DEFA14A

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): July 28, 2005

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)

x 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 1.01 Entry into a Material Definitive Contract.

On July 28, 2005, Insight Communications Company, Inc. (the “Registrant”) entered into a definitive merger agreement (the “Merger Agreement”) with Insight Acquisition Corp. (“Insight Acquisition”), an entity formed specifically for the transactions contemplated by the Merger Agreement. Pursuant to the Merger Agreement, Insight Acquisition would be merged with and into the Registrant with the Registrant as the surviving corporation.

Concurrently with the execution of the Merger Agreement, the Registrant, Insight Acquisition, Sidney R. Knafel (Chairman of the Board and a co-founder of the Registrant), Michael S. Willner (Chief Executive Officer, a director and a co-founder of the Registrant), Thomas L. Kempner (a director of the Registrant), James S. Marcus (a director of the Registrant), Andrew G. Knafel, Joshua Rubenstein and William L. Scherlis, as trustees under Trusts F/B/O Knafel children (the “Trusts”) (a principal stockholder of the Registrant), Andrew G. Knafel individually, and Carlyle Partners III Telecommunications, L.P., Carlyle Partners IV Telecommunications, L.P., CP III Coinvestment, L.P. and CP IV Coinvestment, L.P. (“Carlyle” and collectively with the other parties, the “Buyers”) entered into an Exchange Agreement. Pursuant to the Exchange Agreement, immediately prior to the closing under the Merger Agreement, among other things,

• Messrs. Knafel and Willner and the Trusts will subscribe for shares of a new series of preferred stock issued by the Registrant.

• Carlyle will contribute cash to Insight Acquisition in exchange for shares of Class D preferred stock of Insight Acquisition.

• Holders of the Registrant’s Class B common stock, including Messrs. Knafel and Willner (collectively, the “Former Class B Holders”), will convert such shares of Class B common stock into an equivalent number of shares of Class A common stock.

• The Former Class B Holders (after giving effect to such conversion) and Mr. Kempner will contribute to Insight Acquisition some or all of their shares of Class A common stock in exchange for an equivalent number of shares of Class C preferred stock of Insight Acquisition.

Under the terms of the proposed merger (the “Merger”), all outstanding shares of common stock of the Registrant other than those held by the Registrant, Insight Acquisition and stockholders perfecting dissenters’ rights under Delaware law will be converted into the right to receive a cash payment equal to $11.75 per share. Consummation of the Merger is subject to certain conditions, including, among others,

• Approval of the Merger Agreement and the Merger by the holders of a majority of the voting power of the outstanding shares of the Registrant’s common stock entitled to vote thereon, voting together as a single class. Messrs. Knafel, Willner, Kempner and Marcus and the Trusts collectively own shares of the Registrant representing approximately 62% of the aggregate voting power entitled to vote on the Merger as a single class.

• Approval of the Merger Agreement and Merger by holders of a majority of the outstanding shares of the Registrant’s Class A common stock not held by Insight Acquisition, its affiliates or the officers and directors of the Registrant.

• Approval of an amendment to the Registrant’s Restated Certificate of Incorporation by a majority of the outstanding shares of the Registrant’s Class A common stock and a majority of the outstanding shares of the Registrant’s Class B common stock to make Section 5.6 thereof, which provides that holders of each class of the Registrant’s common stock must receive equal per share payments or distributions in a merger transaction, inapplicable to the Merger.

• Termination or expiration of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

The Registrant has agreed to pay to Insight Acquisition a termination fee of $10 million (inclusive of an expense reimbursement of $4 million) if the Merger Agreement is terminated under certain circumstances described in Section 7.01 of the Merger Agreement and upon the occurrence of certain subsequent transactions described in Section 7.03 of the Merger Agreement.

Concurrently with the execution of the Merger Agreement, the Registrant and certain of the Carlyle entities entered into a Guaranty whereby such entities agreed to guarantee to the Registrant the payment and performance of Insight Acquisition’s obligations to the Registrant arising under the Merger Agreement up to a maximum amount of $10 million.

The descriptions of the Merger Agreement, the Exchange Agreement and the Guaranty herein are qualified in their entirety by reference to the full text of the Merger Agreement, the Exchange Agreement and the Guaranty, which are filed as Exhibits 2.1, 10.1 and 10.2 hereto, respectively, and are incorporated herein by this reference.

Upon consummation of the Merger, the Class A common stock of the Registrant would be delisted from the Nasdaq National Market and deregistered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”).

The Registrant will file a proxy statement and other documents regarding the proposed merger with the Securities and Exchange Commission (the “SEC”). The definitive proxy statement will be sent to stockholders of the Registrant seeking their approval of the matters discussed above at a special meeting of stockholders. Stockholders are urged to read the proxy statement and any other relevant document when they become available, because they will contain important information about the Registrant, the proposed merger and related matters. Stockholders may obtain a free copy of the definitive proxy statement (when available) and other documents filed by the Registrant with the SEC at the SEC’s web site at www.sec.gov. The definitive proxy statement (when available) and other related SEC documents may also be obtained free of charge by directing a request to Sandy Colony, Insight Communications Company, Inc., 810 7^th Avenue, New York, New York 10019, telephone: (917) 286-2300.

