EXHIBIT 99.1
Insight Announces Second Quarter 2007 Results
NEW YORK--(BUSINESS WIRE)--Aug. 16, 2007--Insight Communications
Company today announced financial results for the quarter ended June
30, 2007.
"We couldn't be more pleased with our record second quarter
operating and financial results," said Michael Willner, Insight's
chief executive officer. "Our outstanding operating performance
demonstrates our continued ability to grow RGUs at a high rate, with
record second quarter results in total RGUs, Basic and Telephone.
Importantly, this operating performance is now being fully reflected
in our financial results with adjusted OIBDA growth of 20%. We have
terrific momentum going into the second half of the year and are very
well positioned to sustain our strong growth into 2008 and beyond."
Second Quarter Highlights
-- Revenue of $355.5 million, an increase of 14% over Q2 2006
-- Adjusted Operating Income before Depreciation and
Amortization* of $141.4 million, an increase of 20% over Q2
2006
-- Capital expenditures of $55.8 million
-- Free Cash Flow* of $30.9 million
-- Total Customer Relationships of 1,424,100 at June 30, 2007, an
increase of 49,000 compared to 1,375,100 at June 30, 2006
-- Total Revenue Generating Units ("RGUs") of 2,854,600 at June
30, 2007, an increase of 338,300, or 13%, from June 30, 2006,
comprised of:
-- Basic customer net loss of 3,000, an improvement of 1,300
from Q2 2006 net losses of 4,300, and the best Q2
performance in the company's history. Total basic customers
at quarter end were 1,341,000, representing a 3.0% annual
growth rate in basic customers from June 30, 2006
-- High-speed Internet ("HSI") customer net gain of 18,900,
compared to net additions in Q2 2006 of 19,700. Total HSI
customers at quarter end were 674,900, a penetration of 28%
of HSI homes passed.
-- Digital customer net gain of 7,700, compared to net
additions in Q2 2006 of 11,700. Total digital customers at
quarter end were 661,500, a penetration of 52% of the
company's digital universe.
-- Telephone customer net gain of 29,400, surpassing Q1 2007
as the company's best growth quarter ever, and compared to
net additions in Q2 2006 of 7,500. Total telephone
customers at quarter end were 177,200, a penetration of 9%
of the company's telephone universe.
-- As of June 30, 2007, 98% of the company's customers were
passed by two-way, 750 MHz or higher capacity upgraded
network.
* See explanation of these Non-GAAP measures on page 5.
(Page 1)
Operating Results for the Three Months Ended June 30, 2007
Compared to the Three Months Ended June 30, 2006
Insight has restated its previously issued financial results to
correct the accounting for non-cash income tax expense and deferred
income taxes. The restatement had no effect on Insight's revenues,
operating income, cash flows or liquidity for any period and no effect
on Insight's pre-tax operating results or its net operating loss
carry-forwards. The impact on operating results for the second quarter
of 2006 was an understatement of net loss in the amount of $1.9
million.
Revenue for the three months ended June 30, 2007, totaled $355.5
million, an increase of 14% over the prior year, due primarily to RGU
growth across all of Insight's services, as well as video rate
increases. High-speed Internet service revenue increased 25% over the
prior year, which was attributable to an increased customer base and
was partially offset by lower average revenue per customer ("ARPU")
due to promotional discounts. Insight added a net 18,900 high-speed
Internet customers during the quarter to end at 674,900 customers.
Basic cable service revenue increased 6% due to an increased
customer base and video rate increases, partially offset by
promotional discounts. Historically, Insight has experienced a
seasonal decline in basic customers during the second quarter
primarily as a result of students leaving the university communities
Insight serves. In addition, digital service revenue increased 25%
over the prior year due to an increased customer base and a $1.58
increase in digital ARPU. Insight added a net 7,700 digital customers
during the quarter to end at 661,500 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. The company is also continuing to focus on improving
customer satisfaction through higher service levels and increased
customer education of product offerings.
To increase its bundling opportunities and extend its growth
potential in future years, the company successfully rolled out its
telephone product in eight previously unserved districts during the
second half of 2006 and in January 2007. As a result, the company
added a net 29,400 telephone customers during the quarter to end at
177,200 customers.
