.
Any shortfall in sources of funds and any funding requirements above
currently projected levels would require additional funding. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for information on forward-looking statements in this Form 10-Q
and the factors that may cause actual results or developments to differ
materially from the forward looking statements contained or incorporated by
reference herein.

In 2003, the Company projects a significantly reduced funding requirement in
light of the improvements expected to be provided by its restructuring plan and
believes it has adequate funding available under its existing, committed bank
credit facilities to fund its projected requirements through 2003. The plan
contemplates no additional investment in Northcoast Communications (other than
required payments to maintain and protect Northcoast Communications' FCC
licenses) or in R/L DBS in 2003.

Depending on the scope of the Company's pursuit of a direct broadcast satellite
business, significant additional funding to launch and operate this satellite
business may be required. Based on the Company's current business plan and its
intention to maintain the liquidity necessary to meet its projected funding
requirements, as discussed above, the Company believes that the Restricted Group
would only be able to raise funds for the direct broadcast satellite business
through asset sales or by obtaining a strategic partner to contribute such
funds.

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 & Poor's. Moody's recently
lowered the ratings on the Restricted Group's outstanding securities and
Standard and Poor's placed the Company's ratings on credit watch for a potential
downgrade. 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.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

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 July 30, 2002, Madison Square Garden had
outstanding debt and letters of credit of $180.0 million and $12.4 million,
respectively, under this facility, resulting in undrawn funds of $307.6 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 through 2003, internally generated funds and funds
available under Madison Square Garden's existing credit facility will be
sufficient to meet its projected funding requirement; however, 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.

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 July 30,
2002, total outstanding debt under the credit facility was $58.5 million with
additional available funds of $13.0 million based on eligible inventory. CSC
Holdings' cash investment, including intercompany advances, in Cablevision
Electronics was approximately $477.7 million at July 30, 2002. Through July 30,
2002, Cablevision Electronics received other financial support from CSC Holdings
in the form of guarantees and letters of credit of approximately $36.9 million.

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CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

For 2002, Cablevision Electronics will require additional financial support from
CSC Holdings in respect of operating losses, capital expenditures and
expenditures associated with its announced new business plan. For 2003, the
Company anticipates its store closure program to result in limited financial
support from CSC Holdings and expects this support plus funds available under
Cablevision Electronics' credit facility, assuming the agreement can be renewed
at maturity, will be sufficient to meet its funding requirements. No assurances
as to the Company's ability to renew or extend the facility or obtain support
from other sources can be provided.

COMMITMENTS AND CONTINGENCIES

RESTRICTED GROUP

The Restricted Group's guarantees outstanding as of June 30, 2002 totaled $60.5
million, an increase of $24.0 million over the amount reported in our Annual
Report on Form 10-K as of December 31, 2001. The increase is primarily
attributable to an increase in the mark-to-market exposure under the guarantees
issued in connection with the monetization of the Company's Charter
Communications and Adelphia Communications common stocks in respect of potential
early termination events. Such increase is a result of the declines in the
prices of these common stocks during the period. The guarantee exposure is
estimated as of a particular point in time by the financial institution
counterparty and is based upon the current price of the underlying common stock
and various other assumptions, including stock market volatility and prevailing
interest rates; however, no amounts are payable under the guarantee unless an
early termination event (as defined in the agreements) occurs. The guarantee
exposure approximates the net sum of the fair value 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.

In August 2002, the Company reached an agreement with its supplier of digital
set top boxes which reduced the Company's purchase commitments for set top
boxes from $378.5 million in 2002, $378.5 million in 2003, and $567.8 million
in 2004 to a total remaining commitment of $87.5 million in 2002 and nothing
thereafter and requires the Company to make certain other cash payments
aggregating $50 million plus interest on a portion of such amount, with
respect to, among other things, a license for certain software. In
connection with this agreement, CSC Holdings received a waiver from the
lenders under its $2.4 billion credit facility. The Company expects that it
will incur costs related to this agreement in the third quarter of 2002.

OBLIGATIONS UNDER DERIVATIVE CONTRACTS

To manage interest rate risk, the Company has 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

I-56

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.

