-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O4XpViGaQIs0uqL/b+Ei2RKx88BZwwfxN/MJSqbJeI09RmU9mmv9G1ZxyNw4rNzM YjAtjCgJW3Y0p+q0U+3YVA== 0001157523-04-010082.txt : 20041029 0001157523-04-010082.hdr.sgml : 20041029 20041029074823 ACCESSION NUMBER: 0001157523-04-010082 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041029 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041029 DATE AS OF CHANGE: 20041029 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INSIGHT COMMUNICATIONS CO INC CENTRAL INDEX KEY: 0001084421 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 134053502 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26677 FILM NUMBER: 041104223 BUSINESS ADDRESS: STREET 1: 126 EAST 56TH STREET CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2123712266 MAIL ADDRESS: STREET 1: INSIGHT COMMUNICATIONS CO INC STREET 2: 126 EAST 56TH STREET CITY: NEW YORK STATE: NY ZIP: 10022 8-K 1 a4754189.txt INSIGHT COMMUNICATIONS 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 29, 2004 Insight Communications Company, Inc. (Exact name of Registrant as specified in its charter) Delaware 0-26677 13-4053502 (State of incorporation) (Commission File No.) (IRS Employer Identification No.) 810 7th Avenue New York, New York 10019 (Address of principal executive offices) Registrant's telephone number: (917) 286-2300 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On October 29, 2004, we issued a press release announcing our financial results for the three and nine months ended September 30, 2004. A copy of the press release is being furnished as Exhibit 99.1 to this report and incorporated herein by reference. This press release contains disclosure of operating cash flow, system cash flow and free cash flow, each of which is a financial measure that is not calculated and presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Tabular reconciliation of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are presented on pages 10 and 12 to the press release. Disclosure regarding management's reasons for presenting these non-GAAP measures appears on page 6 of the press release. Item 9.01. Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired - None (b) Pro Forma Financial Information - None (c) Exhibits: Exhibit No. Description - ----------- ----------- 99.1 Press release issued on October 29, 2004 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Insight Communications Company, Inc. Dated: October 29, 2004 By: /s/ Elliot Brecher ----------------------------------- Elliot Brecher Senior Vice President and General Counsel EX-99.1 2 a4754189ex991.txt INSIGHT COMMUNICATIONS EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Insight Announces Third Quarter 2004 Results NEW YORK--(BUSINESS WIRE)--Oct. 29, 2004--Insight Communications Company (NASDAQ: ICCI) today announced financial results for the third quarter ended September 30, 2004. "We experienced solid customer growth this quarter to 1,330,300 distinct customer relationships," stated Michael S. Willner, president and chief executive officer of Insight Communications. "In addition, Revenue Generating Units expanded to 2,097,300, an 8% increase over Q3 2003. And, our high-speed Internet service reached the highest growth level in its history, posting 37,600 new customers, an increase in net additions of 30% over Q3 last year." Third Quarter Highlights Third quarter 2004 highlights for Insight Communications Company include: -- Revenue of $250.5 million, an increase of 10% over Q3 2003 -- Operating cash flow (operating income before depreciation and amortization) of $105.1 million, an increase of 7% over Q3 2003 -- Capital expenditures of $47.3 million -- Free cash flow (net cash provided by operating activities less capital expenditures) of $46.0 million -- Total Customer Relationships of 1,330,300 at quarter-end, a growth of 5,500 in the quarter -- As of September 30, 2004, 97% of the company's customers were passed by two-way, 750 MHz or higher capacity upgraded network -- Total RGUs of 2,097,300 at quarter-end, a growth of 61,200 in the quarter, comprised of: -- High-speed Internet customer net gain of 37,600, an increase of 30% over Q3 2003 net additions. Total HSI customers at quarter-end were 311,500, a penetration of 13% of HSI homes passed. -- Basic customer net gain of 1,200, for a total of 1,283,600 customers at quarter-end. -- Digital customer net gain of 21,200, increasing digital customers to 439,400 at quarter-end, a penetration of 36% of the Company's Digital Universe. -- Telephone customer net additions of 1,200, bringing total telephone customers to 62,800 at quarter-end and penetration to 8% of marketable homes passed. 