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Insight Announces Third Quarter 2007 Results
[November 05, 2007]

Insight Announces Third Quarter 2007 Results


NEW YORK --(Business Wire)-- Insight Communications Company today announced financial results for the quarter ended September 30, 2007.

"The true test of success for any business is its ability to sustain positive financial results over time," said Michael Willner, Insight's chief executive officer. "Our exceedingly strong third quarter results clearly indicate that we have established an operating business model that consistently grows RGUs at a pace that supports ongoing positive financial returns."



Third Quarter Highlights

-- Revenue of $362.3 million, an increase of 14% over Q3 2006


-- Adjusted Operating Income before Depreciation and Amortization* of $143.6 million, an increase of 15% over Q3 2006

-- Capital expenditures of $76.5 million

-- Free Cash Flow* of $13.6 million, an increase of $17.9 million over Q3 2006

-- Total Customer Relationships of 1,449,400 at September 30, 2007, an increase of 54,000 compared to 1,395,400 at September 30, 2006

-- Total Revenue Generating Units ("RGUs") of 2,993,700 at September 30, 2007, an increase of 385,000, or 15%, from September 30, 2006, comprised of:

    -- Basic customer net gain of 21,100, an improvement of 4,700
      from Q3 2006 net gain of 16,400, and the best Q3
      performance in the company's history. Total basic
      customers at quarter end were 1,362,100, representing a
      3.3% annual growth rate in basic customers from September
      30, 2006
    -- High-speed Internet ("HSI") customer net gain of 47,900, an
      increase over net additions in Q3 2006 of 44,800 and
      matching the best net gain performance in the company's
      history. Total HSI customers at quarter end were 722,800,
      a penetration of 29% of HSI homes passed.
    -- Digital customer net gain of 26,100, an increase over net
      additions in Q3 2006 of 25,500. Total digital customers at
      quarter end were 687,600, a penetration of 53% of the
      company's digital universe.
    -- Telephone customer net gain of 44,000, surpassing Q2 2007
      as the company's best growth quarter ever, and compared to
      net additions in Q3 2006 of 5,700. Total telephone
      customers at quarter end were 221,200, a penetration of
      11% of the company's telephone universe.



-- As of September 30, 2007, 98% of the company's customers were passed by two-way, 750 MHz or higher capacity upgraded network.

* See explanation of these Non-GAAP measures on p. 7. (Page 1)

Operating Results for the Three Months Ended September 30, 2007 Compared to the Three Months Ended September 30, 2006

Revenue for the three months ended September 30, 2007, totaled $362.3 million, an increase of 14% over the prior year, due primarily to RGU growth across all of Insight's services, as well as video rate increases. High-speed Internet service revenue increased 28% over the prior year, which was primarily attributable to an increased customer base, partially offset by promotional discounts. Insight added a net 47,900 high-speed Internet customers during the quarter to end at 722,800 customers.

Basic cable service revenue increased 6% due to an increased customer base and video rate increases, partially offset by promotional discounts. In addition, digital service revenue increased 22% over the prior year due to an increased customer base and a $1.23 increase in digital average revenue per customer ("ARPU"). Insight added a net 26,100 digital customers during the quarter to end at 687,600 customers.

Insight has been increasing its customer growth and retention efforts by increasing spending on sales and marketing efforts, emphasizing bundling and enhancing and differentiating its video services with video-on-demand, high-definition television and digital video recorders. The company is also continuing to focus on improving customer satisfaction through higher service levels and increased customer education of product offerings.

