Operator: Good morning. My name is Christie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cablevision Fourth Quarter and Full Year 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.
I would now like to turn the call over to Bret Richter, Senior Vice President of Financial Strategy and Development. Please go ahead, sir.
Bret Richter - SVP, Financial Strategy & Development: Thank you. Good morning, and welcome to Cablevision's fourth quarter 2012 earnings conference call. Joining me this morning are Jim Dolan, President and CEO of Cablevision; and Gregg Seibert, Vice Chairman and Chief Financial Officer.
Following a discussion of the Company's fourth quarter 2012 results, we will open the call for questions. If you don't have a copy of today's earnings release, it is available on our website at cablevision.com. Please take note of the following.
Today's discussion may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigations Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ.
Please refer to the Company's filings with the Securities and Exchange Commission for a discussion of risks and uncertainties. The Company disclaims any obligation to update the forward-looking statements that may be discussed during this call.
Let me point out that on Page 7 of today's earnings release, we provide consolidated operations data and a reconciliation of adjusted operating cash flow or AOCF to operating income. In addition, on Page 4, the Company has provided details of certain items affecting the comparability of revenue AOCF and operating income for the three months and 12 months ended December 31, 2012 to that of comparable periods in 2011.
I would now like to introduce Jim Dolan, President and CEO of Cablevision.
James L. Dolan - President and CEO: Thank you, Bret, and good morning. 2012 was a challenging year for Cablevision. We set out to implement a number of critical initiatives in support of two primary goals. One, to meet and more importantly, exceed the expectations of our existing customers and two, to prove to those who are making choices about a new provider that no one offers better products or better service than Cablevision. Looking back, we made substantial progress towards these goals despite the ongoing challenges of a soft economy and strong competition. Then in the fourth quarter, we were hit with Superstorm Sandy, the most dramatic weather event in the Company's history.
Let me address Sandy's impact on our business. Almost 60% of our Optimum East customers had their services interrupted as a result of the storm. The vast majority of our service disruptions were related to power outages and recovery from the storm was our number one priority for weeks following the catastrophic event. We repaired over 450 miles of damaged cable at more than 16,000 locations. Approximately 90% of our 63 headend and hub locations was commercial power and were transferred to generator, as many remained without commercial power for more than a week. In addition, we deployed more than 1,000 portable generators to power portions of our network until commercial power was restored.
Our fourth quarter and full year 2012 results reflect the impact of our recovery efforts as well as the significant financial investments that we made throughout 2012 in support of our goals.
The Company's financial results also reflect a number of other items affecting the comparability to prior periods. The most significant of these items was the impact of Superstorm Sandy which resulted in a reduction to fourth quarter 2012 AOCF of nearly $110 million. Each adjustment is highlighted in our earnings release and Gregg will discuss them in more detail.
Adjusting for these items, fourth quarter total Company revenue increased 0.3% and consolidated AOCF declined 18.4%, each as compared with the prior year period and full year total Company revenue increased 0.4% and consolidated AOCF declined 11.7%.
The storm also had significant negative impact on our customer metrics in the fourth quarter. And in addition to the impact of lost and damaged homes, we offered our customers service credits, substantially curtailed our sales and advertising efforts, and suspended our non-pay collection procedures and disconnect policy as we worked through the storm's impact.
Despite all of this, in full year 2012, we reported higher combined net video data and voice customer additions than we did in 2011.
Capital expenditures increased by approximately $26 million compared with the fourth quarter of last year. This increased level investment and storm-related costs contributed to negative free cash flow in the fourth quarter, resulting in full year free cash flow of $76 million compared with $583 million in 2011. We did not repurchase any shares during the fourth quarter as we assess the overall impact of Sandy.
On February 26, the Board declared a $0.15 per share quarterly dividend which is payable on April 3.
During our last call, we discussed the settlement of VOOM versus DISH Network litigation. We received $350 million of the settlement proceeds in December and Gregg will discuss how these funds were deployed as well as the status of the process to determine the final allocation of the settlement proceeds between Cablevision and AMC networks.
Earlier this month, we entered into a definitive agreement with Charter Communications to sell our Optimum West cable business for $1.625 million in cash. We are proud of the value we created and the return on investment that we achieved since our acquisition of Optimum West. We are also proud of our employees' effort to improve the product services and overall customer experience in that region. I'm confident that our Optimum West team will continue to build on this success under new stewardship.