1 Three Months Ended September 30, 2004 Compared to Three Months Ended September 30, 2003 The $22.1 million, or 10%, increase in revenue was primarily a result of gains in high-speed Internet revenues, which increased 40% over the prior year's quarter due to an increased customer base; increases in basic cable service revenue of 6% due to basic rate increases; and a 16% increase in digital video revenues also due to an increase in digital customers. Revenue by service offering was as follows (in thousands): Revenue by Service Offering ------------------------------------- -------- Three Three Months Months Ended Ended September % of September % of % Change 30, Total 30, Total in 2004 Revenue 2003 Revenue Revenue --------- -------- --------- -------- -------- Basic $143,918 57.4% $135,829 59.5% 6.0% Digital 24,872 9.9% 21,391 9.4% 16.3% High-speed Internet 33,955 13.5% 24,346 10.7% 39.5% Premium / analog pay- per-view 13,694 5.5% 13,776 6.0% -0.6% Telephone 3,829 1.5% 3,232 1.4% 18.5% Advertising 15,725 6.3% 14,550 6.4% 8.1% Franchise fees 7,183 2.9% 6,928 3.0% 3.7% Other 7,340 3.0% 8,343 3.6% -12.0% --------- -------- --------- -------- Total $250,516 100.0% $228,395 100.0% 9.7% ========= ======== ========= ======== Revenue Generating Units ("RGUs"), which represent the sum of basic, digital, high-speed Internet and telephone customers, as of September 30, 2004 increased approximately 8% as compared to September 30, 2003. RGUs by category were as follows (in thousands): September 30, September 30, 2004 2003 ------------------ ----------------- Basic 1,283.6 1,293.4 Digital 439.4 383.7 High-speed Internet 311.5 208.5 Telephone 62.8 49.3 ------------------ ----------------- Total RGUs 2,097.3 1,934.9 ================== ================= Average monthly revenue per basic customer was $65.08 for the three months ended September 30, 2004, compared to $58.81 for the three months ended September 30, 2003, primarily reflecting the continued growth of high-speed Internet and digital product offerings in all markets as well as basic rate increases. 2 Programming and other operating costs increased $5.9 million, or 7%. Programming costs increased primarily as a result of increased programming rates and increased digital customers. Other operating costs increased primarily due to increased high-speed Internet service provider costs driven by the net addition of approximately 103,000 high-speed Internet customers since September 30, 2003. This increase in operating costs was partially offset by more favorable per customer charges under a new agreement with Insight's Internet service provider. In addition, other operating costs increased as a result of an increased volume of modems provided to customers under certain marketing campaigns. A favorable reversal of accrued property taxes also contributed to partially offsetting these increases. Selling, general and administrative expenses increased $9.7 million, or 20%, primarily due to increased marketing expenses required to support the continued rollout of high-speed Internet and digital products, and to maintain the core video customer base. Marketing support funds (recorded as a reduction to selling, general and administrative expenses) decreased over the prior year's quarter. A decrease in expenses previously allocated to Comcast in connection with the managed properties also contributed to the increase in selling, general and administrative expenses. As this agreement was terminated effective July 31, 2004, the period ending September 30, 2004, contains only one month of expense allocations versus three months recorded for the period ending September 30, 2003. While cost savings have been realized upon termination of the agreement, the impact of some of these savings is reflected in programming and other operating costs. In addition, payroll and related costs increased due to salary increases for existing employees and increases in health insurance costs. Depreciation and amortization expense increased $3.7 million, or 7%, primarily as a result of additional capital expenditures through September 30, 2004. These expenditures chiefly constituted network extensions, upgrades to headends and purchases of customer premise equipment, all of which Insight considers necessary in order to continue to grow its customer base and expand its service offerings. Partially offsetting this increase was a decrease in depreciation expense related to certain assets that have become fully depreciated since September 30, 2003. Operating cash flow (Non-GAAP measure) increased $6.6 million, or 7%, primarily due to increased high-speed Internet, basic, and digital revenue, and was partially offset by increases in programming and other operating costs, as well as selling, general and administrative costs. Interest expenses decreased $5.0 million, or 9%, primarily due to lower interest rates, which averaged 7% for the three months ended September 30, 2004 as compared to 8% for the three months ended September 30, 2003. 