Item 2.02 Results of Operations and Financial Condition.

On July 29, 2005, the Registrant issued a press release announcing its financial results for the quarter ended June 30, 2005. 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 income before depreciation and amortization 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”). Disclosure regarding management’s reasons for presenting these non-GAAP measures, as well as tabular reconciliation of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP, are presented in the press release under the caption “Use of Operating Income before Depreciation and Amortization and Free Cash Flow.”

The information required to be furnished pursuant to Item 2.02 and Exhibit 99.1 of this report shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, except if the Registrant specifically incorporates it by reference into a filing under the Securities Act of 1933 or the Exchange Act.

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Item 8.01 Other Events.

Between March 7 and March 15, 2005, five purported class action lawsuits were filed in the Delaware Court of Chancery naming the Registrant and each of its directors as defendants. Three of the lawsuits also named The Carlyle Group as a defendant. The cases were subsequently consolidated under the caption In Re Insight Communications Company, Inc. Shareholders Litigation, and, on April 11, 2005, a Consolidated Amended Complaint (“Complaint”) was filed against each director and The Carlyle Group. The Complaint alleges, among other things, that the defendant directors breached their fiduciary duties to the stockholders of the Registrant in connection with a proposal from Sidney R. Knafel, Michael Willner, together with certain related and other parties, and The Carlyle Group to acquire all of the outstanding, publicly-held Class A common stock of the Registrant. The Complaint also alleges that the proposed transaction violates the Registrant’s Restated Certificate of Incorporation and that The Carlyle Group has aided and abetted the alleged fiduciary duty breaches. The Complaint seeks the certification of a class of the Registrant’s stockholders; a declaration that the proposed transaction violates the Registrant’s Restated Certificate of Incorporation; an injunction prohibiting the defendants from proceeding with the proposed transaction; rescission or other damages in the event the proposed transaction is consummated; an award of costs and disbursements including attorneys’ fees; and other relief.

On July 28, 2005, the parties to the action entered into a memorandum of understanding setting forth the terms of a proposed settlement of the litigation which, among other things, provides that the Buyers shall proceed with the Merger, subject to the terms and conditions of the Merger Agreement, including the “majority of the minority” stockholder voting condition, and under which the defendants admit to no wrongdoing or fault. The memorandum of understanding contemplates certification of a plaintiff class consisting of all record and beneficial owners of the Registrant’s Class A common stock, other than the Buyers, during the period beginning on and including March 6, 2005, through and including the date of the consummation of the Merger, a dismissal of all claims with prejudice, and a release in favor of all defendants of any and all claims related to the Merger. The proposed settlement is subject to a number of conditions, including consummation of the Merger, the plaintiffs’ approval of a definitive settlement agreement and final court approval of the settlement.

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
2.1	Agreement and Plan of Merger, dated as of July 28, 2005, by and between Insight Acquisition Corp. and the Registrant (filed as an exhibit to Amendment No. 1 to the Schedule 13D filed by Messrs. S. Knafel, Willner, Kempner, Marcus and A. Knafel and the Trusts with the SEC on July 29, 2005 (the “Schedule 13D”), and incorporated herein by reference)
10.1	Exchange Agreement, dated as of July 28, 2005, by and among the Registrant, Insight Acquisition Corp., Sidney R. Knafel, Michael S. Willner, the other stockholders of the Registrant listed on the signature pages thereof, Carlyle Partners III Telecommunications, L.P., Carlyle Partners IV Telecommunications, L.P., CP III Coinvestment, L.P. and CP IV Coinvestment, L.P. (filed as an exhibit to the Schedule 13D and incorporated herein by reference)
10.2	Guaranty, dated as of July 28, 2005, by and among the Registrant, Carlyle Partners III Telecommunications, L.P. and Carlyle Partners IV Telecommunications, L.P.
99.1	Press release issued on July 29, 2005

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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: August 3, 2005	By:	/s/    Elliot Brecher
		Elliot Brecher
		Senior Vice President
		and General Counsel

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EX-10.2

Exhibit 10.2

GUARANTY

This GUARANTY (this “Guaranty”), dated as of July 28, 2005, is entered into by and among Insight Communications Company, Inc., a Delaware corporation (the “Company”), Carlyle Partners III Telecommunications, L.P., a Delaware limited partnership, and Carlyle Partners IV Telecommunications, L.P., a Delaware limited partnership (each, a “Guarantor” and together, the “Guarantors”). Capitalized terms used herein without definition have the meanings given to them in the Merger Agreement (as defined below).