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

As of June 30, 2002, the notional value of all such contracts was $1,055.0
million and the fair value of these derivative contracts was $19.5 million, a
net receivable position. For the six months ended June 30, 2002, the Company
recorded a net gain on interest swap contracts of $16.6 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, Charter
Communications, and Adelphia Communications common stock. These contracts, at
maturity, are expected to offset negative changes in the fair value of these
securities, while allowing for certain upside appreciation potential. In the
event of an early termination of such contracts, however, the Company would be
obligated to repay the fair value of the monetization indebtedness less the sum
of the fair value of the underlying stock and the fair value of the equity
collar, calculated at the termination date. The following table details the
Company's estimated early termination exposure as of June 30, 2002:

The underlying stock and the equity collars are carried at fair market value on
the Company's consolidated balance sheet and the monetization indebtedness is
carried at its accreted value. 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

I-57

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

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.

EARLY TERMINATION OF ADELPHIA COMMUNICATIONS MONETIZATION CONTRACTS

In May 2002, due to certain events relating to Adelphia Communications, the
Company received early termination notices from its bank counterparties on
certain monetization contracts covering 9.79 million shares of Adelphia
Communications common stock. As a result, the Company was required to repay the
related collateralized indebtedness prior to maturity, net of the benefit of the
related prepaid equity forward contracts in a gain position. The Company made
cash payments totaling $54.8 million to the counterparties, which represented
primarily the present value of interest payable over the remaining life of the
contracts if they had been held to maturity, and received back 9.79 million
shares of Adelphia Communications common stock that had been held as collateral.
As of June 30, 2002 no value was ascribed to these securities. In connection
with the early termination, the Company recorded a $17.2 million loss,
representing the difference between the carrying value and the redemption value
of the collateralized indebtedness which is reflected as a loss on the early
extinguishment of debt in the accompanying consolidated statement of operations.
The remaining 1.01 million shares of Adelphia Communications common stock held
by the Company continue to remain subject to prepaid equity forward contracts
maturing in 2005.

All of the Company's 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
potential payments that could be due as a result of an early termination event
(as defined in the agreements). The guarantee exposure approximates the net sum
of the fair value 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. 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 June 30, 2002, the fair value of the Company's equity derivative
contracts was $663.6 million, a net receivable position. For the six months
ended June 30, 2002, the Company recorded gains of $766.6 million on these
contracts, consisting of a realized gain of $256.6 million on the Adelphia
Communications contracts which were subject to early termination and a net
unrealized gain on all other outstanding prepaid forward contracts of $510.1
million attributable to changes in market conditions during the period. The
gains on derivative contracts offset a significant portion of the losses on the
Company's holdings of the underlying stocks of $925.4 million for the six months
ended June 30, 2002, as shown in the following table:

I-58

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

In 2001, 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 $1,115.0 million. 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. These swaps have maturities in 2005 and 2006 that coincide with the
related prepaid equity forward maturities. Certain contracts provide for early
termination of the prepaid interest rate swap in the event of an early
termination of the related prepaid equity forward.

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 June 30, 2002, the fair value of the
Company's prepaid interest rate derivative contracts was $177.4 million, a net
liability position. For the six months ended June 30, 2002, the Company recorded
a net gain on such derivative contracts of $34.8 million as detailed below:

I-59

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

LIQUIDITY AND CAPITAL RESOURCES - RAINBOW MEDIA GROUP

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, 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.

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 flows of American Movie Classics, Bravo and The Independent Film
Channel) through September 30, 2004. As of July 30, 2002, Rainbow Media Group
had outstanding borrowings under its credit facility of $118 million, resulting
in undrawn revolver commitments of $282 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, and permits investments by RMG, subject to certain limitations,
in other entities which may include the Company. 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 July 30, 2002, there were no outstanding borrowings under this
credit facility. The revolver 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

I-60

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

these sources to fund these activities through 2003. 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 through 2003. 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 quarterly.

Beginning on December 18, 2002, Fox Sports Networks has the ability under
certain circumstances to exercise a right to put, at fair market value, its
40% interest in Regional Programming Partners, which includes Rainbow Media
Group's regional sports programming businesses as well as other operations
attributed to Cablevision NY Group, such as Madison Square Garden, Fox Sports
Net New York and Metro Channel, to Rainbow Regional Holdings, a subsidiary of
Rainbow Media Holdings. It also has the separate right to put its 50%
interest in Fox Sports Net Chicago and Fox Sports Net Bay Area to the
Regional Programming Partners' subsidiaries holding the interest in those
businesses. These rights must be exercised within thirty days of December 18,
2002 and are not exercisable again until December 2005. Upon exercise,
Rainbow Media Holdings may elect to either conduct an initial public offering
of securities of Regional Programming Partners, which eliminates Regional
Programming Partners' put, conduct an initial public offering of securities
of Fox Sports Net Chicago or Fox Sports Net Bay Area, which would eliminate
the Fox Sports Net Chicago and the Fox Sports Net Bay Area puts, as
applicable, or purchase Fox Sports Networks' interest(s). Payment for the
interest(s) may be made via issuance of marketable securities of Cablevision
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 puts are within Fox Sports Networks'
discretion and no assurances can be given that they will or will not occur.

