8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
November 9, 2007

CABLEVISION SYSTEMS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware
(State of Incorporation)

1-14764	11-3415180
(Commission File Number)	(IRS Employer Identification Number)

CSC HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

(State of Incorporation)

1-9046	11-2776686
(Commission File Number)	(IRS Employer Identification Number)

1111 Stewart Avenue, Bethpage, New York 11714

(Address of Principal Executive Offices)

Registrants’ telephone number, including area code:

(516) 803-2300

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01   REGULATION FD DISCLOSURE

On November 9, 2007, Unaudited Condensed Consolidated Financial Statements of Rainbow National Services LLC and Subsidiaries (“RNS”), an indirect wholly-owned subsidiary of Cablevision Systems Corporation and CSC Holdings, Inc., as of September 30, 2007 and for the three and nine months ended September 30, 2007 and 2006, and Management’s Discussion and Analysis of Financial Condition and Results of Operations were furnished to RNS bondholders in accordance with the requirements of the Indenture relating to RNS’ and RNS Co-Issuer Corporation’s $300,000,000 8-3/4% Senior Notes due 2012 and the Indenture relating to RNS’ and RNS Co-Issuer Corporation’s $325,000,000 10-3/8% Senior Subordinated Notes due 2014. The RNS Unaudited Condensed Consolidated Financial Statements are attached hereto as Exhibit 99.1 and the RNS Management’s Discussion and Analysis of Financial Condition and Results of Operations is attached hereto as Exhibit 99.2 and both items are being furnished in this Form 8-K filing.

ITEM 9.01FINANCIAL STATEMENTS AND EXHIBITS

(c)Exhibits

99.1.Rainbow National Services LLC and Subsidiaries Unaudited Condensed Consolidated Financial Statements as of September 30, 2007 and for the three and nine months ended September 30, 2007 and 2006

99.2.Rainbow National Services LLC and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and nine months ended September 30, 2007 and 2006

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CABLEVISION SYSTEMS CORPORATION
	By:	/s/ Wm. Keith Harper
		Name:	Wm. Keith Harper
		Title:	Senior Vice President and Controller
Dated: November 9, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CSC HOLDINGS, INC.
	By:	/s/ Wm. Keith Harper
		Name:	Wm. Keith Harper
		Title:	Senior Vice President and Controller
Dated: November 9, 2007

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EX-99.1

Exhibit 99.1

Rainbow National Services LLC and Subsidiaries

Condensed Consolidated Financial Statements

September 30, 2007 and 2006

Rainbow National Services LLC and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(unaudited)

	September 30,				December 31,
	2007				2006
ASSETS
Current Assets:
Cash and cash equivalents	$		6,549		$	7,919
Accounts receivable, trade (less allowance for doubtful accounts of $1,810 and $4,066)	135,395				124,729
Accounts receivable-affiliates, net	1,251				1,835
Feature film inventory, net	111,399				109,109
Prepaid expenses and other current assets	8,343				11,340
Deferred tax asset	849				5,997
Total current assets	263,786				260,929
Property and equipment, net of accumulated depreciation of $23,630 and $30,159	18,260				19,890
Feature film inventory, net	376,015				352,059
Deferred carriage fees, net	131,876				145,113
Deferred financing costs, net of accumulated amortization of $6,313 and $5,403	14,333				19,431
Affiliation agreement intangibles, net of accumulated amortization of $352,997 and $319,676	244,159				277,480
Other intangible assets, net of accumulated amortization of $52,621 and $45,037	46,830				54,414
Excess costs over fair value of net assets acquired	50,957				52,586
Other assets	17,749				16,922
	$	1,163,965			$		1,198,824
LIABILITIES AND MEMBER’S DEFICIENCY
Current Liabilities:
Accounts payable	$	10,261			$		8,872
Accrued liabilities:
Interest	7,378				33,715
Employee related costs	12,668				13,294
Deferred carriage fees payable	18,558				41,361
Other accrued expenses	7,732				6,790
Accounts payable to affiliates, net	19,559				13,056
Feature film rights payable	101,185				98,992
Deferred revenue	14,052				8,525
Capital lease obligations	469				639
Bank debt	18,750				—
Total current liabilities	210,612				225,244
Feature film rights payable	300,518				305,276
Deferred tax liability, net	99,000				104,584
Capital lease obligations	9,155				10,868
Senior notes	298,678				298,476
Senior subordinated notes	323,247				497,011
Bank debt	481,250				510,000
Other liabilities	14,804				17,814
Total liabilities	1,737,264				1,969,273
Commitments and contingencies
Member’s deficiency	(573,299			)	(770,449			)
	$	1,163,965			$		1,198,824

See accompanying notes to

condensed consolidated financial statements.

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Rainbow National Services LLC and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three and Nine Months Ended September 30, 2007 and 2006

(Dollars in thousands)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Revenues, net	$	164,387		$	144,483		$	489,457		$	441,738
Operating expenses:
Technical and operating (excluding depreciation and amortization shown below)	44,892			41,132			138,385			134,694
Selling, general and administrative	43,041			36,353			130,165			129,139
Restructuring charges	583			—			1,508			—
Depreciation and amortization	14,685			15,347			44,553			46,011
	103,201			92,832			314,611			309,844
Operating income	61,186			51,651			174,846			131,894
Other income (expense):
Interest expense	(27,781		)	(30,383		)	(86,810		)	(95,288		)
Interest income	273			483			680			3,405
Write-off of deferred financing costs	(2,919		)	(6,084		)	(2,919		)	(6,084		)
Loss on extinguishment of debt	(19,113		)	—			(19,113		)	—
Miscellaneous, net	128			(13		)	322			(23		)
	(49,412		)	(35,997		)	(107,840		)	(97,990		)
Income before income taxes	11,774			15,654			67,006			33,904
Income tax expense	(5,208		)	(6,237		)	(27,554		)	(13,546		)
Income before cumulative effect of a change in accounting principle	6,566			9,417			39,452			20,358
Cumulative effect of a change in accounting principle, net of taxes	—			—			—			(121		)
Net income	$	6,566		$	9,417		$	39,452		$	20,237

See accompanying notes to

 condensed consolidated financial statements.

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Rainbow National Services LLC and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF MEMBER’S DEFICIENCY

Nine Months Ended September 30, 2007

(Dollars in thousands)

(unaudited)

Balance, December 31, 2006	$		(770,449	)
Capital distributions	(75,884			)
Capital contributions	233,582
Net income	39,452
Balance, September 30, 2007	$	(573,299		)

See accompanying notes to

condensed consolidated financial statements.