RECITALS

WHEREAS, concurrently with the execution and delivery of this Guaranty, the Company and Insight Acquisition Corp., a Delaware corporation (“Parent”), are entering into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), providing for the Merger of Parent with and into the Company upon the terms and subject to the conditions set forth therein;

WHEREAS, Parent is an Affiliate of the Guarantors; and

WHEREAS, in order to induce the Company to enter into the Merger Agreement, the Guarantors have agreed to enter into this Guaranty;

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Guarantors hereby agree as follows:

1. Guaranty. The Guarantors hereby irrevocably and unconditionally guarantee to the Company, jointly and severally, the prompt and complete payment and performance of Parent’s obligations to the Company arising under the Merger Agreement (the “Guaranteed Obligations”); provided, however, that the maximum aggregate liability of the Guarantors hereunder shall not exceed $10,000,000 (the “Maximum Amount”). The Company hereby agrees that in no event shall the Guarantors, collectively, be required to pay to any Person under, in respect of, or in connection with this Guaranty more than the Maximum Amount, and that neither Guarantor shall have any obligation or liability to any Person relating to, arising out of or in connection with this Guaranty other than as expressly set forth herein.

2. Terms of Guaranty.

(a) This Guaranty is one of payment, not collection, and a separate action or actions may be brought and prosecuted against each of the Guarantors to enforce this Guaranty, irrespective of whether any action is brought against Parent or the other Guarantor or whether Parent or the other Guarantor is joined in any such action or actions.

(b) Notwithstanding any other provision of this Guaranty, the Company hereby agrees that (i) each of the Guarantors may assert, as a defense to any payment or performance by such Guarantor under this Guaranty, any claim, set-off, deduction or defense that Parent could assert against the Company under the terms of the Merger Agreement or that could otherwise be asserted by Parent against the Company in any action by the Company against Parent and (ii) any failure by the Company to comply with the terms of the Merger Agreement, including, without limitation, any breach by the Company of the representations and warranties contained therein or in any of the agreements, certificates and other documents required to be delivered by the Company pursuant to the terms of the Merger Agreement (whether such breach results from fraud, intentional misrepresentation or otherwise), that would relieve Parent of its obligations under the Merger Agreement shall likewise relieve the Guarantors of their obligations under this Guaranty.

3. Sole Remedy.

(a) The Company hereby acknowledges and agrees that Parent has no assets as of the date hereof, and that the Company shall not have any right to cause any monies to be contributed to Parent by any current, former or prospective stockholder, officer, member, director, agent, employee, Affiliate or assignee of the Guarantors.

(b) The Company hereby agrees that no Person other than the Guarantors shall have any obligation or liability arising out of, in connection with or relating to this Guaranty and that neither the Company nor any other Person shall have any remedy, recourse or right of recovery against any current, former or prospective stockholder, member, general or limited partner, officer, director, agent, employee, Affiliate or assignee of the Guarantor, or against any current, former or prospective stockholder, member, general or limited partner, officer, director, agent, employee, Affiliate or assignee of any of the foregoing, whether through a Guarantor or otherwise, by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of Parent against a Guarantor or against any current, former or prospective stockholder, member, general or limited partner, officer, director, agent, employee, Affiliate or assignee of a Guarantor, Parent or any of their respective Affiliates, or otherwise.

(c) Recourse by the Company against the Guarantors under this Guaranty shall be the sole and exclusive remedy of the Company against the Guarantors or any of their Affiliates (other than Parent) in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby. The Company hereby covenants and agrees that it shall not institute, and shall cause its

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Affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby, against either Guarantor or any of its Affiliates (other than Parent), except for claims by the Company against the Guarantors under this Guaranty. Nothing set forth in this Guaranty shall affect or be construed to affect any liability of Parent to the Company or shall confer or give, or shall be construed to confer or give, to any Person other than the Company (including any Person acting in a representative capacity) any rights or remedies against any Person in respect of or relating to any obligation or liability of the Guarantors arising out of, in connection with or relating to this Guaranty.

(d) Notwithstanding any provision hereof or otherwise, including by applicable Law, no obligation or liability contained in, arising out of, in connection with or relating to this Guaranty shall be enforceable by way of specific performance.

4. Termination. This Guaranty shall terminate at the Effective Time. In the event that the Company or any of its Affiliates asserts in any litigation relating to this Guaranty that the provisions of Section 1 hereof limiting the maximum aggregate liability of the Guarantors to the Maximum Amount or the provisions of Section 3 hereof are illegal, invalid or unenforceable in whole or in part, the obligations of the Guarantors under this Guaranty shall terminate forthwith and shall thereupon be null and void.

5. Continuing Guaranty. Unless terminated pursuant to the provisions of Section 4 hereof, this Guaranty is a continuing one and shall remain in full force and effect until the indefeasible payment and satisfaction in full of the Guaranteed Obligations, and shall be binding upon, inure to the benefit of and be enforceable by, the parties hereto and their respective successors and permitted transferees and assigns.

6. Entire Agreement. This Guaranty constitutes the entire agreement with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, between the Guarantors or any of their Affiliates on the one hand, and the Company or any of its Affiliates on the other hand.

7. Amendments and Waivers. No amendment or waiver of any provision of this Guaranty shall be valid and binding unless it is in writing and signed, in the case of an amendment, by each of the Guarantors and the Company, or in the case of waiver, by the party against whom the waiver is sought to be enforced. No waiver by a party of any breach or violation of, or default under, this Guaranty shall be deemed to extend to any prior or subsequent breach, violation or default hereunder or to affect in any way any rights arising by virtue of any such prior or subsequent occurrence. No delay or omission by any party in exercising any right, power or remedy under this Guaranty shall operate as a waiver thereof.