Finally, on Tuesday, we filed a lawsuit against Viacom in federal court for illegally tying its program networks during our recent carriage negotiations. Viacom's practice of forcing distributors to carry more than a dozen lesser watched networks in order to carry it must have networks is an abuse of its market power and a violation of federal antitrust laws. Importantly, this practice impairs programming competition and causes our customers' cable prices to rise and we believe it needs to be stopped.
Before turning to Gregg, I'd like to highlight a couple of other 2012 operating achievements in Optimum East and discuss the impact of and the recovery from Superstorm Sandy. We began 2012 with the completion of our 140 million data network augmentation, which more than doubled our broadband capacity and significantly enhanced the performance of our high-speed data product.
Today, our network continues to exceed 100% of our advertised broadband speeds as highlighted in this month's latest FCC broadband report. Throughout the year, we invested in our WiFi network, which has allowed us to meet a significant portion of the growing mobile data needs of our customers and extend the reach of our broadband service beyond their homes. This was never more evident than after Superstorm Sandy when during the week following the storm the rate of new weekly customer adoptions to WiFi increased by more than 80% over pre-storm levels.
With use of our WiFi Finder App, many of our customers were able to locate hotspots even in badly impacted areas in the days after the storm and utilize our WiFi network to communicate while power was unavailable in their homes. We ended 2012 with more than 67,000 installed hotspots and more than 30% of our Optimum online customers used the service in 2012.
In 2013, we plan to continue to expand our network within our footprint and we will continue to work on our plan to deploy a commuter rail WiFi network. We believe that our WiFi network is a key element of our product proposition in the competitive environment for our products and services.
In October, we completed our analog to digital conversion project and our DVR Plus product is now available in the vast majority of Optimum East service area. We enhanced the DVR Plus user interface in 2012 and we are currently supporting more than 10 million recordings and more than 3 million playbacks per week. The new Optimum program guide is active on all of our Samsung set-top boxes and we expect to complete the rollout for the balance of our set-top boxes in the near future.
We relaunched the Optimum brand and significantly improved and expanded our video products with new networks, additional prime time on-demand content and more TV-to-Go applications. We also expanded the availability of our popular Optimum app, launching versions of the app for laptops, kindles and certain Android devices in addition to our OS applications.
In 2012, we also pursued a series of initiatives focused on improving the overall experience of our customers. We revamped our outage communication and added additional network monitoring capabilities, improved the tools and information that our technicians use to resolve issues and launched the same-day installations.
The progress we made during the first 10 months of the year was tested by Superstorm Sandy. As with any crisis, we learned a lot from Superstorm Sandy. Our ability to monitor the active components of our network greatly enhanced our restoration efforts. We gathered data and generated visual health checks of all the nodes home and active devices that make up our network. We use this data to identify outages and address network issues proactively versus simply reacting to customers' call and rolling trucks to their homes.
We will build on this experience as we pursue three of our most important goals for 2013; to improve customer relationships by reducing issues that cause frustration and impact the quality experience and generate trouble, to improve service efficiency by reducing unnecessary truck rolls and to improve data, process and accountability throughout the organization.
As we begin 2013, we are focused on improving the business's performance and returning the business to growth. We believe that our operational initiatives will help us achieve this goal. Overall, I'm pleased with the progress we are making on our various operating initiatives and I'm proud of the dedication of our employees. I want to thank them for their continued efforts in moving our increasingly complicated business forward.
With that, I now turn the call over to Chief Financial Officer, Gregg Seibert.
Gregg G. Seibert - EVP and CFO: Thank you, Jim, and good morning, everyone. Let me start by highlighting a number of items affecting the comparability of our 2012 and 2011 results. Page 4 of the earnings release contains details related to these items including fourth quarter 2012 revenue credits and expenses related to the storm, a contract termination settlement related to a canceled equipment purchase commitment in the fourth quarter and the impact of a voice carrier settlement we have discussed last quarter.
