10-K/A

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K/A
(Amendment No. 1)

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

For the fiscal year ended December 31, 2002

Commission file number 0-26677

Insight Communications Company, Inc.
(Exact name of registrant as specified in its charter)
Delaware	13-4053502
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
810 Seventh Avenue New York, New York 10019
(Address of principal executive offices)

Registrant’s telephone number, including area code: (917) 286-2300

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Class A Common Stock, $.01 Par Value

(Title of class)

          Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   x No   o

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

          Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes   x No   o

          The aggregate market value of the common equity held by non-affiliates of the registrant as of June 28, 2002 was approximately $526.7 million.

          The number of shares of the registrant’s common stock outstanding as of February 28, 2003: 50,704,390 shares of Class A Common Stock and 9,354,468 shares of Class B Common Stock.

Documents Incorporated by Reference:

          Portions of the registrant’s proxy statement for the 2003 Annual Meeting of Stockholders are incorporated by reference into Part III.

EXPLANATORY NOTE

          Insight Communications Company, Inc. hereby amends its Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (the “Form 10-K”) (filed on March 14, 2003) as set forth in this Annual Report on Form 10-K/A (Amendment No. 1) (the “Form 10-K/A”).  This Form 10-K/A includes amendments to the following sections of the Form 10-K:

          I.          Item 6.  Selected Financial Data.  The last sentence on p. 36 reflects a change in the pro forma net loss that would have resulted from the adoption of SFAS No. 142 for the year ended December 31, 2001 to $(11.8) million.  A change has also been made on p. 38 to change the number of  “cable modem customers” under the “Ohio System” column to18,600, resulting in a change in the corresponding “Total Systems” column to 139,900.

          II.          Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.  The first sentence of the third paragraph on p. F-8 reflects a change in the pro forma net loss that would have resulted from the adoption of SFAS No. 142 for the year ended December 31, 2001 to $(11.8) million. This sentence also reflects a change in the pro forma basic and diluted loss per share attributable to common stockholders to $(.52) and $(.57) for the years ended December 31, 2001 and 2000. The table accompanying such paragraph reflects changes in the exclusion of amortization for the year ended December 31, 2001 for franchise costs to $50.3 million and for goodwill to $12.7 million, resulting in the change to the pro forma net loss.

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Item 6.        Selected Financial Data

                    In the following table, we provide you with our selected consolidated historical financial and other data.  We have prepared the consolidated selected financial information using our consolidated financial statements for the five years ended December 31, 2002. When you read this selected consolidated historical financial and other data, it is important that you read along with it the historical financial statements and related notes in our consolidated financial statements included in this report, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” also included in this report.

                    Under our franchise agreements, we are obligated to pay to local franchising authorities a percentage of our revenue derived from providing cable and other services the majority of which are passed through to customers.  We have historically recorded revenue net of franchise fees charged to our customers.  Staff Announcement D-103, issued by the FASB in November 2001, specifies that reimbursements received from a customer should be reflected as revenues and not as a reduction of expenses.  This Staff Announcement applies to financial reporting periods beginning after December 15, 2001.  Upon application of this Staff Announcement, comparative financial statements for prior periods are required to be reclassified to comply with the guidance in this Staff Announcement.  Consequently, we have reclassified the prior period amounts in the accompanying consolidated statements of operations to reflect franchise fees on a gross basis with reimbursements as revenue and payments as expense.  The effect on the prior period statements of operations was to increase both revenue and selling, general and administrative costs by $24.0 million, $13.0 million, $6.9 million and $2.0 million for each of the years ended December 31, 2001, 2000, 1999 and 1998.

                    In addition, in accordance with the adoption of SFAS No. 142, beginning January 1, 2002, we no longer record amortization expense associated with franchise costs, goodwill and other indefinite-lived intangible assets.  This change in accounting would have resulted in a net income (loss) of $(11.8) million, $(15.1) million, $(68.6) million and $142.5 million for each of the years ended December 31, 2001, 2000, 1999 and 1998.

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			Year Ended December 31,
			2002			2001			2000			1999			1998
			(dollars in thousands, except per share data)
Statement of Operations Data:
	Revenues		$	807,882		$	728,338		$	489,146		$	249,563		$	114,861
	Operating costs and expenses:
		Programming and other operating costs		274,753			258,934			170,071			73,208			30,984
		Selling, general and administrative		173,505			153,003			104,974			60,816			25,822
		Non-recurring high-speed data charges		4,116			3,785			—			—			—
		Non-cash compensation and related charges		—			—			—			19,285			—
		Depreciation and amortization		216,506			383,449			236,242			131,308			43,849
	Total operating costs and expenses			668,880			799,171			511,287			284,617			100,655
	Operating income (loss)			139,002			(70,833	)		(22,141	)		(35,054	)		14,206
	Other income (expense):
		Gain (loss) on cable systems exchange		—			34,178			(956	)		15,799			111,746
		Gain on contribution of cable systems to joint venture		—			—			—			—			44,312
		Interest expense		(204,730	)		(213,045	)		(115,524	)		(57,053	)		(31,817	)
		Interest income		2,126			7,315			5,771			6,655			3,711
		Other		(502	)		(2,320	)		(294	)		(345	)		(444	)
	Total other income (expense)			(203,106	)		(173,872	)		(111,003	)		(34,944	)		127,508
	Income (loss) before minority interest, investment activity and income taxes			(64,104	)		(244,705	)		(133,144	)		(69,998	)		141,714
	Minority interest			31,076			141,314			67,773			31,339			3,410
	Equity in losses of investees			—			(2,031	)		(3,830	)		(13,963	)		(3,251	)
	Impairment write-down of investments			(18,023	)		(9,899	)		(88,554	)		—			—
	Gain (loss) from early extinguishment of debt			3,560			(10,315	)		—			—			(3,267	)
	Gain on sale of equity investments			—			—			80,943			—			—
	Income (loss) before income taxes			(47,491	)		(125,636	)		(76,812	)		(52,622	)		138,606
	Benefit (provision) for income taxes			(501	)		50,847			33,825			(31,586	)		—
	Net income (loss)			(47,992	)		(74,789	)		(42,987	)		(84,208	)		138,606
	Accrual of preferred interests			(20,107	)		(19,432	)		(18,725	)		—			—
	Accretion of redeemable Class B common units			—			—			—			(7,118	)		(5,729	)
	Net income (loss) attributable to common stockholders		$	(68,099	)	$	(94,221	)	$	(61,712	)	$	(91,326	)	$	132,877
	Basic income (loss) per share attributable to common stockholders		$	(1.13	)	$	(1.57	)	$	(1.03	)	$	(2.58	)	$	6.55
	Diluted income (loss) per share attributable to common stockholders			(1.13	)		(1.57	)		(1.03	)		(2.58	)		4.61

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		Year Ended December 31,
		2002			2001			2000			1999			1998
		(dollars in thousands)
Other Financial Data:
	OCF  (1)	$	359,624		$	316,401		$	214,101		$	115,539		$	58,055
	OCF Margin  (2)		44.5	%		43.4	%		43.8	%		46.3	%		50.5	%
	Capital expenditures		283,004			325,581			262,241			135,929			44,794
	Net cash provided by operating activities		175,296			161,325			91,632			96,448			44,760
	Net cash used in investing activities		293,390			802,875			279,810			516,487			142,190
	Net cash provided by (used in) financing activities		(5,604	)		806,365			108,400			513,648			116,250
Balance Sheet Data:
	Cash and cash equivalents	$	74,850		$	198,548		$	33,733		$	113,511		$	19,902
	Property, plant and equipment, net		1,220,251			1,151,709			820,888			643,138			155,412
	Total assets		3,789,062			3,867,392			2,244,586			1,989,470			660,916
	Total debt, including preferred interests		2,772,824			2,728,189			1,552,804			1,233,000			573,663
	Partners’ (deficit)/stockholders’ equity		578,145			646,030			540,680			588,060			(7,928	)

		As of December 31, 2002, except where noted
		Indiana Systems			Kentucky Systems			Illinois Systems (3)			Ohio System			Managed Systems (4)			Total Systems
Technical Data:
	Network miles		8,700			9,300			7,700			2,600			3,400			32,000
	Number of headends		16			6			22			1			17			62
	Number of headends expected upon completion of upgrades during 2003  (5)		11			5			19			1			N/A			51
	Number of headends serving 95% of our customers expected upon completion of our upgrades (5)		3			4			6			1			N/A			14
Operating Data:
	Homes passed (6)		569,200			783,100			687,800			198,700			197,600			2,436,400
	Basic customers (7)		326,000			449,100			413,700			88,100			114,600			1,391,500
	Basic penetration (8)		57.3	%		57.4	%		60.2	%		44.3	%		58.0	%		57.1	%
	Digital ready homes (9)		299,300			446,700			395,400			81,700			17,100			1,240,200
	Digital customers (10)		77,000			143,400			82,800			29,400			2,800			335,400
	Digital penetration (11)		25.7	%		32.1	%		20.9	%		35.9	%		16.2	%		26.9	%
	Premium units (12)		131,500			233,800			188,100			64,400			29,600			647,400
	Premium penetration (13)		40.3	%		52.1	%		47.0	%		73.0	%		25.8	%		46.6	%
	Cable modem customers (14)		35,600			51,500			30,900			18,600			3,300			139,900

(1) Operating Cash Flow (“OCF”) represents operating income or loss before depreciation and amortization, non-recurring high-speed data costs and non-cash compensation and related charges.  We believe that OCF is commonly used in the cable television industry to analyze and compare cable television companies on the basis of operating performance, leverage and liquidity.  However, OCF is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, either operating income or net income as an indicator of operating performance or cash flows as a measure of liquidity, as determined in accordance with accounting principles generally

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	accepted in the United States.  Refer to our consolidated financial statements, including our consolidated statements of cash flows, which appear elsewhere in this report.
(2)	Represents operating cash flow a percentage of total revenues.
(3)	Does not include the Griffin, Georgia system which was sold to an affiliate of Comcast Cable on February 28, 2003.
(4)	Projections for capital expenditures related to managed system rebuilds are subject to approval by Comcast Cable.  Includes the New Albany and Shelbyville systems which we purchased from an affiliate of Comcast Cable on February 28, 2003.
(5)	The upgrades of the Illinois systems acquired in 2001 are scheduled to be substantially completed by mid-2003.
(6)	Homes passed are the number of single residence homes, apartments and condominium units passed by the cable distribution network in a cable system’s service area.
(7)	Basic customers are customers of a cable television system who receive a package of over-the-air broadcast stations, local access channels and certain satellite-delivered cable television services, other than premium services, and who are usually charged a flat monthly rate for a number of channels.
(8)	Basic penetration means basic customers as a percentage of total number of homes passed.
(9)	Digital ready homes means the total number of homes passed to which digital service is available.
(10)	Customers with a digital converter box.
(11)	Digital penetration means digital service units as a percentage of digital ready homes.
(12)	Premium units mean the number of subscriptions to premium services, which are paid for on an individual unit basis.
(13)	Premium penetration means premium service units as a percentage of the total number of basic customers. A customer may purchase more than one premium service, each of which is counted as a separate premium service unit. This ratio may be greater than 100% if the average customer subscribes to more than one premium service unit.
(14)	Customers receiving high-speed Internet service.