To increase its bundling opportunities and extend its growth potential in future years, the company successfully rolled out its telephone product in eight previously unserved districts during the second half of 2006 and in January 2007. As a result, the company added a net 44,000 telephone customers during the quarter to end at 221,200 customers. (Page 2)

Revenue by service offering was as follows for the three months ended
September 30 (dollars in thousands):
             Revenue by Service Offering
           -------------------------------------- --------
            Three       Three
            Months       Months
            Ended   % of   Ended  % of   % Change
           September Total  September Total   in
           30, 2007  Revenue 30, 2006 Revenue  Revenue
           ---------- -------- --------- -------- --------
Basic         $ 169,510  46.8% $ 159,677  50.2%   6.2%
High-speed Internet    76,994  21.2%  60,402  19.0%   27.5%
Digital          42,818  11.8%  34,979  11.0%   22.4%
Telephone         24,631   6.8%  13,249   4.2%   85.9%
Advertising        21,133   5.8%  20,024   6.3%   5.5%
Premium          13,841   3.8%  13,891   4.4%   -0.4%
Franchise fees       8,081   2.2%   7,496   2.3%   7.8%
Other           5,328   1.6%   8,387   2.6%  -36.5%
           ---------- -------- --------- -------- --------
Total         $ 362,336  100.0% $ 318,105  100.0%   13.9%
           ========== ======== ========= ======== ========



Total Customer Relationships were 1,449,400 as of September 30, 2007, an increase of 54,000 from 1,395,400 as of September 30, 2006. Total Customer Relationships represent the number of customers who receive one or more of Insight's products (i.e., basic cable, high-speed Internet or telephone) without regard to which product they purchase.

In the quarter ended September 30, 2007, Insight added 139,100 RGUs, which represent the sum of basic, digital, high-speed Internet and telephone customers, and as of September 30, 2007, had 2,993,700 RGUs, an increase of 15% from September 30, 2006.

RGUs by category were as follows (in thousands):
                September 30, 2007 September 30, 2006
                ------------------ ------------------
Basic                    1,362.1      1,318.8
High-speed Internet              722.8       579.3
Digital                    687.6       597.7
Telephone                   221.2       112.9
                ------------------ ------------------
 Total RGUs                2,993.7      2,608.7
                ================== ==================



Average monthly revenue per basic customer was $89.36 for the three months ended September 30, 2007, compared to $80.90 for the three months ended September 30, 2006. This primarily reflects the continued growth of high-speed Internet, video and telephone product offerings in all markets, as well as video rate increases.

Programming and other operating costs increased $14.5 million, or 13%. Increases in programming rates, customers and the addition of new programming content were significant drivers of the cost increase for the quarter ended September 30, 2007. (Page 3)

Other direct operating costs increased due to the increase in telephone cost of service as the company successfully rolled out this product in eight previously unserved districts during the second half of 2006 and in January 2007 and an increase in high-speed Internet service costs due to the increased customer base. Other operating costs increased primarily as a result of an increase in installation labor due to increased customer activity.

Selling, general and administrative expenses increased $14.6 million, or 17%, primarily due to increased payroll, payroll- related costs and temporary help associated with an increase in the number of employees and salary increases for existing employees. The increase in the number of employees represents investments in sales and marketing, customer care and network operations personnel to continue to upgrade and enhance Insight's product offerings, manage its increasingly complex network and increase customer satisfaction. A portion of the network operations personnel increases were in support of the company's recent telephone product launches. Partnership dissolution costs of $3.5 million recorded in the third quarter of 2007 that primarily related to Insight's planned division of its partnership with Comcast significantly contributed to the increase in selling, general and administrative expenses. Franchise fees, customer billing and collection fees increased primarily due to the increase in revenues and the customer base. Marketing expenses increased over the prior year to support the continued rollout of high-speed Internet, digital and telephone products, and to grow the company's core video customer base.

Depreciation and amortization expense increased $4.8 million, or 7%, primarily as a result of a continued high level of capital expenditures through September 30, 2007. These expenditures were primarily for purchases of customer premise equipment, installation labor and materials, capitalized labor, headend equipment, network extensions and network capacity and bandwidth increases, all of which Insight considers necessary in order to continue to maintain and grow its customer base and expand its service offerings. Partially offsetting this increase was a decrease in depreciation expense related to certain assets that have become fully depreciated since September 30, 2006.

As a result of the factors discussed above, Adjusted Operating Income before Depreciation and Amortization increased $18.7 million to $143.6 million, an increase of 15% over Q3 2006.