As you may recall, our 2011 results were also impacted by storm costs as well as a number of compensation, executive separation and programming expense adjustments. Superstorm Sandy had a major impact on our fourth quarter customer metrics. We reported a net reduction of approximately 39,000 customer relationships during the quarter. This amount includes an estimated 11,000 losses related to homes where we had been unable to contact and customers whose billing has been temporarily suspended as their homes are restored. In addition, as Jim noted, we suspended our non-pay disconnect policy during this difficult period. As a result, our net customer relationship decline includes an estimated 27,000 customers that would normally have been disconnected had we not suspended our policy. Our normal non-pay disconnect procedures resumed in January.
We lost 50,000 net video customers, 5,000 net high-speed data customers and 10,000 net voice customers during the fourth quarter. Again, each of these metrics reflect similar impacts to those affecting customer relationships. Further information related to these adjustments and estimates will be provided in our 10-K filing.
Average revenue per video subscriber across all properties was $152.35 in the fourth quarter, down $1.75 as compared with the prior year period. Customer credits relating to the storm reduced RPS for the fourth quarter by more than $3. If excluded, RPS would have been a $1.64 higher than last year's fourth quarter, reflecting higher high-speed data and voice penetration as well as higher political advertising, partially offset by lower pay-per-view usage. Adjusted average revenue per customer relationship was $138.66.
As compared with the prior year, total cable revenue for the quarter declined 2.2%. Adjusting for the $33 million in storm-related credits, revenue for the quarter would've been flat compared with the prior year period. These results reflect the year-over-year reduction in video subscribers, the impact of certain promotional pricing, and lower pay-per-view and VOD usage, offset by additional data and voice subscribers and higher advertising revenue.
Total cable advertising revenue in the fourth quarter was up nearly 18% compared with last year's fourth quarter. This growth reflects increased political advertising in the quarter, partially offset by reduced programming and auto sector advertising.
Total cable AOCF declined 42% in the fourth quarter as compared to the prior year period. Excluding the impact of items affecting comparability, this decline would have been 17.1%. The AOCF decline reflects the absence of the 2012 rate increase, higher programming costs, and higher other operating expenses, primarily non-executive employee compensation.
Fourth quarter cable AOCF margin was 25%, down from 42.2% during the prior year quarter. Excluding the adjustments, fourth quarter margins would have been 32.1%.
Optimum East's fourth quarter AOCF declined by 45.7%, reflecting higher programming costs and an increase in other operating expenses. Excluding the impact of the adjustments, Optimum East's AOCF would have declined 19.7% compared to last year's fourth quarter.
Optimum West's video subs remained flat, while we gained approximately 6,600 data subscribers and 500 voice subscribers in the fourth quarter. Total Optimum West customer relationships increased by approximately 14,000 in 2012; driven primarily by an increase in data-only customers.
Average revenue per video subscriber for Optimum West was $143.99 in the fourth quarter, which is up more than $9 since the fourth quarter of last year. Revenue was up 7.6%, primarily due to higher video and data revenues, and AOCF increased 17.5%. The AOCF margin for Optimum West was 34% in the fourth quarter, a 9.3% increase over Q4 2011.
As Jim discussed, we recently entered into a definitive agreement for Charter Communications to acquire our Optimum West business for $1.625 billion in cash. The transaction is expected to close in the third quarter of this year and the receipt of the net proceeds will reduce our overall leverage on a net debt basis. The transaction is taxable to Cablevision and we will use our NOL to offset our significant gain. All-in-all, this is a great transaction for the Company as we continue to focus our resources on our Optimum East. Pending the closing of the sale beginning in the first quarter of 2013, the plans reflect the results of Optimum West as discontinued operations.
Total capital spending in the fourth quarter was $266 million, reflecting a $57 million increase in Optimum East as compared to 2011. This increase primarily reflects investments in customer premise equipment and support, primarily related to the digitization of our cable network, our WiFi network, our Optimum program guide and our DVR Plus product.
As we continue to invest to improve our products and services, continue to meet the demands of the growing data usage on our network and expand our WiFi network, we expect our capital expenditures will remain at elevated levels in 2013. However, we have budgeted our 2013 capital expenditures at a lower level than those of our 2012 actual capital expenditures net of Optimum West and we plan to dynamically manage our capital budget as we move through 2013.
At Lightpath, revenue increased 3.4% while AOCF declined 11.6%, both over the prior-year period. Excluding the items referenced earlier, Lightpath's revenue and AOCF would have grown 3.5% and 5.6% respectively.