Item 15.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K

                    (a)     Financial Statements:

                    Our financial statements, as indicated by the Index to Consolidated Financial Statements set forth below, begin on page F-1 of this Form 10-K, and are hereby incorporated by reference. Financial statement schedules have been omitted because they are not applicable or the required information is included in the financial statements or notes thereto.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
Report of Independent Auditors		F-1
Insight Communications Company, Inc.
	Consolidated Balance Sheets as of December 31, 2002 and 2001	F-2
Insight Communications Company, Inc.
	Consolidated Statements of Operations for the years ended December 31, 2002, 2001 and 2000	F-3
Insight Communications Company, Inc.
	Consolidated Statements of Changes in Stockholders’Equity for the years ended December 31, 2002, 2001 and 2000	F-4
Insight Communications Company, Inc.
	Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000	F-5
Insight Communications Company, Inc.
	Notes to Consolidated Financial Statements	F-6

(b)     Reports on Form 8-K:
We filed the following reports on Form 8-K during the fourth quarter of the year ended December 31, 2002:
	1.		On December 10, 2002 relating to forward-looking statements with respect to 2003.
	2.	On December 13, 2002 relating to the announcement of a debt offering by Insight Midwest, L.P. and Insight Capital, Inc., as presented in press releases of December 11, 2002 and December 13, 2002.
		(c)     Exhibits:

Exhibit Number		Exhibit Description
	2.1	Purchase and Option Agreement, dated as of August 8, 2000, among Coaxial Communications of Central Ohio, Inc., Insight Communications of Central Ohio, LLC, Insight Holdings of Ohio, LLC, Insight Communications Company, L.P., Insight Communications Company, Inc., Coaxial LLC, Coaxial DJM LLC, Coaxial DSM LLC, Barry Silverstein, Dennis J. McGillicuddy, and D. Stevens McVoy (1)
	2.2	Asset Contribution Agreement, dated August 15, 2000, by and among, Command Cable of Eastern Illinois Limited Partnership, MediaOne of Illinois, Inc., Northwest Illinois TV Cable Company, S/D Cable Partners, Ltd., TCI American Cable Holdings, L.P., TCI of

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	Bloomington/Normal, Inc., TCI Cablevision of Texas, Inc., UACC Midwest, Inc., United Cable Television of Illinois Valley, Inc., United Cable Television of Southern Illinois, Inc., TCI of Indiana Holdings, LLC, Insight Communications Company, L.P. and Insight Midwest, L.P. (“Asset Contribution Agreement”) (2)
2.3	Amendment to the Asset Contribution Agreement, dated January 5, 2001 (3)
2.4	Asset Exchange Agreement, dated August 15, 2000, by and between MediaOne of Illinois, Inc. and Insight Communications Company, L.P. (“Asset Exchange Agreement”) (2)
2.5	Amendment to the Asset Exchange Agreement, dated January 5, 2001 (3)
2.6	Asset Purchase and Sale Agreement, dated August 15, 2000, by and between TCI of Illinois, Inc., TCI of Racine, Inc., UACC Midwest, Inc. and Insight Communications Company, L.P. (“Asset Purchase and Sale Agreement”) (2)
2.7	Amendment to the Asset Purchase and Sale Agreement, dated January 5, 2001 (3)
3.1	Restated Certificate of Incorporation of Registrant (4)
3.2	By-laws of Registrant (4)
10.1	1999 Equity Incentive Plan of Registrant (amends and restates 1999 Stock Option Plan)*
10.2	Credit Agreement, dated as of January 5, 2001, among Insight Midwest Holdings, LLC, several banks and financial institutions or entities, and The Bank of New York, as administrative agent (“Credit Agreement”) (3)
10.2A	Amendment No. 1 to Credit Agreement*
10.2B	Amendment No. 2 to Credit Agreement (5)
10.3	Second Amended and Restated Operating Agreement of Insight Communications Midwest, LLC, dated as of January 5, 2001(6)
10.4	Amended and Restated Management Agreement by and between Insight Communications of Indiana, LLC (now known as Insight Communications Midwest, LLC) and Insight Communications Company, L.P., dated as of October 1, 1999 (7)
10.5	First Amendment to Amended and Restated Management Agreement dated as of January 5, 2001, by and between Insight Communications Midwest, LLC and Insight Communications Company, L.P.(6)
10.6	Amended and Restated Limited Partnership Agreement of Insight Kentucky Partners II, L.P., dated as of October 1, 1999(6)
10.7	First Amendment to Amended and Restated Limited Partnership Agreement of Insight Kentucky Partners II, L.P., dated as of January 5, 2001(6)
10.8	Management Agreement by and between Insight Kentucky Partners II, L.P. and Insight Communications Company, L.P., dated as of October 1, 1999 (7)
10.9	Amended and Restated Operating Agreement of Insight Ohio, dated as of August 8, 2000 (1)
10.10	Amended and Restated Limited Partnership Agreement of Insight Midwest, L.P., dated January 5, 2001 (3)
10.10A	First Amendment to Amended and Restated Limited Partnership Agreement of Insight Midwest, L.P., dated September 30, 2002 (8)
10.11	Indenture relating to 9 ¾% senior notes of Insight Midwest, L.P. and Insight Capital, Inc., dated as of October 1, 1999 (9)
10.12	Indenture relating to 10½ senior notes of Insight Midwest, L.P. and Insight Capital, Inc., dated as of November 6, 2000(6)
10.13	Indenture relating to 10% senior notes of Coaxial Communications of Central Ohio, Inc. and Phoenix Associates, dated as of August 21, 1998 (10)
10.14	Indenture relating to 12 7/8% senior discount notes of Coaxial LLC and Coaxial Financing Corp., dated as of August 21, 1998 (11)
10.15	Indenture relating to 12.25% senior discount notes of Registrant, dated as of February 6, 2001(6)

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10.16	Revolving Credit Agreement dated as of October 7, 1998 among Insight Communications of Central Ohio, LLC, several banks and financial institutions or entities, and Canadian Imperial Bank of Commerce, as administrative agent  (“Insight Ohio Credit Agreement”) (11)
10.16A	First Amendment to Insight Ohio Credit Agreement, dated as of June 30, 2000 (12)
10.16B	Second Amendment to Insight Ohio Credit Agreement, dated as of June 30, 2000 (12)
10.16C	Third Amendment to Insight Ohio Credit Agreement, dated as of March 4, 2002 (12)
10.17	Security holders Agreement by and among Registrant, Vestar Capital Partners III, L.P., Sandler Capital Partners IV, L.P., Sandler Capital Partners IV FTE, L.P., Sidney R. Knafel, Michael S. Willner, Kim D. Kelly and Senior Management Securityholders, dated as of May 11, 1999, with Side Letter Agreement by and among Insight Communications Company, L.P., Vestar Capital Partners III, L.P., Sidney R. Knafel, Michael S. Willner, Kim D. Kelly, Sandler Capital Partners IV, L.P. and Sandler Capital Partners IV FTE, L.P., dated May 11, 1999 (the “Letter Agreement”) (4)
10.18	Amendment, dated July 16, 1999 to the Letter Agreement (4)
10.19	Cable Facilities Lease Agreement, dated July 17, 2000, among AT&T Broadband, LLC, Registrant and certain of Registrant’s affiliates (portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment) (1)
10.20	Amended and Restated Consulting Agreement, dated as of March 17, 2000, by and between InterMedia Partners Southeast and Insight Communications Company, L.P.(7)
10.21	Asset Exchange Agreement, dated September 30, 2002, between InterMedia Partners Southeast and Insight Communications Midwest, LLC (8)
10.22	Form of Amended and Restated Non-Recourse Secured Promissory Note, dated December 23, 2002*
10.23	Agreement, dated as of December 23, 2002, by and between Kim D. Kelly, Registrant and certain stockholders*
21.1	Subsidiaries of the Registrant (13)
23.1	Consent of Ernst & Young LLP

*Previously filed.
(1)	Filed as an exhibit to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 and incorporated herein by reference.
(2)	Filed as an exhibit to Registrant’s Current Report on Form 8-K, dated August 15, 2000, and incorporated herein by reference.
(3)	Filed as an exhibit to Registrant’s Current Report on Form 8-K, dated January 5, 2001, and incorporated herein by reference.
(4)	Filed as an exhibit to Registrant’s Registration Statement on Form S-1 (Registration Statement No. 333-78293) and incorporated herein by reference.
(5)	Filed as an exhibit to Registrant’s Quarterly Report on form 10-Q for the quarterly period ended June 30, 2002 and incorporated herein by reference.
(6)	Filed as an Exhibit to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference.
(7)	Filed as an exhibit to the Registration Statement on Form S-4 of Insight Midwest, L.P. and Insight Capital, Inc. (Registration No. 333- 33540) and incorporated herein by reference.
(8)	Filed as an exhibit to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002 and incorporated herein by reference.
(9)	Filed as an exhibit to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference.

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(10)	Filed as an exhibit to the Registration Statement on Form S-4 of Coaxial Communications of Central Ohio, Inc., Phoenix Associates and Insight Communications of Central Ohio, LLC (Registration No. 333- 63677) and incorporated herein by reference.
(11)	Filed as an exhibit to the Registration Statement on Form S-4 of Coaxial LLC, Coaxial Financing Corp., and Insight Communications of Central Ohio, LLC (Registration No. 333- 64449) and incorporated herein by reference.
(12)	Filed as an exhibit to Insight Ohio’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002 and incorporated herein by reference.
(13)	Filed as an exhibit to Registrant’s Annual Report on Form 10–K for the year ended December 31, 2001 and incorporated herein by reference.

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Report of Independent Auditors

The Stockholders and Board of Directors
Insight Communications Company, Inc.

We have audited the accompanying consolidated balance sheets of Insight Communications Company, Inc. (the “Company”) as of December 31, 2002 and 2001, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2002.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2002 and 2001, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

As discussed in Note 2, the Company changed its method of accounting for Goodwill and Other Intangible Assets effective January 1, 2002.

