Exhibit 99.1
Insight Communications Announces Fourth Quarter and
Year-End 2005 Results
NEW YORK--(BUSINESS WIRE)--March 7, 2006--Insight Communications
Company today announced financial results for the quarter and year
ended December 31, 2005.
2005 Highlights
-- Revenue of $1.1 billion, an increase of 12% over 2004
-- Operating Income before Depreciation and Amortization* of
$406.0 million. After adjusting for going-private
transaction-related costs of $62.0 million, Operating Income
before Depreciation and Amortization was $468.0, an increase
of 8% over 2004.
-- Capital expenditures of $220.1 million
-- Total Customer Relationships of 1,347,500 at year end, an
increase of 24,800 compared to 1,322,700 at year end 2004
-- Total RGUs of 2,360,700 at year end, an increase of 11% from
year end 2004, comprised of:
-- High-speed Internet ("HSI") customer net gain of 139,900,
an increase of 39% over 2004 net additions. Total HSI
customers at year end were 470,400, a penetration of 20%
of HSI homes passed.
-- Basic customer net gain of 9,100, an increase of 30,200
customers over 2004 net losses, resulting in 1,281,600
basic customers at year end
-- Digital customer net gain of 67,500, an increase of 39%
over 2004 net additions, increasing digital customers to
518,800 at year end. Digital penetration was 42% of the
company's Digital Universe.
-- Telephone customer net gain of 25,600, an increase of
16,700 customers over 2004 net additions, bringing total
telephone customers to 89,900 at year end and penetration
to 11% of marketable homes passed
-- As of December 31, 2005, 97% of the company's customers were
passed by two-way, 750 MHz or higher capacity upgraded
network.
Operating Results for the Year Ended December 31, 2005 Compared to
Year Ended December 31, 2004
Revenue for the year ended December 31, 2005 totaled $1.1 billion,
an increase of 12% over the prior year, due primarily to customer
gains in all services, as well as basic and classic video rate
increases. High-speed Internet service revenue increased 45% over the
prior year, which is mainly attributable to an increased customer
base. Insight added a net 139,900 high-speed Internet customers during
the year to end the year at 470,400 customers. In addition, digital
service revenue increased 13% over the prior year primarily due to an
increased customer base. Insight added a net 67,500 digital customers
during the year to end the year at 518,800 customers.
(1)
* See explanation of this Non-GAAP measure on Page 5.
Basic cable service revenue increased 4% due to basic and classic
video rate increases, partially offset by promotional discounts.
Although the number of basic video customers was higher at December
31, 2005 than December 31, 2004, the average number of customers
during the year declined slightly. 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 satisfaction through higher
service levels, increased education of product offerings and increased
spending on sales and marketing efforts.
Revenue by service offering was as follows for the year ended
December 31 (dollars in thousands):
Revenue by Service Offering
------------------------------------------- ----------
% of
Total % of Total % Change
2005 Revenue 2004 Revenue in Revenue
----------- -------- ----------- ---------- ----------
Basic $596,321 53.4% $573,650 57.2% 4.0%
High-speed
Internet 190,820 17.1% 132,011 13.2% 44.5%
Digital 111,202 9.9% 98,797 9.9% 12.6%
Advertising 76,004 6.8% 68,415 6.8% 11.1%
Premium 54,414 4.9% 57,054 5.7% (4.6)%
Telephone 35,502 3.2% 15,254 1.5% 132.7%
Franchise fees 30,721 2.7% 28,721 2.9% 7.0%
Other 22,697 2.0% 28,554 2.8% (20.5)%
----------- -------- ----------- ---------- ----------
Total $1,117,681 100.0% $1,002,456 100.0% 11.5%
=========== ======== =========== ========== ==========
Total Customer Relationships were 1,347,500 as of December 31,
2005, an increase of 24,800 from 1,322,700 as of December 31, 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 Units ("RGUs"), which represent the sum
of basic, digital, high-speed Internet and telephone customers, as of
December 31, 2005 increased 11% as compared to December 31, 2004. RGUs
by category were as follows (in thousands):
(2)
RGUs by Category
----------------------
December 31, December 31,
2005 2004
------------ ------------
Basic 1,281.6 1,272.5
Digital 518.8 451.3
High-speed Internet 470.4 330.5
Telephone 89.9 64.3
------------ ------------
Total RGUs 2,360.7 2,118.6
============ ============
Average monthly revenue per basic customer was $73.30 for the year
ended December 31, 2005 compared to $64.96 for the year ended December
31, 2004. This primarily reflects the continued growth of high-speed
Internet and digital product offerings in all markets, as well as
basic and classic video rate increases. In addition, telephone
revenues for the year ended December 31, 2005 reflect service revenues
earned directly from customers, compared to telephone revenues in the
year ended December 31, 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 year ended December 31, 2005 is the continued amortization of
installation revenue under the previous arrangement with Comcast in
the amount of $3.3 million.