RELATED PARTY TRANSACTIONS

The Company holds a 49.9% voting interest and certain preferential distribution
rights in Northcoast Communications. Northcoast Communications holds licenses to
provide wireless personal communications services ("PCS") in 56 markets,
including New York City, Boston, Minneapolis and Cleveland and commenced
commercial service in Cleveland (which accounts for approximately 5% of
Northcoast's total "Points of Presence" or "POPs" covered by its licenses) in
April 2001. 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. The operations of Northcoast
Communications are not consolidated with those of the Company.

As of June 30, 2002, Northcoast Communications had $63.7 million in notes
payable to the FCC for the acquisition of the PCS licenses acquired during
1997. In addition, a wholly owned subsidiary of Northcoast Communications,
Cleveland PCS, LLC, had $68.4 million in vendor financing outstanding under a
stand-alone $75 million facility obtained in connection with the launch of
commercial service in Cleveland. Additional funding for Northcoast
Communications has been provided by the Company through the Restricted Group
which as of June 30, 2002 totaled $198.8 million (comprised of contributions
directly to Northcoast Communications as well as loans to Northcoast PCS,
LLC, the other member in Northcoast Communications), in addition to certain
unpaid

I-61

CABLEVISION SYSTEMS CORPORATION AND SUBSIDIARIES

general and administrative charges from the Company amounting to approximately
$4.1 million at June 30, 2002.

The Company currently anticipates that it will invest up to approximately
$100 million in Northcoast Communications in 2002, 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. At this time, the Company has no plans to fund any additional
market launches. The FCC minimum buildout requirements required Northcoast
Communications to certify to the FCC by June 27, 2002 that it had met certain
construction benchmarks in the markets in which it is licensed in order to
avoid forfeiture of the licenses. Northcoast Communications has met these
requirements in all of its 49 originally licensed markets.

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
cost and expenses. For the six months ended June 30, 2002, the Company
recorded management fees of $1.5 million, which, together with previous
management fees and interest thereon aggregating $14.8 million, were unpaid
as of June 30, 2002.

CLEVELAND FINANCING

Vendor financing for Northcoast Communications' Cleveland operation consists
of the $75 million credit facility at Cleveland PCS, LLC. This facility has
no recourse to Cablevision or to Northcoast Communications, other than
pursuant to a pledge by Northcoast Communications of the stock of Cleveland
PCS and a guarantee of the payment by Northcoast Communications and
Cablevision of the FCC indebtedness of the Cleveland PCS subsidiary which
holds the Cleveland license which, as of June 30, 2002, had an outstanding
balance of $3.0 million. As of June 30, 2002, Cleveland PCS was in default of
the terms of this credit facility and had received notice of commitment
termination and acceleration from the lender. Northcoast Communications has
invested $3.6 million of the $198.8 million invested by Cablevision in
Northcoast Communications in Cleveland PCS at June 30, 2002 and was owed $1.3
million by Cleveland PCS for general and administrative charges at June 30,
2002.

I-62

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

See accompanying notes to
condensed consolidated financial statements.

II-1

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(continued)

See accompanying notes to
condensed consolidated financial statements.

II-2

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
(Unaudited)

See accompanying notes to
condensed consolidated financial statements.

II-3

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2002 and 2001
(Dollars in thousands)
(Unaudited)

See accompanying notes to
condensed consolidated financial statements.

II-4

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of CSC
Holdings, Inc. and its majority owned subsidiaries (the "Company") have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted.

NOTE 2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS

The financial statements as of and for the three and six months ended June 30,
2002 and 2001 presented in this Form 10-Q are unaudited; however, in the opinion
of management, such statements include all adjustments, consisting solely of
normal recurring adjustments, necessary for a fair presentation of the results
for the periods presented.

The interim financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001.

The results of operations for the interim periods are not necessarily indicative
of the results that might be expected for future interim periods or for the full
year ending December 31, 2002.