/s/ ERNST & YOUNG LLP

New York, New York
February 25, 2003

F-1

INSIGHT COMMUNICATIONS COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)

		December 31, 2002			December 31, 2001
Assets
Cash and cash equivalents		$	74,850		$	198,548
Investments			3,666			18,080
Trade accounts receivable, net of allowance for doubtful accounts of $1,296 and $2,818 as of December 31, 2002 and 2001			25,725			22,918
Launch funds receivable			5,197			12,980
Prepaid expenses and other assets			16,177			18,363
	Total current assets		125,615			270,889
Fixed assets, net			1,220,251			1,151,709
Goodwill			72,965			72,675
Franchise costs			2,331,282			2,324,263
Deferred financing costs, net of accumulated amortization of $9,030 and $5,259 as of December 31, 2002 and 2001			33,298			32,294
Other non-current assets			5,651			15,562
	Total assets	$	3,789,062		$	3,867,392
Liabilities and stockholders’ equity
Accounts payable		$	47,220		$	67,095
Accrued expenses and other liabilities			23,035			23,793
Accrued property taxes			14,428			11,030
Accrued programming costs			34,922			24,287
Deferred revenue			4,132			8,673
Interest payable			24,685			21,940
Debt – current portion			5,000			—
Preferred interest distribution payable			5,250			5,250
	Total current liabilities		158,672			162,068
Deferred revenue			6,533			12,262
Debt			2,576,004			2,542,476
Other non-current liabilities			53,085			62,964
Minority interest			224,803			255,879
Preferred interests			191,820			185,713
Stockholders’ equity:
Preferred stock; $.01 par value; 100,000,000 shares authorized; no shares issued and outstanding as of December 31, 2002 and 2001			—			—
Common stock; $.01 par value:
	Class A - 300,000,000 shares authorized; 50,704,390 and 50,266,162 shares issued and outstanding as of December 31, 2002 and 2001		507			502
	Class B - 100,000,000 shares authorized; 9,354,468 and 9,977,537 shares issued and outstanding as of December 31, 2002 and 2001		93			100
Additional paid-in-capital			829,873			851,936
Accumulated deficit			(237,956	)		(189,964	)
Deferred stock compensation			(5,882	)		—
Accumulated other comprehensive loss			(8,490	)		(16,544	)
	Total stockholders’ equity		578,145			646,030
	Total liabilities and stockholders’ equity	$	3,789,062		$	3,867,392

See accompanying note

F-2

INSIGHT COMMUNICATIONS COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

		Year Ended December 31,
			2002			2001			2000
Revenue		$	807,882		$	728,338		$	489,146
Operating costs and expenses:
	Programming and other operating costs		274,753			258,934			170,071
	Selling, general and administrative		173,505			153,003			104,974
	Non-recurring high-speed data charges		4,116			3,785			—
	Depreciation and amortization		216,506			383,449			236,242
Total operating costs and expenses			668,880			799,171			511,287
Operating income (loss)			139,002			(70,833	)		(22,141	)
Other income (expense):
	Gain (loss) on cable systems exchange		—			34,178			(956	)
	Interest expense		(204,730	)		(213,045	)		(115,524	)
	Interest income		2,126			7,315			5,771
	Other		(502	)		(2,320	)		(294	)
Total other expense, net			(203,106	)		(173,872	)		(111,003	)
Loss before minority interest, investment activity and income taxes			(64,104	)		(244,705	)		(133,144	)
Minority interest			31,076			141,314			67,773
Equity in losses of investees			—			(2,031	)		(3,830	)
Impairment write-down of investments			(18,023	)		(9,899	)		(88,554	)
Gain (loss) from early extinguishment of debt			3,560			(10,315	)		—
Gain on sale of equity investment			—			—			80,943
Loss before income taxes			(47,491	)		(125,636	)		(76,812	)
Benefit (provision) for income taxes			(501	)		50,847			33,825
Net loss			(47,992	)		(74,789	)		(42,987	)
Accrual of preferred interests			(20,107	)		(19,432	)		(18,725	)
Net loss attributable to common stockholders		$	(68,099	)	$	(94,221	)	$	(61,712	)
Basic and diluted loss per share attributable to common stockholders		$	(1.13	)	$	(1.57	)	$	(1.03	)
Basic and diluted weighted average shares outstanding			60,284			60,202			59,703

See accompanying note

F-3

INSIGHT COMMUNICATIONS COMPANY, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands)

			Common Stock			Additional Paid-in Capital			Accumulated Deficit			Deferred Stock Compensation			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 31, 1999				594			656,486			(72,188	)		—			3,168			588,060
		Net loss								(42,987	)								(42,987	)
		Realization of impairment of investments														(3,168	)		(3,168	)
		Total comprehensive loss																	(46,155	)
		Issuance of common stock in acquisition of equity interest		8			17,492												17,500
		Accrual of preferred interests					(18,725	)											(18,725	)
Balance at December 31, 2000				602			655,253			(115,175	)		—			—			540,680
	Net loss									(74,789	)								(74,789	)
	Unrealized loss on investments															(3,118	)		(3,118	)
	Transition adjustment loss on adoption of SFAS No. 133, net of tax															(1,108	)		(1,108	)
	Unrealized loss on interest rate swaps, net of tax															(12,318	)		(12,318	)
	Total comprehensive loss																		(91,333	)
	Issuance of common stock to 401(k) plan						768												768
	Issuance of common stock through exercise of stock options and as stock compensation						399												399
	Contribution of capital associated with AT&T transactions (Note 3)						214,948												214,948
	Accrual of preferred interests						(19,432	)											(19,432	)
Balance at December 31, 2001				602			851,936			(189,964	)		—			(16,544	)		646,030
	Net loss									(47,992	)								(47,992	)
	Unrealized loss on investments															(8,904	)		(8,904	)
	Realization of impairment of investments															12,023			12,023
	Unrealized gain on interest rate swaps															4,935			4,935
	Total comprehensive loss																		(39,938	)
	Acquisition of common stock in satisfaction of employee loan			(7	)		(9,576	)											(9,583	)
	Issuance of common stock to employees			4			5,769						(5,882	)					(109	)
	Issuance of common stock to 401(k) plan			1			1,851												1,852
	Accrual of preferred interests						(20,107	)											(20,107	)
Balance at December 31, 2002			$	600		$	829,873		$	(237,956	)	$	(5,882	)	$	(8,490	)	$	578,145

See accompanying notes

F-4

INSIGHT COMMUNICATIONS COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

				Year Ended December 31,
				2002			2001			2000
Operating activities:
	Net loss			$	(47,992	)	$	(74,789	)	$	(42,987	)
	Adjustments to reconcile net loss to net cash
	Provided by operating activities:
		Depreciation and amortization			216,506			383,449			236,242
		Equity in losses of investees			—			2,031			3,830
		Impairment of investments			18,023			9,899			88,554
		Loss (gain) on cable systems exchange			—			(34,178	)		956
		Loss (gain) from early extinguishment of debt			(3,560	)		10,315			—
		Gain on sale of equity investment			—			—			(80,943	)
		Minority interest			(31,076	)		(141,314	)		(67,774	)
		Provision for losses on trade accounts receivable			13,386			12,093			8,655
		Non-cash compensation			124			—			—
		Contribution of common stock to 401(k) plan			1,852			768			—
		Amortization of note discount			31,736			24,770			(722	)
		Deferred income taxes			—			(51,495	)		(33,825	)
		Changes in operating assets and liabilities, net of the effect of acquisitions:
			Trade accounts receivable		(15,871	)		(13,375	)		(14,012	)
			Launch fund receivable		7,783			3,111			(9,052	)
			Prepaid expenses and other assets		2,713			(5,631	)		2,111
			Accounts payable		(20,003	)		20,937			(7,409	)
			Accrued expenses and other liabilities		1,675			14,734			8,008
	Net cash provided by operating activities				175,296			161,325			91,632
Investing activities:
	Purchase of fixed assets				(283,004	)		(325,581	)		(262,241	)
	Purchase of intangible assets				(1,588	)		(3,069	)		(3,978	)
	Investment in equity securities				—			(10,725	)		(11,873	)
	Purchase of cable television systems, net of cash acquired				(8,798	)		(463,500	)		(1,718	)
	Net cash used in investing activities				(293,390	)		(802,875	)		(279,810	)
Financing activities:
	Distributions of preferred interests				(14,000	)		(14,000	)		(14,000	)
	Proceeds from borrowings under credit facilities				131,000			1,580,000			124,400
	Repayment of credit facilities				(273,000	)		(654,900	)		(488,500	)
	Proceeds from issuance of notes				179,995			220,084			492,500
	Repayment of debt associated with cable system transactions				—			(306,158	)		—
	Purchase of senior discount notes				(23,220	)		—			—
	Debt issuance costs				(5,535	)		(18,310	)		(6,000	)
	Principal payments on capital leases and other non-current liabilities				(844	)		(574	)		—
	Exercise of stock options				—			223			—
	Net cash provided by (used in) financing activities				(5,604	)		806,365			108,400
Net change in cash and cash equivalents					(123,698	)		164,815			(79,778	)
Cash and cash equivalents, beginning of year					198,548			33,733			113,511
Cash and cash equivalents, end of year				$	74,850		$	198,548		$	33,733

See accompanying notes

F-5

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Presentation

Through our wholly owned subsidiary, Insight Communications Company, L.P. (“Insight LP”), we own a 50% interest in Insight Midwest, L.P. (“Insight Midwest”), which through its subsidiaries, Insight Communications Midwest, LLC (“Insight Communications Midwest”), Insight Communications of Kentucky, L.P. (“Insight Kentucky”) and Insight Communications of Central Ohio, LLC (“Insight Ohio”), owns and operates cable television systems in Indiana, Kentucky, Ohio, Illinois and Georgia which passed approximately 2.3 million homes and served approximately 1.3 million customers as of December 31, 2002. 

Insight LP is the general partner of Insight Midwest.  Through Insight LP, we manage all of Insight Midwest’s systems and also manage certain systems owned by an affiliate of AT&T Broadband, LLC (now known as Comcast Cable Holdings, LLC, “Comcast Cable”), the owner of the remaining 50% interest in Insight Midwest. 

In November 2002, AT&T Broadband and Comcast Corporation merged their respective cable systems and certain other assets. The transaction did not result in any direct change in Insight Midwest’s ownership structure and we continue to serve as the general partner of Insight Midwest and as the manager of all of Insight Midwest’s systems. 

Our other wholly owned subsidiary, Insight Interactive LLC, owns a 100% equity interest in SourceSuite LLC the results of which have been consolidated as of January 1, 2002 as a result of Insight Interactive’s acquisition of the remaining 50% equity interest from Source Media, Inc. in March 2002. 

2. Significant Accounting Policies

Basis of Consolidation

The consolidated financial statements include our accounts and those of our wholly owned subsidiaries.   Although Insight Midwest is equally owned by Insight LP and an indirect subsidiary of Comcast Cable, Insight LP, as the general partner of Insight Midwest, effectively controls all its operating and financial decisions.  Accordingly, the results of Insight Midwest are included in our consolidated financial statements.  The minority interest represents Comcast’s 50% ownership interest in Insight Midwest.  Intercompany balances and transactions have been eliminated in consolidation.

Revenue Recognition

Revenue is earned from customer fees for cable television programming services including premium, digital and pay-per-view services and ancillary services, such as rental of converters and remote control devices, installations and from selling advertising.  In addition, we earn revenues from providing high-speed data services and from facilitating the delivery of telephone services as well as from commissions for products sold through home shopping networks and management fees.  Revenue is recorded in the month the related services are rendered.

F-6

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Significant Accounting Policies (continued)

Use of Estimates

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

Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents.

Investments

All marketable equity investments are classified as available-for-sale under Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities”.  In accordance with SFAS No. 115, available-for-sale securities are carried at fair value, with unrealized gains and losses, net of income taxes, reported as a separate component of stockholders’ equity.  Fair value is based on quoted market prices.  All other equity investments for which a quoted market price is unavailable are carried at cost and periodically reviewed for impairment. 

Fixed Assets

Fixed assets are stated at cost and include costs capitalized for labor and overhead incurred in connection with the installation of cable system infrastructures, including those providing high-speed data and telephone services.  In addition, we capitalize labor and material costs associated with installations related to new services on customer premises.  Depreciation for buildings, cable system equipment, furniture, fixtures and office equipment is calculated using the straight-line method over estimated useful lives ranging from 2 to 30 years.  Building improvements are amortized using the straight-line method over the shorter of the remaining terms of the leases or the estimated lives of the improvements. 