3 Minority interest, equal to 50% of Insight Midwest's net income or loss attributable to common interests, decreased $8.2 million, or 84%, as a direct result of the decrease in net income recorded by Insight Midwest for the prior year quarter. This decrease is primarily due to the gain on settlement of a programming contract recorded during the three months ended September 30, 2003. This gain was partially offset by the loss from the extinguishment of the Coaxial debt. Liquidity and Capital Resources Cash provided by operations for the nine months ended September 30, 2004 and 2003 was $227.7 million and $171.3 million, respectively. The increase was primarily attributable to increased operating income and the timing of cash receipts and payments related to working capital accounts. Cash used in investing activities for the nine months ended September 30, 2004 and 2003 was $130.9 million and $169.7 million, respectively. The decrease was attributable to the swap of the Griffin, Ga. system for the New Albany, Ind. and Shelbyville, Ky. systems in the first quarter of 2003. Cash used in financing activities for the nine months ended September 30, 2004 and 2003 was $60.8 million and $22.4 million, respectively. During the nine months ended September 30, 2004, Insight: -- made scheduled debt amortization payments related to the A and B Term Loan portions of its credit facility, which totaled $46.7 million; -- repaid $6.0 million of revolver borrowings that were outstanding as of March 31, 2004 and did not need to re-borrow due to increased operating cash flow; and -- repurchased $10.0 million (amount at maturity) of senior discount notes in order to capitalize on current market conditions and help lower outstanding debt. During the nine months ended September 30, 2003, Insight: -- borrowed $212.0 million under the Midwest Holdings credit facility to refinance the then outstanding obligations of Insight Ohio, including $195.9 million for the Coaxial notes and $22.0 million for the Insight Ohio credit facility; and -- made $11.6 million of scheduled preferred interest distribution payments, which ceased with the refinancing of debt of Insight Ohio, discussed below, during the third quarter of 2003. 4 For the nine months ended September 30, 2004 and 2003 Insight spent $130.9 million and $131.1 million respectively in capital expenditures. These expenditures chiefly constituted network extensions, upgrades to headends and purchases of customer premise equipment, all of which Insight considers necessary in order to continue to grow its customer base and expand its service offerings. Recent Developments Acquisition of Telephone Business On July 2, 2004, Insight entered into an agreement with Comcast Cable to acquire its telephone business as relates to the markets served under their existing telephone joint operating agreement. Under the current agreement, Insight Midwest leases certain capacity on its local network to Comcast Cable for which it receives a fee, and Insight Midwest provides certain services and support for which it receives additional payments related to installations, marketing and billing. By acquiring ownership of the telephone business from Comcast Cable, Insight will gain operational and strategic control over the business. Comcast Cable has agreed to pay Insight, upon the closing of the transaction, an amount equal to $20.0 million, less the cumulative negative free cash flow incurred by Comcast Cable in operating this telephone business between June 1, 2004 and the closing. Additionally, as part of the agreement, Comcast Cable will provide to Insight certain fixed assets related to the telephone business. The transfer of ownership and operational control of Comcast Cable's telephone business to Insight will take place after a transition period and is subject to customary closing conditions, including regulatory approvals. The closing is expected to occur during the first half of 2005. At this time, Insight is unable to predict with certainty the actual closing date or the amount of cumulative negative free cash flow that will be incurred by Comcast Cable prior to the closing. Termination of Managed Systems Arrangement On March 17, 2000, Insight entered into a management agreement with an affiliate of Comcast to provide management services to cable television systems owned by Comcast. These systems served approximately 89,400 customers in the state of Indiana for which Insight received a fee equal to 5% of the gross revenues of the systems as well as reimbursement of expenses. Effective July 31, 2004, the management agreement was terminated by mutual agreement. Termination of Kentucky Advertising Sales Arrangement In October 1999, Insight entered into an agreement with an affiliate of Comcast Cable whereby the Comcast Cable affiliate performed all of Insight's Kentucky advertising sales and related administrative services. Effective September 26, 2004, this agreement was terminated by mutual agreement. Insight believes that the assumption of the advertising sales responsibilities in Kentucky offers it the opportunity to continue to grow this business and align the Kentucky operating strategy with its other markets. 