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Rainbow National Services LLC and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2007 and 2006

(Dollars in thousands)

(unaudited)

	2007			2006
Cash flows from operating activities:
Income before cumulative effect of a change in accounting principle	$	39,452		$	20,358
Adjustments to reconcile income before cumulative effect of a change in accounting principle to net cash provided by operating activities:
Depreciation and amortization	44,553			46,011
Cablevision share-based compensation expense allocations	6,875			7,843
Amortization of feature film inventory	89,151			84,223
Amortization of deferred carriage fees	15,908			14,570
Amortization and write-off of deferred financing costs and discounts on indebtedness	5,581			8,919
Loss on extinguishment of debt	19,113			—
Provision for (recoveries of) doubtful accounts, net	372			(203		)
Investment securities received from a customer bankruptcy settlement	(777		)	—
Loss on investment securities	13			—
Unrealized foreign currency transaction gain, net	(212		)	—
Deferred income tax expense (benefit)	129			(8,744		)
Changes in assets and liabilities:
Accounts receivable, trade	(10,826		)	4,806
Accounts receivable-affiliates, net	584			520
Proceeds from the sale of trading securities	764			—
Prepaid expenses and other assets	2,170			4,834
Feature film inventory	(115,397		)	(74,473		)
Deferred carriage fees	(2,671		)	(23		)
Accounts payable and accrued expenses	(19,105		)	14,771
Accounts payable to affiliates, net	30,013			15,963
Feature film rights payable	(2,565		)	(16,298		)
Deferred carriage fees payable	(25,803		)	(23,339		)
Other long-term liabilities	(10		)	(25,507		)
Net cash provided by operating activities	77,312			74,231
Cash flows from investing activities:
Capital expenditures	(3,212		)	(3,138		)
Net cash used in investing activities	(3,212		)	(3,138		)
Cash flows from financing activities:
Cash distributions to parent	(74,820		)	(135,000		)
Cash contributions from parent	203,000			—
Additions to deferred financing costs	—			(5,369		)
Proceeds from bank debt	23,000			538,000
Repayment of bank debt	(33,000		)	(595,500		)
Redemption of senior subordinated notes	(193,158		)	—
Principal payments on capital lease obligations	(492		)	(1,483		)
Net cash used in financing activities	(75,470		)	(199,352		)
Net decrease in cash and cash equivalents	(1,370		)	(128,259		)
Cash and cash equivalents at beginning of period	7,919			148,002
Cash and cash equivalents at end of period	$	6,549		$	19,743

See accompanying notes to

condensed consolidated financial statements.

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Rainbow National Services LLC and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

(unaudited)

NOTE 1.                BUSINESS

In July 2004, Cablevision Systems Corporation (“Cablevision”) formed Rainbow National Services LLC (the “Company”). Rainbow Programming Holdings LLC (“Rainbow Programming Holdings”), an indirect wholly owned subsidiary of Cablevision, owns 100% of the membership interests in the Company. The Company is a holding company with no independent operations of its own. Its subsidiaries include entities that principally own nationally distributed 24-hour entertainment services operated as integral parts of Cablevision, including AMC, WE tv and IFC. The Company’s condensed consolidated financial statements have been derived from the condensed consolidated financial statements and accounting records of Cablevision and reflect certain assumptions and allocations. The financial position, results of operations and cash flows of the Company could differ from those that might have resulted had the Company been operated autonomously or as an entity independent of Cablevision.

NOTE 2.                BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information as required by the Company’s indentures even though the Company is not a reporting company under the Securities Exchange Act of 1934. Accordingly, these unaudited condensed consolidated financial statements do not include all the information and notes required for complete annual financial statements.

The condensed consolidated financial statements as of September 30, 2007 and for the three and nine months ended September 30, 2007 and 2006 presented herein are unaudited; however, in the opinion of management, such condensed consolidated financial statements include all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. All significant intercompany transactions and balances have been eliminated in consolidation.

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, 2007.

The interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2006.

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

Advertising revenue is recognized when commercials are aired. Through 2006, such revenue was recorded in accordance with the broadcast year which ends on the Sunday on or prior to the

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last day of each quarter, which was December 31, 2006 for the fourth quarter of 2006. Effective January 1, 2007, advertising revenue is recorded for each quarter based on the calendar year.

Comprehensive income for the three and nine months ended September 30, 2007 and 2006 equals net income for the respective periods.

NOTE 3.                CASH FLOWS

For purposes of the condensed 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 nine months ended September 30, 2007 and 2006, the Company’s non-cash investing and financing activities and other supplemental data were as follows:

	Nine Months Ended September 30,
	2007			2006
Non-Cash Investing and Financing Activities:
Deemed capital contributions from affiliate related to income taxes and other taxes	$	23,707		$	21,004
Deemed capital distribution and related income tax effect for adjustment to intangible asset basis (see Note 7)	(1,629		)	—
Capital lease obligations	—			11,751
Cumulative effect of a change in accounting principle	—			121
Supplemental Data:
Cash interest paid	110,485			107,777
Income taxes paid	2,441			1,778

In 2007, the Company transferred a capital lease obligation for transponder space of $1,391 to an affiliate which resulted in a decrease in property and equipment, net, of $1,285 and an increase in accounts payable to affiliates of $106.

NOTE 4.                RECENTLY ADOPTED ACCOUNTING STANDARDS

On January 1, 2007, Cablevision adopted Financial Accounting Standards Board (“FASB”) Interpretation No. (“FIN”) 48, Accounting for Uncertainty in Income Taxes - an interpretation of SFAS No. 109. This Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of an income tax position taken or expected to be taken in an income tax return. The adoption of FIN 48 on January 1, 2007 by Cablevision had no impact on the Company’s financial statements.

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NOTE 5.                RESTRUCTURING

During the nine months ended September 30, 2007, the Company recorded restructuring charges of $1,508 for employee severance. At September 30, 2007, unpaid balances of approximately $583 are reflected as accounts payable to affiliates, net in the condensed consolidated balance sheet as such restructuring charges were allocated to the Company from Rainbow Media Holdings LLC (the Company’s indirect parent).

NOTE 6.                INCOME TAXES

The Company is a single-member limited liability company, indirectly wholly-owned by Rainbow Media Enterprises, Inc. (“RME”), a subsidiary of Rainbow Media Holdings LLC (the Company’s indirect parent), a taxable corporation. RME is an indirect wholly-owned subsidiary of Cablevision. As such, the Company is treated as a division of RME and is included in the consolidated income tax return of Cablevision for federal income tax purposes. Accordingly, based upon the provisions of SFAS No. 109, the income tax provision is determined on a stand-alone basis as if the Company filed separate consolidated income tax returns for the periods presented herein.

The income tax expense for the nine months ended September 30, 2007 and 2006 of $27,554 and $13,546, respectively, differs from the income tax expense derived from applying the statutory federal rate to pretax income due principally to the impact of state income taxes, non-deductible expenses and, for 2007, tax expense of $1,074 including accrued interest recorded pursuant to FIN 48 and tax expense of $551 for the impact of a change in the state rate used to measure deferred taxes.