Interest expense decreased $7.1 million, or 11%. In October, 2006, Insight entered into a new $2.445 billion senior secured credit facility, using the proceeds to refinance its existing senior credit facility and to redeem a portion of the outstanding 9 3/4% Senior Notes and all of the outstanding 10 1/2% Senior Notes of Insight Midwest. Because of this refinancing, lower borrowing base rates and lower costs of borrowing as a result of improved leverage ratios, the company's interest rate averaged 8.0% for the three months ended September 30, 2007, as compared to 9.1% for the three months ended September 30, 2006.

Liquidity and Capital Resources

Insight's business requires cash for operations, debt service and capital expenditures. The cable television business has substantial ongoing capital requirements for the provision of new services and the construction, expansion and maintenance of its broadband networks. (Page 4)

In the past, expenditures have been made for various purposes, including the upgrade of the existing cable network, and will continue to be made for customer premise equipment (e.g., set-top boxes), installation and deployment of new product and service offerings, capitalized payroll, network capacity, bandwidth increases, network extensions, and, to a lesser extent, network upgrades. Historically, Insight has been able to meet its cash requirements with cash flow from operations, borrowings under its credit facilities and issuances of private and public debt and equity.

Cash provided by operations for the nine months ended September 30, 2007 and 2006 was $270.5 million and $200.6 million. The increase was primarily attributable to the decrease in net loss and the timing of cash receipts and payments related to working capital accounts.

Cash used in investing activities for the nine months ended September 30, 2007 and 2006 was $209.1 million and $213.5 million, and was primarily for capital expenditures. These expenditures principally constituted purchases of customer premise equipment, installation labor and materials, capitalized labor, telephony equipment, headend equipment, network extensions and network capacity and bandwidth increases, all of which are necessary to grow the customer base and expand the company's service offerings.

Cash used in financing activities for the nine months ended September 30, 2007 was $65.4 million compared to $2.4 million of cash provided by financing activities for the nine months ended September 30, 2006. The uses of cash in 2007 were primarily for the repayment of Insight's credit facility and, in 2006 cash was provided by net proceeds from borrowings under the credit facility.

Free Cash Flow for the nine months ended September 30, 2007 totaled $61.3 million, compared to ($12.7) million for the nine months ended September 30, 2006. This increase in Free Cash Flow from September 30, 2006 to September 30, 2007 of $74.0 million was primarily driven by the following:

-- A $59.6 million increase in Adjusted Operating Income before Depreciation and Amortization;

-- A $26.0 million increase in the generation of Free Cash Flow over the same period in the prior year from changes in working capital accounts; and

-- A $4.1 million decrease in capital expenditures.

These increases in cash flow were offset by:

-- A $16.2 million increase in cash interest expense paid, which was primarily driven by interest on the 12 1/4% Senior Discount Notes, which was paid in cash in February 2007, whereas in February 2006 it was paid in-kind. Partially offsetting this increase was a decrease in interest rates.

Insight believes that the Insight Midwest Holdings credit facility, cash on-hand and cash flow from operations are sufficient to support the company's current operating plan. As of September 30, 2007, Insight had the ability to draw upon $214.3 million of unused availability to fund any shortfall resulting from the inability of Insight Midwest's cash from operations to fund its capital expenditures, meet its debt service requirement or otherwise fund its operations. Insight expects to use any available Free Cash Flow to repay its indebtedness. (Page 5)

Division of Insight Midwest Partnership

Insight Midwest holds all of the cable systems served by Insight and is equally owned by Insight and Comcast. On April 1, 2007, Insight Midwest's partnership agreement was amended, and Insight and Comcast agreed on a division of the partnership's assets and liabilities. Upon completion of the transaction, Insight will own all of the cable systems serving customers in Louisville, Lexington, Bowling Green, and Covington, Ky., and in Evansville, Ind. and Columbus, Ohio. Comcast will own all of the cable systems serving customers in Rockford/Dixon, Quincy/Macomb, Springfield, Peoria, and Champaign/Urbana, Ill., and in Bloomington, Anderson, and Lafayette/Kokomo, Ind. Pending completion of the transaction, Insight continues to serve as general partner and manager of all of the cable systems of Insight Midwest. In conjunction with the division of assets and liabilities, the Insight systems group was initially allocated approximately $1.260 billion of the partnership's debt, and the Comcast systems group was initially allocated approximately $1.335 billion of the partnership's debt. The closing is subject to closing conditions, including local governmental approvals and regulatory approvals and is expected to be completed by the end of 2007.