The carrying value of fixed assets is reviewed if facts and circumstances suggest that they may be impaired.  If this review indicates that the carrying value of the fixed assets will not be recovered from undiscounted future cash flows generated from such assets, an impairment loss would be recognized for the amount that the asset’s carrying value exceeds its fair value.  We believe that no impairment of fixed assets existed as of December 31, 2002 or 2001.

F-7

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Significant Accounting Policies (continued)

Franchise Costs and Goodwill

Costs incurred in negotiating and renewing franchise agreements are capitalized and were amortized over the life of the franchise agreements through December 31, 2001.  Franchise costs and goodwill acquired through the purchase of cable television systems were amortized using the straight-line method over a period of up to 15 years.  As of January 1, 2002, in connection with our adoption of SFAS No. 142, we no longer amortize franchise costs or goodwill.  We recorded amortization expense of $4.7 million, $200.9 million and $100.3 million for the years ended December 31, 2002, 2001 and 2000.  We estimate aggregate amortization expense to be approximately $5.5 million for each of the five succeeding fiscal years, primarily relating to deferred financing costs.

SFAS No. 142 requires that goodwill and indefinite-lived intangible assets be tested annually for impairment using a two-step process.  The first step is to identify a potential impairment and the second step measures the amount of the impairment loss, if any.  Based on our analysis, there was no impairment of goodwill or franchise costs upon the adoption of SFAS No. 142 on January 1, 2002 or on October 1, 2002, the date on which we performed our first annual impairment test.

Applying the effects of the adoption of SFAS No. 142 to the years ended December 31, 2001 and 2000, would have resulted in net loss of $(11.8) million and $(15.1) million and basic and diluted loss per share attributable to common stockholders of $(.52) and $(.57).  The reconciliation of reported net loss to pro forma net loss as adjusted for the effects of SFAS No. 142 for the years ended December 31, 2001 and 2000 is as follows (in thousands):

			Year Ended December 31, 2001			Year Ended December 31, 2000
Net loss as reported			$	(74,789	)	$	(42,987	)
Exclude amortization, net of minority interest and taxes for:
		Franchise costs		50,308			23,827
		Goodwill		12,688			4,052
	Pro forma net loss		$	(11,793	)	$	(15,108	)

In August 2001, the Financial Accounting Standards Board issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which became effective for us beginning January 1, 2002.  SFAS No. 144 supersedes SFAS No. 121, “Accounting for the Impairment or Disposal of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” and the accounting and reporting provisions relating to the disposal of a segment of a business of Accounting Principles Board Opinion No. 30.  The adoption of SFAS No. 144 had no impact on our consolidated financial position or results of operations.

F-8

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Significant Accounting Policies (continued)

Deferred Financing Costs

Deferred financing costs relate to costs, primarily legal and bank facility fees, incurred in securing bank loans and other sources of financing.  These costs are amortized over the life of the applicable debt. 

Stock-Based Compensation

We have elected to use the intrinsic value method under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB No. 25”), to account for stock-based compensation. Under APB No. 25, compensation expense is recognized only when the exercise price of options is below the market price of the underlying stock on the date of grant.  Such costs are deferred and recognized ratably as compensation expense over the vesting period.  The following table summarizes relevant information as to reported results under our intrinsic value method of accounting for stock awards, with supplemental information, as if the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” had been applied for each of the three years ended December 31, 2002.  The following assumptions were used in determining the fair values: weighted average risk-free interest rate – 4.00% (2002), 4.50% (2001) and 6.25% (2000); stock price volatility of 50% in all years; dividend yield of 0% in all years; and expected option life of seven years in all years (in thousands, except share data):

	2002			2001			2000
Net loss attributable to common stockholders	$	(68,099	)	$	(94,221	)	$	(61,712	)
Stock-based compensation as reported, net of tax		124			56			—
Stock-based compensation determined under fair value based method for all awards, net of tax		(4,175	)		(748	)		(400	)
Adjusted net loss attributable to common stockholders	$	(72,150	)	$	(94,913	)	$	(62,112	)
Basic and diluted net loss per share, as reported	$	(1.13	)	$	(1.57	)	$	(1.03	)
Basic and diluted net loss per share, SFAS 123 adjusted	$	(1.20	)	$	(1.58	)	$	(1.04	)

Comprehensive Loss

We own certain investments that are classified as available-for-sale and reported at market value, with net unrealized gains and losses recorded as components of comprehensive loss.  Additionally, we record the effective portion of certain derivatives’ net unrealized gains and losses as components of comprehensive loss.  Comprehensive loss is presented in the accompanying consolidated statements of changes in stockholders’ equity.  The cumulative amount of comprehensive loss is presented in the accompanying consolidated balance sheets as accumulated other comprehensive loss.

F-9

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Significant Accounting Policies (continued)

Loss Per Share

Basic loss per share is computed using average shares outstanding during the period.  Diluted loss per share is equal to basic loss per share as we had generated net losses for the years ended December 31, 2002, 2001 and 2000, thereby making the potential effects of dilutive securities anti-dilutive.  Securities that could potentially dilute basic earnings per share in the future include stock options.

Income Taxes

Deferred income taxes are provided for using the liability method. Under this approach, differences between the financial statements and tax bases of assets and liabilities are determined annually, and deferred income tax assets and liabilities are recorded for those differences that have future tax consequences. Valuation allowances are established, if necessary, to reduce deferred tax assets to an amount that will more likely than not be realized in future periods.  Income tax expense is comprised of the current tax payable or refundable for the period plus or minus the net change in deferred tax assets and liabilities.

Marketing and Promotional

Marketing and promotional costs are expensed as incurred.  Marketing and promotional expenses for the years ended December 31, 2002, 2001 and 2000 were $12.7 million, $14.8 million and $ 13.8 million.

Recent Accounting Pronouncements

In May 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections”.  SFAS No. 145 eliminates the requirement under SFAS No. 4, “Reporting Gains and Losses from Extinguishment of Debt”, to report gains and losses from extinguishments of debt as extraordinary items in the income statement.  Accordingly, gains or losses from extinguishments of debt for fiscal years beginning after May 15, 2002 shall not be reported as extraordinary items unless the extinguishment qualifies as an extraordinary item under the provisions of APB Opinion No. 30, “Reporting the Results of Operations – Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions”.  Upon adoption of this pronouncement, any gain or loss on extinguishment of debt previously classified as an extraordinary item in prior periods presented that does not meet the criteria of APB Opinion No. 30 for such classification should be reclassified to conform to the provisions of SFAS No. 145.  In connection with our adoption of this pronouncement on December 31, 2002, we reclassified a loss from early extinguishment of debt of $10.3 million ($6.1 million net of tax) recorded during the year ended December 31, 2001 and a gain of $3.6 million recorded during the year ended December 31, 2002, to results from continuing operations.

F-10

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Significant Accounting Policies (continued)

In June 2002, the FASB issued SFAS No. 146, “Accounting for Disposal Obligations”, which became effective for us beginning January 1, 2003.  SFAS No. 146 supersedes EITF Issue No. 94-3 “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)”.  SFAS No. 146 addresses the accounting for and disclosure of costs to terminate an existing contractual obligation (including but not limited to operating leases), incremental direct and other costs associated with the related disposal activity and termination benefits (severance pay) provided to employees pursuant to a one-time benefit arrangement that does not constitute a preexisting or newly-created ongoing benefit plan.  The adoption of SFAS No. 146 had no impact on our consolidated financial position or results of operations.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure”, which amends SFAS No. 123, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation.  In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method used on reported results.  The disclosure provisions of SFAS No. 148 are effective for fiscal years ending after December 15, 2002 and have been incorporated into these financial statements and accompanying footnotes.

Reclassifications

Under our franchise agreements, we are obligated to pay to local franchising authorities a percentage of our revenue derived from providing cable and other services the majority of which are passed through to customers.  We have historically recorded revenue net of franchise fees charged to our customers.  Staff Announcement D-103, issued by the FASB in November 2001, specifies that reimbursements received from a customer should be reflected as revenues and not as a reduction of expenses.  This Staff Announcement applies to financial reporting periods beginning after December 15, 2001.  Upon application of this Staff Announcement, comparative financial statements for prior periods are required to be reclassified to comply with the guidance in this Staff Announcement.  Consequently, we have reclassified the prior period amounts in the accompanying consolidated statements of operations to reflect franchise fees on a gross basis with reimbursements as revenue and payments as expense.  The effect on the prior period statements of operations was to increase both revenue and selling, general and administrative costs by $24.0 million for the year ended December 31, 2001 and $13.0 million for the year ended December 31, 2000.

Additionally, certain other prior year amounts have been reclassified to conform to the current year’s presentation.

F-11

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. Insight Midwest

In September 1999, Insight Midwest was formed to serve as the holding company and a financing vehicle for our cable television system 50/50 joint venture with AT&T Broadband (now known as Comcast Cable).  As of December 31, 2002, Insight Midwest was comprised of systems located in Indiana, Kentucky, Ohio, Illinois and Georgia. 

Indiana Systems

On October 31, 1998, Insight LP and AT&T Broadband contributed certain of their cable television systems located in Indiana and Northern Kentucky to form Insight Indiana in exchange for a 50% equity interest.  On October 1, 1999, as part of a joint venture restructuring involving the Kentucky Systems (discussed below), Insight Indiana became a wholly owned subsidiary of Insight Midwest.  Pursuant to the terms of their respective operating agreements, Insight Midwest and Insight Indiana will continue for a twelve-year term through October 1, 2011, unless extended by Insight LP and Comcast Cable.

Kentucky Systems

On October 1, 1999, Insight LP acquired a combined 50% interest in InterMedia Capital Partners VI, LP (the “IPVI Partnership”) from related parties of Blackstone Cable Acquisition Company, LLC, InterMedia Capital Management VI, LLC and a subsidiary and related party of AT&T Broadband, for $341.5 million (inclusive of expenses).  Insight Midwest assumed debt of $742.1 million (the total debt of the IPVI Partnership) in connection with this transaction.  Concurrently with this acquisition, the Kentucky Systems were contributed to Insight Midwest.  Pursuant to the terms of their respective operating agreements, Insight Midwest and Insight Kentucky will continue for a twelve-year term through October 1, 2011, unless extended by Insight LP and Comcast Cable.

Illinois Systems

Effective January 1, 2001, Insight Midwest completed a series of transactions with Insight LP and AT&T Broadband for the acquisition of additional cable television systems, primarily located in the state of Illinois, valued at approximately $2.2 billion (the “AT&T transactions”), inclusive of systems valued at approximately $775.8 million, contributed by Insight LP.  The AT&T transactions were financed through a credit facility established on January 5, 2001, the Midwest Holdings Credit Facility.  As a result of the AT&T transactions, Insight Midwest acquired all of Insight LP’s wholly owned systems serving approximately 280,000 customers, including systems that Insight LP purchased from AT&T Broadband.  At the same time, Insight Midwest acquired from AT&T Broadband systems serving approximately 250,000 customers. 

In connection with the systems Insight LP purchased from AT&T Broadband that included approximately 105,000 customers, we recorded the purchased systems’ respective assets and liabilities, including debt incurred in connection with the purchase, at their respective fair values.  The purchase price of $393.5 million was allocated to the cable television assets acquired in relation to their fair values as increases in fixed assets of $52.3 million and franchise costs of $341.2 million.