NOTE 3. RECLASSIFICATIONS

Certain reclassifications have been made to the 2001 financial statements to
conform to the 2002 presentation.

NOTE 4. INCOME (LOSS) PER COMMON SHARE

Net income (loss) per common share for the three and six months ended June 30,
2002 and 2001 is not presented since the Company is a wholly owned subsidiary of
Cablevision Systems Corporation ("Cablevision").

NOTE 5. 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 the six months ended June 30, 2002 and 2001, the Company's non-cash
investing and financing activities and other supplemental data were as follows:

II-5

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)

NOTE 6. TRANSACTIONS

In March 2002, Rainbow Media Holdings, Inc., a subsidiary of the Company
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 $33,000 payable only from a
percentage of 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' results are
consolidated with those of the Company as of the date of acquisition.

In 2002, NBC-Rainbow Holding, Inc. exchanged a 5.0% interest in Rainbow Media
Holdings equity securities for 9,968,988 shares of Rainbow Media Group Class A
common stock of Cablevision (valued at $98,514). The acquisition of the 5.0% and
the 3.1% minority interest in 2002 and 2001, respectively, was accounted for as
a purchase. The excess of the purchase price over the net book value of assets
acquired of approximately $118,911 was allocated to the specific assets
acquired, in 2002, based upon an independent appraisal as follows:

II-6

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unauidted)

NOTE 7. RECENTLY ADOPTED ACCOUNTING STANDARDS

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets. Statement 142 requires
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 requires 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
connection with the adoption of Statement 142, the Company ceased the
amortization of goodwill and intangible assets that were determined to have an
indefinite useful life and that had been acquired in a purchase business
combination. The Company did not record any impairment charges in connection
with the implementation of Statement 142.

Summarized below is pro forma net income and basic and diluted earnings per
share for the three and six months ended June 30, 2001 as adjusted for
amortization expense that is no longer recorded in accordance with Statement
142.

Effective January 1, 2002, the Company adopted 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). The
adoption of Statement 144 did not 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.

Effective January 1, 2002, the Company adopted the provisions of the FASB's
Emerging Issues Task Force, 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

II-7

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unauidted)

deferred carriage fees) as either a reduction of revenue or an operating
expense. Upon adoption, the Company reclassified the amortization of its
deferred carriage fees as a reduction to revenues, net. This reclassification
has been made for the comparable 2001 period. The amortization of deferred
carriage fees shown on the balance sheet was previously included in operating
expenses, which were correspondingly reduced.

NOTE 8. INTANGIBLE ASSETS

The following table summarizes information relating to the Company's acquired
intangible assets at June 30, 2002.

GROSS CARRYING AMOUNT OF AMORTIZED INTANGIBLE ASSETS:
Franchises.................................................................................... $ 1,676
Affiliation agreements........................................................................ 345,780
Broadcast rights.............................................................................. 101,483
Player contracts.............................................................................. 42,926
Other intangibles............................................................................. 194,865
-------------
686,730
-------------

ACCUMULATED AMORTIZATION:
Franchises.................................................................................... 1,092
Affiliation agreements........................................................................ 176,035
Broadcast rights.............................................................................. 48,525
Player contracts.............................................................................. 34,161
Other intangibles............................................................................. 35,031
-------------
294,844
-------------

UNAMORTIZED INTANGIBLE ASSETS:
Franchises.................................................................................... 731,848
Excess costs over the fair value of net assets acquired....................................... 1,339,893
-------------
2,071,741
-------------

Total intangibles................................................................................ $ 2,463,627
=============

AGGREGATE AMORTIZATION EXPENSE:
Six months ended June 30, 2002................................................................ $ 26,464

ESTIMATED AMORTIZATION EXPENSE:
Year ending December 31, 2002................................................................. 50,699
Year ending December 31, 2003................................................................. 50,167
Year ending December 31, 2004................................................................. 38,846
Year ending December 31, 2005................................................................. 26,319
Year ending December 31, 2006................................................................. 22,756

II-8

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unauidted)

The changes in the carrying amount of excess costs over the fair value of net
assets acquired for the six months ended June 30, 2002 are as follows:

NOTE 9. DEBT

In March 2002, Rainbow Media Group, LLC, a wholly owned subsidiary of Rainbow
Media Holdings, 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, American Movie Classics Company and Bravo Company, 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 amended and restated the previously existing American Movie Classics
$200,000 revolving credit facility. The American Movie Classics/Bravo revolving
credit facility contains certain financial covenants that may limit the ability
of American Movie Classics/Bravo 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.