(Page 2)
Revenue by service offering was as follows for the three months
ended June 30 (dollars in thousands):
Revenue by Service Offering
----------------------------------- --------
Three
Months Three
Ended Months
June % of Ended % of % Change
30, Total June 30, Total in
2007 Revenue 2006 Revenue Revenue
-------- -------- -------- -------- --------
Basic $169,891 47.8% $160,328 51.5% 6.0%
High-speed Internet 73,260 20.6% 58,616 18.8% 25.0%
Digital 42,954 12.1% 34,307 11.0% 25.2%
Advertising 21,674 6.1% 20,020 6.4% 8.3%
Telephone 20,083 5.6% 12,528 4.0% 60.3%
Premium 13,953 3.9% 13,852 4.4% 0.7%
Franchise fees 8,114 2.3% 7,384 2.4% 9.9%
Other 5,574 1.6% 4,682 1.5% 19.1%
-------- -------- -------- -------- --------
Total $355,503 100.0% $311,717 100.0% 14.0%
======== ======== ======== ======== ========
Total Customer Relationships were 1,424,100 as of June 30, 2007,
an increase of 49,000 from 1,375,100 as of June 30, 2006. 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 quarter ended June 30, 2007, Insight added 53,000 RGUs,
which represent the sum of basic, digital, high-speed Internet and
telephone customers, and as of June 30, 2007, had 2,854,600 RGUs, an
increase of 13% from June 30, 2006.
RGUs by category were as follows (in thousands):
June 30, 2007 June 30, 2006
---------------------------
Basic 1,341.0 1,302.4
High-speed Internet 674.9 534.5
Digital 661.5 572.2
Telephone 177.2 107.2
------------- -------------
Total RGUs 2,854.6 2,516.3
============= =============
Average monthly revenue per basic customer was $88.27 for the
three months ended June 30, 2007, compared to $79.65 for the three
months ended June 30, 2006. This primarily reflects the continued
growth of high-speed Internet, video and telephone product offerings
in all markets, as well as video rate increases.
Programming and other operating costs increased $9.4 million, or
8%. Increases in programming rates, customers and the addition of new
programming content were significant drivers of the cost increase for
the quarter ended June 30, 2007. Other direct operating costs
increased due to the increase in telephone cost of service as the
company successfully rolled out this product in eight previously
unserved districts during the second half of 2006 and in January 2007.
This increase was partially offset by decreases in high-speed Internet
service costs as the company, in 2006, transitioned its Internet
services in-house and realized both cost savings and operational
benefits from this investment even while increasing its customer base.
(Page 3)
Selling, general and administrative expenses increased $16.5
million, or 20%, 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 network operations personnel to continue to upgrade
and enhance Insight's product offerings, manage its increasingly
complex network and increase customer satisfaction. A portion of the
network operations personnel increases were directly related to the
transition of the company's Internet services in-house. Partnership
dissolution costs of $5.8 million recorded in the second quarter of
2007 that primarily related to Insight's planned division of its
partnership with Comcast significantly contributed to the increase in
selling, general and administrative expenses. Franchise fees, customer
billing and collection fees increased primarily due to the increase in
revenues and the customer base. 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.
Depreciation and amortization expense increased $4.6 million, or
7%, primarily as a result of a continued high level of capital
expenditures through June 30, 2007. These expenditures were primarily
for purchases of customer premise equipment, installation labor and
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 June 30, 2006.
As a result of the factors discussed above, Adjusted Operating
Income before Depreciation and Amortization increased $23.8 million to
$141.4 million, an increase of 20% over Q2 2006.
Interest expense decreased $4.7 million, or 8%, because of lower
interest rates, which averaged 8.1% for the three months ended June
30, 2007, as compared to 8.9% for the three months ended June 30,
2006.
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.
(Page 4)
Cash provided by operations for the six months ended June 30, 2007
and 2006 was $180.4 million and $133.3 million. The increase was
primarily attributable to the decrease in net loss and the timing of
cash receipts and payments related to working capital accounts.
Cash used in investing activities for the six months ended June
30, 2007 and 2006 was $132.6 million and $141.8 million, and was
primarily for capital expenditures. These expenditures principally
constituted purchases of customer premise equipment, installation
labor and materials and capitalized labor, all of which are necessary
to grow the customer base and expand the company's service offerings.
Cash used in financing activities for the six months ended June
30, 2007 and 2006 was $45.4 million and $16.7 million. These
expenditures were primarily for the repayment of Insight's credit
facility.
