Exhibit 99.1
Insight Announces Third Quarter 2006 Results
NEW YORK--(BUSINESS WIRE)--Nov. 8, 2006--Insight Communications
Company today announced financial results for the quarter ended
September 30, 2006.
Third Quarter Highlights
- -- Revenue of $318.1 million, an increase of 14% over Q3 2005
- -- Adjusted Operating Income before Depreciation and Amortization* of
$124.9 million, an increase of 8% over Q3 2005
- -- Capital expenditures of $71.5 million
- -- Free Cash Flow* of ($4.2) million
- -- Total Customer Relationships of 1,395,400 at Q3 2006, an increase
of 61,200 compared to 1,334,200 at Q3 2005
- -- Total Revenue Generating Units ("RGUs") of 2,608,700 at Q3 2006,
an increase of 14% from Q3 2005
-- High-speed Internet ("HSI") customer net gain of 44,800,
compared to net additions in Q3 2005 of 47,900. Total HSI
customers at quarter end were 579,300, a penetration of 24% of
HSI homes passed.
-- Basic customer net gain of 16,400, an improvement of 2,600 from
Q3 2005 net gains of 13,800, resulting in 1,318,800 basic
customers at quarter end, representing a 3.8% growth rate in
basic customers
-- Digital customer net gain of 25,500, compared to net additions
in Q3 2005 of 29,100. Total digital customers at quarter end
were 597,700, a penetration of 48% of the company's Digital
Universe.
-- Telephone customer net gain of 5,700, compared to net additions
in Q3 2005 of 7,400. Total telephone customers at quarter end
were 112,900, a penetration of 11% of marketable homes passed.
- -- As of September 30, 2006, 98% of the company's customers were
passed by two-way, 750 MHz or higher capacity upgraded network.
Operating Results for the Three Months Ended September 30, 2006
Compared to the Three Months Ended September 30, 2005
Revenue for the three months ended September 30, 2006, totaled
$318.1 million, an increase of 14% over the prior year, due primarily
to customer gains in all services, as well as video rate increases.
High-speed Internet service revenue increased 22% over the prior year,
which was attributable to an increased customer base and was partially
offset by lower average revenue per customer due to promotional
discounts. Insight added a net 44,800 high-speed Internet customers
during the quarter to end at 579,300 customers.
* See explanation of these Non-GAAP measures on page 5.
1
Basic cable service revenue increased 8% due to an increased
customer base and video rate increases, partially offset by
promotional discounts. In addition, digital service revenue increased
28% over the prior year primarily due to an increased customer base.
Insight added a net 25,500 digital customers during the quarter to end
at 597,700 customers. Other revenue also increased as a result of a
settlement of a fiber lease dispute.
Insight has been increasing its customer growth and retention
efforts by increasing spending on sales and marketing efforts,
emphasizing bundling and enhancing and differentiating its video
services with video-on-demand, high definition television and digital
video recorders. The company is also continuing to focus on improving
customer satisfaction through higher service levels and increased
customer education of product offerings.
Revenue by service offering was as follows for the three months
ended September 30 (dollars in thousands):
Revenue by Service Offering
------------------------------------------------- --------
Three Months Three Months %
Ended Ended Change
September 30, % of Total September 30, % of Total in
2006 Revenue 2005 Revenue Revenue
------------- ---------- ------------- ---------- --------
Basic $ 159,677 50.2% $ 148,393 53.2% 7.6%
High-Speed
Internet 60,402 19.0% 49,677 17.8% 21.6%
Digital 34,979 11.0% 27,300 9.8% 28.1%
Advertising 20,024 6.3% 18,416 6.6% 8.7%
Premium 13,891 4.4% 13,215 4.7% 5.1%
Telephone 13,249 4.2% 9,020 3.2% 46.9%
Franchise
fees 7,496 2.3% 7,681 2.8% -2.4%
Other 8,387 2.6% 5,284 1.9% 58.7%
------------- ---------- ------------- ---------- --------
Total $ 318,105 100.0% $ 278,986 100.0% 14.0%
============= ========== ============= ========== ========
Total Customer Relationships were 1,395,400 as of September 30,
2006, an increase of 61,200 from 1,334,200 as of September 30, 2005.
Total Customer Relationships represent the number of customers who
receive one or more of Insight's products (i.e., basic cable,
high-speed Internet or telephone) without regard to which product they
purchase. In the three months ending September 30, 2006, Insight added
92,400 RGUs, which represent the sum of basic, digital, high-speed
Internet and telephone customers, and as of September 30, 2006, had
2,608,700 RGUs, an increase of 14% from September 30, 2005.