We continue to work with AMC Networks to finalize the allocation of the VOOM litigation settlement proceeds in accordance with the terms of our existing letter agreement and our related party transaction approval policy. Pending the determination of the final allocation, $350 million of the cash portion of the settlement was distributed to us and to AMC Networks in December 2012. Any additional proceeds will be recognized if and when received once the final allocation of the settlement proceeds is determined. With regard to Clearview Cinemas, we hope to finalize a transaction in the second quarter. We expect that the transaction will result in a number of financial benefits to Cablevision, although the net proceeds are expected to be immaterial in the scope of the overall Company.
Now, turning to the Company's financial position, free cash flow from continuing operations was negative $80 million in the fourth quarter due principally to the decline in AOCF, including the impact of Superstorm Sandy and higher levels of capital investment. The Company's fourth quarter consolidated cash position was $365 million and net debt was $10.1 billion. We had $1.19 billion undrawn and available under the $1.25 billion revolving credit facility at CSC Holdings.
During the second half of 2012, we executed a number of successful financing transactions, which extended our maturities and reduced our overall cost of capital. These transactions included the issuance of senior notes at Cablevision, carrying the lowest fixed interest rate in the Company's history and the refinancing of the Newsday credit facility, which is expected to result in significant interest expense savings over the term of the facility.
In September, we repaid $150 million of our Term Loan B2 debt facility and in December, we used to $275 million of the proceeds received from the DISH settlement to repay an additional portion of our Term Loan B2 debt facility.
At December 31, the Company's consolidated net leverage ratio was 7.3 times and the CSC Holdings' Restricted Group leverage ratio was 4.0 times. As there are no exclusions for the adjustment items addressed earlier, fourth quarter leverage ratios are higher than typical. Excluding storm costs, the consolidated ratio would've been approximately 5.5 times and the Restricted Group leverage ratio would've been 3.7 times.
I again want to highlight that in calculating our total Company leverage ratio, AOCF is determined using the latest quarter annualized AOCF. As a result, our leverage ratios may continue to be volatile as they are more sensitive to changes in quarterly AOCF than they would be if our leverage was measured based on a trailing 12-month AOCF metric.
As we work to return the business to overall AOCF growth, we will continue to focus on opportunities to reduce our leverage. As Jim noted, we did not repurchase any shares of Cablevision stock during the fourth quarter and we do not anticipate repurchasing shares during the first quarter of 2013. However, we have more than $450 million of remaining stock repurchase authorization and we will continue to be opportunistic with regard to additional repurchases. From the inception of the program through the end of 2012, we've repurchased 45.3 million Class A shares.
In 2013 we will remain focused on both continuing to improve the overall experience of our customers as well as improving the Company's overall financial performance. Part of our plan for 2013 is to return to revenue growth which would partly mitigate the continuing pressure on expenses and in particular the growth in programming expenses.
In 2012, we endured a significant increase in programming expenses as a result of contractual rate increases, the renewal of contracts with many of our largest programming suppliers, new channel launches, and an increase in the number of customers receiving certain programming services. Our programming costs increased by 12% in 2012 and we anticipate similar increases in 2013 as a result of the full year impact of these changes.
We intend to be disciplined in the pricing and packaging of our services and we continue to consider and implement changes to our pricing as appropriate. In December, we announced the first increase to high-speed data service pricing since the product's inception and last week we announced plans to implement the $2.98 per month sports programming surcharge in April as well as certain other pricing changes.
We anticipate that we will experience significant AOCF pressure in the first quarter of 2013 as these changes take effect and as we continue to absorb the impact of higher programming costs and other expense increases as well as the first quarter seasonal decline in advertising revenues. While we expect 2013 to be a challenging year, we believe that our pricing initiatives coupled with cost reduction opportunities such as the initiatives that Jim discussed and other cost-saving measures such as the recent combination of MSG Varsity in our local programming operations, will help position us to achieve sequential AOCF growth in the second quarter of 2013.
With that, operator, we'd now like to open the call for questions.
Operator: Mike McCormack, Nomura Securities.
Michael McCormack - Nomura Securities: Just thinking about the Sandy impact and thanks for giving us a little bit more on the guidance front for 2013. I'm assuming that Sandy obviously had an impact on some of the projects that were rolling and just trying to get a sense for the timing on that. How much of an impact goes into 1Q and do you start showing that off in 2Q, maybe primarily on the Onyx guide launch and then secondly on the high-speed data price up, any impact you're seeing on churn related to that?