The table below shows the company's RGU net additions for the three months ended September 30, 2007 in the Insight Systems Group and the Comcast Systems Group (in thousands).

                   Insight Systems Comcast Systems
RGU Net Additions              Group      Group
                   --------------- ---------------
Basic                       11.5       9.7
Digital                      12.9      13.2
High-speed Internet                24.4      23.5
Telephone                     25.1      18.8
                   --------------- ---------------
 Total RGUs                   73.9      65.2
                   =============== ===============



The tables below show the company's total RGUs as of September 30, 2007 and 2006 in the Insight Systems Group and the Comcast Systems Group (in thousands).

                     September 30, September 30,
Total RGUs - Insight Systems Group       2007     2006
                     ------------- -------------
Basic                       665.8     634.9
Digital                      365.6     311.2
High-speed Internet                366.7     291.2
Telephone                     164.1     112.5
                     ------------- -------------
 Total RGUs                   1,562.2    1,349.8
                     ============= =============

(Page 6)

                     September 30, September 30,
Total RGUs - Comcast Systems Group       2007     2006
                     ------------- -------------
Basic                       696.3     683.9
Digital                      322.0     286.5
High-speed Internet                356.1     288.1
Telephone                      57.1      0.4
                     ------------- -------------
 Total RGUs                   1,431.5    1,258.9
                     ============= =============



Use of Adjusted Operating Income before Depreciation and Amortization and Free Cash Flow

Insight utilizes Adjusted Operating Income before Depreciation and Amortization (defined as operating income before depreciation, amortization, non-cash stock-based compensation and partnership dissolution costs), among other measures, to evaluate the performance of its businesses. Adjusted Operating Income before Depreciation and Amortization is considered an important indicator of the operational strength of Insight's businesses and is a component of its annual compensation programs. In addition, Insight's debt agreements use Adjusted Operating Income before Depreciation and Amortization, adjusted for certain non-recurring items, in their leverage and other covenant calculations. Insight also uses this measure to determine how it will allocate resources and capital. Insight's management finds this measure helpful because it captures all of the revenue and ongoing operating expenses of its businesses and therefore provides a means to directly evaluate the ability of the business operations to generate returns and to compare operating capabilities across its businesses. This measure is also used by equity and fixed income research analysts in their reports to investors evaluating Insight's businesses and other companies in the cable television industry. Insight believes Adjusted Operating Income before Depreciation and Amortization is useful to investors because it enables them to assess its performance in a manner similar to the methods used by Insight's management and provides a measure that can be used to analyze, value and compare companies in the cable television industry that may have different depreciation, amortization and stock-based compensation policies.

A limitation of Adjusted Operating Income before Depreciation and Amortization, however, is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in Insight's businesses. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures, investment spending and Free Cash Flow. Management also evaluates the costs of capitalized tangible and intangible assets by analyzing returns provided on the capital dollars deployed. Another limitation of Adjusted Operating Income before Depreciation and Amortization is that it does not reflect income net of interest expense, which is a significant expense for the company because of the substantial debt it has incurred to acquire cable television systems and finance capital expenditures to upgrade its cable network. Management evaluates the impact of interest expense through other measures, including interest expense itself, Free Cash Flow, the returns analysis discussed above and debt service covenant ratios under Insight's credit facility.

Free Cash Flow is net cash provided by operating activities (as defined by accounting principles generally accepted in the United States) less capital expenditures. Free Cash Flow is considered to be an important indicator of Insight's liquidity, including its ability to repay indebtedness. (Page 7)

Insight believes Free Cash Flow is useful for investors because it enables them to assess Insight's ability to service its debt and to fund continued growth with internally generated funds in a manner similar to the methods used by Insight's management, and provides a measure that can be used to analyze, value and compare companies in the cable television industry.