2
RGUs by category were as follows (in thousands):
September 30, 2006 September 30, 2005
------------------ ------------------
Basic 1,318.8 1,271.0
Digital 597.7 489.9
High-Speed Internet 579.3 439.2
Telephone 112.9 80.9
------------------ ------------------
Total RGUs 2,608.7 2,281.0
================== ==================
Average monthly revenue per basic customer was $80.90 for the
three months ended September 30, 2006, compared to $73.57 for the
three months ended September 30, 2005. This primarily reflects the
continued growth of high-speed Internet and digital product offerings
in all markets, as well as video rate increases and one-time revenue
from the settlement of a fiber lease dispute.
Programming and other operating costs increased $17.9 million, or
19%. Increases in customers, the addition of new programming content
and substantial increases in programming rates were significant
drivers of the cost increase for the three months ended September 30,
2006. For the three months ended September 30, 2005, programming costs
reflected certain programming credits and a one-time settlement for a
disputed claim with a vendor. These 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. Programming credits for the three months ended
September 30, 2006, were significantly lower, causing overall
programming cost increases to be greater. Direct operating costs
decreased due to a decrease in our high-speed Internet service costs
as the company finalized the transition of its Internet services
in-house and realized both the cost savings and operational benefits
of this investment partially offset by increases in telephone cost of
sales as we continue to invest and roll out this product. Other
operating costs increased primarily as a result of increases in
technical salaries for new and existing employees; increases in
repair, maintenance and warranty costs; an increase in taxes due to a
change in the tax law in Kentucky; and an increase in installation
labor due to increased customer activity.
Selling, general and administrative expenses increased $8.8
million, or 12%, primarily due to increased payroll, payroll related
costs and temporary help associated with an increase in the number of
employees and salary increases for existing employees. The increase in
the number of employees represents investments in direct sales,
customer care and information technology personnel to continue to
upgrade and enhance our product offerings and increase customer
satisfaction. A portion of these information technology personnel
increases were directly related to the transition of our Internet
services in-house. Marketing expenses increased over the prior year to
support the continued rollout of high-speed Internet, digital and
telephone products, and to grow the company's core video customer
base. Customer billing, collection fees and bad debt expense increased
due to the increase in our customer base.
3
Depreciation and amortization expense increased $7.7 million, or
13%, primarily as a result of an increased level of capital
expenditures through September 30, 2006. These expenditures were
primarily for purchases of customer premise equipment, installation
materials, capitalized labor, headend equipment, network extensions
and network capacity and bandwidth increases, all of which Insight
considers necessary in order to continue to maintain and grow its
customer base and expand its service offerings. Partially offsetting
this increase was a decrease in depreciation expense related to
certain assets that have become fully depreciated since September 30,
2005.
As a result of the factors discussed above, Adjusted Operating
Income before Depreciation and Amortization increased $8.9 million to
$124.9 million, an increase of 8% over Q3 2005.
Interest expense increased $8.0 million, or 14%, because of:
-- higher interest rates, which averaged 9.1% for the three
months ended September 30, 2006, as compared to 8.3% for the
three months ended September 30, 2005;
-- the termination of our interest rate swap agreement during the
three months ended September 30, 2006; and
-- additional interest expense on the now fully accreted 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 will continue
to be made for network extensions, network capacity and bandwidth
increases, 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.
Cash provided by operations for the nine months ended September
30, 2006 and 2005 was $200.6 million and $225.0 million. The decrease
was primarily attributable to the effect of the initial cash interest
payment on the 12 1/4% Senior Discount Notes, partially offset by the
timing of cash receipts and payments related to our working capital
accounts.
Cash used in investing activities for the nine months ended
September 30, 2006 and 2005 was $213.5 million and $143.0 million. The
increase primarily was due to increases in capital expenditures. For
the nine months ended September 30, 2006 and 2005, Insight spent
$213.3 million and $144.6 million in capital expenditures. These
expenditures principally constituted purchases of customer premise
equipment, capitalized labor, installation materials, headend
equipment, network capacity and bandwidth increases 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.
4
Cash provided by financing activities for the nine months ended
September 30, 2006 was $2.4 million compared to $64.3 million of cash
used in financing activities for the nine months ended September 30,
2005. The decrease was due to $65.0 million in net proceeds from
borrowings under Insight's credit facility for the nine months ended
September 30, 2006.