NOTE 10. COLLATERALIZED INDEBTEDNESS AND DERIVATIVE CONTRACTS

In May 2002, due to certain events relating to Adelphia Communications
Corporation, the Company received early termination notices from its bank
counterparties pursuant to certain monetization contracts covering 9.79 million
shares of Adelphia Communications common stock. As a result, the Company was
required to repay the related collateralized indebtedness prior to maturity, net
of the benefit of the related prepaid equity forward contracts in a significant
gain position. The Company made cash payments aggregating $54,813, representing
the difference between the redemption value of the collateralized indebtedness
and the fair market value of the prepaid equity forward contracts as of the
early termination date, and 9.79 million

II-9

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unauidted)

shares of Adelphia Communications common stock that were held as collateral were
returned to the Company. In connection with the early termination, the Company
recognized a loss of $17,237, representing the difference between the carrying
value and the redemption value of the collateralized indebtedness, which is
reflected as a loss on the early extinguishment of debt in the accompanying
consolidated statement of operations.

NOTE 11. INCOME TAXES

In connection with the exchange of equity securities by NBC described in Note 6,
the Company recorded a deferred tax liability of approximately $42,000 in
accordance with the purchase method of accounting. Pursuant to such exchange,
the Company will begin to file one consolidated federal income tax return
effective June 29, 2002. As a result of the consolidation of Rainbow Media
Holdings for federal tax purposes, the valuation allowance and excess costs over
the fair value of net assets acquired were reduced by approximately $91,000.

Income tax benefit for the six months ended June 30, 2002 of $55,062 differs
from the income tax benefit derived by applying the statutory rate principally
due to an increase in the valuation allowance of approximately $74,850.

NOTE 12. RESTRUCTURING

In December 2001, the Company recorded restructuring charges of $56,442 which
included 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) and
estimated expenses of approximately $35,424 associated with facility realignment
and other related costs. The following table summarizes the accrued
restructuring liability at June 30, 2002.

NOTE 13. SEGMENT INFORMATION

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 or loss before depreciation and
amortization, stock plan income or expense, long-term incentive plan income or
expense and restructuring charges).

II-10

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unauidted)

II-11

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unauidted)

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.

NOTE 14. LEGAL MATTERS

On April 29, 2002, Yankees Entertainment & Sports Network, LLC (the "YES
Network") filed a complaint against the Company in the United States District
Court, Southern District of New York. The complaint arises from the failure of
the YES Network and the Company to reach

II-12

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unauidted)

agreement on the carriage of programming of the YES Network (primarily New York
Yankees baseball games) on the Company's cable television systems. The complaint
alleges a variety of anticompetitive acts. The complaint seeks declaratory
judgments as to violations of laws, treble damages and injunctive relief,
including an injunction requiring the Company to carry the YES Network on its
cable television systems. The Company believes that the claims set forth in the
complaint are without merit and intends to vigorously contest the lawsuit.

In August 2002, purported class actions naming as defendants Cablevision and
each of its directors were filed in the Delaware Chancery Court. The actions,
which allege breach of fiduciary duties and breach of contract with respect
to the exchange of the Rainbow Media Group tracking stock for Cablevision NY
Group common stock, were purportedly brought on behalf of all holders of
publicly traded shares of Rainbow Media Group tracking stock. The actions
seek to (i) enjoin the exchange of Rainbow Media Group tracking stock for
Cablevision NY Group common stock, (ii) enjoin any sales of "RMG assets", or,
in the alternative, award rescissory damages, (iii) if the exchange is
completed, rescind it or award recissory damages, (iv) award compensatory
damages, and (v) award costs and disbursements. The Company believes the
claims are without merit and intends to vigorously contest the lawsuits.

NOTE 15. OTHER MATTERS

In January 2001, the Company completed the sale of its cable television systems
in Boston and eastern Massachusetts to AT&T Corporation in exchange for AT&T's
cable television systems in certain northern New York suburbs, shares of AT&T
common stock and a cash payment. The sales agreements with AT&T provided both
parties with certain post closing adjustments to the purchase price following
agreement on those adjustments between the parties, or, in the event no
agreement was reached, that the post closing adjustment issues would be resolved
by third party experts whose determination would be binding. The Company
believes the amount of any negotiated settlement or expert determination of the
parties' respective claims will not be material to the Company.

