Non-GAAP Financial Measures
Cablevision defines adjusted operating cash flow as operating income (loss) before depreciation and amortization, excluding charges or credits related to its employee stock plan, including those related to the vesting of restricted shares, variable stock options and stock appreciation rights, and restructuring charges or credits. The company believes that the exclusion of such amounts allows investors to better track the performance of the various operating units of our business without regard to the distortive effects of a fluctuating stock price (in the case of variable stock options and stock appreciation rights expense) or, in the case of restricted shares, the settlement of an obligation that will not be made in cash.
“Adjusted operating cash flow” is presented as a measure of the company’s ability to service its debt and make continuing investments, including in our capital infrastructure. The company believes adjusted operating cash flow is an appropriate measure for evaluating the operating performance of its business segments and the company on a consolidated basis. Adjusted operating cash flow and similar measures with other titles is a common performance measure used by investors, analysts and peers to compare performance in our industry. Internally, the company uses revenue and adjusted operating cash flow measures as the most important indicators of its business performance, and evaluates management’s effectiveness with specific reference to these indicators. Adjusted operating cash flow should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows, and other measures of performance presented in accordance with generally accepted accounting principles (“GAAP”). Since adjusted operating cash flow is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with other titles used by other companies. Please refer to the company’s third quarter 2003 earnings press release for a reconciliation to the comparable GAAP measures.