Free Cash Flow for the nine months ended September 30, 2006
totaled ($12.7) million, compared to $80.4 million for the nine months
ended September 30, 2005. The decrease in Free Cash Flow from the nine
months ended September 30, 2005, to the nine months ended September
30, 2006, of $93.1 million was primarily driven by the following:
-- A $68.7 million increase in capital expenditures; and
-- A $37.5 million increase in cash interest expense paid
primarily driven by the initial cash interest payment on the
12 1/4% Senior Discount Notes and an increase in interest
rates.
These uses of cash were offset by:
-- An $8.7 million increase in Adjusted Operating Income before
Depreciation and Amortization; and
-- A $4.9 million decrease in the use of Free Cash Flow over the
same period in the prior year from changes in working capital
accounts.
Insight believes that the Insight Midwest Holdings credit
facility, cash on-hand and cash flow from operations are sufficient to
support the company's current operating plan. On October 6, 2006,
Insight Midwest Holdings completed the financing of $2.445 billion of
senior secured credit facilities. The facilities comprise term loans
in the amount of $2.185 billion and a $260.0 million revolving credit
facility. The proceeds were used to refinance Insight Midwest
Holdings' existing senior credit facilities and to redeem all of
Insight Midwest's 10 1/2% Senior Notes due November 1, 2010 and $185.0
million principal amount of Insight Midwest's 9 3/4% Senior Notes due
October 1, 2009. This financing will reduce Insight's interest expense
and near term debt amortizations. As of November 8, 2006, $110.3
million of the $260.0 million revolving credit facility was drawn
(including $9.3 million in letters of credit), and Insight had the
ability to draw upon $149.7 million of unused availability to fund any
shortfall resulting from the inability of Insight Midwest's cash from
operations to fund its capital expenditures, meet its debt service
requirement or otherwise fund its operations. Insight expects to use
any available Free Cash Flow to repay its indebtedness.
Use of Adjusted Operating Income before Depreciation and
Amortization and Free Cash Flow
Insight utilizes Adjusted Operating Income before Depreciation and
Amortization (defined as operating income before depreciation,
amortization and non-cash stock-based compensation), among other
measures, to evaluate the performance of its businesses. Adjusted
Operating Income before Depreciation and Amortization is considered an
important indicator of the operational strength of Insight's
businesses and is a component of its annual compensation programs. In
addition, Insight's debt agreements use Adjusted Operating Income
before Depreciation and Amortization, adjusted for certain
non-recurring items, in their leverage and other covenant
calculations. Insight also uses this measure to determine how it will
allocate resources and capital. Insight's management finds this
measure helpful because it captures all of the revenue and ongoing
operating expenses of its businesses and therefore provides a means to
directly evaluate the ability of the business operations to generate
returns and to compare operating capabilities across its businesses.
This measure is also used by equity and fixed income research analysts
in their reports to investors evaluating Insight's businesses and
other companies in the cable television industry. Insight believes
Adjusted Operating Income before Depreciation and Amortization is
useful to investors because it enables them to assess its performance
in a manner similar to the methods used by Insight's management and
provides a measure that can be used to analyze, value and compare
companies in the cable television industry that may have different
depreciation, amortization and stock-based compensation policies.
5
A limitation of Adjusted Operating Income before Depreciation and
Amortization, however, is that it does not reflect the periodic costs
of certain capitalized tangible and intangible assets used in
generating revenues in Insight's businesses. Management evaluates the
costs of such tangible and intangible assets through other financial
measures such as capital expenditures, investment spending and Free
Cash Flow. Management also evaluates the costs of capitalized tangible
and intangible assets by analyzing returns provided on the capital
dollars deployed. Another limitation of Adjusted Operating Income
before Depreciation and Amortization is that it does not reflect
income net of interest expense, which is a significant expense for the
company because of the substantial debt it has incurred to acquire
cable television systems and finance capital expenditures to upgrade
its cable network. Management evaluates the impact of interest expense
through other measures, including interest expense itself, Free Cash
Flow, the returns analysis discussed above and debt service covenant
ratios under Insight's credit facility.
Free Cash Flow is net cash provided by operating activities (as
defined by accounting principles generally accepted in the United
States) less capital expenditures. Free Cash Flow is considered to be
an important indicator of Insight's liquidity, including its ability
to repay indebtedness. Insight believes Free Cash Flow is useful for
investors because it enables them to assess Insight's ability to
service its debt and to fund continued growth with internally
generated funds in a manner similar to the methods used by Insight's
management, and provides a measure that can be used to analyze, value
and compare companies in the cable television industry.