As of June 30, 2002, Northcoast Communications, LLC, a 49.9% owned
unconsolidated subsidiary of the Company, had $63,700 in notes payable to the
FCC for the acquisition of the PCS licenses acquired during 1997. In addition, a
wholly owned subsidiary of Northcoast Communications, Cleveland PCS, LLC, had
$68,400 in vendor financing outstanding under a stand-alone $75,000 facility
obtained in connection with the launch of commercial service in Cleveland.
Additional funding for Northcoast Communications has been provided by the
Company through the Restricted Group which as of June 30, 2002 totaled $198,800
(comprised of contributions directly to Northcoast Communications as well as
loans to Northcoast PCS, LLC, the other member in Northcoast Communications), in
addition to certain unpaid general and administrative charges from the Company
amounting to approximately $4,100 at June 30, 2002.

Vendor financing for Northcoast Communications' Cleveland operation consists of
the $75,000 credit facility at Cleveland PCS, LLC. This facility has no recourse
to Cablevision or to Northcoast Communications, other than pursuant to a pledge
by Northcoast Communications of the stock of Cleveland PCS and a guarantee of
the payment by Northcoast Communications and Cablevision of the FCC indebtedness
of the Cleveland PCS subsidiary which holds the

II-13

CSC HOLDINGS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Cablevision Systems Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unauidted)

Cleveland license which, as of June 30, 2002, had an outstanding balance of
$3,000. As of June 30, 2002, Cleveland PCS was in default of the terms of
this credit facility and had received notice of commitment termination and
acceleration from the lender. Northcoast Communications has invested $3,645
of the $198,800 invested by Cablevision in Northcoast Communications in
Cleveland PCS at June 30, 2002 and was owed $1,300 by Cleveland PCS for
general and administrative charges at June 30, 2002.

NOTE 16. SUBSEQUENT EVENTS

In August 2002, Cablevision's board of directors approved the exchange of
Rainbow Media Group common stock for shares of Cablevision NY Group common
stock pursuant to the terms of Cablevision's certificate of incorporation. Each
share of Rainbow Media Group common stock will be exchanged for 1.19093 shares
of Cablevision NY Group common stock on August 20, 2002. Fractional shares will
be paid in cash. From and after the date of the exchange, all rights of holders
of shares of Rainbow Media Group common stock will cease except for the right,
upon surrender of the certificates representing their shares of Rainbow Media
Group common stock, to receive the shares of Cablevision NY Group common stock
for which their shares of Rainbow Media Group common stock were exchanged,
together with any fractional payment as provided above, without interest. As a
result of this exchange, the computation and presentation of earnings per share
for future periods will be impacted.

In August 2002, purported class actions naming as defendants Cablevision and
each of its directors were filed in the Delaware Chancery Court. The actions,
which allege breach of fiduciary duties and breach of contract with respect
to the exchange of the Rainbow Media Group tracking stock for Cablevision NY
Group common stock, were purportedly brought on behalf of all holders of
publicly traded shares of Rainbow Media Group tracking stock. The actions
seek to (i) enjoin the exchange of Rainbow Media Group tracking stock for
Cablevision NY Group common stock, (ii) enjoin any sales of "RMG assets", or,
in the alternative, award rescissory damages, (iii) if the exchange is
completed, rescind it or award recissory damages, (iv) award compensatory
damages, and (v) award costs and disbursements. The Company believes the
claims are without merit and intends to vigorously contest the lawsuits.

In August 2002, the Company announced its plans to dispose of the Company's
motion picture theater business, close 26 retail electronics store locations,
eliminate certain staff positions and reduce capital expenditures.
Additionally, the Company reached an agreement with its supplier of set top
boxes which reduced the Company's purchase commitments for set top boxes from
$378,500 in 2002, $378,500 in 2003, and $567,750 in 2004 to a total remaining
commitment of $87,500 in 2002 and nothing thereafter and requires the Company
to make certain other cash payments aggregating $50,000 plus interest on a
portion of such amount, with respect to, among other things, a license for
certain software. In connection with this agreement, CSC Holdings received a
waiver from the lenders under its $2.4 billion credit facility. In connection
with this plan, the Company expects that it will incur aggregating
approximately $80,000 severance and related costs and costs related to the
agreement referred to above aggregating approximately $80,000 in the third
quarter of 2002.

II-14

CSC HOLDINGS, INC. AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.

The operations of CSC Holdings are identical to the operations of Cablevision,
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 filed as part of this
document.

II-15