Interest expense related to income tax liabilities recognized in accordance with the provisions of FIN 48 is included in income tax expense. Interest expense of $147, net of deferred tax benefit of $86, has been recognized in the nine months ended September 30, 2007 and is included in income tax expense in the statement of income.

As of January 1, 2007, the Company had no liabilities for uncertain income tax positions. As of September 30, 2007, the Company had a liability of $1,659 for uncertain income tax positions, including accrued interest, which is included in other long-term liabilities.

AMC and WE tv are presently under audit by the City of New York with regard to the unincorporated business tax for 2003 through 2005.  IFC is currently being audited by the City of New York with regard to the unincorporated business tax for 2004.  Management does not believe that the resolution of these audits will have a material adverse impact on the financial position of the Company. Changes in the liabilities for uncertain tax positions will be recognized in the interim period in which the positions are effectively settled or there is a change in factual circumstances.

Since there is no tax sharing agreement in place between the Company and Cablevision, allocable current income tax liabilities calculated on a separate company basis that the Company does not pay directly have been reflected as deemed capital contributions to the Company from

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its parent. Such contributions amounted to $23,652 and $21,004 for the nine months ended September 30, 2007 and 2006, respectively.

NOTE 7.                INTANGIBLE ASSETS

The following table summarizes information relating to the Company’s acquired intangible assets at September 30, 2007 and December 31, 2006:

	September 30, 2007			December 31, 2006			Estimated Useful Lives
Gross carrying amount of amortizable intangible assets
Affiliation agreements	$		597,156	$		597,156	10 years
Advertiser relationships	90,738			90,738			7 to 10 years
Other intangibles	8,713			8,713			10 years
	696,607			696,607
Accumulated amortization
Affiliation agreements	352,997			319,676
Advertiser relationships	43,908			36,520
Other intangibles	8,713			8,517
	405,618			364,713
Indefinite-lived intangible assets
Excess costs over the fair value of net assets acquired	50,957			52,586
Total intangible assets, net	$		341,946	$		384,480
	Nine Months Ended September, 30, 2007			Year Ended December 31, 2006
Aggregate amortization expense	$	40,905		$	55,716

Estimated amortization expense
Year ending December 31, 2007	$	54,396
Year ending December 31, 2008	53,796
Year ending December 31, 2009	52,487
Year ending December 31, 2010	51,531
Year ending December 31, 2011	51,531

In the first quarter of 2007, an adjustment of $1,629 was recorded to reduce excess costs over the fair value of net assets acquired that was pushed down to the Company from Rainbow Media Holdings LLC in prior years. This adjustment to basis was recorded as a deemed capital distribution to Rainbow Media Holdings LLC amounting to $1,064 in addition to the reduction of the related deferred income tax liability of $565.

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NOTE 8.                SEGMENT INFORMATION

The Company classifies its business interests into two reportable segments: AMC Networks (which includes AMC and WE tv) and IFC. These reportable segments are strategic business units that are managed separately. The Company evaluates segment performance based on several factors, of which the primary financial measure is business segment adjusted operating cash flow (defined as operating income (loss) before depreciation and amortization, share-based compensation expense or benefit and restructuring charges or credits), a non-GAAP measure. The Company has presented the components that reconcile adjusted operating cash flow to operating income, an accepted GAAP measure. Information as to the operations of the Company’s business segments is set forth below.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Revenues, net
AMC Networks	$	138,991	$	121,974	$	414,719	$	373,756
IFC	25,396		22,509		74,738		67,982
Total	$	164,387	$	144,483	$	489,457	$	441,738

Reconciliation (by Segment and in Total) of Adjusted Operating Cash Flow to Operating Income

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Adjusted operating cash flow
AMC Networks	$	68,749	$	62,125	$	204,129	$	166,241
IFC	9,121		7,197		23,653		19,507
Total	$	77,870	$	69,322	$	227,782	$	185,748

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Depreciation and amortization
AMC Networks	$	13,716	$	14,056	$	41,572	$	42,105
IFC	969		1,291		2,981		3,906
Total	$	14,685	$	15,347	$	44,553	$	46,011

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Share-based compensation expense
AMC Networks	$	1,111	$	1,807	$	5,459	$	6,231
IFC	305		517		1,416		1,612
Total	$	1,416	$	2,324	$	6,875	$	7,843

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Restructuring charges
AMC Networks	$	387	$	—	$	1,151	$	—
IFC	196		—		357		—
Total	$	583	$	—	$	1,508	$	—

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Operating income
AMC Networks	$	53,535	$	46,261	$	155,947	$	117,905
IFC	7,651		5,390		18,899		13,989
Total	$	61,186	$	51,651	$	174,846	$	131,894

A reconciliation of reportable segment amounts to the Company’s consolidated balances is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Income before income taxes
Total operating income for reportable segments	$	61,186		$	51,651		$	174,846		$	131,894
Items excluded from operating income:
Interest expense	(27,781		)	(30,383		)	(86,810		)	(95,288		)
Interest income	273			483			680			3,405
Write-off of deferred financing costs	(2,919		)	(6,084		)	(2,919		)	(6,084		)
Loss on extinguishment of debt	(19,113		)	—			(19,113		)	—
Miscellaneous, net	128			(13		)	322			(23		)
Income before income taxes	$	11,774		$	15,654		$	67,006		$	33,904

	September 30,			December 31,
	2007			2006
Assets
AMC Networks	$	1,607,097		$	1,462,607
IFC	245,087			233,892
RNS Parent	20,848			27,265
Deferred tax asset	849			5,997
Intersegment eliminations (1)	(709,916		)	(530,937		)
	$	1,163,965		$	1,198,824

	Nine Months Ended September 30,
	2007		2006
Capital expenditures
AMC Networks	$	1,980	$	2,759
IFC	1,232		379
Total	$	3,212	$	3,138

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(1)Primarily represents intercompany receivables from RNS Parent recorded on the balance sheets of AMC Networks and IFC.

Substantially all revenues and assets of the Company’s reportable segments are attributed to or located in the United States.

Concentrations of Credit Risk

Financial instruments that may potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents and trade receivables. Cash is invested in money market funds and bank time deposits. The Company’s cash investments are placed with money market funds or financial institutions that have received the highest rating awarded by Standard & Poor’s and Moody’s Investors Service. The Company selects money market funds that predominately invest in marketable, direct obligations issued or guaranteed by the United States government or its agencies, commercial paper, fully collateralized repurchase agreements, certificates of deposit, banker’s acceptances and time deposits. The Company had three customers that in the aggregate accounted for approximately 32% of the Company’s consolidated net trade receivable balances at September 30, 2007 and December 31, 2006, which exposes the Company to a concentration of credit risk. These customers in the aggregate accounted for approximately 39% of the Company’s net revenues for the nine months ended September 30, 2007 and 2006.

