NOTE 11.

INCOME TAXES

The Company

In general, the Company is required to use an estimated annual effective tax rate to measure the income tax expense or benefit recognized in an interim period. The estimated annual effective tax rate is revised on a quarterly basis. In addition, certain items included in income tax expense as well as the tax impact of certain items included in pretax income from continuing operations must be treated as discrete items. The income tax expense or benefit associated with these discrete items is fully recognized in the interim period in which the items occur.

The Internal Revenue Service is currently examining the Company's consolidated federal income tax returns for years 2009 and 2010. As a result, it is reasonably possible that the liabilities for uncertain tax positions as of March 31, 2013 may change by a significant amount within the next twelve months. An estimate of the change in the liabilities, while potentially significant, cannot be made.

Cablevision

Cablevision recorded income tax benefit of $17,221 related to the pretax loss attributable to continuing operations for the three months ended March 31, 2013, which included a tax benefit of $2,250 for an increase in research credits.

Cablevision recorded income tax expense of $39,137 for the three months ended March 31, 2012, reflecting an effective tax rate of 38%. A nontaxable gain at an entity that is not consolidated for income tax purposes resulted in a tax benefit of $2,889. Absent this tax benefit, the effective tax rate for the three months ended March 31, 2012 would have been 41%. Income tax expense for the three month period included tax expense of $677 relating to nondeductible expenses and tax expense of $880 resulting from an increase in the valuation allowance for certain state net operating loss carry forwards.

Subsequent to the utilization of Cablevision's net operating loss and tax credit carry forwards, payments for income taxes are expected to increase significantly. Cablevision's federal net operating loss carry forward as of March 31, 2013 was approximately $1,700,000.

CSC Holdings

CSC Holdings recorded income tax expense of $13,268 for the three months ended March 31, 2013, reflecting an effective tax rate of 35%. Income tax benefit for the three months ended March 31, 2013 included a tax benefit of $2,250 for an increase in research credits. Absent this tax benefit, the effective tax rate for the three months ended March 31, 2013 would have been 41%.

CSC Holdings recorded income tax expense of $65,381 for the three months ended March 31, 2012, reflecting an effective tax rate of 40%. A nontaxable gain at an entity that is not consolidated for income tax purposes resulted in a tax benefit of $2,889. Absent this tax benefit, the effective tax rate for the three months ended March 31, 2012 would have been 42%. Income tax expense for the three month period included tax expense of $677 relating to nondeductible expenses and tax expense of $880 resulting from an increase in the valuation allowance for certain state net operating loss carry forwards.

As of March 31, 2013, on a stand-alone basis CSC Holdings had federal net operating loss carry forwards of approximately $56,000, including a portion related to excess tax benefits that have not yet been realized, primarily 'windfall' deductions on share-based awards. On a stand-alone basis, CSC Holdings realized excess tax benefit of $1,012 during the three months ended March 31, 2013. Such excess tax benefit resulted in an increase to other member's equity. Subsequent to the utilization of CSC Holdings' net operating loss and tax credit carry forwards, obligations to Cablevision pursuant to the tax allocation policy will increase significantly.