Both Adjusted Operating Income before Depreciation and Amortization and Free Cash Flow should be considered in addition to, not as a substitute for, Operating Income, Net Income and various cash flow measures (e.g., Net Cash Provided by Operating Activities), as well as other measures of financial performance and liquidity reported in accordance with accounting principles generally accepted in the United States.

Reconciliation of Net Loss to Adjusted Operating Income before Depreciation and Amortization

The following table reconciles Net Loss to Adjusted Operating Income before Depreciation and Amortization. In addition, the table provides the components from Net Loss to Operating Income.

                 Three Months    Nine Months
               Ended September 30, Ended September 30,
               ------------------- -------------------
                2007   2006   2007   2006
               --------- --------- --------- ---------
                     (in thousands)
                      As         As
                     restated      restated
Net loss            $(10,224) $ (9,637) $(18,527) $(33,170)
Provision for income taxes    1,909   1,815   5,848   5,794
               --------- --------- --------- ---------
Loss before income taxes     (8,315)  (7,822) (12,679) (27,376)
Minority interest income
(expense)            9,907  (1,839)  24,151  (6,454)
               --------- --------- --------- ---------
Income (loss) before minority
interest and income taxes    1,592  (9,661)  11,472  (33,830)
Other (income) expense:
     Other expense      6,040    28   5,258    78
     Interest income     (309)   (366)   (880)  (1,247)
     Interest expense    58,742  65,810  173,141  188,093
               --------- --------- --------- ---------
Total other expense, net     64,473  65,472  177,519  186,924
               --------- --------- --------- ---------
Operating income         66,065  55,811  188,991  153,094
Depreciation and amortization  73,554  68,743  214,787  200,398
Partnership dissolution costs   3,479     -   9,327     -
Stock-based compensation      495    335   1,209   1,219
               --------- --------- --------- ---------
Adjusted Operating Income
before Depreciation and
Amortization         $143,593 $124,889 $414,314 $354,711
               ========= ========= ========= =========

(Page 8)

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

The following table provides a reconciliation from net cash provided by operating activities to Free Cash Flow. In addition, the table provides the components from net cash provided by operating activities to operating income.

                Three Months     Nine Months
              Ended September 30, Ended September 30,
              ------------------- ---------------------
               2007   2006    2007    2006
              --------- --------- ---------- ----------
                     (in thousands)
Operating income       $ 66,065 $ 55,811 $ 188,991 $ 153,094
  Depreciation and
   amortization       73,554  68,743  214,787  200,398
  Partnership dissolution
   costs           3,479     -   9,327     -
  Stock-based compensation   495    335   1,209   1,219
              --------- --------- ---------- ----------
Adjusted Operating Income
before Depreciation and
Amortization         143,593  124,889  414,314  354,711
  Changes in working
  capital accounts (1)    9,089  (6,918)  22,720   (3,246)
  Cash paid for interest  (62,529) (50,603) (166,251) (150,074)
  Cash paid for taxes      (26)   (64)   (285)   (755)
              --------- --------- ---------- ----------
Net cash provided by
operating activities     90,127  67,304  270,498  200,636
  Capital expenditures   (76,496) (71,544) (209,176) (213,309)
              --------- --------- ---------- ----------
Free Cash Flow        $ 13,631 $ (4,240) $ 61,322 $ (12,673)
              ========= ========= ========== ==========



(1) Changes in working capital accounts are based on the net cash changes in current assets and current liabilities, excluding changes related to interest and taxes and other non-cash expenses.

About Insight Communications

Insight Communications is the ninth largest cable operator in the United States with approximately 1.4 million customer relationships in the four contiguous states of Illinois, Kentucky, Indiana and Ohio. Insight offers bundled, state-of-the-art video, high-speed Internet and voice telephony services to its customers. # # #