NOTE 9.                LEGAL MATTERS

The Company is subject to various claims in the ordinary course of business. Although the outcome of these matters cannot be predicted with certainty and the impact of the final resolution of these matters on the Company’s results of operations in a particular subsequent reporting period is not known, management does not believe that the resolution of these matters will have a material adverse effect on the financial position of the Company or the ability of the Company to meet its financial obligations as they become due.

Broadcast Music, Inc. Matter

Broadcast Music, Inc. (“BMI”), an organization that licenses the performance of musical compositions of its members, has alleged that certain of the Company’s subsidiaries require a license to exhibit musical compositions in its catalog. BMI agreed to interim fees based on revenues covering certain periods for certain subsidiaries. These matters were submitted to a Federal Rate Court. The interim fees paid to BMI remain subject to retroactive adjustment until such time as either a final decision is made by the Court or an agreement is reached by the parties.

Accounting Related Investigations

The improper expense recognition matter previously reported by Cablevision has been the subject of investigations by the Securities and Exchange Commission (“SEC”) and the U.S. Attorney’s Office for the Eastern District of New York. The SEC is continuing to investigate the

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improper expense recognition matter and Cablevision’s timing of recognition of launch support, marketing and other payments under affiliation agreements.

Stock Option Related Matters

Cablevision and CSC Holdings, Inc. (“CSC Holdings”) announced on August 8, 2006 that, based on a voluntary review of past practices in connection with grants of stock options and stock appreciation rights (“SARs”), they had determined that the grant date and exercise price assigned to a number of their stock option and SAR grants during the 1997-2002 period did not correspond to the actual grant date and the fair market value of Cablevision’s common stock on the actual grant date. The review was conducted with a law firm that was not previously involved with the Cablevision stock option plans. Cablevision and CSC Holdings have advised the SEC and the U.S. Attorney’s Office for the Eastern District of New York of these matters and each has commenced an investigation. Cablevision and CSC Holdings have received a grand jury subpoena from the U.S. Attorney’s Office for the Eastern District of New York seeking documents related to the stock option issues. Cablevision and CSC Holdings have also received a document request from the SEC relating to its informal investigation into these matters. Cablevision and CSC Holdings continue to fully cooperate with such government investigations.

NOTE 10.              DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of the Company’s debt instruments are summarized as follows:

	September 30, 2007
	Carrying Amount		Estimated Fair Value
Debt instruments:
Bank debt	$	500,000	$	500,000
Senior notes	298,678		319,585
Senior subordinated notes	323,247		352,339
	$	1,121,925	$	1,171,924

	December 31, 2006
	Carrying Amount		Estimated Fair Value
Debt instruments:
Bank debt	$	510,000	$	510,000
Senior notes	298,476		313,400
Senior subordinated notes	497,011		551,682
	$	1,305,487	$	1,375,082

In August 2007, the Company redeemed 35% of its senior subordinated notes (see Note 13).

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and

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involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

NOTE 11.              DOLAN FAMILY GROUP TRANSACTION

On May 2, 2007, Cablevision entered into a merger agreement with Central Park Holding Company, LLC (“Dolan Family Acquisition Company”), an entity owned by the Dolan Family Group, and Central Park Merger Sub, Inc. The terms of the merger agreement provided that Central Park Merger Sub, Inc. would be merged with and into Cablevision and, as a result, Cablevision would continue as the surviving corporation and a wholly-owned subsidiary of Dolan Family Acquisition Company (the “Proposed Merger”).

On October 24, 2007, the Proposed Merger was submitted to a vote of Cablevision’s shareholders and did not receive Cablevision shareholder approval. Subsequently, the parties terminated the merger agreement pursuant to its terms.

NOTE 12.              TRANSACTIONS

Affiliation Agreements

On April 30, 2007, Rainbow Media Holdings LLC entered into a purchase agreement with Comcast Corporation for the sale of its interests in subsidiaries which operate two regional television sports programming networks. Contemporaneously with the execution of the purchase agreement relating to the sale of such networks, subsidiaries of the Company and Comcast Corporation entered into or extended affiliation agreements relating to the carriage of AMC, IFC and WE tv.

NOTE 13.              DEBT

On July 24, 2007, the Company entered into an equity commitment agreement with its sole member, Rainbow Programming Holdings, pursuant to which Rainbow Programming Holdings agreed to purchase additional membership interests in the Company for an aggregate purchase price of $203,000. The Company used the proceeds of the investment by Rainbow Programming Holdings to redeem $175,000 in aggregate principal amount of its 10-3/8% senior subordinated notes due 2014, representing 35% of the outstanding notes at a redemption price equal to 110.375% of the principal amount of the notes plus accrued and unpaid interest to August 31, 2007, the redemption date. In connection with the redemption, the Company recognized a loss on extinguishment of debt of $19,113, representing primarily the redemption premium and wrote-off the related unamortized deferred financing costs of $2,919.

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EX-99.2

Exhibit 99.2

Rainbow National Services LLC and Subsidiaries

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

September 30, 2007 and 2006

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations for the period ended September 30, 2007 is separately furnished by Rainbow National Services LLC and its subsidiaries (“RNS” and collectively with its subsidiaries, the “Company” or “we”, “us” or “our”).

This Quarterly Report contains statements that constitute forward looking information within the meaning of the Private Securities Litigation Reform Act of 1995, including disclosures relating to availability under credit facilities, 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 our revenues;

•the cost of programming and industry conditions;

•the regulatory environment in which we operate;

•developments in the government investigations and litigation related to past practices of Cablevision and CSC Holdings, Inc. (“CSC Holdings”) in connection with grants of stock options and stock appreciation rights;

•developments in the government investigations relating to improper expense recognition and the timing of recognition of launch support, marketing and other payments under affiliation agreements;

•the outcome of litigation and other proceedings, including the matters described in the notes to the accompanying condensed consolidated financial statements;

•general economic conditions in the areas in which we operate;

•demand for advertising inventory;

•our ability to obtain or produce content for our programming businesses;

•the level of our capital expenditures;

•the level of our expenses;

•future acquisitions and dispositions of assets;

•the demand for our programming among cable television system and direct broadcast satellite (“DBS”) operators and telephone companies and our ability to maintain and renew affiliation agreements with cable television system and DBS operators and telephone companies;

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•market demand for new programming services;

•other risks and uncertainties inherent in our programming businesses;

•financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate, and the additional factors described herein.

We disclaim any obligation to update or revise the forward looking statements contained herein, except as otherwise required by applicable federal securities laws.

Overview

We provide television programming principally to cable television system and DBS operators primarily throughout the United States. We own three nationally distributed 24-hour entertainment programming networks:  AMC, WE tv and IFC.