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8. Counterparts. This Guaranty may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. This Guaranty shall become effective when duly executed by each party hereto.

9. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or sent by telecopy or telex, overnight courier service or by registered or certified mail (postage prepaid, return receipt requested), to the respective parties at the following addresses or at such addresses as shall be specified by the parties by like notice:

(a) If to the Guarantors:

The Carlyle Group

1001 Pennsylvania Avenue, NW

Suite 220 South

Washington, D.C. 20004

Telecopier: (202) 347-1692

Attention:   William E. Kennard

with a copy to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Telecopier:  (212) 909-6836

Attention:   Jeffrey J. Rosen

                   Andrew L. Bab

and

Dow, Lohnes & Albertson, PLLC

1200 New Hampshire Avenue, NW

Suite 800

Washington, D.C. 20036

Telecopier:  (202) 776-2222

Attention:    Leonard J. Baxt

                    J. Kevin Mills

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(b) If to the Company:

Insight Communications Company, Inc.

810 7th Avenue, 41st Floor

New York, NY 10019

Telecopier:  (917) 286-2301

Attention:    Elliot Brecher

with a copy to:

Special Committee of the Board of Directors of

  Insight Communications Company, Inc.

c/o

D.B. Zwirn & Co.

745 Fifth Avenue, 18^th Floor

New York, New York 10151

Telecopier:  (646) 720-9077

Attention:    David C. Lee

and

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Telecopier:  (917) 777-3542

Attention:    Lou R. Kling

                    Stephen F. Arcano

and

Sonnenschein Nath & Rosenthal LLP

1221 Avenue of the Americas

New York, New York 10020

Telecopier:  (212) 768-6800

Attention:    Robert L. Winikoff

10. Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof, except to the extent that mandatory provisions of federal law apply.

11. Jurisdiction and Venue; Service of Process. Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the

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exclusive jurisdiction of the courts of the State of Delaware and any appellate court thereof, in any action or proceeding arising out of or relating to this Guaranty or any of the transactions contemplated hereby or for recognition or enforcement of any judgment relating thereto, and each of the parties hereby irrevocably and unconditionally (a) agrees not to commence any such action except in such court, (b) agrees that any claim in respect of any such action or proceeding may be heard and determined in such Delaware state court, (c) waives, to the fullest extent it may legally and effectively do so any objection which it may now or hereafter have to venue of any such action or proceeding in any such Delaware state court, and (d) waives, to the fullest extent permitted by law, the defense of any inconvenient forum to the maintenance of such action or proceeding in any such Delaware state court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties hereto irrevocably consents to service of process in any such action or proceeding in the manner provided for notices in Section 9 of this Guaranty; provided, however, that nothing in this Guaranty shall affect the right of any party hereto to serve process in any other manner permitted by law.

12. Waiver of Jury Trial. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS GUARANTY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY AND ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.

13. Severability. Any term or provision of this Guaranty that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Guaranty or affecting the validity or enforceability of any terms or provisions of this Guaranty in any other jurisdiction so long as the economic or legal substance of the transactions contemplated hereby is not affected in

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any manner adverse to any party; provided, however, that this Guaranty may not be enforced without giving effect to the limitation of the amount payable hereunder to the Maximum Amount provided in Section 1 hereof and to the provisions of Sections 3 and 4 hereof. No party hereto shall assert, and each party shall cause its respective Affiliates not to assert, that this Guaranty or any part hereof is invalid, illegal or unenforceable.

14. Headings. Headings are used for reference purposes only and do not affect the meaning or interpretation of this Guaranty.

15. Parties in Interest. This Guaranty shall be binding upon and inure solely to the benefit of each party hereto and their respective successors and permitted assigns, and nothing in this Guaranty, express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Guaranty.

[Signatures follow on next page]

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IN WITNESS WHEREOF, the undersigned have executed and delivered this Guaranty as of the date first above written.

CARLYLE PARTNERS III TELECOMMUNICATIONS, L.P.
By:	TC Group III, L.P., its General Partner
By:	TC Group III, L.L.C., its General Partner
By:	TC Group, L.L.C., its Managing Member
By:	/s/    William E. Kennard
Name:	William E. Kennard
Title:	Managing Director
CARLYLE PARTNERS IV TELECOMMUNICATIONS, L.P.
By:	TC Group IV, L.P., its General Partner
By:	TC Group IV, L.L.C., its General Partner
By:	TC Group, L.L.C., its Managing Member
By:	/s/    William E. Kennard
Name:	William E. Kennard
Title:	Managing Director
INSIGHT COMMUNICATIONS COMPANY, INC.
By:	/s/
Name:
Title:

EX-99.1

Exhibit 99.1

Contact: Sandy Colony | Senior Vice President, Corporate Communications | Insight Communications | 917.286.2300

FOR IMMEDIATE RELEASE

INSIGHT COMMUNICATIONS ANNOUNCES SECOND QUARTER 2005 RESULTS

NEW YORK – July 29, 2005 – Insight Communications Company (NASDAQ:ICCI) today announced financial results for the quarter ended June 30, 2005. Additionally, in a separate press release today, the company announced that it and Insight Acquisition Corp. have entered into a definitive merger agreement providing for Insight Acquisition Corp. to acquire all of the publicly held shares of Insight Communications.

