Exhibit 99.1
Insight Announces Fourth Quarter and Year-End 2006 Results
NEW YORK--(BUSINESS WIRE)--March 6, 2007--Insight Communications
Company today announced financial results for the quarter and year
ended December 31, 2006.
2006 Highlights
-- Revenue of $1.3 billion, an increase of 13% over 2005
-- Adjusted Operating Income before Depreciation and
Amortization* of $490.2 million. Excluding the effect of $62.0
million of going-private transaction-related costs recorded in
2005, Adjusted Operating Income before Depreciation and
Amortization increased 5% from $468.0 million.
-- Capital expenditures of $286.4 million
-- Free Cash Flow* of ($22.4) million
-- Total Customer Relationships of 1,401,800 at year end, an
increase of 54,300 compared to 1,347,500 at year end 2005
-- Total Revenue Generating Units ("RGUs") of 2,679,000 at year
end, an increase of 13% from year end 2005
-- High-speed Internet ("HSI") customer net gain of 140,800,
compared to net additions in 2005 of 139,900. Total HSI
customers at year end were 611,200, a penetration of 25% of
HSI homes passed.
-- Basic customer net gain of 41,200, an improvement of 32,100
from 2005 net gains of 9,100, resulting in 1,322,800 basic
customers at year end, representing a 3.2% growth rate in
basic customers
-- Digital customer net gain of 102,800, compared to net
additions in 2005 of 67,500. Total digital customers at
year end were 621,600, a penetration of 49% of the
company's digital universe.
-- Telephone customer net gain of 33,500, an increase over net
additions in 2005 of 25,600. Total telephone customers at
year end were 123,400, a penetration of 9% of the company's
telephone universe.
-- As of December 31, 2006, 98% 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, 2006 Compared to
the Year Ended December 31, 2005
Revenue for the year ended December 31, 2006, totaled $1.3
billion, an increase of 13% over the prior year, due primarily to
customer gains in all services, as well as video rate increases.
High-speed Internet service revenue increased 26% 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 140,800 high-speed Internet customers
during the year to end at 611,200 customers.
* See explanation of these Non-GAAP measures on page 5.
1
Basic cable service revenue increased 7% due to an increased
customer base and video rate increases, partially offset by
promotional discounts. Insight added a net 41,200 basic customers
during the year to end at 1,322,800 customers. In addition, digital
service revenue increased 24% over the prior year primarily due to an
increased customer base. Insight added a net 102,800 digital customers
during the year to end at 621,600 customers.
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. To increase its bundling opportunities and extend its
growth potential in future years, the company, during the second half
of 2006 and in January 2007, successfully rolled out its telephone
product in eight previously unserved districts. 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 year ended
December 31 (dollars in thousands):
Revenue by Service Offering
----------------------------------------- --------
% of % of % Change
Total Total in
2006 Revenue 2005 Revenue Revenue
----------- -------- ----------- -------- --------
Basic $640,474 50.7% $596,321 53.4% 7.4%
High-Speed Internet 240,717 19.1% 190,820 17.1% 26.1%
Digital 138,172 10.9% 111,202 9.9% 24.3%
Advertising 83,729 6.6% 76,004 6.8% 10.2%
Premium 55,160 4.4% 54,414 4.9% 1.4%
Telephone 50,893 4.0% 35,502 3.2% 43.4%
Franchise fees 29,817 2.4% 30,721 2.7% -2.9%
Other 23,595 1.9% 22,697 2.0% 4.0%
----------- -------- ----------- -------- --------
Total $1,262,557 100.0% $1,117,681 100.0% 13.0%
=========== ======== =========== ======== ========
Total Customer Relationships were 1,401,800 as of December 31,
2006, an increase of 54,300 from 1,347,500 as of December 31, 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 year ended December 31, 2006, Insight added 318,300
RGUs, which represent the sum of basic, digital, high-speed Internet
and telephone customers, and as of December 31, 2006, had 2,679,000
RGUs, an increase of 13% from December 31, 2005.
2
RGUs by category were as follows (in thousands):
December 31, 2006 December 31, 2005
----------------- -----------------
Basic 1,322.8 1,281.6
Digital 621.6 518.8
High-Speed Internet 611.2 470.4
Telephone 123.4 89.9
----------------- -----------------
Total RGUs 2,679.0 2,360.7
================= =================
Average monthly revenue per basic customer was $80.53 for the year
ended December 31, 2006, compared to $73.30 for the year ended
December 31, 2005. This primarily reflects the continued growth of
high-speed Internet and digital product offerings in all markets, as
well as video rate increases.