Kristin Dolan - SVP, Product Management: This is Kristin Dolan. On the Onyx rollout, what we did issue that we had there was our testing labs were underwater and unusable for almost three weeks. So, that set us back a little bit, but we are – as they noted on the call, we are all completely deployed on our (Samsung boxes) and we'll continue with the (SA boxes) within week of today that will be fully deployed across the footprint.
Gregg G. Seibert - EVP and CFO: Mike, in terms of financial impact, the primary financial impact from the storm is very clearly seen in the fourth quarter. We don't anticipate any follow-on impact as we go into the first quarter of 2013.
Michael McCormack - Nomura Securities: Gregg, I was just trying to figure out. Obviously, 2012 was a year that you guys stated was a year of investment and it sounds like based upon your expectations for AOCF and a lot of it is programming cost driven that '13 is going to have sort of a continuation of that. How much of that continuation is Sandy related versus just programing cost increases that should have been anticipated I would have assumed?
James L. Dolan - President and CEO: Mike, this is Jim. The storm clearly set us back with our initiatives about two months, maybe a little less than that. While we had to divert our attention to getting the network back in shape and getting all of our customer relations back in shape, that the – the beginning of the year really we got back to working on the initiatives and advancing them. But I would say basically from the storm through to the end of the year, we lost that time.
Michael McCormack - Nomura Securities: And any impact on the high-speed increase?
Kristin Dolan - SVP, Product Management: Yeah, that was – it's Kristin again. We got a couple – maybe a handful – a few thousand phone calls on the rate increase. It's processed through all of our customers already, and less than – and fewer than hundreds of people disconnected, but what gave us an opportunity to do was really to enable our reps to reinforce the value of WiFi. As customers called in, we could tell them how much WiFi they were using and it's all you can need. Data plans are becoming less and less prevalent. Sprint is the only one that still has them. It gives us actually an opportunity to revalue for customers how important WiFi is for them. So we saw a negligible – like, very, very, very little impact, and as I said, we've processed through every customer has received the increase already. So, we're through it.
Operator: Doug Mitchelson, Deutsche Bank.
Brian Russo - Deutsche Bank: This is Brian Russo for Doug. Just two questions. One is just to clarify the storm impact on subscribers. You gave a lot of information. Part of it was that some customers were unreachable and you also suspended the non-pay disconnect policy, and the total of those things for video, for example, would be 24,000. I just want to make sure I interpreted that correctly. And then the second question is really the programming deal. So, there's lot of deals that were done in 2013. So, does that kind of imply that your programming cost growth in 2014 and beyond will be lower or more (smooth) or any color on that would be helpful?
Gregg G. Seibert - EVP and CFO: Brian, I think on the subscriber front, you're looking at it the right way. The combination of non-paid disconnects and displaced homes was roughly 27,000 on the subscriber side. You'll see all of that detail in the K in addition to what we've presented in the earnings release. We've indicated a double-digit increase in programming expenses this year. We entered into a significant number of new agreements or revised agreements last year. So, we're having a significant impact this year. But I think it's clear that for video distributors as a whole programing expenses remain a very significant issues and pressure on margin. I would anticipate as we go forward that over time the percentage increase will come down. But it's still a very difficult issue not only for us but for the industry as a whole.
Brian Russo - Deutsche Bank: So, it'd be fair to say it might be more normalized with the rest of the industry appears to be kind of looking 8% roller beyond when we get past 2013?
Gregg G. Seibert - EVP and CFO: I don't think you should look at an 8% rate for us next year. I think ours will be higher than that and ultimately, programming costs are going to continue to be an issue.
Operator: Philip Cusick, JPMorgan.
Philip Cusick - JPMorgan: Can we talk about CapEx a little bit? I think you said it will still be elevated this year. But can you help me think about what the sort of big spending areas will be this year in terms of the projects you've laid out in the past versus the ones that are really mostly or totally complete?
James L. Dolan - President and CEO: Besides the normal ones like home premise equipment et cetera that the – we're continuing to work on the network. WiFi is a significant contributor to CapEx. We are continuing to be aggressive in that area. There is CapEx associated with the initiatives, particularly in the IT areas. I mean, those are the ones that are sort of extraordinary from the usual CapEx ones; maintenance and like I said, CPE.