Our future performance is dependent, to a large extent, on general economic conditions including the impact of competition, our ability to manage our businesses effectively, and our relative strength and leverage in the marketplace, both with suppliers and customers.

We earn revenues in two principal ways. First, we receive affiliate fee payments principally from cable television system and DBS operators. These revenues are generally on a per subscriber basis and earned under multi-year contracts with those operators referred to as affiliation agreements. The specific affiliate fee revenues we earn vary from operator to operator and also vary among our networks, but are generally based upon the number of each operator’s subscribers who receive our programming, referred to as “viewing subscribers.”  The second principal source of revenues is from advertising. Under our agreements with cable television system and DBS operators, we have the right to sell a specific amount of national advertising time on our programming networks. Our advertising revenues are more variable than affiliate fee revenues because most of our advertising is sold on a short-term basis, not under long-term contracts. Also, our advertising revenues vary based upon the popularity of our programming as measured by rating services.

We seek to grow our revenues by increasing the number of operators that carry our services and the number of viewing subscribers. We refer to this as our “penetration.”  AMC, which is widely distributed, has less ability to increase its penetration than WE tv and IFC, which are not as widely distributed as AMC, a primarily analog service. WE tv and IFC, although carried by many of the larger operators, have higher growth opportunities due to their current penetration levels with cable television system operators. IFC is currently carried primarily on digital tiers, while WE tv is carried on either analog expanded basic or digital tiers. Therefore, WE tv and IFC penetration rates may increase if operators are successful in converting their analog subscribers to highly penetrated digital tiers of service. Our revenues may also increase over time through contractual rate increases stipulated in certain of our affiliation agreements. In negotiating for increased or extended carriage, we may be subject to requests by operators to make upfront payments in exchange for additional subscribers or extended carriage, which we record as deferred carriage fees and which are amortized as a reduction to revenue over the period of the related subscriber guarantee, or to waive for a specified period or accept lower per

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subscriber fees if certain additional subscribers are provided. We also may help fund the operators’ efforts to market our channels or we may permit operators to offer limited promotional periods without payment of subscriber fees. As we continue our efforts to add subscribers, our subscriber revenue may be negatively affected by subscriber acquisition fees (deferred carriage), discounted subscriber fees and other payments; however, we believe that these transactions generate a positive return on investment over the contract period. We seek to increase our advertising revenues by increasing the number of minutes of national advertising and by increasing rates for such advertising, but ultimately, the level of our advertising revenues is directly related to the overall distribution of our programming, penetration of our services and the popularity (including within desirable demographic groups) of our services as measured by rating services.

Our principal goals are to increase our affiliation fee revenues and our advertising revenues by increasing distribution and penetration of our services. To do this, we must continue to contract for and produce high-quality, attractive programming. Our greatest challenge arises from the increasing concentration of subscribers in the hands of a few cable television system and DBS operators, creating disparate bargaining power between us and the largest cable television system and DBS operators. This increased concentration could adversely affect our ability to increase the penetration of our services or even result in decreased penetration. In addition, this concentration gives those operators greater leverage in negotiating the pricing and other terms of affiliation agreements. The Company had three customers that in the aggregate accounted for approximately 32% of the Company’s consolidated net trade receivable balances at September 30, 2007 and December 31, 2006, which exposes the Company to a concentration of credit risk. These customers accounted for approximately 39% of the Company’s net revenues for each of the nine months ended September 30, 2007 and 2006. Moreover, as a result of this concentration, the potential impact of a loss of any one of our major affiliate relationships would have a significant adverse impact on our business.

The Company classifies its business interests into two reportable segments:  AMC Networks (which comprises AMC and WE tv) and IFC.

Cautionary Note Concerning Historical Financial Statements

Our financial information does not necessarily reflect what our results of operations and financial position would have been if we had operated as an entity separate from Cablevision, our indirect parent, during the periods presented herein.

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Results of Operations

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

RESULTS OF OPERATIONS DATA

	Three Months Ended September 30,
	2007					2006					Increase
				% of Net					% of Net		(Decrease)
	Amount			Revenues		Amount			Revenues		in Income
				(dollars in thousands)
Revenues, net	$	164,387		100	%	$	144,483		100	%	$	19,904
Operating expenses:
Technical and operating (excluding depreciation and amortization shown below)	44,892			27		41,132			28		(3,760		)
Selling, general and administrative	43,041			26		36,353			25		(6,688		)
Restructuring charges	583			—		—			—		(583		)
Depreciation and amortization	14,685			9		15,347			11		662
Operating income	61,186			37		51,651			36		9,535
Other income (expense):
Interest expense, net	(27,508		)	(17	)	(29,900		)	(21	)	2,392
Write-off of deferred financing costs	(2,919		)	(2	)	(6,084		)	(4	)	3,165
Loss on extinguishment of debt	(19,113		)	(12	)	—			—		(19,113		)
Miscellaneous, net	128			—		(13		)	—		141
Income before income taxes	11,774			7		15,654			11		(3,880		)
Income tax expense	(5,208		)	(3	)	(6,237		)	(4	)	1,029
Net income	$	6,566		4	%	$	9,417		7	%	$	(2,851	)

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	Nine Months Ended September 30,
	2007					2006					Increase
				% of Net					% of Net		(Decrease)
	Amount			Revenues		Amount			Revenues		in Income
				(dollars in thousands)
Revenues, net	$	489,457		100	%	$	441,738		100	%	$	47,719
Operating expenses:
Technical and operating (excluding depreciation and amortization shown below)	138,385			28		134,694			30		(3,691		)
Selling, general and administrative	130,165			27		129,139			29		(1,026		)
Restructuring charges	1,508			—		—			—		(1,508		)
Depreciation and amortization	44,553			9		46,011			11		1,458
Operating income	174,846			36		131,894			30		42,952
Other income (expense):
Interest expense, net	(86,130		)	(18	)	(91,883		)	(21	)	5,753
Write-off of deferred financing costs	(2,919		)	(1	)	(6,084		)	(1	)	3,165
Loss on extinguishment of debt	(19,113		)	(4	)	—			—		(19,113		)
Miscellaneous, net	322			—		(23		)	—		345
Income before income taxes	67,006			14		33,904			8		33,102
Income tax expense	(27,554		)	(6	)	(13,546		)	(3	)	(14,008		)
Income before cumulative effect of a change in accounting principle	39,452			8		20,358			5		19,094
Cumulative effect of a change in accounting principle, net of taxes	—			—		(121		)	—		121
Net income	$	39,452		8	%	$	20,237		5	%	$	19,215

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Comparison of the Three and Nine Months Ended September 30, 2007 Versus the Three and Nine Months Ended September 30, 2006