Any statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. The words "estimate," "expect," "anticipate" and other expressions that indicate future events and trends identify forward-looking statements. The above forward-looking statements are subject to risks and uncertainties and are subject to change based upon a variety of factors that could cause actual results to differ materially from those Insight anticipates. Factors that could have a material and adverse impact on actual results include: all of the services offered by Insight face a wide range of competition; Insight has substantial debt and has significant interest payment requirements; upon completion of the division of Insight's joint venture with a subsidiary of Comcast Corporation it will face new challenges as a smaller company; the terms of Insight Midwest's indebtedness limits Insight's ability to access the cash flow of Insight Midwest's subsidiaries; Insight has a history of net losses; Insight's programming costs are substantial; general business conditions, economic uncertainty or slowdown, and the effects of governmental regulation; and the other risk factors described in Insight's annual report on Form 10-K and other periodic filings. Insight does not undertake any obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law. (Page 9)

        Insight Communications Company, Inc.
          Consolidated Balance Sheets
   (dollars in thousands, except share and per share amounts)
                      September 30, December 31,
                          2007     2006
                      ------------- ------------
                      (unaudited)
Assets
Cash and cash equivalents           $  39,576  $  43,573
Trade accounts receivable, net of allowance
for doubtful accounts of $1,211 and $1,148
as of September 30, 2007 and December 31,
2006                       31,957    31,060
Prepaid expenses and other current assets      8,764    8,828
                      ------------- ------------
Total current assets               80,297    83,461
Fixed assets, net                1,146,142  1,151,260
Goodwill                     187,982   187,982
Franchise costs                 2,361,959  2,361,959
Deferred financing costs, net of
accumulated amortization of $32,121 and
$29,473 as of September 30, 2007 and
December 31, 2006                 16,817    19,053
Investments                     3,137    7,000
Other non-current assets              2,567    2,941
                      ------------- ------------
Total assets                 $3,798,901  $3,813,656
                      ============= ============
               (Page 10)


        Insight Communications Company, Inc.
          Consolidated Balance Sheets
   (dollars in thousands, except share and per share amounts)
                      September 30, December 31,
                        2007     2006
                      ------------- ------------
                      (unaudited)
Liabilities and stockholders' equity
Accounts payable               $  47,135  $  43,772
Accrued expenses and other current
liabilities                   58,136    45,521
Accrued property taxes              20,133    13,595
Accrued programming costs (inclusive of
$37,323 and $30,677 due to related parties
as of September 30, 2007 and December 31,
2006)                      54,651    45,880
Deferred revenue                  1,303    2,076
Interest payable                 53,453    49,518
                      ------------- ------------
 Total current liabilities           234,811   200,362
Deferred revenue                   196     683
Deferred tax liability              218,377   212,648
Debt                      2,743,878  2,805,722
Other non-current liabilities            874      -
Minority interest                269,783   245,634
Stockholders' equity:
Voting preferred stock, $.01 par value:
 Series A - 1,000,000 shares authorized;
 848,945 shares issued and outstanding as
 of September 30, 2007 and December 31,
 2006                        8      8
 Series B - 1,000,000 shares authorized;
 517,836 shares issued and outstanding as
 of September 30, 2007 and December 31,
 2006                        5      5
Non-voting preferred stock, $.01 par value:
 Series C - 15,000,000 shares authorized;
 13,364,693 shares issued and outstanding
 as of September 30, 2007 and December
 31, 2006                     134     134
 Series D - 50,000,000 shares authorized;
 47,015,659 shares issued and outstanding
 as of September 30, 2007 and December
 31, 2006                     470     470
Non-voting common stock, $.01 par value:
 Series E - 5,000,000 shares authorized;
 3,555,497 and 3,536,247 shares issued
 and outstanding as of September 30, 2007
 and December 31, 2006               36      35
 Series F - 100,000 shares authorized;
 94,660 and 93,250 shares issued and
 outstanding as of September 30, 2007 and
 December 31, 2006                  1      1
Voting common stock, $.01 par value:
 Series G - 10,000,000 shares authorized;
 0 shares issued and outstanding as of
 September 30, 2007 and December 31, 2006      -      -
Additional paid-in-capital            827,716   826,509
Accumulated deficit               (497,388)  (478,861)
Accumulated other comprehensive income         -     306
                      ------------- ------------
 Total stockholders' equity           330,982   348,607
                      ------------- ------------
 Total liabilities and stockholders'
 equity                   $3,798,901  $3,813,656
                      ============= ============
               (Page 11)