F-12

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. Insight Midwest (continued)

Concurrently with the completion of Insight LP’s purchase of systems from AT&T Broadband, Insight LP contributed such systems, along with all of its wholly owned systems serving approximately 175,000 customers, to Insight Midwest.  The total value of such contributed systems was $1.2 billion.  The assets and liabilities, including debt assumed, of such contributed systems’ continue to be recorded at their respective carrying values, as these systems remain within the consolidated group. We recorded a reduction in paid in capital of $113.8 million equal to 50% of the carrying value of such net assets contributed to Insight Midwest, representing the interest owned by AT&T Broadband (minority interest) through its investment in Insight Midwest. 

Concurrently, AT&T Broadband contributed directly to Insight Midwest certain Illinois systems serving approximately 250,000 customers. The total value of such contributed systems was $983.3 million.  We recorded an addition to paid in capital and a reduction to our minority interest liability equal to $328.8 million, representing the value of net assets contributed attributable to AT&T Broadband’s 50% interest in Insight Midwest.  Insight Midwest recorded 100% of the assets and liabilities (including debt assumed of $306.2 million) of such systems contributed at their respective fair values.  The fair value of $983.3 million was allocated to the cable television assets acquired in relation to their fair values as increases in fixed assets of $116.1 million and franchise costs of $867.2 million. 

Both Insight LP and AT&T Broadband contributed their respective systems to Insight Midwest subject to an amount of indebtedness such that Insight Midwest remains equally owned by Insight LP and AT&T Broadband.  The total debt assumed by Insight Midwest of $654.5 million was financed with the proceeds from the Midwest Holdings Credit Facility.

As part of the AT&T transactions, we exchanged our Claremont, California cable television system, serving approximately 8,400 customers, for AT&T Broadband’s Freeport, Illinois system, serving approximately 10,000 customers, each valued at approximately $38.0 million.  This system exchange was accounted for by Insight LP as a sale of its Claremont system and a purchase of the Freeport system.  We recorded a gain of approximately $34.2 million in connection with this transaction.

Ohio Systems

On August 21, 1998, Insight LP and Coaxial Communications of Central Ohio, Inc. entered into a contribution agreement pursuant to which Coaxial contributed to Insight Ohio (a newly formed limited liability company) substantially all of the assets and liabilities of its cable television systems located in Columbus, Ohio and Insight LP contributed to Insight Ohio $10.0 million in cash.  As a result of the Coaxial Contribution Agreement, Coaxial owned 25% of the non-voting common equity and Insight LP, through its subsidiary Insight Holdings of Ohio, LLC, owned 75% of the non-voting common equity of Insight Ohio.  In addition, Coaxial also received two separate series of voting preferred equity (Series A Preferred Interest—$140 million and Series B Preferred Interest—$30 million) of Insight Ohio.

F-13

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. Insight Midwest (continued)

The Voting Preferred Interests provides for cash distributions to Coaxial and certain of its affiliates as follows: Series A—10% and Series B—12 7/8%.  Insight Ohio cannot redeem the Voting Preferred Interests without the permission of Coaxial; however, Insight Ohio will be required to redeem the Series A Preferred Interests in August 2006 and the Series B Preferred Interest in August 2008. Coaxial has pledged the Series A Preferred Interest as security for $140.0 million of 10% Senior Notes due in 2006 issued by Coaxial and its affiliate.  Coaxial’s majority shareholder has pledged Coaxial’s stock as security for $55.9 million of aggregate principal amount at maturity of 12 7/8% Senior Discount Notes due in 2008 issued by Coaxial’s majority shareholder and its affiliate.  The Senior Notes and Senior Discount Notes are conditionally guaranteed by Insight Ohio.

On August 8, 2000, Insight Ohio purchased Coaxial’s 25% non-voting common equity interest.  The purchase price was 800,000 shares of our common stock and cash in the amount of $2.6 million.  In connection with the purchase, Insight Ohio’s operating agreement was amended to, among other things, remove certain participating rights of the principals of Coaxial and certain of its affiliate.  Additionally, the agreement was amended to incorporate 70% of Insight Ohio’s total voting power into the common equity interests of Insight Ohio and 30% of Insight Ohio’s total voting power into the Preferred Interests of Insight Ohio.

As a result of this transaction, the financial results of Insight Ohio have been consolidated with our financial results effective January 1, 2000, with minority interest recorded for the 25% common interest owned by Coaxial through August 8, 2000.  In connection with this transaction, Insight LP recorded a step-up in fair value of Insight Ohio’s assets of $229.2 million, which represents the difference between the purchase price and its equity in Insight Ohio’s net assets in excess of Insight Ohio’s net assets.  This amount has been allocated to franchise costs and goodwill.

Although the financial results of Insight Ohio for 2000 have been consolidated as a result of this transaction, for financing purposes, Insight Ohio is an unrestricted subsidiary of ours and is prohibited by the terms of its indebtedness from making distributions to us.  Insight Ohio’s conditional guarantee of the Senior Notes and the Senior Discount Notes remains in place.

If at any time the Senior Notes or Senior Discount Notes are repaid or significantly modified, or in any case after August 15, 2008, the principals of the Coaxial Entities may require us to purchase their interests in the Coaxial Entities for a purchase price equal to the difference, if any, of $32.6 million less the then market value of the 800,000 shares of our common stock issued on August 8, 2000.  The fair value of such contingent consideration was $7.1 million.  As of December 31, 2002, the difference between $32.6 million and the market value of such 800,000 shares of our common stock was $22.7 million.

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INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. Pro Forma Results of Operations

Our unaudited pro forma results of operations for the years ended December 31, 2001 and 2000, assuming the acquisition of the Illinois systems and the Greenwood, Indiana system occurred as of January 1, 2000 and excluding the effect of the gain on cable system exchange recorded in the year ended December 31, 2001 were as follows (in thousands, except per share amounts):

	Year Ended December 31,
	2001			2000
Revenue	$	728,546		$	680,375
Loss before accrual of preferred interests		(95,340	)		(73,827	)
Net loss attributable to common stockholders		(114,772	)		(92,552	)
Basic and diluted loss per share attributable to common stockholders		(1.91	)		(1.55	)

5. Investments

SourceSuite and Liberate

Effective November 17, 1999, Insight Interactive entered into a Contribution Agreement with Source Media, Inc., providing for the creation of a joint venture, SourceSuite LLC.  Under the terms of the Contribution Agreement, Source Media contributed its Virtual Modem 2.5 software and the Interactive Channel products and services, including SourceGuide and LocalSource television content.  We contributed $13.0 million in equity financing for 50% of the equity in the joint venture.

On March 3, 2000, pursuant to a merger of the joint venture with a subsidiary of Liberate Technologies, SourceSuite sold all of its VirtualModem assets in exchange for the issuance to each of Insight Interactive and Source Media of 886,000 shares of Liberate common stock.

SourceSuite continues to own and operate its programming assets, LocalSource and SourceGuide, and has preferred content and programming services agreements with Liberate. As a result of this transaction, we recorded a gain on sale of joint venture assets of $80.9 million in the year ended December 31, 2000.  In addition, on December 31, 2000, we recorded an impairment write-down of $74.1 million to reflect an other-than-temporary decline in the value of our investment in Liberate.  This impairment write-down was calculated as the difference between the fair value of the Liberate shares as of December 31, 2000 as compared to March 3, 2000, the date we received the shares.  Further, on December 31, 2002, we recorded an additional impairment write-down of $12.0 million to reflect an other-than-temporary decline in the value of our investment in Liberate.   The carrying amount of our investment in Liberate was $1.3 million and $10.2 million (net of unrealized losses of $3.1 million) as of December 31, 2002 and 2001.

F-15

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. Investments (continued)

In connection with the Contribution Agreement, on November 17, 1999, we purchased 842,105 shares of Source Media common stock at $14.25 per share, representing approximately 6% of Source Media’s outstanding stock, for a purchase price of $12.0 million in cash.  On December 31, 2000, we recorded an impairment write-down of $11.2 million to reflect an other-than-temporary decline in the value of our investment in Source Media.  This impairment write-down was calculated as the difference between the fair value of the Source Media shares on December 31, 2000 as compared to November 17, 1999, the date we purchased the shares.  Fair value was determined using the quoted market price of the stock.  During the year ended December 31, 2001, we wrote-off our remaining investment in Source Media of $842,000.  Source Media has announced that it has terminated operations effective March 14, 2002.

In addition, in October 1999, we purchased $10.2 million face amount of Source Media’s 12% bonds, maturing November 1, 2004, for approximately $4.1 million.  The bond discount of $6.1 million was being amortized to interest income over the life of the bonds.  As of December 31, 2000, we recorded an impairment write-down of $3.3 million to reflect other-than-temporary declines in the value of our investment in Source Media bonds.  Additionally, as of December 31, 2000, we ceased amortization of the bond discount. 

During the year ended December 31, 2001, we recorded additional impairment write-downs of $1.4 million to reflect an other-than-temporary decline in the value of such bonds.  These impairment write-downs were calculated as the difference between the amortized cost of the bonds and their fair value as of the date of write-down.  Fair value was determined using the quoted market price of the bonds.  As of December 31, 2001, the carrying value of these bonds was $410,000. 

For the years ended December 31, 2001 and 2000, we accounted for our investment in SourceSuite under the equity method of accounting.  Accordingly, the accompanying statements of operations for the years ended December 31, 2001 and 2000 include losses of $2.0 million and $3.8 million that represents our 50% share of SourceSuite’s net loss.  As of December 31, 2001, through equity method accounting, our investment in SourceSuite has a carrying value of $741,000.

On March 14, 2002, Insight Interactive purchased the remaining 50% equity interest in SourceSuite that it did not already own from Source Media by tendering $10.2 million face amount of Source Media’s 12% bonds.  The fair market value of such tendered bonds on March 14, 2002 was $205,000.  The excess of the fair value of SourceSuite’s acquired assets and liabilities over the purchase price of $205,000, totaling $571,000 of negative goodwill, was allocated as a reduction to long-lived assets based on their respective fair values.  The operating results of SourceSuite have been consolidated in the accompanying financial statements effective January 1, 2002.  SourceSuite recorded $323,000 of revenue, net of $1.6 million of intercompany revenue eliminated in consolidation, and $1.7 million of net loss for the year ended December 31, 2002.

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INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. Investments (continued)

AgileTV

AgileTV Corporation is a privately owned company developing a speech recognition system that enables cable television customers to operate their digital set-top boxes using voice recognition technology.

In November 2001, we purchased 3.0 million shares of AgileTV’s Series C redeemable, convertible preferred stock for $7.5 million, which is accounted for under the cost method.  This preferred stock has a liquidation preference equal to $7.5 million.  In connection with this investment, we received 3 million warrants to purchase AgileTV common stock with an exercise price of $2.50 per share and an additional 800,000 warrants with an exercise price of $1.25 per share.

Based on our on-going assessment of potential impairments in our investments in equity securities, as of December 31, 2002, we recorded an impairment charge of $6.0 million related to our investment in AgileTV bringing our carrying value in this investment to $1.5 million as of December 31, 2002. 