Revenues, net for the three and nine months ended September 30, 2007 increased $19.9 million (14%) and $47.7 million (11%) respectively, as compared to revenues for the same periods in the prior year. The net increases are attributable to the following:

	Comparison of Three Months Ended September 30, 2007 Versus Three Months Ended September 30, 2006
	(dollars in millions)
	AMC Networks		IFC		Total
Increase in:
Advertising revenue	$	10.3	$	0.9	$	11.2
Affiliate fee revenue	6.5		1.9		8.4
Other revenue	0.2		0.1		0.3
	$	17.0	$	2.9	$	19.9

	Comparison of Nine Months Ended September 30, 2007 Versus Nine Months Ended September 30, 2006
	(dollars in millions)
	AMC Networks		IFC			Total
Increase (decrease) in:
Advertising revenue	$	24.4	$	1.1		$	25.5
Affiliate fee revenue	15.7		5.9			21.6
Other revenue	0.8		(0.2		)	0.6
	$	40.9	$	6.8		$	47.7

The increase in advertising revenue for the three and nine months ended September 30, 2007 compared to the same periods in the prior year at AMC Networks resulted principally from higher pricing and units sold and at IFC is due to increased event sponsorship sales related to programming aired on the network. The increase in affiliate fee revenue for the three and nine months ended September 30, 2007 compared to the same periods in the prior year is due to an increase in viewing subscribers and per subscriber rate increases. Viewing subscribers as of September 30, 2007 compared to the same period in the prior year, increased 4.6% and 8.9% at AMC Networks and IFC, respectively.

	As of September 30,			Percent
	2007	2006	Increase	Increase
		(in thousands)
Viewing Subscribers:
AMC	84,100	80,600	3,500	4.3	%
WE tv	55,600	53,000	2,600	4.9	%
IFC	42,800	39,300	3,500	8.9	%

The Company believes the WE tv and IFC programming services may benefit from increased distribution, especially on the digital tiers of cable television system operators as digital capacity continues to become available, and increased advertising revenues as cable networks, including

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ad-supported niche programming networks (such as WE tv), attract a greater advertising market share. These increases could potentially be offset by lower net effective rates per viewing subscriber for our programming services due to the consolidation of cable television system operators and limited opportunities for increases in distribution in the United States for our substantially fully penetrated AMC programming service. Changes in the viewership ratings of our AMC and WE tv programming services may also significantly affect future advertising revenues.

Our advertising revenue as a percentage of total revenue has increased in the 2007 period as compared to the 2006 period and we expect this trend to continue.

Technical and operating expenses include primarily amortization of costs to license programming, including feature films, and programming and production costs. Depreciation and amortization expense of fixed assets and amortizable intangibles is not included in technical and operating expenses but is presented as a separate operating expense.

Technical and operating expenses for 2007 increased $3.8 million (9%) and $3.7 million (3%) for the three and nine months ended September 30, 2007, respectively, compared to the same periods in 2006. The increases in technical and operating expense are attributed to the following:

	Comparison of Three Months Ended September 30, 2007 Versus Three Months Ended September 30, 2006
	(dollars in millions)
	AMC Networks		IFC		Total
Increase, net in:
Amortization of programming content and series development/original programming expenses	$	1.9	$	0.5	$	2.4
Programming related expenses	1.2		0.2		1.4
	$	3.1	$	0.7	$	3.8

The increase in amortization of programming content and in series development/original programming expenses of $2.4 million for the three months ended September 30, 2007 compared to the same period in the prior year is due primarily to an increase in amortization of programming content and in series development expenses of $7.1 million, partially offset by a reduction in owned original programming expenses of $4.7 million due to such expenses qualifying for capitalization in 2007.

	Comparison of Nine Months Ended September 30, 2007 Versus Nine Months Ended September 30, 2006
	(dollars in millions)
	AMC Networks			IFC		Total
Increase (decrease), net in:
Amortization of programming content and series development/original programming expenses	$	(1.2	)	$	1.8	$	0.6
Programming related expenses	2.6			0.5		3.1
	$	1.4		$	2.3	$	3.7

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The increase in amortization of programming content and in series development/original programming expenses of $0.6 million for the nine months ended September 30, 2007 compared to the same period in the prior year is due primarily to an increase in amortization of programming content and in series development expenses of $11.3 million, partially offset by a reduction in owned original programming expenses of $10.7 million due to such expenses qualifying for capitalization in 2007.

As a percentage of revenues, technical and operating expenses decreased to 27% and 28% for the three and nine months ended September 30, 2007, respectively, compared to 28% and 30% for the same periods in 2006.

There may be significant changes in the level of our expenses from quarter to quarter and/or year to year due to content acquisitions and/or program development activities. As additional competition for product increases from new programming services and alternate distribution technologies continue to develop in the industry, expenses for film and other programming content may increase.

Selling, general and administrative expenses include primarily sales, marketing and advertising expenses, administrative expenses and costs of facilities. Selling, general and administrative expenses increased $6.7 million (18%) and $1.0 million (1%) for the three and nine months ended September 30, 2007, as compared to the same period in 2006. As a percentage of revenues, selling, general and administrative expenses increased to 26% for the three months ended September 30, 2007 compared to 25% for the same period in the prior year and decreased to 27% for the nine months ended September 30, 2007 compared to 29% for the same period in 2006. The increases are attributable to the following:

	Comparison of Three Months Ended September 30, 2007 Versus Three Months Ended September 30, 2006
	(dollars in millions)
	AMC Networks			IFC			Total
Increase (decrease) in:
Sales and marketing expenses	$	6.2		$	0.3		$	6.5
Other general and administrative expenses	(0.1		)	(0.2		)	(0.3		)
Management fees	0.5			—			0.5
Share-based compensation expense allocation	(0.7		)	(0.2		)	(0.9		)
Long-term incentive plan expense	0.7			0.2			0.9
	$	6.6		$	0.1		$	6.7

The increase in selling and marketing expenses at AMC Networks of $6.2 million primarily related to an increase in expenses for the marketing and promotion of original programming series premieres in the third quarter of 2007 compared to the third quarter of 2006. The increase at IFC of $0.3 million is primarily attributable to an increase in marketing and promotion expenses associated with the premiere of new original programming during the quarter. Management fees increased due to increased revenues of AMC Networks in 2007 compared to 2006. Pursuant to an agreement with CSC Holdings, a wholly owned subsidiary of Cablevision, AMC Networks pays an annual management fee of 3.5% of its revenues to CSC Holdings on a monthly basis.