Programming and other operating costs increased $37.6 million, or
11%. Total programming costs for Insight's video products decreased
for the year ended December 31, 2005 compared to the year ended
December 31, 2004. The substantial increases in programming rates were
offset by programming credits. The credits resulted from favorable
resolution of pricing negotiations related to certain prior period
programming costs that were accrued at a higher rate than the amount
actually paid, as well as a settlement of disputed claims with a
vendor. In addition, direct operating costs increased due to an
increased volume of modems sold and cost of sales associated with
telephone that were previously paid by Comcast. 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 increases in repairs and
maintenance costs due to increased repair costs for customer premise
equipment, an increase in drop materials due to customer growth and
increased property taxes due to a favorable reversal of accrued
property taxes recorded in 2004.
Selling, general and administrative expenses increased $41.7
million, or 18%, primarily due to increased payroll and payroll
related costs, including an increase in the number of employees and
salary increases for existing employees. Marketing support funds
(recorded as a reduction to selling, general and administrative
expenses) decreased over the prior year. Marketing expenses increased
over the prior year to support the continued rollout of high-speed
Internet, digital and telephone products, and to maintain the
company's core video customer base. A decrease in expenses previously
allocated to Comcast, under Insight's 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 year ended December 31, 2005 does not
include any of these expense allocations, and the year ended December
31, 2004 includes seven months 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.
(3)
Transaction-related costs of $62.0 million were recorded for the
year ended December 31, 2005. These costs were comprised of sponsor
and investment fees, legal and accounting fees, financial advisor
fees, the cancellation of in-the-money stock options, printing and
mailing and other miscellaneous expenses related to the going-private
transaction.
Stock-based compensation expense increased $12.9 million due to
the expense associated with the accelerated vesting of certain
restricted shares in connection with the going-private transaction and
in connection with the granting of restricted and deferred shares
during the year ended December 31, 2005.
Depreciation and amortization expense increased $7.9 million, or
3%, primarily as a result of additional capital expenditures through
December 31, 2005. These expenditures were primarily for telephone
equipment, purchases of customer premise equipment and drop materials
and network extensions, 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 December 31, 2004.
As a result of the factors discussed above, Operating Income
before Depreciation and Amortization decreased $26.0 million. After
adjusting for going-private transaction-related costs of $62.0
million, Operating Income before Depreciation and Amortization
increased $36.0 million to $468.0 million, an increase of 8% over
2004.
Interest expense increased $25.5 million, or 13%, due to higher
interest rates, which averaged 8.2% for the year ended December 31,
2005, as compared to 7.1% for the year ended December 31, 2004, and an
increase in the accreted value of the 12 1/4% Senior Discount Notes.
Liquidity and Capital Resources
Insight's business requires cash for operations, debt service and
capital expenditures. The cable television business has substantial
ongoing capital requirements for the 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,
customer premise equipment (e.g., set-top boxes), deployment of new
product and service offerings, 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.
(4)
Cash provided by operations for the years ended December 31, 2005
and 2004 was $233.6 million and $289.9 million. The decrease was
primarily attributable to an increase in net loss due to costs
incurred in connection with the going-private transaction and
partially offset by the effect of non-cash items.
Cash used in investing activities for the years ended December 31,
2005 and 2004 was $218.7 million and $173.5 million. The increase
primarily was due to capital expenditures to launch Insight's
telephone product in additional markets and for customer premise
equipment and drop materials.
Cash used in financing activities for the years ended December 31,
2005 and 2004 was $85.2 million and $76.4 million. The increase was
primarily due to increased amortization payments on the credit
facility in 2005.
For the years ended December 31, 2005 and 2004, Insight spent
$220.1 million and $174.1 million in capital expenditures. These
expenditures principally constituted purchases of customer premise
equipment, telephone equipment, capitalized labor, drop materials,
headend equipment and system upgrades and rebuilds, all of which are
necessary to maintain Insight's existing network, grow its customer
base and expand its service offerings.