Both Adjusted Operating Income before Depreciation and
Amortization and Free Cash Flow should be considered in addition to,
not as a substitute for, Operating Income, Net Income and various cash
flow measures (e.g., Net Cash Provided by Operating Activities), as
well as other measures of financial performance and liquidity reported
in accordance with accounting principles generally accepted in the
United States.
6
Reconciliation of Net Loss to Adjusted Operating Income before
Depreciation and Amortization
The following table reconciles Net Loss to Adjusted Operating
Income before Depreciation and Amortization. In addition, the table
provides the components from Net Loss to Operating Income.
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
(in thousands)
Net loss $ (7,728) $ (7,375) $(27,442) $(16,445)
(Benefit) provision for income
taxes (94) 125 66 375
--------- --------- --------- ---------
Loss before income taxes (7,822) (7,250) (27,376) (16,070)
Minority interest income
(expense) (1,839) 2,242 (6,454) 6,069
--------- --------- --------- ---------
Loss before minority interest
and income taxes (9,661) (5,008) (33,830) (10,001)
Other (income) expense:
Other 28 (834) 78 (1,505)
Interest income (366) (853) (1,247) (1,876)
Interest expense 65,810 57,773 188,093 168,781
--------- --------- --------- ---------
Total other expense, net 65,472 56,086 186,924 165,400
--------- --------- --------- ---------
Operating income 55,811 51,078 153,094 155,399
Depreciation and amortization 68,743 61,054 200,398 183,274
Stock-based compensation 335 3,876 1,219 7,325
--------- --------- --------- ---------
Adjusted Operating Income
before Depreciation and
Amortization $124,889 $116,008 $354,711 $345,998
========= ========= ========= =========
Reconciliation of Net Cash Provided by Operating Activities to
Free Cash Flow
The following table provides a reconciliation from net cash
provided by operating activities to Free Cash Flow. In addition, the
table provides the components from net cash provided by operating
activities to operating income.
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
(in thousands)
Operating income $ 55,811 $ 51,078 $ 153,094 $ 155,399
Depreciation and
amortization 68,743 61,054 200,398 183,274
Stock-based compensation 335 3,876 1,219 7,325
---------- ---------- ---------- ----------
Adjusted Operating Income
before Depreciation and
Amortization 124,889 116,008 354,711 345,998
Changes in working
capital accounts (1) (6,918) (13,713) (3,246) (8,136)
Cash paid for interest (50,603) (20,480) (150,074) (112,598)
Cash paid for taxes (64) (30) (755) (252)
---------- ---------- ---------- ----------
Net cash provided by
operating activities 67,304 81,785 200,636 225,012
Capital expenditures (71,544) (51,109) (213,309) (144,622)
---------- ---------- ---------- ----------
Free Cash Flow $ (4,240) $ 30,676 $ (12,673) $ 80,390
========== ========== ========== ==========
(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.
7
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, except share and per share amounts)
September 30, December 31,
2006 2005
------------- -------------
unaudited
Assets
Cash and cash equivalents $ 19,279 $ 29,782
Investments 6,679 5,901
Trade accounts receivable, net of
allowance for doubtful accounts of $1,169
and $1,079 as of September 30, 2006 and
December 31, 2005 26,395 27,261
Launch funds receivable 516 974
Prepaid expenses and other current assets 11,350 9,645
------------- -------------
Total current assets 64,219 73,563
Fixed assets, net 1,147,333 1,130,705
Goodwill 72,430 72,430
Franchise costs 2,361,959 2,361,959
Deferred financing costs, net of
accumulated amortization of $28,527 and
$24,302 as of September 30, 2006 and
December 31, 2005 19,998 24,220
Other non-current assets 2,785 2,287
------------- -------------
Total assets $ 3,668,724 $ 3,665,164
============= =============
9
INSIGHT COMMUNICATIONS COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share and per share amounts)
September 30, December 31,