6. Long-Lived Assets

Fixed assets consisted of:

		December 31, 2002			December 31, 2001
		(in thousands)
Land, buildings and improvements		$	37,751		$	36,501
Cable system equipment			1,851,864			1,573,733
Furniture, fixtures and office equipment			16,850			16,019
			1,906,465			1,626,253
Less accumulated depreciation and amortization			(686,214	)		(474,544	)
	Total fixed assets, net	$	1,220,251		$	1,151,709

During the year ended December 31, 2002, we wrote-off approximately $11.1 million related to video-on-demand equipment as a result of transitioning to a new video-on-demand service provider.  This amount was included in depreciation and amortization in our statement of operations. 

Depreciation expense for the years ended December 31, 2002, 2001 and 2000 was $211.8 million, $182.5 million and $135.9 million.

F-17

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. Debt

Debt consisted of:

		December 31, 2002			December 31, 2001
		(in thousands)
Insight Ohio Credit Facility		$	25,000		$	25,000
Insight Midwest Holdings Credit Facility			1,438,000			1,580,000
Insight Midwest 9¾% Senior Notes			385,000			200,000
Insight Midwest 10½% Senior Notes			500,000			500,000
Insight Inc. 12¼% Senior Discount Notes			360,000			400,000
			2,708,000			2,705,000
Less unamortized discount on notes			(126,996	)		(162,524	)
	Total debt	$	2,581,004		$	2,542,476

Insight Ohio Credit Facility

Insight Ohio’s credit facility provides for revolving credit loans of up to $25.0 million.  The Insight Ohio Credit Facility has a six-year maturity from the date of borrowings, with reductions to the amount of the commitment commencing after three years.  Our obligations under the Insight Ohio Credit Facility are secured by substantially all the assets of Insight Ohio.  The Insight Ohio Credit Facility requires Insight Ohio to meet certain financial and other debt covenants.  Loans under the Insight Ohio Credit Facility bear interest, at our option, at the prime rate or at a Eurodollar rate.  In addition to the index rates, we pay an additional margin percentage tied to Insight Ohio’s ratio of total debt to adjusted annualized operating cash flow.  The weighted average interest rates in effect as of December 31, 2002 and 2001 were 3.6% and 4.3%.

Insight Midwest Holdings Credit Facility

On January 5, 2001, through a wholly owned subsidiary of Insight Midwest (“Insight Midwest Holdings”) which holds all of our cable television systems other than the Ohio System, we entered into a credit facility to finance the AT&T transactions and to repay the outstanding indebtedness under our Insight Indiana and Insight Kentucky Credit Facilities.  The Midwest Holdings Credit Facility expires in 2009 and provides for maximum borrowings of $1.75 billion.  Obligations under this credit facility are secured by a pledge of the outstanding equity interests of Insight Midwest Holdings and its subsidiaries.

The Midwest Holdings Credit Facility requires Insight Midwest Holdings to meet certain financial and other debt covenants.  Borrowings under this credit facility bear interest, based on our election, of an Alternative Base Rate (equal to the greater of the Prime Rate or the Federal Funds Effective Rate plus 0.5%) or Adjusted LIBOR (equal to LIBOR multiplied by the Statutory Reserve Rate) plus an additional margin yield tied to Insight Midwest Holdings’ leverage ratio of between 0.5% and 2.75%.  As of

F-18

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. Debt (continued)

December 31, 2002 and 2001, the weighted average interest rate on this credit facility was 4.3% and 5.1%.

On March 25, 2002, we formally requested approval from the lenders of amendments to the leverage ratio covenant to allow Insight Midwest Holdings more flexibility and to increase the aggregate amount that can be distributed to Insight Midwest for the purpose of making investments in Insight Ohio.  In addition, on March 28, 2002, we loaned $100.0 million to Insight Midwest to lower our effective interest rates, $97.0 million of which was contributed to Insight Midwest Holdings in April 2002 for use in paying down the credit facility balance and in funding financing costs associated with the amendments, and $3.0 million of which was contributed to Insight Ohio as of March 28, 2002.  Pursuant to the credit facility amendments, Insight Midwest Holdings is permitted to make distributions to Insight Midwest for the purpose of repaying our loan provided that the leverage ratio is less than 4.25 and there are no defaults existing under the credit facility.  The loan to Insight Midwest bears annual interest of 9%, has a scheduled maturity date of January 31, 2011 and permits prepayments.  On April 18, 2002, the lenders approved these amendments to the credit facility. 

On June 6, 2002, a further amendment to the credit facility was entered into which permits distributions by Insight Midwest Holdings to Insight Midwest for the purpose of repaying our $100.0 million loan, without regard to the minimum leverage ratio requirement.

As a result of the repayment of the Insight Indiana and Insight Kentucky Credit Facilities on January 5, 2001, we recorded a charge of $10.3 million related to the write-off of unamortized deferred financing costs related to these credit facilities.

Insight Midwest Senior Notes

On October 1, 1999 simultaneously with the closing of the purchase of Insight Kentucky, Insight Midwest completed a $200.0 million offering of 9¾% senior notes due in October 2009.  The proceeds of the offering were used to repay certain debt of the IPVI Partnership.  Interest payments on these Senior Notes, which commenced on April 1, 2000, are payable semi-annually on April 1 and October 1. 

On November 6, 2000, Insight Midwest completed a $500.0 million offering of 10½% senior notes due in November 2010.  Insight Midwest received proceeds of $487.5 million, net of an underwriting fee of $5.0 million and a bond discount of $7.5 million that is being amortized through November 2010.  The proceeds of the offering were used to repay a portion of the outstanding debt under the Insight Indiana Credit Facility and Insight Kentucky Credit Facility.  Interest payments on these Senior Notes, which commenced on May 1, 2001, are payable semi-annually on May 1 and November 1.

The Insight Midwest 9¾% and 10½% Senior Notes are redeemable on or after October 1, 2004 and November 1, 2005.  In addition, Insight Midwest can redeem up to 35% of the Insight Midwest 9¾% and 10½% Senior Notes prior to October 1, 2002 and November 1, 2005, with the net proceeds from certain sales of Insight Midwest’s equity.  Each holder of the Insight Midwest Senior Notes may require

F-19

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. Debt (continued)

Insight Midwest to redeem all or part of that holder’s notes upon certain changes of control.  The Insight Midwest Senior Notes are general unsecured obligations and are subordinate to all other liabilities of Insight Midwest, the amounts of which were $1.9 billion and $2.1 billion as of December 31, 2002 and 2001.  The Insight Midwest Senior Notes contain certain financial and other debt covenants.

In May 2000 and September 2001, Insight Midwest completed exchange offers pursuant to which the 9¾% Senior Notes and 10½% Senior Notes were exchanged for identical notes registered under the Securities Act of 1933. 

In December 2002, Insight Midwest completed a $185.0 million add-on offering under the 9¾% Senior Notes indenture.  Insight Midwest received proceeds of $176.9 million, including $3.8 million of interest accruing from October 1, 2002 through the date of issuance that will be repaid to holders of the bonds in the first semi-annual interest payment due on April 1, 2003, and net of an underwriting fee of $3.1 million and a bond discount of $8.8 million that is being amortized through October 2009.  The proceeds of this offering were used to repay a portion of the outstanding revolving loans under the Midwest Holdings Credit Facility.  Since this additional add-on offering occurred under the 9¾% Senior Notes indenture, these additional debt securities and the 9¾% Senior Notes are considered a single series of senior notes with identical terms.

Insight Inc. 12¼% Senior Discount Notes

On February 6, 2001, we completed a $400.0 million offering of 12¼% Senior Discount Notes due in February 2011.  These notes were issued at a discount to their principal amount at maturity resulting in gross proceeds to us of $220.1 million.  We utilized $20.2 million of the proceeds to repay an outstanding intercompany loan from Insight Midwest, which we incurred in connection with the AT&T transactions.

In September 2001, we completed an exchange offer pursuant to which the 12¼% Senior Discount Notes, issued in February 2001, were exchanged for identical notes registered under the Securities Act of 1933. 

In December 2002, we repurchased $40.0 million face amount of the 12¼% Senior Discount Notes at the then accreted value of $27.4 million for $23.2 million, resulting in a gain of $3.6 million, net of the write-off of unamortized deferred financing costs of $616,000.  As of December 31, 2002, the outstanding principal and accreted amounts of these notes were $360.0 million and $247.4 million. 

No cash interest on the discount notes will accrue prior to February 15, 2006.  Thereafter, cash interest on the discount notes will accrue and be paid on February 15 and August 15 of each year, commencing August 15, 2006.  The initial accreted value of the discount notes will increase until February 15, 2006 such that the accreted value will equal the revised outstanding principal amount of $360.0 million on February 15, 2006.

F-20

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

7. Debt (continued)

Debt Principal Payments

As of December 31, 2002, annual principal payments required on our debt were as follows (in thousands):

2003		$	5,000
2004			80,000
2005			81,250
2006			81,250
2007			81,250
Thereafter			2,379,250
	Total	$	2,708,000

Interest Rate Swap and Collar Agreements

Through December 31, 2002, we entered into interest-rate swap and collar agreements to modify the interest characteristics of our outstanding debt from a floating rate to a fixed rate basis. These agreements involve the payment of fixed rate amounts in exchange for floating rate interest receipts over the life of the agreement without an exchange of the underlying principal amount. The differential to be paid or received is accrued as interest rates change and is recognized as an adjustment to interest expense related to the debt. The related amount payable or receivable is included in other liabilities or assets.

On January 1, 2001, our derivative financial instruments, which were obtained to manage our exposure to interest rate risk, included interest rate swap and collar agreements, which qualified as cash flow hedges.  On January 1, 2001, we recorded as a component of other comprehensive loss a $1.1 million transition adjustment loss (net of $776,000 tax benefit) representing the cumulative effect of adopting SFAS No. 133.  Changes in the fair value of such cash flow hedges are recognized in stockholders’ equity as a component of comprehensive loss. 

As of December 31, 2002 and 2001, we had entered into various interest rate swap and collar agreements effectively fixing interest rates between 4.7% and 5.9%, plus the applicable margin, on $435.0 million and $500.0 million notional value of debt.  Of the agreements outstanding as of December 31, 2002, $285.0 million expire in July 2003 and $150.0 million expire in August 2004.  We had $2.7 million and $1.8 million of accrued interest related to these agreements as of December 31, 2002 and 2001.

In February 2003, we entered into two additional interest rate swap agreements whereby we swapped fixed rates under our 9¾% senior notes due in October 2009, for variable rates of 7.7%, plus the applicable margin, on $185.0 million notional value of debt.  These interest rate swaps expire in November 2005.

F-21

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

8. Supplemental Cash Flow Information

The following amounts were paid in cash during the years ended December 31,:

	2002		2001		2000
	(in thousands)
Interest	$	167,703	$	182,747	$	103,100
Income taxes		531		538		657

During the year ended December 31, 2001, we entered into a non-cash investing activity in which our joint venture partner contributed cable systems to Insight Midwest valued at $983.3 million resulting in a non-cash increase in long-lived assets, debt, other liabilities, minority interest and additional paid-in-capital.

During the year ended December 31, 2000, we entered into a non-cash investing activity in which we issued common stock valued at $17.5 million in connection with an acquisition of a cable system resulting in a non-cash increase in long-lived assets, debt and additional paid-in-capital.