Programming and other operating costs increased $68.2 million, or
18%. Increases in programming rates, customers and the addition of new
programming content were significant drivers of the cost increase for
the year ended December 31, 2006. For the year ended December 31,
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 year
ended December 31, 2006 were significantly lower, causing overall
programming cost increases to be greater. Direct operating costs
increased due to an increase in telephone cost of sales as we continue
to invest and roll out this product partially offset by decreases in
our high-speed Internet services costs as the company, in 2006,
transitioned its Internet services in-house and realized both cost
savings and operational benefits from this investment. 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 $38.5
million, or 13%, 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 sales and marketing,
customer care and information technology personnel to continue to
upgrade and enhance our product offerings, manage our increasingly
complex network and increase customer satisfaction. A portion of the
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 primarily due to the increase in our
customer base.
Depreciation and amortization expense increased $23.2 million, or
9%, primarily as a result of an increased level of capital
expenditures through December 31, 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 December 31,
2005.
3
As a result of the factors discussed above, Adjusted Operating
Income before Depreciation and Amortization increased $84.2 million to
$490.2 million, an increase of 21%. After adjusting for the
going-private transaction-related costs of $62.0 million in 2005,
Adjusted Operating Income before Depreciation and Amortization
increased $22.2 million, an increase of 5% over 2005.
Interest expense increased $24.4 million, or 11%, because of:
-- higher interest rates, which averaged 9.0% for the year ended
December 31, 2006, as compared to 8.2% for the year ended
December 31, 2005;
-- the termination of an interest rate swap agreement during the
year ended December 31, 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 provision of new services and the
construction, expansion and maintenance of its broadband networks. 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 customer premise equipment (e.g., set-top boxes),
installation and deployment of new product and service offerings,
capitalized payroll, network capacity, bandwidth increases, network
extensions, 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 years ended December 31, 2006
and 2005 was $263.9 million and $233.6 million. The increase was
primarily attributable to the decrease in our net loss due to the
affect of the transaction-related costs in 2005 and the timing of cash
receipts and payments related to our working capital accounts. This
increase was partially offset by the decrease in amortization of note
discount because cash interest payments on the 12 1/4% notes commenced
in February 2006.
Cash used in investing activities for the years ended December 31,
2006 and 2005 was $286.6 million and $218.7 million. For the years
ended December 31, 2006 and 2005, Insight spent $286.4 million and
$220.1 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
The increase in capital expenditures was driven primarily by
increases in:
-- Customer premise equipment required to support our digital
customer growth; and
-- Network capacity and bandwidth equipment for the transition of
our Internet services in-house in 2006.
Cash provided by financing activities for the year ended December
31, 2006 was $36.5 million compared to $85.2 million of cash used in
financing activities for the year ended December 31, 2005. This source
of cash was due to the financing of our $2.445 billion senior secured
credit facility during the fourth quarter of 2006.
Free Cash Flow for the year ended December 31, 2006 totaled
($22.4) million, compared to $13.5 million for the year ended December
31, 2005. This decrease in Free Cash Flow from the year ended December
31, 2005, to the year ended December 31, 2006, of $35.9 million was
primarily driven by the following:
-- A $66.3 million increase in capital expenditures;
-- A $26.8 million decrease in the generation of Free Cash Flow
over the same period in the prior year from changes in working
capital accounts; and
-- A $26.5 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 $84.2 million increase in
Adjusted Operating Income before Depreciation and Amortization.
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 entered into new $2.445 billion senior
secured credit facilities. The facilities are comprised of 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. The purpose of this financing was to reduce Insight's
interest expense and near term debt amortizations. As of December 31,
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.
On February 12, 2007, Insight Midwest Holdings amended its $2.445
billion senior secured facility to reduce the applicable margin with
respect to its $1.8 billion B Term Loan facility by 25 basis points,
or 0.25%.
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 Ended
Year Ended December 31, December 31,
----------------------- -------------------
2006 2005 2006 2005
----------- ----------- --------- ---------
(in thousands)
Net loss $(36,566) $(84,929) $(9,124) $(68,484)
Provision for income taxes 159 500 93 125
----------- ----------- --------- ---------
Loss before income taxes (36,407) (84,429) (9,031) (68,359)
Minority interest (income)
expense (5,377) 5,488 1,077 (581)
----------- ----------- --------- ---------
Loss before minority
interest and income taxes (41,784) (78,941) (7,954) (68,940)
Other (income) expense:
Other 10,719 (3,541) 10,641 (2,036)
Interest income (1,787) (2,895) (540) (1,019)
Interest expense 251,404 226,956 63,311 58,175
----------- ----------- --------- ---------
Total other expense, net 260,336 220,520 73,412 55,120
----------- ----------- --------- ---------
Operating income 218,552 141,579 65,458 (13,820)
Depreciation and
amortization 270,231 247,039 69,833 63,765
Stock-based compensation 1,413 17,368 194 10,043
----------- ----------- --------- ---------
Adjusted Operating Income
before Depreciation and
Amortization $490,196 $405,986 $135,485 $59,988
=========== =========== ========= =========
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).