2006 2005
------------- -------------
unaudited
Liabilities and stockholders' equity
Accounts payable $ 39,097 $ 42,333
Accrued expenses and other current
liabilities 43,641 45,413
Accrued property taxes 13,947 12,921
Accrued programming costs (inclusive of
$32,316 and $29,878 due to related
parties as of September 30, 2006 and
December 31, 2005) 47,008 43,705
Deferred revenue 2,152 4,978
Interest payable 51,783 20,459
Debt - current portion 83,500 83,500
------------- -------------
Total current liabilities 281,128 253,309
Deferred revenue 874 1,499
Debt 2,687,838 2,676,418
Other non-current liabilities - 2,382
Minority interest 244,557 251,011
Stockholders' equity:
Voting preferred stock, $.01 par value:
Series A - 1,000,000 shares authorized;
848,945 shares issued and outstanding
as of September 30, 2006 and December
31, 2005 8 8
Series B - 1,000,000 shares authorized;
517,836 shares issued and outstanding
as of September 30, 2006 and December
31, 2005 5 5
Non-voting preferred stock, $.01 par
value:
Series C - 15,000,000 shares authorized;
13,364,693 shares issued and
outstanding as of September 30, 2006
and December 31, 2005 134 134
Series D - 50,000,000 shares authorized;
47,015,659 shares issued and
outstanding as of September 30, 2006
and December 31, 2005 470 470
Non-voting common stock, $.01 par value:
Series E - 5,000,000 shares authorized;
3,475,629 and 0 shares issued and
outstanding as of September 30, 2006
and December 31, 2005 37 -
Series F - 100,000 shares authorized;
93,250 and 0 shares issued and
outstanding as of September 30, 2006
and December 31, 2005 1 -
Voting common stock, $.01 par value:
Series G - 10,000,000 shares authorized;
0 shares issued and outstanding as of
September 30, 2006 and December 31,
2005 - -
Additional paid-in-capital 829,249 829,337
Accumulated deficit (372,641) (345,199)
Deferred stock compensation (2,936) (4,210)
------------- -------------
Total stockholders' equity 454,327 480,545
------------- -------------
Total liabilities and stockholders'
equity $ 3,668,724 $ 3,665,164
============= =============
10
INSIGHT COMMUNICATIONS COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(dollars in thousands)
Three months ended Nine months ended
September 30, September 30,
-------------------------------------------
2006 2005* 2006 2005*
---------- ---------- ---------- ----------
Revenue $ 318,105 $ 278,986 $ 931,103 $ 827,624
Operating costs and
expenses:
Programming and other
operating costs
(exclusive of
depreciation and
amortization)
(inclusive of $47,772
and $135,110, and
$39,438 and $120,114 of
programming expense
incurred through
related parties for the
three and nine months
ended September 30,
2006 and 2005) 111,431 93,514 333,676 284,269
Selling, general and
administrative
(inclusive of $335 and
$1,219, and $3,876 and
$7,325 of stock-based
compensation for the
three and nine months
ended September 30,
2006 and 2005) 82,120 73,340 243,935 204,682
Depreciation and
amortization 68,743 61,054 200,398 183,274
---------- ---------- ---------- ----------
Total operating costs and
expenses 262,294 227,908 778,009 672,225
---------- ---------- ---------- ----------
Operating income 55,811 51,078 153,094 155,399
Other income (expense):
Interest expense (65,810) (57,773) (188,093) (168,781)
Interest income 366 853 1,247 1,876
Other income (expense) (28) 834 (78) 1,505
---------- ---------- ---------- ----------
Total other expense, net (65,472) (56,086) (186,924) (165,400)
Loss before minority
interest and income taxes (9,661) (5,008) (33,830) (10,001)
Minority interest income
(expense) 1,839 (2,242) 6,454 (6,069)
---------- ---------- ---------- ----------
Loss before income taxes (7,822) (7,250) (27,376) (16,070)
Benefit (provision) for
income taxes 94 (125) (66) (375)
---------- ---------- ---------- ----------
Net loss $ (7,728) $ (7,375) $(27,442)$ (16,445)
===========================================
* Reclassifications have been made to the prior year's financial
statements to conform to those used in 2006.