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	Comparison of Nine Months Ended September 30, 2007 Versus Nine Months Ended September 30, 2006
	(dollars in millions)
	AMC Networks			IFC			Total
Increase (decrease) in:
Sales and marketing expenses	$	(0.2	)	$	0.5		$	0.3
Other general and administrative expenses	(0.7		)	(0.5		)	(1.2		)
Management fees	1.0			—			1.0
Share-based compensation expense allocation	(0.8		)	(0.2		)	(1.0		)
Long-term incentive plan expense	1.6			0.3			1.9
	$	0.9		$	0.1		$	1.0

The increase in selling and marketing expenses at IFC of $0.5 million is primarily attributable to marketing and promotion of the network for the nine months ended September 30, 2007 compared to the same period in the prior year. The decrease in other general and administrative expenses at AMC Networks is primarily driven by a decrease in legal expenses. Management fees of 3.5% of revenue increased due to increased revenues at AMC Networks in 2007 compared to 2006.

Restructuring charges of $0.6 million and $1.5 million for the three and nine months ended September 30, 2007, respectively, represents severance charges resulting from the elimination of certain staff positions due to the consolidation and reorganization of certain departments.

Depreciation and amortization decreased $0.7 million (4%) and $1.5 million (3%) for the three and nine months ended September 30, 2007, respectively, compared to the same periods in 2006 due to a net decrease in depreciation expense relating to fixed assets and a decrease in amortization of intangible assets due to certain intangible assets becoming fully amortized in the first quarter of 2007.

Net interest expense decreased $2.4 million and $5.8 million for the three and nine months ended September 30, 2007, respectively, compared to the same periods in the prior year. The net decrease was attributable to a decrease in interest expense of $2.6 million and $8.5 million for the three and nine months ended September 30, 2007, respectively, compared to the same periods in the prior year. The decreased interest expense resulted from the redemption of $175.0 million of senior subordinated notes on August 31, 2007 and lower average outstanding bank debt. Although bank debt outstanding at September 30, 2007 decreased $92.5 million compared to the period in 2006 immediately prior to the refinancing of our credit facility in July 2006, interest expense did not decrease more significantly in 2007 due to higher variable interest rates. The decrease in interest expense was offset by a decrease in interest income of $0.2 million and $2.7 million for the three and nine months ended September 30, 2007, respectively, compared to the same periods in the prior year, due to a decrease in cash balances.

Write-off of deferred financing costs of $2.9 million and $6.1 million in the three and nine month periods ended September 30, 2007 and 2006, respectively, represents $2.9 million of costs written off in connection with the partial redemption of our senior subordinated notes in August 2007 (see Recent Events below) and $6.1 million of costs written off in connection with the refinancing of our August 2004 credit agreement in July 2006.

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Loss on extinguishment of debt of $19.1 million in the three and nine month periods ended September 30, 2007 represents the excess of the redemption price over the carrying value of the $175.0 million principal amount of our senior subordinated notes redeemed August 2007 (see Recent Events below).

Income tax expense of $5.2 million and $27.6 million for the three and nine months ended September 30, 2007, respectively, resulted primarily from pretax income, the impact of state taxes, non-deductible expenses, and for the nine months tax expense of $1.1 million, including accrued interest, recorded pursuant to FIN 48 and tax expense of $0.6 million for the impact of a change in the state rate used to measure deferred taxes. Income tax expense of $6.2 million and $13.5 million for the three and nine months ended September 30, 2006, respectively, resulted primarily from pretax income, the impact of state taxes and non-deductible expenses.

CASH FLOW DISCUSSION

Operating Activities

Net cash provided by operating activities amounted to $77.3 million for the nine months ended September 30, 2007 compared to $74.2 million for the nine months ended September 30, 2006. The 2007 cash provided by operating activities resulted from $220.2 million of income before depreciation and amortization and non-cash items, an increase in accounts payable to affiliates, net of $30.0 million and a decrease in net other assets totaling $10.7 million, partially offset by a decrease in cash resulting primarily from the purchase of licenses of feature film inventory and original programming totaling $118.0 million, an increase in accounts receivable, trade of $10.8 million due primarily to an increase in affiliate fee trade receivables, deferred carriage fee payments of $28.5 million, and a decrease in accrued interest of $26.3 million due to the timing of interest payments on our senior and senior subordinated notes.

Net cash provided by operating activities amounted to $74.2 million for the nine months ended September 30, 2006. The 2006 cash provided by operating activities resulted from $173.0 million of income before depreciation and amortization and non-cash items and a decrease in cash resulting from the purchase of feature film inventory and original programming licenses totaling $90.8 million and deferred carriage fee payments of $23.3 million, partially offset by an increase in cash resulting from a net change in other assets and liabilities totaling $15.3 million.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2007 and 2006 was $3.2 million and $3.1 million, respectively. The 2007 and 2006 investing activities consisted of capital expenditures. Capital expenditures in 2007 were primarily for the purchase of technical equipment for the future transmission of our networks in high-definition. Capital expenditures in 2006 related primarily to the purchase of technical equipment for cable television systems and DBS operators to migrate to and receive a digital feed from an analog feed for the transmission of our networks.

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Financing Activities

Net cash used in financing activities amounted to $75.5 million for the nine months ended September 30, 2007 compared to $199.4 million for the nine months ended September 30, 2006. In 2007, financing activities consisted of capital distributions to our parent of $74.8 million, $193.2 million for the partial redemption of $175.0 million of our senior subordinated notes including a redemption premium of $18.2 million (see Recent Events below), repayment of bank debt of $33.0 million, and principal payments on capital leases of $0.5 million, partially offset by proceeds from bank debt of $23.0 million and a cash contribution from our parent of $203.0 million (see Recent Events below).

In 2006, financing activities consisted of capital distributions to our parent of $135.0 million, repayment of bank debt of $595.5 million from our previous credit facility, partially offset by the proceeds from borrowings under our July 2006 credit facility (see Debt Financing Agreements below) of $538.0 million, the payment of deferred financing costs associated with our July 2006 credit facility of $5.4 million, and principal payments on capital leases of $1.5 million.

LIQUIDITY AND CAPITAL RESOURCES

Overview

The operations of the businesses that are included in our consolidated financial statements collectively have historically generated positive cash flow from operating activities. However, each of our programming businesses has substantial programming, acquisition and development expenditure requirements.

We generated positive cash from operating activities in 2006 and for the nine months ended September 30, 2007. We currently expect our funding requirements for the next twelve months to be met by our cash on hand, cash from operations and available borrowings under our credit facility. In addition, our cash on hand, plus cash flow from operations, plus proceeds from borrowings available to us, provides the capital required for net funding and investment requirements of other Rainbow programming services that we do not own, including the VOOM HD Networks, Rainbow’s regional news networks (“News 12 Networks”) and fuse, subject to the applicable covenants and limitations contained in our financing agreements.  During the nine months ended September 30, 2007, we distributed $74.8 million to Rainbow Programming Holdings LLC, our direct parent, to, among other things, fund other Rainbow programming services, including the VOOM HD Networks, News 12 Networks and fuse.

