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Cablevision Systems Corporation Reports First Quarter 2016 Results

*Delivered the best first quarter performance in customer relationships since 2012, following total customer growth for the full year 2015*Gained 19,000 high-speed data customers — more HSD additions than first quarter 2015 and 2014 combined*Continued improvements in service quality, with a 33% reduction in trouble call truck rolls compared to the prior year period*Became the first cable provider to activate a channel dedicated to Hulu that is available on all current-generation set top boxes*Increases in consolidated net revenue, adjusted operating cash flow (“AOCF”)1, and operating income*Industry-leading Average Monthly Cable Revenue per Customer ("RPC") of $157.91*Partnered with FourthWall Media to expand advanced data analytics reach beyond the New York DMA

BETHPAGE, NY, May 05, 2016 (BUSINESS WIRE) -- Cablevision Systems Corporation CVC, +1.83% today reported results for the first quarter ended March 31, 2016.

Cablevision continued to grow customer relationships during the first quarter with a net gain of 9,000, marking six months of sequential total customer growth. In addition, the Company had more high-speed data customers in the New York market than ever before, gaining 19,000 since the end of 2015. First quarter 2016 net video customer results improved nearly 50% compared to the prior year period. Additionally, Cablevision experienced the lowest quarterly churn in more than eight years, while continuing its disciplined pricing strategies.

First quarter consolidated net revenues increased 1.6% to $1.641 billion, consolidated AOCF increased 5.6% to $479.4 million and consolidated operating income increased 12.3% to $251.3 million, all compared with the prior year period.

Cablevision CEO James L. Dolan said, “Cablevision had an excellent first quarter. The Company continued to build momentum with solid improvements in service quality and subscriber growth, and achieved the best first quarter performance in customer relationships since 2012. The transformation of the Optimum experience over the past three years reflects the success of our management team and employees in providing the best products, services and experience to our customers. In addition, we are moving full speed ahead towards the completion of our transaction with Altice, and are proceeding through the regulatory process as expected."

1. See definition of adjusted operating cash flow (“AOCF”) included in the discussion of non-GAAP financial measures on page 4 of this earnings release.

Cable includes our Optimum-branded digital cable television, high-speed Internet and voice services as well as Optimum WiFi, the nation's most robust WiFi network with more than 1.5 million access points.

Cable net revenues for the first quarter 2016 increased 2.0% to $1.480 billion, primarily due to rate initiatives and continued disciplined pricing strategies, and an increase in high-speed data customers, partially offset by fewer video and voice customers compared to the prior year period. AOCF increased 5.7% to $472.2 million and operating income increased 11.6% to $281.4 million, both compared with the prior year period. First quarter AOCF primarily reflects the increase in revenue and a decrease in marketing costs, partially offset by higher programming costs, as compared to the prior year period.

Customer Data

The following table illustrates the change in the Cable customer base during the first quarter of 2016:

(rounded to nearest thousand)

December 31, 2015

Net Gain/(Loss)

March 31, 2016

Total Customers [(a)] 3,120 9 3,129
Video 2,594 (15) 2,579
High-Speed Data 2,809 19 2,828
Voice 2,193 (8) 2,185
Serviceable Passings 5,080 10 5,090

(a) Total customers are defined as the number of households/businesses that receive at least one of the Company's services.

Customer Service
During the first quarter of 2016, Cablevision continued to improve the customer experience through its service initiatives which have resulted in 33% fewer trouble call truck rolls and 42% fewer repeat trouble calls, compared to the same period in 2015. Since these initiatives were implemented more than three years ago, the Company has reduced the number of trouble call truck rolls by 36% and has reduced the number of repeat trouble calls by 52%.

Lightpath is an industry leader in providing advanced Ethernet-based data, Internet, voice, video transport solutions and managed services to large and mid-sized organizations throughout the New York metropolitan area.

The company operates one of the densest metro area fiber networks in the U.S., with more than 7,000 lit locations. In the education market, Lightpath’s popular Hosted Voice, Private Fiber Network and comprehensive data services offer an attractive solution for schools to provide premium connectivity for staff and students.

For the first quarter 2016, Lightpath net revenues increased 0.7% to $91.8 million, AOCF was essentially flat at $43.4 million and operating income increased 5.0% to $20.2 million, each as compared with the prior year period. First quarter results primarily reflect an increase in revenue from Ethernet services.

Other principally consists of Newsday, News 12 Networks, Cablevision Media Sales Corporation and certain other businesses and unallocated corporate costs.

First quarter net revenues decreased 4.5% to $78.1 million, primarily due to lower advertising revenue at Newsday. The AOCF deficit increased 0.6% to $36.1 million and operating loss increased 5.8% to $50.4 million, all compared with the prior year period. First quarter AOCF reflects lower revenue at Newsday and merger related costs of $1.4 million, partially offset by lower Newsday and corporate costs. If the merger related costs were excluded, the AOCF deficit would have improved 3.3% and operating loss would have increased 2.9%.

Other Matters
On September 16, 2015, Cablevision and Altice N.V. entered into a definitive agreement pursuant to which Altice has agreed to acquire Cablevision for $34.90 in cash for each share of Cablevision Class A and Class B common stock.

Assuming timely satisfaction of the necessary closing conditions, the acquisition by Altice is currently expected to close in the second quarter of 2016.

Due to the pending acquisition by Altice and the terms of the merger agreement, Cablevision has suspended its stock repurchase program and does not anticipate declaring or paying any dividends during the pendency of the acquisition.

For additional information, please refer to our SEC filings at

Non-GAAP Financial Measures
We define adjusted operating cash flow (“AOCF”), which is a non-GAAP financial measure, as operating income (loss) before depreciation and amortization (including impairments), excluding share-based compensation expense and restructuring charges or credits. Because it is based upon operating income (loss), AOCF also excludes interest expense (including cash interest expense) and other non-operating income and expense items. We believe that the exclusion of share-based compensation expense allows investors to better track the performance of the various operating units of our business without regard to expense associated with awards that are not expected to be made in cash, in the case of restricted shares, restricted stock units and stock options, and the distortive effects of fluctuating stock prices in the case of liability classified awards.

We present AOCF as a measure of our ability to service our debt and make continuing investments, including in our...