Second Quarter Highlights

Revenue of $279.3 million, an increase of 11% over Q2 2004

• Operating Income before Depreciation and Amortization* of $122.4 million, an increase of 15% over Q2 2004

• Capital expenditures of $54.8 million

• Free Cash Flow* of $12.4 million

• Total Customer Relationships of 1,315,400, compared to 1,324,800 for Q2 2004

• Total RGUs of 2,182,800, an increase of 7% from Q2 2004, comprised of:

• High-speed Internet customer net gain of 23,500, an increase of 48% over Q2 2004 net additions. Total HSI customers at quarter end were 391,300, a penetration of 17% of HSI homes passed

• Basic customer net loss of 14,200, resulting in 1,257,200 basic customers at quarter end

• Digital customer net gain of 1,800, increasing digital customers to 460,800 at quarter end. Digital penetration was 38% of the company’s Digital Universe.

• Telephone customer net gain of 4,900, bringing total telephone customers to 73,500 at quarter end and penetration to 10% of marketable homes passed

• As of June 30, 2005, 97% of the company’s customers were passed by two-way, 750 MHz or higher capacity upgraded network.

Operating Results for the Three Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004

Revenue for the three months ended June 30, 2005 totaled $279.3 million, an increase of 11% over the prior year, due primarily to customer gains in high-speed Internet and digital services, as well as basic rate increases. High-speed Internet service revenue increased 49% over the prior year, which is mainly attributable to an increased customer base. Insight added a net 23,500 high-speed Internet customers during the quarter to end at 391,300 customers. In addition, digital service revenue increased 13% over the prior year, primarily due to an increased customer base. Insight added a net 1,800 digital customers during the quarter to end at 460,800 customers.

* See explanation of these Non-GAAP measures below.

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Basic cable service revenue increased 3%, due to basic rate increases partially offset by customer losses. Historically, the company has experienced a seasonal decline in basic customers during the second quarter, primarily as a result of students leaving the university communities served by Insight at the end of the school year. Compounding this loss were continued competitive pressures by DBS service providers, including the continuing effects of earlier “local-to-local” launches and bundled offers with DSL providers. To reverse this trend, Insight is increasing its customer retention efforts by emphasizing bundling, enhancing and differentiating its video services and providing video-on-demand, high definition television and digital video recorders. The company is also continuing to focus on improving customer service through quicker response times, increased education of product offerings and increased spending on marketing and sales efforts.

Revenue by service offering was as follows for the three months ended June 30 (dollars in thousands):

	Revenue by Service Offering
	Three Months Ended June 30, 2005		% of Total Revenue		Three Months Ended June 30, 2004		% of Total Revenue		% Change in Revenue
Basic	$	150,071	53.7	%	$	145,446	58.0	%	3.2	%
High-Speed Internet		46,318	16.6	%		31,095	12.4	%	49.0	%
Digital		27,838	10.0	%		24,679	9.9	%	12.8	%
Advertising		19,749	7.1	%		16,883	6.8	%	17.0	%
Premium		13,746	4.9	%		14,612	5.8	%	(5.9	)%
Telephone		8,387	3.0	%		3,802	1.5	%	120.6	%
Franchise fees		7,782	2.8	%		7,264	2.9	%	7.1	%
Other		5,420	1.9	%		6,857	2.7	%	(21.0	)%
Total	$	279,311	100.0	%	$	250,638	100.0	%	11.4	%

Total Customer Relationships were 1,315,400 as of June 30, 2005, compared to 1,324,800 as of June 30, 2004. Total Customer Relationships represent the number of customers who receive one or more of Insight’s products (i.e., basic cable, high-speed Internet or telephone) without regard to which product they purchase. Revenue Generating

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Units (“RGUs”), which represent the sum of basic, digital, high-speed Internet and telephone customers, as of June 30, 2005, increased 7% as compared to June 30, 2004. RGUs by category were as follows (in thousands):

	June 30, 2005	June 30, 2004
Basic	1,257.2	1,282.4
Digital	460.8	418.2
High-speed Internet	391.3	273.9
Telephone	73.5	61.6
Total RGUs	2,182.8	2,036.1

Average monthly revenue per basic customer was $73.64 for the three months ended June 30, 2005, compared to $64.76 for the three months ended June 30, 2004. This primarily reflects the continued growth of high-speed Internet and digital product offerings in all markets, as well as basic rate increases. In addition, telephone revenues for the three months ended June 30, 2005, reflect service revenues earned from customers, compared to the three months ended June 30, 2004, which reflected revenues billed to Comcast under a previous contractual arrangement that was terminated effective December 31, 2004. Also included in telephone revenue for the three months ended June 30, 2005, is the continued amortization of installation revenue under the previous arrangement with Comcast in the amount of $834,000.