9. Capital Stock

Our authorized capitalization consists of 300,000,000 shares of Class A common stock, par value $.01 per share, 100,000,000 shares of Class B common stock, par value $.01 per share and 100,000,000 shares of preferred stock, par value $.01 per share.  The rights of the holders of Class A and Class B common stock are substantially identical in all respects, except for voting rights.  Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share.

10. Income Taxes

For the years ended December 31, 2002, 2001 and 2000, we recorded a deferred tax benefit of $0, $47.1 million and $34.3 million.  In addition, for each of the tax years ended December 31, 2002, 2001 and 2000, we recorded a current tax expense related to state and local taxes of approximately $500,000.  Deferred income taxes represent the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. 

F-22

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

10. Income Taxes (continued)

Significant components of our deferred tax assets and liabilities consisted of the following:

		December 31,
		2002			2001
		(in thousands)
Deferred tax assets:
	Net operating loss carry-forward	$	204,438		$	147,587
	Accounts receivable		—			243
	Investment in unconsolidated affiliates		2,787			2,787
	Unrealized loss on investments		15,847			8,458
	Deferred interest expense		21,336			9,523
	Interest hedges		8,567			9,330
	Capital loss		2,003			—
	Accrued expenses and other liabilities		—			18
Gross deferred tax asset			254,978			177,946
Valuation allowance			(39,364	)		(12,631	)
Net deferred tax asset			215,614			165,315
Deferred tax liabilities:
	Depreciation & amortization		215,614			165,315
Gross deferred tax liability			215,614			165,315
Net deferred tax liability		$	—		$	—

We have provided a full valuation allowance on our deferred tax asset, consisting primarily of net operating loss carryforwards and unrealized losses on investments, due to the uncertainty regarding our realization of such assets in the future.  The increase in the valuation allowance on the deferred tax asset for the year ended December 31, 2002 was $26.7 million.

F-23

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

10. Income Taxes (continued)

The reconciliation of income tax expense computed at the U.S. federal statutory rate to income tax expense for the years ended December 31, 2002, 2001 and 2000 were as follows:

		Year ended December 31,
		2002			2001			2000
		(in thousands)
Benefit at federal statutory rate		$	(16,147	)	$	(43,438	)	$	(26,116	)
State and local taxes, net			(4,063	)		(8,283	)		(5,258	)
Expenses not deductible for U.S. tax purposes			94			335			70
Non-deductible amortization			—			1,859			726
Preferred interest accrual			(6,837	)		(6,607	)		(6,367	)
Disallowed interest expense			721			581			—
Disallowed compensation deduction			—			647			—
Increase in valuation allowance			26,733			4,059			3,120
	Income tax (benefit) provision	$	501		$	(50,847	)	$	(33,825	)

As of December 31, 2002, we had a net operating loss carry-forward of $498.6 million for U.S. federal income tax purposes.  Our net operating loss began accumulating effective July 26, 1999, the date of our IPO.  The net operating loss will expire in the years 2019 through 2022.

11. Stock Option Plan and Other Stock Based Compensation

Stock Option Plan

On December 9, 2002, we amended and restated our stock option plan to, among other things, increase the number of authorized shares and to provide for restricted stock awards.  The amendment is subject to ratification at the 2003 Annual Meeting of Stockholders.  As amended, the plan provides for the grant of incentive stock options, nonqualified stock options and restricted shares, as well as other awards such as performance units, performance shares, deferred stock, dividend equivalents and other stock-based awards. 

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INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

11. Stock Option Plan and Other Stock Based Compensation (continued)

Employee stock options vest over five years and expire ten years from the date granted.  The following summarizes stock option activity for the years ended December 31, 2002, 2001 and 2000:

	Options			Weighted Average Exercise Price
Outstanding as of January 1, 2000		2,883,400		$	24.60
Granted		263,000			15.72
Canceled/forfeited		(130,500	)		23.93
Outstanding as of December 31, 2000		3,015,900			23.86
Granted		1,282,840			19.81
Exercised		(14,500	)		16.45
Canceled/forfeited		(126,500	)		18.76
Outstanding as of December 31, 2001		4,157,740			22.79
Granted		1,792,186			11.31
Canceled/forfeited		(145,500	)		19.46
Outstanding as of December 31, 2002		5,804,426		$	19.33

The weighted average fair value of options granted in 2002, 2001 and 2000 was $6.44, $11.30 and $9.43 per share.  As of December 31, 2002, 2001 and 2000, 1,973,969, 1,158,032 and 577,300 of the outstanding options were exercisable with weighted average exercise prices of $23.62, $24.28 and $24.38.  The following summarizes details of outstanding stock options as of December 31, 2002:

Range of Exercise Prices		Number of Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
$7.43 – $9.56			785,500	$	9.03		9.6
$12.83 – $18.99			1,977,210	$	15.45		9.3
$19.77 – $29.18			3,011,716	$	24.45		6.8
	at $30.13		30,000	$	30.13		6.8
			5,804,426	$	19.33		8.0

Pursuant to SFAS No. 123, “Accounting for Stock-Based Compensation”, we have elected to account for employee stock-based compensation under APB Opinion No. 25, “Accounting for Stock Issued to Employees,” using an intrinsic value approach to measure compensation expense.  Accordingly, no compensation expense has been recognized for options granted under the Plan since all options were granted to employees at exercise prices equal to or greater than fair market value on the date of grant. 

F-25

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

11. Stock Option Plan and Other Stock Based Compensation (continued)

Other Stock Based Compensation

In connection with our IPO, we issued a total of 1,412,181 shares of common stock to our employees.  We recorded non-cash compensation expense of $19.3 million in connection with the issuance of these shares.  In October 1999 and April 2000, we made loans to certain of these employees, the proceeds of which were used to satisfy their individual income tax withholding obligations resulting from their receipt of these shares.  In the aggregate, these loans totaled $14.0 million and were recorded to other non-current assets.  The loans are non-recourse and are represented by notes that are secured by common stock pledges equal to the number of shares each individual received as compensation. 

Through April 1, 2001, the notes charged interest at a rate of 6% per annum.  Subsequent to April 1, 2001, the rate of interest was adjusted to 5% per annum.  The maturity date of the notes has been extended from October 1, 2004 to October 1, 2009.  In any case, the notes become due 180 days following termination of employment.  The proceeds of any sales of the pledged shares must be applied towards early repayment of these loans unless the value of the remaining shares exceeds 200% of the remaining loan amount. 

Accrued interest on these loans since October 1999 continues to be fully reserved as a result of a loan interest forgiveness provision approved by the board of directors, which provides for forgiveness, at our election, of accrued interest on the loans to employees in good standing, as well as gross-up payments related to the employee’s income tax liabilities arising from such forgiveness.  On October 1, 2001, the first interest forgiveness initiative under this provision became effective whereby all accrued interest from October 1, 1999 through September 30, 2001 was forgiven.  Additionally, all income taxes related to such interest forgiveness were paid by us on behalf of the affected employees.  Forgiven interest through September 30, 2001 amounted to $1.6 million.  Income tax liabilities resulting from such forgiven interest through September 30, 2001 amounted to $1.7 million, which is included in our statement of operations as compensation expense.

All accrued interest on the notes from October 1, 2001 through December 23, 2002 was forgiven.  Additionally, we made gross-up payments with respect to the income taxes related to such interest forgiveness on behalf of the affected employees.  Forgiven interest from October 1, 2001 through December 23, 2002 amounted to $867,000, and gross-up payments with respect to the employees’ income tax liabilities resulting from such forgiven interest amounted to $900,000, which amount has been ratably accrued into our statement of operations as compensation expense from October 1, 2001 to December 23, 2002.

In December 2002, the Board of Directors approved a plan whereby each affected employee was offered the opportunity to repay the outstanding loan amounts through surrendering a number of pledged shares with a value equal to the outstanding loan amounts.  In return, the employees would receive shares with a five-year vesting period and separate grants of non-qualified stock options vesting over five and nine year periods.

F-26

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

11. Stock Option Plan and Other Stock Based Compensation (continued)

As of December 23, 2002, our President and Chief Operating Officer accepted this offer and surrendered 746,941 shares in full payment of the $9.6 million outstanding principal amount of her loan, and in turn received 450,000 shares of Class B common stock with a five-year vesting period, 600,000 non-qualified stock options vesting equally over five years and 300,000 non-qualified stock options with a cliff vesting after nine years.  All of the stock options issued have an exercise price equal to the closing market value of our common stock on December 23, 2002.  As of December 31, 2002, the shares were recorded as deferred stock compensation on our balance sheet in the amount of $5.9 million.  This deferred compensation will be amortized on a straight-line basis into our operating results as non-cash compensation through December 23, 2007.   

12. Financial Instruments

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable.  We maintain cash and cash equivalents with various financial institutions.  These financial institutions are located throughout the country and our policy is designed to limit exposure to any one institution.  Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers comprising our customer base.

Fair Value

We used the following methods and assumptions in estimating our fair value disclosures for financial instruments:

Cash equivalents and accounts receivable: The carrying amount reported in the balance sheet for cash equivalents and accounts receivable approximates fair value.

Debt: The carrying amounts of our borrowings under our credit arrangements approximate fair value as they bear interest at floating rates.  The fair value of Insight Midwest’s 9¾% and 10½% Senior Notes as of December 31, 2002 and 2001 was $364.8 million and $483.0 million and $210.0 million and $540.0 million.  The fair value of Insight Inc. 12¼% Senior Discount Notes was $208.0 million and $234.0 million as of December 31, 2002 and 2001.

Interest rate swap agreements:  As of January 1, 2001, interest rate swap agreements are recorded in our financial statements at fair value.  Prior to January 1, 2001, interest rate swap agreements were not recorded in our financial statements.  The fair value (cost) of such swap agreements was $(17.8) million and $(22.8) million as of December 31, 2002 and 2001.

F-27

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

13. Related Party Transactions

Managed Systems

On March 17, 2000, we entered into a two-year management agreement with InterMedia Partners Southeast (“IPSE”) (now known as Comcast of Montana/Indiana/Kentucky/Ohio), an affiliate of AT&T Broadband (now known as Comcast Cable), to provide management services to cable television systems acquired by AT&T Broadband.  The management agreement has been extended and expires on June 30, 2003.  As of December 31, 2002, these systems served approximately 114,600 customers in the states of Indiana and Kentucky.  Through March 31, 2001, we earned a monthly fee of 3% of gross revenues for providing such management services.  In September 2001, the management agreement was amended to provide for a monthly fee of 5% of gross revenues retroactive to April 1, 2001.  We recognized management fees in connection with this agreement of $2.7 million, $2.4 million and $1.2 million for the years ended December 31, 2002, 2001 and 2000. 

On September 30, 2002, Insight Communications Midwest signed an agreement with IPSE to exchange the Griffin, Georgia cable television systems, including approximately 13,000 customers, plus $25.0 million for the Managed Systems located in New Albany, Indiana and Shelbyville, Kentucky, together including approximately 23,000 customers.  Additionally, pursuant to the agreement, Insight Communications Midwest will pay $1.5 million as a closing adjustment to IPSE to complete the rebuild and upgrade of the Griffin, Georgia system. 