Free Cash Flow for the year ended December 31, 2005 totaled $13.5
million compared to $115.8 million for the year ended December 31,
2004. The decrease was primarily driven by the following:
-- A $46.0 million increase in capital expenditures;
-- A $26.0 million decrease in Operating Income before
Depreciation and Amortization (including the impact of $62.0
million of going-private transaction-related costs);
-- A $20.6 million increase in cash interest expense paid driven
by an increase in interest rates; and
-- A $16.0 million source of Free Cash Flow for the year ended
December 31, 2005 compared to a $25.7 million source for the
year ended December 31, 2004 from changes in working capital
accounts.
The above changes resulted in an overall decrease in Free Cash
Flow from 2004 to 2005 of $102.3 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.
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 that may have different
depreciation and amortization policies.
(5)
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 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.
(6)
Reconciliation of Net Income (Loss) to Operating Income before
Depreciation and Amortization
The following table reconciles Net Income (Loss) to Operating
Income before Depreciation and Amortization. In addition, the table
provides the components from Net Income (Loss) to Operating Income
(Loss) for purposes of the previous discussions.
Year Ended Three Months Ended
December 31, December 31,
------------------- -------------------
2005 2004 2005 2004
---------------------------------------
(in thousands)
(in thousands) (unaudited)
Net income (loss) $(84,929) $(13,799) $(68,484) $5,992
(Benefit) provision for income
taxes 500 (201) 125 125
---------------------------------------
Income (loss) before income
taxes (84,429) (14,000) (68,359) 6,117
Extraordinary item, net of tax - (15,627) - (15,627)
---------------------------------------
Loss before income taxes and
extraordinary item (84,429) (29,627) (68,359) (9,510)
Minority interest (income)
expense 5,488 14,023 (581) 13,146
---------------------------------------
Income (loss) before minority
interest, income taxes and
extraordinary item (78,941) (15,604) (68,940) 3,636
Other (income) expense:
Other (3,541) 3,388 (2,036) 1,687
Interest income (2,895) (749) (1,019) (326)
Interest expense 226,956 201,450 58,175 51,285
---------------------------------------
Total other expenses 220,520 204,089 55,120 52,646
---------------------------------------
Operating income (loss) 141,579 188,485 (13,820) 56,282
Depreciation and amortization 247,039 239,123 63,765 61,910
Stock-based compensation 17,368 4,438 10,043 1,270
---------------------------------------
Operating Income before
Depreciation and Amortization $405,986 $432,046 $59,988 $119,462
=======================================
(7)
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 (loss) for purposes of the previous
discussions.
Year Ended Three Months Ended
December 31, December 31,
------------------- ------------------
2005 2004 2005 2004
---------------------------------------
(in thousands) (in thousands)
(unaudited)
Operating income (loss) $141,579 $188,485 $(13,820) $56,282
Depreciation and
amortization 247,039 239,123 63,765 61,910
Stock-based compensation 17,368 4,438 10,043 1,270
---------------------------------------
Operating Income before
Depreciation and Amortization 405,986 432,046 59,988 119,462
Changes in working capital
accounts (1) 16,069 25,741 24,205 12,271
Cash paid for interest (188,216) (167,602) (75,618) (69,509)
Cash paid for taxes (266) (271) (14) (29)
---------------------------------------
Net cash provided by operating
activities 233,573 289,914 8,561 62,195
Capital expenditures (220,102) (174,096) (75,480) (43,201)
---------------------------------------
Free Cash Flow $13,471 $115,818 $(66,919) $18,994
=======================================
(1) Changes in working capital accounts are based on the net cash
changes in current assets and current liabilities, excluding changes
related to interest and taxes and other non-cash expenses.
About Insight Communications
Insight Communications is the 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
offers bundled, state-of-the-art services in mid-sized communities,
delivering analog and digital video, high-speed Internet and, in
selected markets, voice telephony to its customers.
Any statements in this press release that are not historical facts
are forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934. The words "estimate," "expect,"
"anticipate" and other expressions that indicate future events and
trends identify forward-looking statements. The above forward-looking
statements are subject to risks and uncertainties and are subject to
change based upon a variety of factors that could cause actual results
to differ materially from those Insight anticipates. Factors that
could have a material and adverse impact on actual results include:
all of the services offered by Insight face a wide range of
competition; Insight has substantial debt and has significant interest
payment requirements; there is uncertainty surrounding the potential
dissolution of Insight's joint venture with a subsidiary of Comcast
Corporation; the terms of Insight Midwest's indebtedness limits
Insight's ability to access the cash flow of Insight Midwest's
subsidiaries; Insight has a history of net losses; Insight's
programming costs are substantial; general business conditions,
economic uncertainty or slowdown, and the effects of governmental
regulation; and the other risk factors described in Insight's annual
report on Form 10-K and other periodic filings. Insight does not
undertake any obligation to publicly update or release any revisions
to these forward-looking statements to reflect events or circumstances
after the date of this press release or to reflect the occurrence of
unanticipated events, except as required by law.