        Insight Communications Company, Inc.
        Consolidated Statements of Operations
              (unaudited)
            (dollars in thousands)
             Three months ended   Nine months ended
               September 30,     September 30,
             --------------------- ----------------------
              2007    2006    2007    2006
             ---------- ---------- ----------- ----------
                    As           As
                   restated        restated
Revenue          $ 362,336 $318,105  $1,057,308 $ 931,103
Operating costs and
 expenses:
 Programming and other
  operating costs
  (exclusive of
  depreciation and
  amortization)
  (inclusive of $52,256
  and $155,182, and
  $47,772 and $135,110
  of programming
  expense incurred
  through related
  parties for the three
  and nine months ended
  September 30, 2007
  and 2006)        123,839  109,307   366,000  333,676
 Selling, general and
  administrative
  (inclusive of $495
  and $1,209, and $335
  and $1,219 of stock-
  based compensation
  for the three and
  nine months ended
  September 30, 2007
  and 2006)        98,878  84,244   287,530  243,935
 Depreciation and
  amortization       73,554  68,743   214,787  200,398
             ---------- --------- ----------- ----------
Total operating costs
 and expenses       296,271  262,294   868,317  778,009
             ---------- --------- ----------- ----------
Operating income      66,065  55,811   188,991  153,094
Other income (expense):
 Interest expense     (58,742) (65,810)  (173,141) (188,093)
 Interest income       309    366     880   1,247
 Other expense       (6,040)   (28)   (5,258)    (78)
             ---------- --------- ----------- ----------
Total other expense, net  (64,473) (65,472)  (177,519) (186,924)
Income (loss) before
 minority interest and
 income taxes        1,592  (9,661)   11,472  (33,830)
Minority interest income
 (expense)         (9,907)  1,839   (24,151)   6,454
             ---------- --------- ----------- ----------
Loss before income taxes  (8,315)  (7,822)   (12,679)  (27,376)
Provision for income
 taxes           (1,909)  (1,815)   (5,848)  (5,794)
             ---------- --------- ----------- ----------
Net loss          ($10,224) ($9,637)  ($18,527) ($33,170)
             ========== ========= =========== ==========
               (Page 12)


        Insight Communications Company, Inc.
        Consolidated Statement of Cash Flows
              (unaudited)
            (dollars in thousands)
                         Nine months ended
                          September 30,
                        ---------------------
                          2007    2006
                        ---------- ----------
                               As
                              restated
Operating activities:
Net loss                     ($18,527) ($33,170)
Adjustments to reconcile net loss to net cash
 provided by operating activities:
  Depreciation and amortization         214,787  200,398
  Stock-based compensation            1,209   1,219
  Minority interest               24,151   (6,454)
  Provision for losses on trade accounts
   receivable                  13,272   13,959
  Amortization of note discount          3,156   6,663
  Impairment of investment            3,863     -
  Deferred income taxes              5,729   5,728
  Loss on disposal of fixed assets        2,077     -
  Changes in operating assets and
   liabilities:
    Trade accounts receivable         (14,169)  (13,093)
    Prepaid expenses and other assets       422   (1,808)
    Accounts payable               3,363   (3,236)
    Interest payable               3,935   31,324
    Accrued expenses and other liabilities   27,230    (894)
                        ---------- ----------
Net cash provided by operating activities     270,498  200,636
                        ---------- ----------
Investing activities:
Purchase of fixed assets             (209,176) (213,309)
Sale of fixed assets                  94    572
Purchase of investments                 -    (778)
                        ---------- ----------
Net cash used in investing activities      (209,082) (213,515)
                        ---------- ----------
Financing activities:
Repayment of credit facilities          (75,000)  (62,625)
Proceeds from borrowings under credit
 facilities                    10,000   65,000
Debt issuance costs                 (412)     -
Other                         (1)     1
                        ---------- ----------
Net cash (used in) provided by financing
 activities                    (65,413)   2,376
                        ---------- ----------
Net decrease in cash and cash equivalents      (3,997)  (10,503)
Cash and cash equivalents, beginning of period   43,573   29,782
                        ---------- ----------
Cash and cash equivalents, end of period     $ 39,576 $ 19,279
                        ========== ==========
               (Page 13)