This system exchange is expected to close on February 28, 2003 and will be accounted for on that date as a sale of the Griffin, Georgia systems and a purchase of the New Albany, Indiana and Shelbyville, Kentucky systems.  In connection with this system exchange, we expect to record a gain of approximately $27.0 million equal to the difference between the fair value and carrying value of the Griffin, Georgia systems as of the closing date.  Of the purchase price of the New Albany, Indiana and Shelbyville, Kentucky systems approximately $32.0 million will be preliminarily allocated to such cable television systems’ assets acquired in relation to their fair values and approximately $33.0 million will be preliminarily allocated to franchise costs.  

Programming

We purchase the majority of our programming through affiliates of AT&T Broadband (now known as Comcast Cable).  Although we have the ability to purchase substantially all our programming through Comcast Cable, we purchase certain programming directly from programmers for strategic and/or cost purposes.  Charges for such programming, including a 1½% administrative fee, were $130.5 million, $116.0 million and $57.4 million for the years ended December 31, 2002, 2001 and 2000.  As of December 31, 2002 and 2001, $22.6 million and $10.3 million of accrued programming costs were due to affiliates of AT&T Broadband.  We believe that the programming rates charged through these affiliates are lower than those available from independent parties.

F-28

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

13. Related Party Transactions (continued)

Telephone Agreements

In July 2000, to facilitate delivery of telephone services, we entered into a ten-year agreement with AT&T Broadband that allows Insight Midwest to deliver to our customers local telephone service.  Under the terms of the agreement, Insight Midwest leases for a fee certain capacity on our network to AT&T Broadband.  Insight Midwest provides certain services and support for which it receives additional payments.  We began providing telephone services to a limited number of our customers in 2001.  Revenue earned from leased network capacity used in the provision of telephone services was $2.2 million and $170,000 in the years ended December 31, 2002 and 2001.  The capital required to deploy telephone services over our networks is shared, with AT&T Broadband responsible for switching and transport facilities.  AT&T is also required to pay us for installations, marketing and billing support that amounted to $7.6 million and $1.4 million for the years ended December 31, 2002 and 2001. 

Advertising Services

In October 1999, to facilitate the administration of our advertising services in our Kentucky Systems, we entered into an agreement expiring on January 1, 2004 with an affiliate of Comcast Cable, which provides for this affiliate to perform all of our Kentucky advertising sale and related administrative services.  We earned advertising revenues through this affiliate, derived from our Kentucky Systems, of $15.8 million, $12.4 million and $12.8 million for the years ended December 31, 2002, 2001 and 2000.  As of December 31, 2002 and 2001, we had $8.5 million and $6.9 million as a receivable due from this affiliate included in other current assets.  We pay this affiliate a fixed and variable fee for providing this service based on advertising sales cash flow growth.  As of December 31, 2002 and 2001, we had $308,000 and $666,000 recorded as payables to this affiliate related to such services. 

14. 401(k) Plan

We sponsor a savings and investment 401(k) Plan for the benefit of our employees. All employees who have completed six months of employment and have attained age 18 are eligible to participate in the plan.  We make matching contributions equal to 100% of the employee’s contribution excluding any such contributions in excess of 5% of the employee’s wages.  Effective April 1, 2001, 50% of our matching contribution to the plan is in the form of our common stock.  For the years ended December 31, 2002, 2001 and 2000, we matched contributions of $3.2 million, $2.3 million and $957,000.

F-29

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

15. Commitments and Contingencies

Programming Contracts

We enter into long-term contracts with third parties who provide us with programming for distribution over our cable television systems.  These programming contracts are a significant part of our business and represent a substantial portion of our operating costs.  Since future fees under such contracts are based on numerous variables, including number and type of customers, we have not recorded any liabilities with respect to such contracts.

Lease Agreements

We lease and sublease equipment and office space under various operating lease arrangements expiring through December 31, 2015.  Future minimum rental payments required under such operating leases as of December 31, 2002 were (in thousands):

2003		$	4,185
2004			3,437
2005			2,798
2006			2,449
2007			1,952
Thereafter			4,286
	Total	$	19,107

Rental expense on operating leases for the years ended December 31, 2002, 2001 and 2000 was $5.7 million, $5.5 million and $4.6 million.

Litigation

Insight Kentucky and certain prior owners of the Kentucky Systems have been named in class actions regarding the pass-through of state and local property tax charges to approximately 320,000 customers by the prior owners of the Kentucky Systems.  The plaintiffs seek monetary damages and the enjoinment of the collection of such taxes.  We have entered into agreements with the plaintiffs to settle these lawsuits and have received final court approval in December 2002.  The settlements will not have a material effect on our results of operations or cash flows.    

Separately, we have filed a state court action against the City of Louisville for its grant of a more favorable franchise to Knology, Inc.  Our commencement of this action automatically suspended this franchise pending a court determination.  In November 2000, Knology filed a federal court action against us seeking monetary damages and other relief for alleged violations of federal laws arising out of our having filed, pursuant to the provisions of our own franchise from the City, the state court action.  In March 2001, the federal court preliminarily set aside the state court suspension of Knology’s franchise.  We believe we have substantial and meritorious defenses to the asserted federal claims and intend to

F-30

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

15. Commitments and Contingencies (continued)

defend it vigorously.  Consequently, we have not recorded any loss reserves in the accompanying financial statements. 

We are subject to various legal proceedings that arise in the ordinary course of business. While it is impossible to determine with certainty the ultimate outcome of these matters, it is our opinion that the resolution of these matters will not have a material adverse affect on our consolidated financial condition.

16. At Home Corporation

On September 28, 2001, At Home Corporation, the former provider of high-speed data services for all of our systems except for those located in Ohio, filed for protection under Chapter 11 of the Bankruptcy Code.  For the purpose of continuing service to existing customers and to resume the provisioning of service to new customers, we entered into an interim agreement with @Home to extend service through November 30, 2001.  Further, in December 2001, we entered into an additional interim service arrangement whereby we paid $10.0 million to @Home to extend service for three months through February 28, 2002 that was recorded as expense ratably over the three-month period. 

As a result of these interim arrangements we incurred approximately $2.8 million in excess of our original agreed-to cost for such services rendered during the year ended December 31, 2001.  Additionally, as of December 31, 2001, we recorded an allowance for bad debt of $1.0 million for a net receivable from @Home in connection with monies @Home collected from our high-speed data customers on our behalf prior to September 28, 2001.  Additionally, we incurred approximately $4.1 million in excess of our original agreed-to cost for such services rendered during the three months ended March 31, 2002.  These additional costs are included in non-recurring high-speed data service charges in our statement of operations.

In December 2001, we entered into a four-year agreement with AT&T Corporation to provide high-speed data service to all our affected systems.  We transferred all our affected systems to our own regional network that resides on AT&T Corporation’s platform.  Such high-speed data services commenced progressively on a system-by-system basis beginning in February 2002, with all affected systems being served as of March 1, 2002.

F-31

INSIGHT COMMUNICATIONS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENS (CONTINUED)

17. Quarterly Financial Data (Unaudited)

	Three months ended												Year ended December 31, 2002
2002	March 31			June 30			September 30			December 31
	(in thousands, except per share amounts)
Revenue	$	192,178		$	200,033		$	204,936		$	210,735		$	807,882
Operating income		29,185			39,824			30,052			39,941			139,002
Net loss		(12,254	)		(6,556	)		(9,013	)		(20,169	)*		(47,992	)
Net loss attributable to common stockholders		(17,209	)		(11,558	)		(14,063	)		(25,269	)*		(68,099	)
Basic and diluted loss per share attributable to common stockholders		(.29	)		(.19	)		(.23	)		(.42	)*		(1.13	)

*  Includes impairment loss of $18.0 million and gain on extinguishment of debt of $3.6 million.

	Three months ended												Year ended December 31, 2001
2002	March 31			June 30			September 30			December 31
	(in thousands, except per share amounts)
Revenue	$	174,226		$	181,247		$	183,466		$	189,399		$	728,338
Operating loss		(13,230	)		(14,976	)		(14,122	)		(28,505	)		(70,833	)
Net loss		(1,977	)		(21,874	)		(20,150	)		(30,788	)		(74,789	)
Net loss attributable to common stockholders		(6,743	)		(26,681	)		(24,998	)		(35,799	)		(94,221	)
Basic and diluted loss per share attributable to common stockholders		(.11	)		(.44	)		(.42	)		(.59	)		(1.57	)

F-32

SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Insight Communications Company, Inc. (the “Registrant”) has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INSIGHT COMMUNICATIONS COMPANY, INC.
Date: March 25, 2003	By:	/s/ MICHAEL S. WILLNER
		Michael S. Willner, Vice Chairman and
		Chief Executive Officer

10

CERTIFICATIONS

I, Michael S. Willner, certify that:
	1)	I have reviewed this annual report on Form 10-K/A (Amendment No. 1) of the Registrant;
	2)	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
	3)	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report;
	4)	The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
			a)	designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
			b)	evaluated the effectiveness of the Registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
			c)	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
	5)	The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors:
			a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant’s ability to record, process, summarize and report financial data and have identified for the Registrant’s auditors any material weaknesses in internal controls; and
			b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal controls; and

11

6) The Registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

/s/ MICHAEL S. WILLNER

Michael S. Willner

Vice Chairman and Chief Executive Officer

March 25, 2003

I, Dinesh C. Jain, certify that:
	1)	I have reviewed this annual report on Form 10-K/A (Amendment No. 1) of the Registrant;
	2)	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
	3)	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report;
	4)	The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
			a.	designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
			b.	evaluated the effectiveness of the Registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
			c.	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
	5)	The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors:
			a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant’s ability to record, process, summarize and report financial data and have identified for the Registrant’s auditors any material weaknesses in internal controls; and

12

		b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal controls; and
6)	The Registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

/s/ DINESH C. JAIN

Dinesh C. Jain

Senior Vice President and Chief Financial Officer

March 25, 2003

13

CERTIFICATION OF CHIEF EXECUTIVE OFFICER UNDER
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael S. Willner, hereby certify that the annual report on Form 10-K/A (Amendment No. 1) of the Registrant for the year ended December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ MICHAEL S. WILLNER

Michael S. Willner

Vice Chairman and Chief Executive Officer

March 25, 2003

14

CERTIFICATION OF CHIEF FINANCIAL OFFICER UNDER
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Dinesh C. Jain, hereby certify that the annual report on Form 10-K/A (Amendment No. 1) of the Registrant for the year ended December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ DINESH C. JAIN

Dinesh C. Jain

Senior Vice President and Chief Financial Officer

March 25, 2003

15

EX-23.1

EXHIBIT 23.1

Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statements (Forms S-3, Nos. 333-58296 and 333-65776) and related prospectuses of Insight Communications Company, Inc. for the registration of up to $1 billion in aggregate offering price in various combinations of its Class A Common Stock, preferred stock, debt securities, warrants or subscription rights and the Registration Statement (Form S-8, No. 333-57808) pertaining to the Insight Communications Company, Inc. 1999 Stock Option Plan of our reports dated February 25, 2003 with respect to the consolidated financial statements of Insight Communications Company, Inc. included in its Annual Report (Form 10-K/A (Amendment No. 1)) for the year ended December 31, 2002.

/S/    ERNST & YOUNG LLP

New York, New York

March 25, 2003