Programming and other operating costs increased $4.5 million, or 5%. Total programming costs for Insight’s video products decreased for the three months ended June 30, 2005 from the three months ended June 30, 2004. Annual programming rate increases were more than offset by the favorable resolution of contract pricing negotiations that were accrued at a higher rate than the amount actually paid. Other operating costs increased primarily as a result of increases in technical salaries for new and existing employees, in addition to decreased capitalized labor costs due to the continued transition from upgrade and new connect activities to maintenance and reconnect activities. Other operating costs also increased as a result of cost of sales associated with telephone that were previously paid by Comcast. Despite an increase of approximately 117,400 high-speed Internet customers, high-speed Internet service provider costs decreased due to more favorable per customer charges under an agreement with Insight’s Internet service provider entered into in the third quarter of 2004. However, as the company continues to add high-speed Internet customers, it expects Internet service provider costs to increase.

Selling, general and administrative expenses increased $8.7 million, or 16%, primarily due to increased payroll and payroll related costs, including salary increases for existing employees and increases in health insurance costs. 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, under a prior agreement to manage certain Comcast systems, also contributed to the increase in selling, general and administrative expenses. As this agreement was terminated effective July 31, 2004, the period ended June 30, 2005 does not include any of these expense allocations. Some cost savings have been realized upon termination of the management agreement, and the impact of certain of these savings is reflected in programming and other operating costs.

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Depreciation and amortization expense increased $1.9 million, or 3%, primarily as a result of additional capital expenditures through June 30, 2005. These expenditures were primarily for network extensions, capitalized payroll, upgrades to headends, telephone equipment and purchases of customer premise equipment, all of which Insight considers necessary in order to continue to maintain and grow its customer base and expand its service offerings. Partially offsetting this increase was a decrease in depreciation expense related to certain assets that have become fully depreciated since June 30, 2004.

As a result of the factors discussed above, Operating Income before Depreciation and Amortization increased $15.5 million, or 15%.

Interest expense increased $5.6 million, or 11%, primarily due to higher interest rates, which averaged 8.1% for the three months ended June 30, 2005 as compared to 7.2% for the three months ended June 30, 2004.

Liquidity and Capital Resources

Insight’s business requires cash for operations, debt service, capital expenditures and acquisitions. The cable television business has substantial ongoing capital requirements for the construction, expansion and maintenance of its broadband networks and provision of new services. In the past, expenditures have been made for various purposes including the upgrade of the existing cable network, and in the future will be made for network extensions, installation of new services, converters and, to a lesser extent, network upgrades. Historically, Insight has been able to meet its cash requirements with cash flow from operations, borrowings under its credit facilities and issuances of private and public debt and equity.

Cash provided by operations for the six months ended June 30, 2005 and 2004 was $143.2 million and $134.4 million. The increase was primarily attributable to increased operating income and the affect of non-cash items partially offset by the timing of cash receipts and payments related to Insight’s working capital accounts.

Cash used in investing activities for the six months ended June 30, 2005 and 2004 was $92.9 million and $82.9 million. The increase was due to amounts spent on capital expenditures primarily for the build out of Insight’s telephone product.

Cash used in financing activities for the six months ended June 30, 2005 and 2004 was $41.8 million and $45.3 million. The decrease was primarily due to the repurchase of senior discount notes in 2004 offset by increased amortization payments of Insight’s credit facility in 2005.

For the six months ended June 30, 2005 and 2004 the company spent $93.5 million and $83.6 million in capital expenditures. These expenditures principally constituted network extensions, upgrades to headends, telephone equipment, purchases of customer premise equipment and capitalized labor, all of which are considered necessary in order to maintain the existing network, to grow the customer base and expand service offerings.

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Free Cash Flow for the six months ended June 30, 2005 totaled $49.7 million, compared to $50.8 million for the six months ended June 30, 2004. The decrease was primarily driven by the following:

• A $9.8 million increase in cash interest expense paid primarily driven by an increase in interest rates;

• A $5.5 million source of Free Cash Flow for the six months ended June 30, 2005 compared to a $9.4 million source for the six months ended June 30, 2004 from changes in working capital accounts; and

• A $9.9 million increase in capital expenditures.

The above fluctuations resulted in a $23.6 million decrease in Free Cash Flow and were largely offset by an increase in operating income before depreciation and amortization of $22.5 million.

While Insight expects to continue to use Free Cash Flow to repay its indebtedness, as interest rates continue to increase, it expects interest costs will also be higher.

On July 21, 2005, Insight completed a refinancing of the existing $1.1 billion Term B loan facility under Insight Midwest’s Credit Agreement, which reduced the applicable margins for LIBOR rate borrowings and adjusted the maximum total leverage ratio covenant.