11
INSIGHT COMMUNICATIONS COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(dollars in thousands)
-------------------------------
Nine months ended September 30,
-------------------------------
2006 2005
--------------- ---------------
Operating activities:
Net loss $ (27,442) $ (16,445)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization 200,398 183,274
Stock-based compensation 1,219 7,325
Non-cash consulting expense - 45
Gain on interest rate swaps - (1,684)
Minority interest (6,454) 6,069
Provision for losses on trade
accounts receivable 13,959 13,196
Contribution of stock to 401(k)
Plan - 1,990
Amortization of note discount 6,663 28,630
Changes in operating assets and
liabilities:
Trade accounts receivable (13,093) (4,470)
Launch funds receivable 458 2,232
Prepaid expenses and other
assets (2,266) (7,392)
Accounts payable (3,236) (9,241)
Interest payable 31,324 27,488
Accrued expenses and other
liabilities (894) (6,005)
--------------- ---------------
Net cash provided by operating
activities 200,636 225,012
--------------- ---------------
Investing activities:
Purchase of fixed assets (213,309) (144,622)
Sale of fixed assets 572 2,145
Purchase of investments (778) (1,551)
Sale of investments - 991
--------------- ---------------
Net cash used in investing
activities (213,515) (143,037)
--------------- ---------------
Financing activities:
Repayment of credit facilities (62,625) (62,625)
Debt issuance costs - (1,712)
Net proceeds from borrowings under
credit facility 65,000 -
Other 1 -
--------------- ---------------
Net cash provided by (used in)
financing activities 2,376 (64,337)
--------------- ---------------
Net increase (decrease) in cash and
cash equivalents (10,503) 17,638
Cash and cash equivalents, beginning
of period 29,782 100,144
--------------- ---------------
Cash and cash equivalents, end of
period $ 19,279 $ 117,782
=============== ===============
12
INSIGHT COMMUNICATIONS COMPANY, INC.
OPERATING STATISTICS
(in thousands, except per customer and penetration data)
Q3 Q2 Q3
2006 2006 2005
--------- --------- ---------
Customer Relationships 1,395.4 1,375.1 1,334.2
Total Average Monthly Revenue per Basic
Customer $80.90 $79.65 $73.57
Basic Cable
- ----------------------------------------
Homes Passed 2,456.0 2,445.9 2,417.6
Basic Cable Customers 1,318.8 1,302.4 1,271.0
Basic Cable Penetration 53.7% 53.2% 52.6%
Cable Revenue $159,677 $160,328 $148,393
Average Monthly Cable Revenue per
Basic Customer $40.61 $40.97 $39.13
High-Speed Internet ("HSI")
- ----------------------------------------
HSI Homes Passed 2,418.5 2,398.2 2,364.6
HSI Customers 579.3 534.5 439.2
HSI Penetration 24.0% 22.3% 18.6%
HSI Revenue $60,402 $58,616 $49,677
Average Monthly HSI Revenue per Basic
Customer $15.36 $14.98 $13.10
Average Monthly HSI Revenue per HSI
Customer $36.15 $37.24 $39.88
Digital Cable
- ----------------------------------------
Digital Universe 1,255.2 1,243.9 1,222.0
Digital Customers 597.7 572.2 489.9
Digital Cable Penetration 47.6% 46.0% 40.1%
Digital Revenue $34,979 $34,307 $27,300
Average Monthly Digital Revenue per
Basic Customer $8.90 $8.77 $7.20
Average Monthly Digital Revenue per
Digital Customer $19.93 $20.19 $19.14
Telephone
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Telephone Universe (marketable homes) 1,008.1 871.8 801.1
Telephone Customers 112.9 107.2 80.9
Telephone Penetration (to marketable
homes) 11.2% 12.3% 10.1%
Telephone Revenue $13,249 $12,528 $9,020
Average Monthly Telephone Revenue per
Basic Customer $3.37 $3.20 $2.38
Average Monthly Telephone Revenue per
Telephone Customer $40.13 $40.37 $38.96
Advertising Revenue
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Advertising Revenue $20,024 $20,020 $18,416
Average Monthly Advertising Revenue
per Basic Customer $5.09 $5.12 $4.86
Other Revenue
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Other Revenue $29,774 $25,918 $26,180
Average Monthly Other Revenue per
Basic Customer $7.57 $6.61 $6.90
13
INSIGHT COMMUNICATIONS COMPANY, INC.
NCTA STANDARD REPORTING CATEGORIES
CAPITAL EXPENDITURES
(unaudited)
(in thousands)
Three Months Nine Months Twelve Months
Ended Ended Ended
September 30, September 30, December 31, 2005
Insight Consolidated 2006 2006
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Customer Premise
Equipment $ 37,661 $ 123,339 $ 114,846
Scaleable Infrastructure 15,454 28,115 20,694
Line Extensions 7,022 20,185 26,813
Upgrade/Rebuild 3,096 11,552 24,704
Support Capital 8,311 30,118 33,045
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Total Insight
Consolidated $ 71,544 $ 213,309 $ 220,102
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14
CONTACT: Insight Communications
Sandy Colony, 917-286-2300
SVP, Communications