Three Months Ended
Year Ended December 31, December 31,
----------------------- ------------------
2006 2005 2006 2005
----------- ----------- -------- ---------
(in thousands)
Operating income (loss) $218,552 $141,579 $65,458 $(13,820)
Depreciation and
amortization 270,231 247,039 69,833 63,765
Stock-based
compensation 1,413 17,368 194 10,043
----------- ----------- -------- ---------
Adjusted Operating Income
before Depreciation and
Amortization 490,196 405,986 135,485 59,988
Changes in working
capital accounts (1) (10,718) 16,069 (7,472) 24,205
Cash paid for interest (214,702) (188,216) (64,628) (75,618)
Cash paid for taxes (827) (266) (72) (14)
----------- ----------- -------- ---------
Net cash provided by
operating activities 263,949 233,573 63,313 8,561
Capital expenditures (286,389) (220,102) (73,080) (75,480)
----------- ----------- -------- ---------
Free Cash Flow $(22,440) $13,471 $(9,767) $(66,919)
=========== =========== ======== =========
(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 ninth largest cable operator in the
United States with approximately 1.4 million customer relationships in
the four contiguous states of Illinois, Kentucky, Indiana and Ohio.
Insight offers bundled, state-of-the-art analog and digital video,
high-speed Internet and voice telephony services 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)
December 31, December 31,
2006 2005
------------ ------------
Assets
Cash and cash equivalents $43,573 $29,782
Investments 7,000 5,901
Trade accounts receivable, net of allowance
for doubtful accounts of $1,148 and $1,079
as of December 31, 2006 and December 31,
2005 31,060 27,261
Launch funds receivable 355 974
Prepaid expenses and other current assets 8,473 9,645
------------ ------------
Total current assets 90,461 73,563
Fixed assets, net $1,151,260 $1,130,705
Goodwill 72,430 72,430
Franchise costs 2,361,959 2,361,959
Deferred financing costs, net of accumulated
amortization of $29,473 and $24,302 as of
December 31, 2006 and December 31, 2005 19,053 24,220
Other non-current assets 2,941 2,287
------------ ------------
Total assets $3,698,104 $3,665,164
============ ============
9
Insight Communications Company, Inc.
Consolidated Balance Sheets
(dollars in thousands, except share and per share amounts)
December 31, December 31,
2006 2005
------------ ------------
Liabilities and stockholders' equity
Accounts payable $43,772 $42,333
Accrued expenses and other current
liabilities 45,521 45,413
Accrued property taxes 13,595 12,921
Accrued programming costs (inclusive of
$30,677 and $29,878 due to related parties
as of December 31, 2006 and December 31,
2005) 45,880 43,705
Deferred revenue 2,076 4,978
Interest payable 49,518 20,459
Debt - current portion - 83,500
------------ ------------
Total current liabilities 200,362 253,309
Deferred revenue 683 1,499
Debt 2,805,722 2,676,418
Other non-current liabilities - 2,382
Minority interest 245,634 251,011
Stockholders' equity:
Voting preferred stock, $.01 par value:
Series A - 1,000,000 shares authorized;
848,945 shares issued and outstanding as
of December 31, 2006 and 2005 8 8
Series B - 1,000,000 shares authorized;
517,836 shares issued and outstanding as
of December 31, 2006 and 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 December 31, 2006 and 2005 134 134
Series D - 50,000,000 shares authorized;
47,015,659 shares issued and outstanding
as of December 31, 2006 and 2005 470 470
Non-voting common stock, $.01 par value:
Series E - 5,000,000 shares authorized;
3,536,247 and 0 shares issued and
outstanding as of December 31, 2006 and
2005 35 -
Series F - 100,000 shares authorized;
93,250 and 0 shares issued and outstanding
as of December 31, 2006 and 2005 1 -
Voting common stock, $.01 par value:
Series G - 10,000,000 shares authorized; 0
shares issued and outstanding as of
December 31, 2006 and 2005 - -
Additional paid-in-capital 826,509 829,337
Accumulated deficit (381,765) (345,199)
Accumulated other comprehensive income 306 -
Deferred stock compensation - (4,210)
------------ ------------
Total stockholders' equity 445,703 480,545
------------ ------------
Total liabilities and stockholders' equity $3,698,104 $3,665,164
============ ============
10
Insight Communications Company, Inc.