5 Use of Non-GAAP Measures This press release contains disclosure of operating cash flow, system cash flow and free cash flow, each of which is a financial measure that is not calculated nor presented in accordance with accounting principles generally accepted in the United States ("GAAP"). This release includes tabular reconciliation of operating income, Insight's most directly comparable financial measure calculated and presented in accordance with GAAP, to operating cash flow and system cash flow. This release also includes a reconciliation of net cash provided by operating activities, Insight's most directly comparable financial measure calculated and presented in accordance with GAAP, to free cash flow. Insight defines operating cash flow as operating income or loss before depreciation and amortization. Insight defines free cash flow as net cash provided by operating activities less capital expenditures and distribution of preferred interests. Operating cash flow and free cash flow are useful to management in measuring the overall operational strength and performance of the company. A limitation of operating cash flow, however, is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating the company's revenues. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures and investment spending. Another limitation of operating cash flow is that it does not reflect income net of interest expense, which is a significant expense of the company because of the substantial debt it incurred to acquire cable television systems and finance the capital expenditures for the upgrade of the cable network. System cash flow is another non-GAAP financial measure, which Insight uses to evaluate the underlying operating performance of its cable systems. Insight defines system cash flow as operating cash flow excluding management fees payable by the company's operating subsidiaries to Insight Communications, and excluding the corporate overhead of Insight Communications. Such management fees are equal to 3% of system revenues and are eliminated in consolidation. System cash flow is subject to the same limitations as described above for operating cash flow. Despite the limitations of operating cash flow, system cash flow and free cash flow, management believes that the presentation of each financial measure is relevant and useful for investors because it allows investors to evaluate Insight's performance in a manner similar to the methods used by management. In addition, operating cash flow, system cash flow and free cash flow are commonly used in the cable television industry to analyze and compare cable television companies on the basis of liquidity, operating performance and leverage, although Insight's measures of operating cash flow, system cash flow and free cash flow may not be directly comparable to similar measures used by other companies. 6 Operating cash flow, system cash flow and free cash flow should not 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 well as other measures of financial performance reported in accordance with GAAP. About Insight Communications Insight Communications (NASDAQ: ICCI) is the 9th largest cable operator in the United States, serving approximately 1.3 million customers in the four contiguous states of Illinois, Kentucky, Indiana and Ohio. Insight specializes in offering bundled, state-of-the-art services in mid-sized communities, delivering basic and digital video, high-speed Internet and voice telephony in selected markets to its customers. # # # Any statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The words "estimate," "expect," "anticipate" and other expressions that indicate future events and trends identify forward-looking statements. The above forward-looking statements are subject to risks and uncertainties and are subject to change based upon a variety of factors that could cause actual results to differ materially from those Insight Communications anticipates. Factors that could have a material and adverse impact on actual results include history and expectation of future net losses, competition, increasing programming costs, changes in laws and regulations, the substantial debt and the other risk factors described in Insight Communications' annual report on Form 10-K for the year ended December 31, 2003. All forward-looking statements in this press release are qualified by reference to the cautionary statements included in Insight Communications' Form 10-K. 7 INSIGHT COMMUNICATIONS COMPANY, INC. CONSOLIDATED BALANCE SHEETS (dollars in thousands) September 30, December 30, 2004 2003 ------------ ------------ unaudited Assets Cash and cash equivalents $96,130 $60,172 Investments 4,850 4,078 Trade accounts receivable, net of allowance for doubtful accounts of $1,049 and $1,123 as of September 30, 2004 and December 31, 2003 25,806 29,313 Launch funds receivable 2,709 9,421 