Philip Cusick - JPMorgan: Should we think about '14 back to a little bit more of a normal level?
James L. Dolan - President and CEO: I'm still trying to think about '13.
Operator: Marci Ryvicker, Wells Fargo.
Marci Ryvicker - Wells Fargo: Two questions; probably for Gregg. Can you just clarify that double-digit programming expense for '12 and '13; is that total P&L or is that per sub number? And then the second question is, can you just talk about your cash tax situation after the Bresnan deal, what your NOLs may look like, and when you would become a federal cash tax payer?
Gregg G. Seibert - EVP and CFO: Sure. It's full P&L in terms of programming cost increase. So, the approximately 12% number that I used in my comments is what we expect to see in our P&L. On the cash tax side, we are going to be in a position where we have bonus depreciation again in 2013 and you can count on us to take full advantage of that. Our NOL is currently at about $1.6 billion. It's our estimate that we will not become a cash tax payer until sometime in 2015, and additionally we have two events that are bumping up against the NOL, but I've taken those into account. One is the taxable gain that we'll receive on the closing of the Bresnan transaction and the second item is the settlement proceeds that we received from the VOOM litigation and any additional proceeds that we will receive. Those represent taxable income to us, but again, we use the NOL to offset both of those items.
Operator: Jessica Reif-Cohen, Bank of America Merrill Lynch.
Jessica Reif-Cohen - Bank of America Merrill Lynch: Could you – I guess two questions, would you give us color on first quarter subscriber trends? And the second thing is, just to go back to the CapEx question, is there anything you can cite the total incremental increase in CapEx from the growth initiatives over the two-year period, 2012 and '13?
James L. Dolan - President and CEO: I think we're going to disappoint you on both of those, Jessica; one because, as you know, we don't give statements on the current period; and two, because we haven't calculated the second question, or at least I don't have it readily available here.
Jessica Reif-Cohen - Bank of America Merrill Lynch: Well then, just on maybe on the first quarter's trend question, do you seeing any change at all in the competitive environment?
James L. Dolan - President and CEO: Well, that's a good question. Verizon tends to be – was our primary competitor in our market; tends to be up and down with their pricing. We've seen them as high as (89.95), and when you take into account things like $300 gift certificates et cetera as well as (69.95), and it tends to vary almost from week to week that the – we're working diligently on our data projects here so that what we end up not doing is just continuing to transfer back and forth between our competitors and ourselves these customers on promotion. And I think we'll start to see the impact of that in the first or second quarter of this year.
Jessica Reif-Cohen - Bank of America Merrill Lynch: Can I just ask Kristin a question? What kind of consumer impact are you getting from the Onyx guide? Do you think ultimately it will decrease churn or get more subs? Are you measuring that?
Kristin Dolan - SVP, Product Management: It's really a retention play, Jessica. It's just better customer experience, which as Jim said, we're doing across all our products. So, the feedback has been good. It should ultimately drive the utilization of some of the other things like free on-demand which should all drive retention.
Operator: Jason Bazinet, Citi.
Jason Bazinet - Citigroup: Just three quick questions. You adjusted the subscriber counts for the suspension of your disconnect policy, but once you begin to disconnect for non-pay again, could that have an impact on Q1 revenues and expenses?
Gregg G. Seibert - EVP and CFO: That shows in Q4, Jason. I think we will take your question serially. That appears in – what we did in the fourth quarter was we estimated how many of those customers that would have that did not get disconnected under our non-pay policy would have been disconnected by December 31 if we had applied our normal policy. So we made our best estimate and I don't expect that to flow over into the first quarter.
Jason Bazinet - Citigroup: Then on the VOOM litigation, what other uncertainties are remaining that could cause that number to change from the $350 million?
James L. Dolan - President and CEO: Why don't you give that to our General Counsel, David Ellen, who probably will not answer it.
David Ellen - EVP and General Counsel: Correct. I mean, we continue to work with AMC under the letter agreement from 2011 and beyond that we are not going to comment.
Jason Bazinet - Citigroup: Then finally on the lawsuit with Viacom. It seems like it's been industry practice to bundle for a long period of time. Is the decision to pursue the lawsuit now a function of just the pressures on margins or has changed in terms of the negotiating posture of Viacom or the industry? In other words, what changed your perception of that?