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

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

A limitation of Operating Income before Depreciation and Amortization, however, is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in Insight’s businesses. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital

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

Free Cash Flow is net cash provided by operating activities (as defined by accounting principles generally accepted in the United States) less capital expenditures. Free Cash Flow is considered to be an important indicator of Insight’s liquidity, including its ability to repay indebtedness. Insight believes Free Cash Flow is useful for investors because it enables them to assess Insight’s ability to service its debt and to fund continued growth with internally generated funds in a manner similar to the methods used by Insight’s management, and provides a measure that can be used to analyze, value and compare companies in the cable television industry.

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

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Reconciliation of Net Loss to Operating Income before Depreciation and Amortization

The following table reconciles Net Loss to Operating Income before Depreciation and Amortization. In addition, the table provides the components from Net Loss to Operating Income for purposes of the previous discussions.

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
	(in thousands)
Net loss	$	728		$	7,527		$	9,070		$	14,344
Income tax benefit (provision)		(125	)		167			(250	)		311
Loss before income taxes		603			7,694			8,820			14,655
Minority interest income (expense)		(5,227	)		841			(3,827	)		720
Income (loss) before minority interest and income taxes		(4,624	)		8,535			4,993			15,375
Other income (expense):
Other		(543	)		4,004			(671	)		2,176
Interest income		(761	)		(109	)		(1,023	)		(249	)
Interest expense		56,291			50,735			111,008			100,937
Total other expense, net		54,987			54,630			109,314			102,864
Operating income		59,611			46,095			104,321			87,489
Depreciation and amortization		62,809			60,862			125,669			120,021
Operating Income before Depreciation and Amortization	$	122,420		$	106,957		$	229,990		$	207,510

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

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
	(in thousands)
Operating income	$	59,611		$	46,095		$	104,321		$	87,489
Depreciation and amortization		62,809			60,862			125,669			120,021
Operating Income before Depreciation and Amortization		122,420			106,957			229,990			207,510
Changes in working capital accounts(1)		(1,151	)		(2,180	)		5,577			9,387
Cash paid for interest		(54,036	)(2)		(65,451	)		(92,118	)		(82,315	)
Cash paid for taxes		(85	)		(74	)		(222	)		(196	)
Net cash provided by operating activities		67,148			39,252			143,227			134,386
Capital expenditures		(54,788	)		(39,398	)		(93,513	)		(83,587	)
Free Cash Flow	$	12,360		$	(146	)	$	49,714		$	50,799

About Insight Communications

Insight Communications (NASDAQ: ICCI) is the 9th largest cable operator in the United States, managing approximately 1.26 million basic 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 and other periodic filings. All forward-looking statements in this press release are qualified by reference to the cautionary statements included in Insight Communications’ Form 10-K and such filings.

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

⁽²⁾ Excludes bond interest payments due April 1, 2005 that were made on March 31, 2005. Had the payments been made on April 1, 2005, Free Cash Flow for the three months ended June 30, 2005 would have been ($6,409). Cash paid for the three months ended June 30, 2005 is lower than for the three months ended June 30, 2004 because it does not include this interest payment.

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INSIGHT COMMUNICATIONS COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

	June 30, 2005			December 31, 2004
	unaudited
Assets
Cash and cash equivalents	$	108,684		$	100,144
Investments		5,562			5,053
Trade accounts receivable, net of allowance for doubtful accounts of $1,273 and $1,050 as of June 30, 2005 and December 31, 2004		24,199			31,355
Launch funds receivable		555			2,749
Prepaid expenses and other current assets		20,228			11,343
Total current assets		159,228			150,644
Fixed assets, net		1,127,231			1,154,251
Goodwill		72,430			72,430
Franchise costs		2,361,959			2,361,959
Deferred financing costs, net of accumulated amortization of $21,489 and $18,892 as of June 30, 2005 and December 31, 2004		25,299			27,896
Other non-current assets		2,712			2,692
Total assets	$	3,748,859		$	3,769,872
Liabilities and stockholders’ equity
Accounts payable	$	39,775		$	31,886
Accrued expenses and other current liabilities		35,979			40,838
Accrued property taxes		11,662			13,049
Accrued programming costs (inclusive of $38,872 and $36,838 due to related parties as of June 30, 2005 and December 31, 2004)		55,143			51,329
Deferred revenue		6,293			8,996
Interest payable		20,685			20,643
Debt – current portion		83,500			83,500
Total current liabilities		253,037			250,241
Deferred revenue		2,180			2,904
Debt		2,701,246			2,724,063
Other non-current liabilities		1,265			1,331
Minority interest		249,350			245,523
Stockholders’ equity:
Preferred stock; $.01 par value; 100,000,000 shares authorized; no shares issued and outstanding as of June 30, 2005 and December 31, 2004		—			—
Common stock; $.01 par value:
Class A - 300,000,000 shares authorized; 51,783,591 and 50,912,910 shares issued and outstanding as of June 30, 2005 and December 31, 2004		516			509
Class B - 100,000,000 shares authorized; 8,489,454 shares issued and outstanding as of June 30, 2005 and December 31, 2004		85			85
Additional paid-in-capital		827,295			813,853
Accumulated deficit		(269,340	)		(260,270	)
Deferred stock compensation		(17,225	)		(8,689	)
Accumulated other comprehensive income		450			322
Total stockholders’ equity		541,781			545,810
Total liabilities and stockholders’ equity	$	3,748,859		$	3,769,872