(8)
INSIGHT COMMUNICATIONS COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
December 31, December 31,
2005 2004
------------- ------------
Assets
Cash and cash equivalents $29,782 $100,144
Investments 5,901 5,053
Trade accounts receivable, net of allowance
for doubtful accounts of $1,079 and $1,050
as of December 31, 2005 and 2004 27,261 31,355
Launch funds receivable 974 2,749
Prepaid expenses and other assets 9,645 11,343
------------- ------------
Total current assets 73,563 150,644
Fixed assets, net 1,130,705 1,154,251
Goodwill 72,430 72,430
Franchise costs 2,361,959 2,361,959
Deferred financing costs, net of
accumulated amortization of $24,302 and
$18,892 as of December 31, 2005 and 2004 24,220 27,896
Other non-current assets 2,287 2,692
------------- ------------
Total assets $3,665,164 $3,769,872
============= ============
Liabilities and stockholders' equity
Accounts payable $42,333 $31,886
Accrued expenses and other current
liabilities 45,411 40,838
Accrued property taxes 12,921 13,049
Accrued programming costs (inclusive of
$29,878 and $36,838 due to related parties
as of December 31, 2005 and 2004) 43,705 51,329
Deferred revenue 4,978 8,996
Interest payable 20,459 20,643
Debt - current portion 83,500 83,500
------------- ------------
Total current liabilities 253,307 250,241
Deferred revenue 1,499 2,904
Debt 2,676,418 2,724,063
Other non-current liabilities 2,384 1,331
Minority interest 251,011 245,523
Stockholders' equity:
Common stock, $.01 par value:
Class A - 300,000,000 shares authorized;
0 and 50,912,910 shares issued and
outstanding as of December 31, 2005 and
2004 - 509
Class B - 100,000,000 shares authorized;
0 and 8,489,454 shares issued and
outstanding as of December 31, 2005 and
2004 - 85
Voting preferred stock, $.01 par value:
Series A - 1,000,000 shares authorized;
848,945 and 0 shares issued and
outstanding as of December 31, 2005 and
2004 8 -
Series B - 1,000,000 shares authorized;
517,836 and 0 shares issued and
outstanding as of December 31, 2005 and
2004 5 -
Non-voting preferred stock, $.01 par value:
(9)
December 31, December 31,
2005 2004
------------- ------------
Series C - 15,000,000 shares authorized;
13,364,693 and 0 shares issued and
outstanding as of December 31, 2005 and
2004 134 -
Series D - 50,000,000 shares authorized;
47,015,659 and 0 shares issued and
outstanding as of December 31, 2005 and
2004 470 -
Non-voting common stock, $.01 par value:
Series E - 5,000,000 shares authorized; 0
and 0 shares issued and outstanding as
of December 31, 2005 and 2004 - -
Series F - 100,000 shares authorized; 0
and 0 shares issued and outstanding as
of December 31, 2005 and 2004 - -
Voting common stock, $.01 par value:
Series G - 10,000,000 shares authorized;
0 and 0 shares issued and outstanding as
of December 31, 2005 and 2004 - -
Additional paid-in-capital 829,337 813,853
Accumulated deficit (345,199) (260,270)
Deferred stock compensation (4,210) (8,689)
Accumulated other comprehensive loss - 322
------------- ------------
Total stockholders' equity 480,545 545,810
------------- ------------
Total liabilities and stockholders'
equity $3,665,164 $3,769,872
============= ============
(10)
INSIGHT COMMUNICATIONS COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands)
Year Ended December 31,
2005 2004 2003
----------- ----------- ---------
Revenue $1,117,681 $1,002,456 $902,592
Operating costs and expenses:
Programming and other operating
costs (exclusive of depreciation
and amortization) (inclusive of
$157,643, $150,956 and $142,387 of
programming expense incurred
through related parties during
December 2005, 2004 and 2003) 380,277 342,636 327,505
Selling, general and administrative 269,446 227,774 187,983
Transaction-related costs 61,972 - -
Stock-based compensation 17,368 4,438 1,729
Depreciation and amortization 247,039 239,123 230,031
----------- ----------- ---------
Total operating costs and expenses 976,102 813,971 747,248
----------- ----------- ---------
Operating income 141,579 188,485 155,344