        Insight Communications Company, Inc.
            Operating Statistics
   (in thousands, except per customer and penetration data)
                      Q3    Q2    Q3
                     2007   2007   2006
                    -----------------------------
Customer Relationships          1,449.4  1,424.1  1,395.4
Total Average Monthly Revenue per Basic
Customer                $ 89.36 $ 88.27 $ 80.90
Basic Cable
----------------------------------------
Homes Passed               2,495.9  2,483.9  2,456.0
Basic Cable Customers           1,362.1  1,341.0  1,318.8
Basic Cable Penetration           56.6%   54.0%   53.7%
Cable Revenue              $169,510 $169,891 $159,677
Average Monthly Cable Revenue per Basic
Customer                $ 41.81 $ 42.18 $ 40.61
High-Speed Internet ("HSI")
----------------------------------------
H
SI Homes Passed 2,473.2 2,458.0 2,418.5 HSI Customers 722.8 674.9 579.3 HSI Penetration 29.2% 27.5% 24.0% HSI Revenue $ 76,994 $ 73,260 $ 60,402 Average Monthly HSI Revenue per Basic Customer $ 18.99 $ 18.19 $ 15.36 Average Monthly HSI Revenue per HSI Customer $ 36.72 $ 36.70 $ 36.15 Digital Cable ---------------------------------------- Digital Universe 1,296.4 1,281.3 1,255.2 Digital Customers 687.6 661.5 597.7 Digital Cable Penetration 53.0% 51.6% 47.6% Digital Revenue $ 42,818 $ 42,954 $ 34,979 Average Monthly Digital Revenue per Basic Customer $ 10.56 $ 10.66 $ 8.90 Average Monthly Digital Revenue per Digital Customer $ 21.16 $ 21.77 $ 19.93 Telephone ----------------------------------------[FEE
D_CRLF]Telephone Universe (marketable homes) 2,031.6 1,973.6 1,008.1 Telephone Customers 221.2 177.2 112.9 Telephone Penetration (to marketable homes) 10.9% 9.0% 11.2% Telephone Revenue $ 24,631 $ 20,083 $ 13,249 Average Monthly Telephone Revenue per Basic Customer $ 6.07 $ 4.99 $ 3.37 Average Monthly Telephone Revenue per Telephone Customer $ 41.22 $ 41.20 $ 40.13 Advertising Revenue ---------------------------------------- Advertising
Revenue $ 21,133 $ 21,674 $ 20,024 Average Monthly Advertising Revenue per Basic Customer $ 5.21 $ 5.38 $ 5.09 Other Revenue ---------------------------------------- Other Revenue $ 27,250 $ 27,641 $ 29,774 Average Monthly Other Revenue per Basic Customer $ 6.72 $ 6.87 $ 7.57 (Page 14)

        Insight Communications Company, Inc.
         NCTA Standard Reporting Categories
            Capital Expenditures
              (unaudited)
              (in thousands)
Insight Consolidated            Three Months Three Months
                       Ended     Ended
                     September 30, September 30,
                        2007     2006
-----------------------------------------------------------------
----- Customer Premise Equipment $ 51,784 $ 37,661 Scaleable Infrastructure 5,300 15,454 Line Extensions 6,435 7,022 Upgrade/Rebuild 6,446 3,096 Support Capital 6,531 8,311 --------------------------- Total Insight Consolidated $ 76,496 $ 71,544 --------------------------- Insight Consolidated Nine Months Nine Months Ended Ended September 30, September 30, 2007 2006 -----------------------------------------------------------------
----- Customer Premise Equipment $141,066 $123,339 Scaleable Infrastructure 18,308 28,115 Line Extensions 17,603 20,185 Upgrade/Rebuild 14,028 11,552 Support Capital 18,171 30,118 --------------------------- Total Insight Consolidated $209,176 $213,309 --------------------------- (Page 15)

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