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INSIGHT COMMUNICATIONS COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except share and per share amounts)

	Three months ended June 30,						Six months ended June 30,
	2005			2004			2005			2004
Revenue	$	279,311		$	250,638		$	548,638		$	489,394
Operating costs and expenses:
Programming and other operating costs (exclusive of depreciation and amortization) (inclusive of $39,176 and $80,675 and $36,734 and $73,479 of programming expense incurred through related parties during June 30, 2005 and 2004)		93,324			88,844			192,133			176,755
Selling, general and administrative		63,567			54,837			126,515			105,129
Depreciation and amortization		62,809			60,862			125,669			120,021
Total operating costs and expenses		219,700			204,543			444,317			401,905
Operating income		59,611			46,095			104,321			87,489
Other income (expense):
Interest expense		(56,291	)		(50,735	)		(111,008	)		(100,937	)
Interest income		761			109			1,023			249
Other income (expense)		543			(4,004	)		671			(2,176	)
Total other expense, net		(54,987	)		(54,630	)		(109,314	)		(102,864	)
Income (loss) before minority interest and income taxes		4,624			(8,535	)		(4,993	)		(15,375	)
Minority interest income (expense)		(5,227	)		841			(3,827	)		720
Loss before income taxes		(603	)		(7,694	)		(8,820	)		(14,655	)
Benefit (provision) for income taxes		(125	)		167			(250	)		311
Net loss applicable to common stockholders	$	(728	)	$	(7,527	)	$	(9,070	)	$	(14,344	)
Basic and diluted loss per share attributable to common stockholders	$	(.01	)	$	(.13	)	$	(.15	)	$	(.24	)
Basic and diluted weighted-average shares outstanding		59,903,572			59,714,013			59,709,081			59,688,141

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INSIGHT COMMUNICATIONS COMPANY, INC.

FINANCIAL INFORMATION

(in thousands)

	Q2 2005			Q1 2005			Q2 2004
Customer Relationships		1,315.4			1,327.1			1,324.8
Total Average Monthly Revenue per Customer	$	73.64		$	70.58		$	64.76
Basic Cable
Homes Passed		2,396.4			2,384.4			2,349.7
Basic Cable Customers		1,257.2			1,271.4			1,282.4
Basic Cable Penetration		52.5	%		53.3	%		54.6	%
Cable Revenue	$	150,071		$	147,632		$	145,446
Average Monthly Cable Revenue per Customer	$	39.57		$	38.69		$	37.58
High-Speed Internet (“HSI”)
HSI Homes Passed		2,338.7			2,329.5			2,284.8
HSI Customers		391.3			367.8			273.9
HSI Penetration		16.7	%		15.8	%		12.0	%
HSI Revenue	$	46,318		$	42,113		$	31,095
Average Monthly HSI Revenue per Customer	$	12.21		$	11.04		$	8.03
Average Monthly HSI Revenue per HSI Customer	$	40.68		$	40.21		$	38.97
Digital Cable
Digital Universe		1,210.5			1,224.5			1,231.3
Digital Customers		460.8			459.0			418.2
Digital Cable Penetration		38.1	%		37.5	%		34.0	%
Digital Revenue	$	27,838		$	26,761		$	24,679
Average Monthly Digital Revenue per Customer	$	7.34		$	7.01		$	6.38
Average Monthly Digital Revenue per Digital Customer	$	20.18		$	19.60		$	19.67
Telephone
Telephone Universe (marketable homes)		763.7			761.1			732.7
Telephone Customers		73.5			68.6			61.6
Telephone Penetration (to marketable homes)		9.6	%		9.0	%		8.4	%
Telephone Revenue	$	8,387		$	7,732		$	3,802
Average Monthly Telephone Revenue per Customer	$	2.21		$	2.03		$	.98
Average Monthly Telephone Revenue per Telephone Customer	$	39.35		$	38.79			NM
Advertising Revenue
Advertising Revenue	$	19,749		$	16,988		$	16,883
Average Monthly Advertising Revenue per Customer	$	5.21		$	4.45		$	4.36
Other Revenue
Other Revenue	$	26,948		$	28,101		$	28,733
Average Monthly Other Revenue per Customer	$	7.10		$	7.36		$	7.43

NM = Not Meaningful

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INSIGHT COMMUNICATIONS COMPANY, INC.

NCTA STANDARD REPORTING CATEGORIES

CAPITAL EXPENDITURES

(unaudited)

(in thousands)

Insight Consolidated	Q2 2005 Actual		YTD Q2 Actual		2004 FY
Customer Premise Equipment	$	26,830	$	45,078	$	95,311
Scaleable Infrastructure		7,206		11,429		14,920
Line Extensions		5,774		11,223		25,168
Upgrade/Rebuild		5,525		9,265		13,616
Support Capital		9,453		16,518		25,081
Total Insight Consolidated	$	54,788	$	93,513	$	174,096

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