James L. Dolan - President and CEO: I think you need to differentiate between wholesale and retail bundling has been going on for a quite some time. In fact, Charles Dolan is one of the first (guy who) do it and it was really designed to provide added value to the customer by giving them a lot more product at a better price. That is not what is this lawsuit is about. This is about the wholesalers forcing in product into retailers taking up shelf space and then stopping the retailer from the ability to add other products and forcing the price up. So, there is a difference between the retail bundling and the wholesale bundling.
Jason Bazinet - Citigroup: But hasn't the wholesale bundling been going on forever, in other words, why now?
James L. Dolan - President and CEO: Okay. I don't think I'm going to try the case right here during our fourth quarter call. So, I think, I'll leave it at what I said.
Operator: Ben Swinburne, Morgan Stanley.
Benjamin Swinburne - Morgan Stanley: I guess picking on that theme, Jim, as you mentioned you and your family have built a lot of this business over the last several decades and that's true for both cable content and particularly sports. So, with that backdrop, maybe you can comment on the RSN fee decision. I know MSG is a separate company, but obviously you have a lot of interest in the success of Regional Sports Networks and I am wondering if the sports programming cost situation for the cable operators is getting to a point where you're going to start to see some kind of breakdown of the model and you need to see these networks move to a tier and what you led you to the decision to put that that fee in place. And maybe just picking up on Jason's question before, AMC, I think, itself has been – I don't know, maybe not formally accused of (tying), but certainly people have complained that they've asked for networks to be carried where the ratings are low pretty publicly last year. So, with all that backdrop and your long history in the industry, maybe you can speak to both of those?
James L. Dolan - President and CEO: I wanted to break this out. I mean, what do you want to know the most?
Benjamin Swinburne - Morgan Stanley: Let's go to just the RSN fee. What's likely the decision on that one?
James L. Dolan - President and CEO: I mean, Madison Square Garden is not the only RSN in New York, and RSN fees are going up pretty much across the board. It's very key product but it's very expensive. And I think it's appropriate to associate the rate increase with the higher cost of regional sports. We are a separate company and so we do the – at Cablevision we do the right things for Cablevision.
Benjamin Swinburne - Morgan Stanley: Do you think that RSNs need to be moved to a tier over a longer period of time to help customers sort of manage through that cost or you think it's okay carrying them all in basic?
James L. Dolan - President and CEO: I don't think I'm going to comment on that.
Operator: Amy Young, Macquarie.
Amy Young - Macquarie Research: On the CapEx front, I think Bresnan's annual CapEx is around $90 million. So when you think about CapEx being elevated to lower than 2012 on an absolute level, can you just help us think through that dynamic?
Gregg G. Seibert - EVP and CFO: Yeah, the comment I made about the capital expenditures being budgeted lower in 2013 than the actuals in 2012 excluded Bresnan. So that is for the remaining operations of Cablevision, even though we didn't treat Bresnan as a discontinued operation in the fourth quarter because we didn't enter into our agreement to sell it until the first quarter. So, Bresnan doesn't have any impact on the comment that we have budgeted our CapEx in '13 below what our actual CapEx was in '12. That's an apples-to-apples basis.
Amy Young - Macquarie Research: Then just on the margin front, can you help us think about your ex-Bresnan and Clearview, any chance that it could go back into kind of a normalized level?
Gregg G. Seibert - EVP and CFO: First off for Clearview, for Clearview to have an impact, we have to complete the sale which we clearly haven't completed at this point in time. So, I think that would be – that's probably premature. From a margin perspective, our margins are under pressure. I think as we've pointed out, it's been a combination of increases in programming costs that are putting them under pressure and in addition, we have this nonexecutive employee compensation program, which was put in place last year around midyear. So, we'll see the full impact of the nonexecutive compensation program flow through I would say by the end of the second quarter or sometime early in the third quarter. So that will no longer be a headwind on margins. On the programming increase side, we did have some of these agreements in place in the third and fourth quarter of last year. So I think that you'll see a greater margin impact from the new programming deals in the first half of this year than you will in the second half of this year. I'm not sure if that's fully responsive, but that's what I feel we're prepared to say now.
Operator: Bryan Kraft, Evercore Partners.