Other income (expense):
Gain on cable system exchange - - 27,134
Interest expense (226,956) (201,450) (206,031)
Interest income 2,895 749 1,433
Other 3,541 (3,388) (31)
----------- ----------- ---------
Total other expense, net (220,520) (204,089) (177,495)
Loss before minority interest,
investment activity, extinguishments
of obligations, gain on contract
settlement, income taxes and
extraordinary item (78,941) (15,604) (22,151)
Minority interest expense (5,488) (14,023) (7,936)
Loss from early extinguishments of
debt - - (10,879)
Loss on settlement of put obligation - - (12,169)
Gain on settlement of programming
contract - - 37,742
Impairment write-down of investments - - (1,500)
----------- ----------- ---------
Loss before income taxes and
extraordinary item (84,429) (29,627) (16,893)
Benefit (provision) for income taxes (500) 201 2,702
----------- ----------- ---------
Loss before extraordinary item (84,929) (29,426) (14,191)
Extraordinary item, net of tax - 15,627 -
----------- ----------- ---------
Loss before preferred interests (84,929) (13,799) (14,191)
Accrual of preferred interests - - (10,353)
----------- ----------- ---------
Net loss $(84,929) $(13,799) $(24,544)
=========== =========== =========
(11)
INSIGHT COMMUNICATIONS COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
Year Ended December 31,
2005 2004 2003
----------- ----------- ---------
Operating activities:
Net loss $(84,929) $(13,799) $(14,191)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization 247,039 239,123 230,031
Stock-based compensation 17,368 4,438 1,729
Non-cash consulting expense 45 60 60
Impairment of investments - - 1,500
Gain on sale of investments (448) (386) (578)
Loss (gain) on interest rate swaps (2,078) (36) 2,114
Loss on early extinguishments of debt - 127 2,616
Settlement of put obligation - - (7,100)
Gain on settlement of programming
contract - - (34,819)
Gain on cable systems exchange - - (27,134)
Minority interest 5,488 14,023 7,936
Provision for losses on trade
accounts receivable 17,619 18,301 13,366
Contribution of stock to 401(k) Plan 2,565 1,309 1,678
Amortization of note discount 38,755 34,931 33,118
Deferred income taxes - (701) (2,952)
Changes in operating assets and
liabilities, net of acquisitions:
Trade accounts receivable (13,525) (20,343) (16,954)
Launch funds receivable 1,775 6,672 (4,224)
Prepaid expenses and other assets 2,238 6,011 (1,219)
Accounts payable 10,447 1,469 (16,803)
Accrued expenses and other
liabilities (8,786) (1,285) 29,614
----------- ----------- ---------
Net cash provided by operating
activities 233,573 289,914 197,788
----------- ----------- ---------
Investing activities:
Purchase of fixed assets (220,102) (174,096) (196,658)
Sale of fixed assets 2,113 1,913 -
Purchase of intangible assets - (107) (889)
Purchase of investments (1,801) (1,856) (1,347)
Sale of investments 1,079 602 999
Purchase of Coaxial interests - - (10,321)
Purchase of cable television
systems, net - - (26,475)
----------- ----------- ---------
Net cash used in investing
activities (218,711) (173,544) (234,691)
----------- ----------- ---------
Financing activities:
Distributions of preferred interests - - (11,554)
Net proceeds from borrowings under
credit facility - - 118,000
Repayment of credit facilities (83,500) (68,250) (25,000)
Repayment of debt - (8,134) (195,869)
Proceeds from issuance of notes - - 141,375
Debt issuance costs (1,733) (14) (4,842)
Proceeds from the cancellation and
conversion of common stock 9 - -
Proceeds from exercise of stock
options - - 115
----------- ----------- ---------
Net cash provided by (used in)
financing activities (85,224) (76,398) 22,225
----------- ----------- ---------
Net change in cash and cash
equivalents (70,362) 39,972 (14,678)
Cash and cash equivalents, beginning
of year 100,144 60,172 74,850
----------- ----------- ---------
Cash and cash equivalents, end of
year $29,782 $100,144 $60,172
=========== =========== =========
(12)
INSIGHT COMMUNICATIONS COMPANY, INC.