Prepaid expenses and other assets 13,576 17,446 ------------ ----------- Total current assets 143,071 120,430 Fixed assets, net 1,173,916 1,216,304 Goodwill 72,430 72,430 Franchise costs, net of accumulated amortization of $359,229 as of September 30, 2004 and December 31, 2003 2,361,959 2,361,959 Deferred financing costs, net of accumulated amortization of $17,574 and $13,676 as of September 30, 2004 and December 31, 2003 29,210 33,288 Other non-current assets 6,649 5,244 ------------ ----------- Total assets $3,787,235 $3,809,655 ============ =========== Liabilities and stockholders' equity Accounts payable $23,271 $30,417 Accrued expenses and other liabilities 36,013 34,182 Accrued property taxes 25,605 22,954 Accrued programming costs 49,754 43,261 Deferred revenue 10,367 10,061 Interest payable 47,747 23,315 Debt - current portion 78,188 62,250 ------------ ----------- Total current liabilities 270,945 226,440 Deferred revenue 3,283 4,523 Debt 2,736,398 2,786,041 Other non-current liabilities 1,864 5,742 Minority interest 232,377 229,790 Stockholders' equity: Preferred stock; $.01 par value; 100,000,000 shares authorized; no shares issued and outstanding as of September 30, 2004 and December 31, 2003 - - Common stock; $.01 par value: Class A - 300,000,000 shares authorized; 50,893,106 and 50,685,317 shares issued and outstanding as of September 30, 2004 and December 31, 2003 509 507 Class B - 100,000,000 shares authorized; 8,879,468 shares issued and outstanding as of September 30, 2004 and December 31, 2003 88 88 Additional paid-in-capital 817,034 816,600 Accumulated deficit (266,262) (246,471) Deferred stock compensation (9,495) (13,582) Accumulated other comprehensive income (loss) 494 (23) ------------ ----------- Total stockholders' equity 542,368 557,119 ------------ ----------- Total liabilities and stockholders' equity $3,787,235 $3,809,655 ============ =========== Certain prior period amounts have been reclassified to conform to the current period presentation. 8 INSIGHT COMMUNICATIONS COMPANY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, -------------------- ------------------- 2004 2003 2004 2003 ---------- --------- --------- --------- restated restated Revenue $250,516 $228,395 $739,910 $666,487 Operating costs and expenses: Programming and other operating costs 87,522 81,655 264,277 243,161 Selling, general and administrative 57,920 48,240 163,049 140,285 Depreciation and amortization 60,360 56,667 180,381 171,936 ---------- --------- --------- --------- Total operating costs and expenses 205,802 186,562 607,707 555,382 ---------- --------- --------- --------- Operating income 44,714 41,833 132,203 111,105 Other income (expense): Gain on cable system exchange - - - 26,992 Interest expense (49,228) (54,291) (150,165) (156,307) Interest income 174 296 423 778 Other income (expense) 475 (1,134) (1,701) 681 ---------- --------- --------- --------- Total other expense, net (48,579) (55,129) (151,443) (127,856) Loss before minority interest, investment activity, extinguishments of obligations, gain on contract settlement and income taxes (3,865) (13,296) (19,240) (16,751) Minority interest expense (1,597) (9,792) (877) (7,778) Loss from early extinguishments of debt - (10,879) - (10,879) Loss on settlement of put obligation - (11,979) - (11,979) Gain on settlement of programming contract - 37,137 - 37,137 Impairment write-down of investments - - - (1,500) ---------- --------- --------- --------- Loss before income taxes (5,462) (8,809) (20,117) (11,750) Benefit (provision) for income taxes 15 521 326 2,392 ---------- --------- --------- --------- Net loss (5,447) (8,288) (19,791) (9,358) Accrual of preferred interests - - - (10,353) ---------- --------- --------- --------- Net loss applicable to common stockholders $(5,447) $(8,288) $(19,791) $(19,711) ========== ========= ========= ========= Basic and diluted loss per share attributable to common stockholders $(.09) $(.14) $(.33) $(.33) Basic and diluted weighted- average shares outstanding 59,758 59,393 59,711 59,332 2003 amounts have been restated due to an accounting change related to the tax impact of interest rate swaps. See Insight's 2003 Form 10-K for a complete discussion of those changes. 