The following table summarizes our outstanding debt, the present value of capital leases, interest expense and capital expenditures as of and for the nine months ended September 30, 2007:

	(dollars in thousands)
Bank debt	$	500,000
Capital leases	9,624
Senior notes	298,678
Senior subordinated notes	323,247
Total debt	$	1,131,549
Interest expense	$	86,810
Capital expenditures	$	3,212

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Debt Financing Agreements

The Company has an $800 million senior secured credit facility (the “Credit Agreement”), which consists of a $500 million term A loan facility and a $300 million revolving credit facility. The term A loan facility matures June 30, 2013 and the revolving credit facility matures June 30, 2012. The Credit Agreement allows us to utilize up to $50 million of the revolving credit facility for letters of credit and up to $5 million for a swing loan. Further, the Credit Agreement provides for an incremental facility of up to a maximum of $925 million, provided that it be for a minimum amount of $100 million. If an incremental facility is established, we and the lenders will enter into a supplement to the Credit Agreement with terms and conditions that are no more restrictive than those in the Credit Agreement. There are no commitments from the lenders to fund the incremental facility.

Outstanding borrowings under the term loan at September 30, 2007 were $500 million. There were no borrowings outstanding under the $300 million revolving credit facility at September 30, 2007. The borrowings under the Credit Agreement may be repaid without penalty at any time. We may use future borrowings under the Credit Agreement to make investments, distributions and other payments permitted under the Credit Agreement and for general corporate purposes.

Borrowings under the Credit Agreement are our direct obligations which are guaranteed jointly and severally by substantially all of our subsidiaries and by Rainbow Programming Holdings LLC. Such borrowings are secured by the pledge of our stock and the stock of substantially all of our subsidiaries and all of our other assets and the assets of substantially all of our subsidiaries (subject to certain limited exceptions). At September 30, 2007, the interest rate on the term A loan facility was 7.07%. The $500 million term A loan is to be repaid in quarterly installments of $6.25 million from March 31, 2008 until December 31, 2010, $12.5 million from March 31, 2011 until December 31, 2012, and $162.5 million on March 31, 2013 and June 30, 2013, the term A loan maturity date. Any amounts outstanding under the revolving credit facility are due at maturity on June 30, 2012.

As defined in the Credit Agreement, the financial covenants consist of (i) a minimum ratio of operating cash flow to total interest expense for each quarter of 1.75 to 1, (ii) a maximum cash flow ratio of total indebtedness to annualized operating cash flow of 6.75 to 1.00 through June 30, 2008, decreasing thereafter to 6.25 to 1, and (iii) a maximum senior secured leverage ratio of senior secured debt to annualized operating cash flow of 5.50 to 1. Additional covenants include restrictions on indebtedness, guarantees, liens, investments, dividends and distributions and transactions with affiliates.

We are obligated to pay fees of 0.375% per annum on any undrawn revolver commitment.

Our notes outstanding consist of $300 million principal amount of 8-3/4% senior notes due September 1, 2012, and $325 million principal amount of 10-3/8% senior subordinated notes due September 1, 2014 following the partial redemption of our senior subordinated notes in August 2007 (see Recent Events below). These notes are guaranteed by substantially all of our subsidiaries.

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We were in compliance with all of our financial covenants under our credit agreement as of September 30, 2007.

Future access to the debt markets and the cost of any future debt issuances are also influenced by our credit ratings, which are provided by Moody’s Investors Service (“Moody’s”) and Standard & Poor’s. Key factors in the assessment of our credit ratings include our free cash flow generating capacity, fiscal strategy, enterprise value and industry risk. Our corporate credit rating is B1 by Moody’s with a developing outlook and BB by Standard & Poor’s with ratings on creditwatch with negative implications. Any future downgrade to our credit ratings by either rating agency could increase the interest rate on future debt issuances and could adversely impact our ability to raise additional funds.

Recent Events

Affiliation Agreements

In June 2007, Rainbow Media Holdings LLC, the Company’s indirect parent, completed its sale to Comcast Corporation of its interests in subsidiaries which operate two regional television sports programming networks. Contemporaneously with the execution of the purchase agreement on April 30, 2007 relating to the sale of such networks, subsidiaries of the Company and Comcast Corporation entered into or extended affiliation agreements relating to the carriage of AMC, IFC and WE tv.

Partial Redemption of Senior Subordinated Notes

On July 24, 2007, the Company entered into an equity commitment agreement with its sole member, RPH, pursuant to which RPH agreed to purchase additional membership interests in the Company for an aggregate purchase price of $203 million. The Company used the proceeds of the investment by RPH to redeem $175 million in aggregate principal amount of its 10-3/8% senior subordinated notes due 2014, representing 35% of the outstanding notes at a redemption price equal to 110.375% of the principal amount of the notes plus accrued and unpaid interest to August 31, 2007, the redemption date. In connection with the redemption, the Company recognized a loss on extinguishment of debt of approximately $19 million representing primarily the redemption premium and wrote-off the related unamortized deferred financing costs of approximately $3 million.

Proposed Dolan Family Group Transaction

On May 2, 2007, Cablevision entered into a merger agreement with Central Park Holding Company, LLC (“Dolan Family Acquisition Company”), an entity owned by the Dolan Family Group, and Central Park Merger Sub, Inc. The terms of the merger agreement provided that Central Park Merger Sub, Inc. would be merged with and into Cablevision and, as a result, Cablevision would continue as the surviving corporation and a wholly-owned subsidiary of Dolan Family Acquisition Company (the “Proposed Merger”).

On October 24, 2007, the Proposed Merger was submitted to a vote of Cablevision’s shareholders and did not receive shareholder approval. Subsequently, the parties terminated the merger agreement pursuant to its terms.

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Recently Issued Accounting Standards Not Yet Adopted

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements (“Statement No. 157”). Statement No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Under Statement No. 157, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. It also clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. This Statement applies under other accounting pronouncements that require or permit fair value measurements. Accordingly, this Statement does not require any new fair value measurements, however, for some entities, the application of Statement No. 157 could change current practices. Statement No. 157 will be effective for financial statements issued with fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company has not yet determined the impact that the adoption of Statement No. 157 will have on its financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115 (“Statement No. 159”). Statement No. 159 permits entities to elect, at specified election dates, to measure eligible financial instruments and certain other items at fair value. An entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date, and recognize upfront costs and fees related to those items in earnings as incurred. Statement No. 159 is effective as of January 1, 2008 for the Company. Early adoption is permitted, but an entity is prohibited from retrospectively applying Statement No. 159, unless it chooses early adoption of Statement No. 157 and Statement No. 159. Statement No. 159 also applies to eligible items existing at January 1, 2008 (or when the date of early adoption occurs). The Company has not yet determined the impact that the adoption of Statement No. 159 will have on its financial statements.

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