OPERATING STATISTICS
(in thousands, except per customer and penetration data)
FY FY Q4 Q4
2005 2004 2005 2004
--------- --------- --------- ---------
Customer Relationships 1,347.5 1,322.7 1,347.5 1,322.7
Total Average Monthly Revenue
per Customer $73.30 $64.96 $75.75 $68.48
Basic Cable
- -----------
Homes Passed 2,420.6 2,375.3 2,420.6 2,375.3
Basic Cable Customers 1,281.6 1,272.5 1,281.6 1,272.5
Basic Cable Penetration 52.9% 53.6% 52.9% 53.6%
Cable Revenue $596,321 $573,650 $150,225 $145,280
Average Monthly Cable
Revenue per Customer $39.11 $37.17 $39.23 $37.89
High-Speed Internet ("HSI")
- ---------------------------
HSI Homes Passed 2,378.9 2,320.4 2,378.9 2,320.4
HSI Customers 470.4 330.5 470.4 330.5
HSI Penetration 19.8% 14.2% 19.8% 14.2%
HSI Revenue $190,820 $132,011 $52,712 $38,021
Average Monthly HSI Revenue
per Customer $12.51 $8.55 $13.77 $9.92
Average Monthly HSI Revenue
per HSI Customer $39.77 $39.18 $38.64 $39.48
Digital Cable
- -------------
Digital Universe 1,238.6 1,224.1 1,238.6 1,224.1
Digital Customers 518.8 451.3 518.8 451.3
Digital Cable Penetration 41.9% 36.9% 41.9% 36.9%
Digital Revenue $111,202 $98,797 $29,303 $25,525
Average Monthly Digital
Revenue per Customer $7.29 $6.40 $7.65 $6.66
Average Monthly Digital
Revenue per Digital Customer $19.47 $19.32 $19.37 $19.10
Telephone
- ---------
Telephone Universe
(marketable homes) 832.0 768.8 832.0 768.8
Telephone Customers 89.9 64.3 89.9 64.3
Telephone Penetration (to
marketable homes) 10.8% 8.4% 10.8% 8.4%
Telephone Revenue $35,502 $15,254 $10,363 $3,865
Average Monthly Telephone
Revenue per Customer $2.33 $.99 $2.71 $1.01
Average Monthly Telephone
Revenue per Telephone
Customer $39.22 NM $40.46 NM
Advertising Revenue
- -------------------
Advertising Revenue $76,004 $68,415 $20,851 $21,820
Average Monthly Advertising
Revenue per Customer $4.98 $4.43 $5.45 $5.69
Other Revenue
- -------------
Other Revenue $107,832 $114,331 $26,603 $28,036
Average Monthly Other
Revenue per Customer $7.08 $7.42 $6.94 $7.31
NM = Not meaningful
(13)
INSIGHT COMMUNICATIONS COMPANY, INC.
FINANCIAL INFORMATION
Three months ended
December 31,
-----------------------
2005 2004
----------- -----------
(unaudited)
Insight Consolidated
- --------------------
Revenue $290,057 $262,546
Operating Income before Depreciation and
Amortization 59,988 119,462
Operating Income (Loss) (13,820) 56,282
Capital Expenditures 75,480 43,201
Interest Expense 58,175 51,285
Free Cash Flow (66,919) 18,994
Year ended December 31,
-----------------------
2005 2004
----------- -----------
Insight Consolidated
- --------------------
Revenue $1,117,681 $1,002,456
Operating Income before Depreciation and
Amortization 405,986 432,046
Operating Income 141,579 188,485
Capital Expenditures 220,102 174,096
Interest Expense 226,956 201,450
Free Cash Flow 13,471 115,818
INSIGHT COMMUNICATIONS COMPANY, INC.
NCTA STANDARD REPORTING CATEGORIES
CAPITAL EXPENDITURES
(unaudited)
(in thousands)
Three Months Ended Year Ended December 31,
Insight Consolidated December 31, 2005 2005 2004
- -------------------- ------------------ -------------- --------
Customer Premise Equipment $39,607 $114,846 $95,311
Scaleable Infrastructure 6,244 20,694 14,920
Line Extensions 7,829 26,813 25,168
Upgrade/Rebuild 10,750 24,704 13,616
Support Capital 11,050 33,045 25,081
------------------ ------------- ---------
Total Insight Consolidated $75,480 $220,102 $174,096
================== ============= =========
(14)
CONTACT: Insight Communications
Sandy Colony, 917-286-2300