Consolidated Statements of Operations
(dollars in thousands)
Year Ended December 31,
2006 2005 2004
----------- ----------- -----------
Revenue $1,262,557 $1,117,681 $1,002,456
Operating costs and expenses:
Programming and other operating
costs
(exclusive of depreciation and
amortization)
(inclusive of $181,560, $157,643
and $150,956 of programming
expense incurred through related
parties during 2006, 2005 and
2004) 447,060 378,878 342,636
Selling, general and
administrative
(inclusive of $1,413, $17,368 and
$4,438 of stock-based
compensation for the years ended
December 31, 2006, 2005 and
2004) 326,714 288,213 232,212
Transaction-related costs - 61,972 -
Depreciation and amortization 270,231 247,039 239,123
----------- ----------- -----------
Total operating costs and expenses 1,044,005 976,102 813,971
----------- ----------- -----------
Operating income 218,552 141,579 188,485
Other income (expense):
Interest expense (251,404) (226,956) (201,450)
Interest income 1,787 2,895 749
Other income (expense) (10,719) 3,541 (3,388)
----------- ----------- -----------
Total other expense, net (260,336) (220,520) (204,089)
Loss before minority interest and
income taxes (41,784) (78,941) (15,604)
Minority interest income (expense) 5,377 (5,488) (14,023)
----------- ----------- -----------
Loss before income taxes (36,407) (84,429) (29,627)
Benefit (provision) for income
taxes (159) (500) 201
----------------------- -----------
Loss before extraordinary item (36,566) (84,929) (29,426)
Extraordinary item, net of tax - - 15,627
----------- ----------- -----------
Net loss $(36,566) $(84,929) $(13,799)
=========== =========== ===========
11
Insight Communications Company, Inc.
Consolidated Statement of Cash Flows
(dollars in thousands)
Year Ended December 31,
2006 2005 2004
----------- --------- ---------
Operating activities:
Net loss $(36,566) $(84,929) $(13,799)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization 270,231 247,039 239,123
Stock-based compensation 1,413 17,368 4,438
Non-cash consulting expense - 45 60
Gain on sale of investments - (448) (386)
Gain on interest rate swaps - (2,078) (36)
Loss on early extinguishments of debt - - 127
Minority interest (5,377) 5,488 14,023
Provision for losses on trade
accounts receivable 18,554 17,619 18,301
Contribution of stock to 401(k) Plan - 2,565 1,309
Amortization of note discount 6,950 38,755 34,931
Deferred income taxes - - (701)
Changes in operating assets and
liabilities:
Trade accounts receivable (22,353) (13,525) (20,343)
Launch funds receivable 619 1,775 6,672
Prepaid expenses and other assets 745 2,238 6,011
Accounts payable 1,439 10,447 1,469
Interest payable 29,059 (184) (2,672)
Accrued expenses and other
liabilities (765) (8,602) 1,387
----------- --------- ---------
Net cash provided by operating
activities 263,949 233,573 289,914
----------- --------- ---------
Investing activities:
Purchase of fixed assets (286,389) (220,102) (174,096)
Sale of fixed assets 857 2,113 1,913
Purchase of intangible assets - - (107)
Purchase of investments (1,099) (1,801) (1,856)
Sale of investments - 1,079 602
----------- --------- ---------
Net cash used in investing activities (286,631) (218,711) (173,544)
----------- --------- ---------
Financing activities:
Repayment of old credit facilities (1,489,250) (83,500) (68,250)
Repayment of notes (815,000) - (8,134)
Proceeds from borrowings under new
credit facilities 2,286,000 - -
Debt refinancing costs (30,282) (1,733) (14)
Proceeds from borrowings under old
credit facilities 85,000 - -
Other 5 9 -
----------- --------- ---------
Net cash provided by (used in)
financing activities 36,473 (85,224) (76,398)
----------- --------- ---------
Net increase (decrease) in cash and
cash equivalents 13,791 (70,362) 39,972
Cash and cash equivalents, beginning of
year 29,782 100,144 60,172
----------- --------- ---------
Cash and cash equivalents, end of year $43,573 $29,782 $100,144
=========== ========= =========
12
Insight Communications Company, Inc.