Bryan Kraft - Evercore Partners: I just had a couple of questions. One on CapEx. I wanted to ask you. How does the accounting work for the repair of the storm damage? What is capitalized versus expensed and how does it shake out when you think about what you had to spend on storm restoration versus what you didn't spend on initiatives? Just trying to figure out whether CapEx was actually benefited or was worsened by the impact of the storm and also the customers for whom you suspended the collection process, how did that impact the P&L? I assume that you booked revenue through the end of the year, but then was there a corresponding increase in bad debt expense and what have you found has happened to them, generally speaking, since the end of the quarter? Have you disconnected most of those or have you actually seen most of them come back?
Gregg G. Seibert - EVP and CFO: Well, what we have in our financials is we have our best estimate as to where we would have been on December 31 with the customers who were affected by the suspension of the non-pay policy and so far our experience is tracking well against our estimate. In terms of the capitalization versus expense side, we did not have a tremendous amount of capital expenditures related to Superstorm Sandy. What we had was we had a large AOCF hit against the business. I would think that our incremental capital expenditures were in the lower single-digit million dollar range. So, it's really all AOCF impact. So, I think Jim and Kristin noted earlier, we did have some delay in the implementation of the initiatives, but I don't believe that it really had a material impact for us on capital expenditures in the fourth quarter.
Bryan Kraft - Evercore Partners: Was the $105 million in storm costs, is net of the insurance claims?
Gregg G. Seibert - EVP and CFO: We have very little insurance claim that we anticipate receiving here. The way our insurance works is that it deals with actual damage to facilities such as headends, equipment et cetera. There was a business interruption piece to that, but it does require damage and are being prevented from delivering our services as a result of the damage. As I think Jim pointed out, one of the reasons we had so many customers out in this particular storm was the fact that the power companies took time to restore power, so we have very little insurable event here.
Operator: Frank Louthan, Raymond James.
Frank Louthan - Raymond James: Can you comment on the SMB impact from Sandy; what have you seen as far as any sort of bounce back there, getting some more traction, and what is sort of the outlook there for traction with small medium business for '13?
James L. Dolan - President and CEO: I mean I think the SMB business pretty much parallel to the consumer business on it. So…
James L. Dolan - President and CEO: Yeah, and I mean I think the outlook continues to be strong. We're continuing to grow in SMB. I think at this point, operator, we're prepared to take one more questions.
Operator: Vijay Jayant, ISI Group.
Vijay Jayant - ISI Group: Given you have a lot of seasonal consumers coming to some of your markets, given Sandy's impact, do you sort of see a trend change this year given you normally see a lift in 2Q? And second, Gregg, you stopped the buyback into 1Q; what's the leverage that you want to get to on an annualized basis before you sort of come back to that?
Gregg G. Seibert - EVP and CFO: On capital return, I don't think we're looking at it in terms of having a leverage target that all of a sudden is a trigger for either increasing or reducing share repurchases. We don't really look at it that way. I will tell you that in the fourth quarter as the impact of the storm began to cycle through, it became clear to us that the prudent thing to do was to stand back, see what the impact of the storm on our business and on our financials were. So that was an easy decision and obviously our leverage did go up. But as I mentioned before, because of the latest quarter annualized impact the reported leverage is higher certainly at the parent company than it is on, what I would call, an as adjusted basis. So we are going to continue to look at the share repurchase program. Clearly, we put the dividend – the Board declared the dividend again. I don't rule a set of the share repurchase came at all, but we do have a number of things going on. We have funds coming in potentially more from the VOOM settlement, at least we hope and we have funds coming in from Bresnan. So, we're just going to time our approach to the share purchase business this year. I'm not setting out a specific leverage goal for the Company at this point in time, other than I would like it to be lower than it is today and that's where we're focused in the first quarter.
James L. Dolan - President and CEO: We're not prepared to prognosticate on the short areas in Jersey and seasonals at this point.
Gregg G. Seibert - EVP and CFO: One though I left off before when I was asked the margin question and I apologize. I think it might have been Jason who asked the question or Amy. I did leave out the fact that the price increases that we put in place this year will be cycling through the revenue line as we get further into the year and that should have a positive impact certainly on the revenue side of the equation. With that, I think, we'd like to thank you all for participating today.
Operator: Thank you. This does conclude today's conference call. You may now disconnect.