9 INSIGHT COMMUNICATIONS COMPANY, INC. FINANCIAL INFORMATION (unaudited) (in thousands) Three months ended September 30, 2004 2003 ---------- ---------- Revenues $250,516 $228,395 System Cash Flow 111,617 104,774 System Cash Flow Margin 44.5% 45.9% Corporate Overhead (6,743) (6,883) Management Fee Income 200 609 Operating Cash Flow 105,074 98,500 Operating Cash Flow Margin 41.9% 43.1% Capital Expenditures 47,308 47,022 Total Debt 2,814,586 2,792,628 Reconciliation of Operating Income to Operating Cash Flow & System Cash Flow - ------------------------------------------------- Operating income $44,714 $41,833 Adjustment: Depreciation and amortization 60,360 56,667 ---------- ---------- Operating Cash Flow $105,074 $98,500 ---------- ---------- Adjustments: Corporate Overhead 6,743 6,883 Management Fee Income (200) (609) ---------- ---------- System Cash Flow $111,617 $104,774 ========== ========== Nine months ended September 30, 2004 2003 ---------- ---------- Revenues $739,910 $666,487 System Cash Flow 331,191 298,827 System Cash Flow Margin 44.7% 44.8% Corporate Overhead (20,000) (17,629) Management Fee Income 1,393 1,843 Operating Cash Flow 312,584 283,041 Operating Cash Flow Margin 42.2% 42.5% Capital Expenditures 130,895 131,133 Reconciliation of Operating Income to Operating Cash Flow & System Cash Flow - ------------------------------------------------- Operating income $132,203 $111,105 Adjustment: Depreciation and amortization 180,381 171,936 ---------- ---------- Operating Cash Flow $312,584 $283,041 ---------- ---------- Adjustments: Corporate Overhead 20,000 17,629 Management Fee Income (1,393) (1,843) ---------- ---------- System Cash Flow $331,191 $298,827 ========== ========== 10 INSIGHT COMMUNICATIONS COMPANY, INC. OPERATING STATISTICS (unaudited) (in thousands, except per customer and penetration data) Q3 Q2 Q3 2004 2004 2003 --------- --------- --------- Customer Relationships 1,330.3 1,324.8 1,323.4 Total Average Monthly Revenue per Customer $65.08 $64.76 $58.81 Basic Cable - ----------------------------------------- Homes Passed 2,364.1 2,349.7 2,313.5 Basic Cable Customers 1,283.6 1,282.4 1,293.4 Basic Cable Penetration 54.3% 54.6% 55.9% Cable Revenue $143,918 $145,446 $135,829 Average Monthly Cable Revenue per Customer $37.39 $37.58 $34.97 High-Speed Internet ("HSI") - ----------------------------------------- HSI Homes Passed 2,307.5 2,284.8 2,222.3 HSI Customers 311.5 273.9 208.5 HSI Penetration 13.5% 12.0% 9.4% HSI Revenue $33,955 $31,095 $24,346 Average Monthly HSI Revenue per Customer $8.82 $8.03 $6.27 Average Monthly HSI Revenue per HSI Customer $38.67 $38.97 $41.84 Digital Cable - ----------------------------------------- Digital Universe 1,234.1 1,231.3 1,243.3 Digital Customers 439.4 418.2 383.7 Digital Cable Penetration 35.6% 34.0% 30.9% Digital Revenue $24,872 $24,679 $21,391 Average Monthly Digital Revenue per Customer $6.46 $6.38 $5.51 Average Monthly Digital Revenue per Digital Customer $19.33 $19.67 $19.17 Telephone - ----------------------------------------- Telephone Universe (marketable homes) 740.7 732.7 641.2 Telephone Customers 62.8 61.6 49.3 Telephone Penetration (to marketable homes) 8.5% 8.4% 7.7% Telephone Revenue $3,829 $3,802 $3,232 Average Monthly Telephone Revenue per Customer $.99 $.98 $.83 Advertising Revenue - ----------------------------------------- Advertising Revenue $15,725 $16,883 $14,550 Average Monthly Advertising Revenue per Customer $4.09 $4.36 $3.75 Other Revenue - ----------------------------------------- Other Revenue $28,217 $28,733 $29,047 Average Monthly Other Revenue per Customer $7.33 $7.43 $7.48 Note: All "per Customer" figures reflect revenue per Basic Cable Customer. 11 INSIGHT COMMUNICATIONS COMPANY, INC. NCTA STANDARD REPORTING CATEGORIES CAPITAL EXPENDITURES (unaudited) (in thousands) ----------------------------------- Q3 2004 YTD Q3 2004 FY 2003 FY Insight Consolidated Actual Actual Guidance Actual - ---------------------------------------------------------------------- Customer Premise Equipment $27,135 $74,098 $104,700 $99,347 Scaleable Infrastructure 3,038 10,382 16,051 14,707 Line Extensions 6,382 18,135 27,357 23,299 Upgrade/Rebuild 3,027 11,562 16,918 33,692 Support Capital 7,726 16,718 19,974 25,613 ----------------------------------- Total Insight Consolidated $47,308 $130,895 $185,000 $196,658 ----------------------------------- INSIGHT COMMUNICATIONS COMPANY, INC. RECONCILIATION OF OPERATING INCOME TO FREE CASH FLOW (unaudited) (in thousands) Three Months Ended Nine Months Ended September 30, September 30, ----------------- ------------------- 2004 2003 2004 2003 -------- -------- --------- --------- Operating income $44,714 $41,833 $132,203 $111,105 Depreciation and amortization 60,360 56,667 180,381 171,936 -------- -------- --------- --------- Operating Cash Flow 105,074 98,500 312,584 283,041 Changes in working capital accounts (1) 4,083 (7,135) 13,470 (3,109) Cash paid for interest (15,778) (24,516) (98,093) (108,175) Cash paid for taxes (46) (2) (242) (425) -------- -------- --------- --------- Net cash provided by operating activities 93,333 66,847 227,719 171,332 Capital expenditures (47,308) (47,022) (130,895) (131,133) Distribution of preferred interests - - - (11,554) -------- -------- --------- --------- Free cash flow $46,025 $19,825 $96,824 $28,645 ======== ======== ========= ========= (1) Changes in working capital accounts is based on the net cash changes in current assets and current liabilities, excluding changes related to interest and taxes and other non-cash expenses. 12 CONTACT: Insight Communications John Abbot, 917-286-2300 -----END PRIVACY-ENHANCED MESSAGE-----