Operating Statistics
(in thousands, except per customer and penetration data)
FY FY Q4 Q4
2006 2005 2006 2005
--------- --------- ------------------
Customer Relationships 1,401.8 1,347.5 1,401.8 1,347.5
Total Average Monthly Revenue
per Basic Customer $80.53 $73.30 $83.65 $75.75
Basic Cable
- --------------------------------
Homes Passed 2,465.2 2,420.6 2,465.2 2,420.6
Basic Cable Customers 1,322.8 1,281.6 1,322.8 1,281.6
Basic Cable Penetration 53.7% 52.9% 53.7% 52.9%
Cable Revenue $640,474 $596,321 $162,262 $150,225
Average Monthly Cable Revenue
per Basic Customer $40.85 $39.11 $40.95 $39.23
High-Speed Internet ("HSI")
- --------------------------------
HSI Homes Passed 2,439.6 2,378.9 2,439.6 2,378.9
HSI Customers 611.2 470.4 611.2 470.4
HSI Penetration 25.1% 19.8% 25.1% 19.8%
HSI Revenue $240,717 $190,820 $65,202 $52,712
Average Monthly HSI Revenue per
Basic Customer $15.35 $12.51 $16.46 $13.77
Average Monthly HSI Revenue per
HSI Customer $37.01 $39.77 $36.51 $38.64
Digital Cable
- --------------------------------
Digital Universe 1,259.6 1,238.6 1,259.6 1,238.6
Digital Customers 621.6 518.8 621.6 518.8
Digital Cable Penetration 49.3% 41.9% 49.3% 41.9%
Digital Revenue $138,172 $111,202 $37,163 $29,303
Average Monthly Digital Revenue
per Basic Customer $8.81 $7.29 $9.38 $7.65
Average Monthly Digital Revenue
per Digital Customer $20.05 $19.47 $20.32 $19.37
Telephone
- --------------------------------
Telephone Universe (marketable
homes) 1,392.7 832.0 1,392.7 832.0
Telephone Customers 123.4 89.9 123.4 89.9
Telephone Penetration (to
marketable homes) 8.9% 10.8% 8.9% 10.8%
Telephone Revenue $50,893 $35,502 $13,761 $10,363
Average Monthly Telephone
Revenue per Basic Customer $3.25 $2.33 $3.47 $2.71
Average Monthly Telephone
Revenue per Telephone Customer $39.78 $39.22 $38.83 $40.46
Advertising Revenue
- --------------------------------
Advertising Revenue $83,729 $76,004 $25,988 $20,851
Average Monthly Advertising
Revenue per Basic Customer $5.34 $4.98 $6.56 $5.45
Other Revenue
- --------------------------------
Other Revenue $108,572 $107,832 $27,078 $26,603
Average Monthly Other Revenue
per Basic Customer $6.93 $7.08 $6.83 $6.94
13
Insight Communications Company, Inc.
NCTA Standard Reporting Categories
Capital Expenditures
(unaudited)
(in thousands)
Three Months
Ended
December 31, Year Ended December 31,
Insight Consolidated 2006 2006 2005
- ---------------------------------------------- ----------- -----------
Customer Premise Equipment $35,430 $158,769 $114,846
Scaleable Infrastructure 9,705 37,820 20,694
Line Extensions 9,023 29,208 26,813
Upgrade/Rebuild 5,157 16,709 24,704
Support Capital 13,765 43,883 33,045
------------ ----------- -----------
Total Insight Consolidated $73,080 $286,389 $220,102
------------ ----------- -----------
Insight Communications Company, Inc.
Financial Information
Three months ended
December 31,
-----------------------
2006 2005
----------- -----------
(unaudited)
Insight Consolidated
- ---------------------------------------------
Revenue $331,454 $290,057
Adjusted Operating Income before Depreciation
and Amortization 135,485 59,988
Operating Income (Loss) 65,458 (13,820)
Capital Expenditures 73,080 75,480
Interest Expense 63,311 58,175
Free Cash Flow (9,767) (66,919)
Year ended December 31,
-----------------------
2006 2005
----------- -----------
Insight Consolidated
- ---------------------------------------------
Revenue $1,262,557 $1,117,681
Adjusted Operating Income before Depreciation
and Amortization 490,196 405,986
Operating Income 218,552 141,579
Capital Expenditures 286,389 220,102
Interest Expense 251,404 226,956
Free Cash Flow (22,440) 13,471
14
CONTACT: Insight Communications
Sandy Colony, 917-286-2300
SVP, Communications