Free Cash Flow for the six months ended June 30, 2007 totaled
$47.7 million, compared to ($8.4) million for the six months ended
June 30, 2006. This increase in Free Cash Flow from June 30, 2006 to
June 30, 2007 of $56.1 million was primarily driven by the following:
-- A $40.9 million increase in Adjusted Operating Income before
Depreciation and Amortization;
-- A $10.0 million increase in the generation of Free Cash Flow
over the same period in the prior year from changes in working
capital accounts; and
-- A $9.1 million decrease in capital expenditures.
These increases in cash flow were offset by:
-- A $4.3 million increase in cash interest expense paid, which
was primarily driven by interest on the 12 1/4% Senior
Discount Notes, which was paid in cash in February 2007,
whereas in February 2006 it was paid in-kind. Partially
offsetting this increase was a decrease in interest rates.
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. As of June 30, 2007,
Insight had the ability to draw upon $194.3 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, non-cash stock-based compensation and partnership
dissolution costs), 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.
(Page 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.
(Page 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 Six Months
Ended June 30, Ended June 30,
------------------- -------------------
2007 2006 2007 2006
--------- --------- --------- ---------
(in thousands)
As As
restated restated
Net loss $ (8,198) $(10,804) $ (8,303) $(23,532)
Provision for income taxes 1,909 1,989 3,939 3,978
--------- --------- --------- ---------
Loss before income taxes (6,289) (8,815) (4,364) (19,554)
Minority interest income
(expense) 13,691 (2,110) 14,244 (4,615)
--------- --------- --------- ---------
Income (loss) before minority
interest and income taxes 7,402 (10,925) 9,880 (24,169)
Other (income) expense:
Other (389) (20) (782) 50
Interest income (251) (369) (571) (881)
Interest expense 56,502 61,208 114,399 122,283
--------- --------- --------- ---------
Total other expense, net 55,862 60,819 113,046 121,452
--------- --------- --------- ---------
Operating income 63,264 49,894 122,926 97,283
Depreciation and amortization 71,954 67,343 141,233 131,655
Partnership dissolution costs 5,848 - 5,848 -
Stock-based compensation 323 334 714 884
--------- --------- --------- ---------
Adjusted Operating Income
before Depreciation and
Amortization $141,389 $117,571 $270,721 $229,822
========= ========= ========= =========
(Page 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.
Three Months Six Months
Ended June 30, Ended June 30,
------------------- ---------------------
2007 2006 2007 2006
--------- --------- ---------- ----------
(in thousands)
Operating income $ 63,264 $ 49,894 $ 122,926 $ 97,283
Depreciation and
amortization 71,954 67,343 141,233 131,655
Partnership dissolution
costs 5,848 - 5,848 -
Stock-based compensation 323 334 714 884
--------- --------- ---------- ----------
Adjusted Operating Income
before Depreciation and
Amortization 141,389 117,571 270,721 229,822
Changes in working
capital accounts (1) (4,740) 5,758 13,631 3,672
Cash paid for interest (49,980) (76,384) (103,722) (99,471)
Cash paid for taxes (17) (138) (259) (691)
--------- --------- ---------- ----------
Net cash provided by
operating activities 86,652 46,807 180,371 133,332
Capital expenditures (55,753) (84,136) (132,680) (141,765)
--------- --------- ---------- ----------
Free Cash Flow $ 30,899 $(37,329) $ 47,691 $ (8,433)
========= ========= ========== ==========
(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 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.
Insight Midwest holds all of the cable systems served by Insight
and is equally owned by Insight and Comcast. On April 1, 2007, Insight
Midwest's partnership agreement was amended, and Insight and Comcast
agreed on a division of the partnership's assets and liabilities. Upon
completion of the transaction, Insight will own all of the cable
systems serving customers in Louisville; Lexington; Bowling Green; and
Covington, Ky., and in Evansville, Ind. and Columbus, Ohio. Comcast
will own all of the cable systems serving customers in Rockford/Dixon;
Quincy/Macomb; Springfield; Peoria; and Champaign/Urbana, Ill., and in
Bloomington; Anderson; and Lafayette/Kokomo, Ind. Pending completion
of the transaction, Insight continues to serve as general partner and
manager of all of the cable systems of Insight Midwest. In conjunction
with the division of assets and liabilities, the Insight systems group
was initially allocated approximately $1.260 billion of the
partnership's debt, and the Comcast systems group was initially
allocated approximately $1.335 billion of the partnership's debt. The
closing is subject to closing conditions, including local governmental
approvals and regulatory approvals and is expected to be completed by
the end of 2007.
###
(Page 8)
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; upon completion of the division of Insight's
joint venture with a subsidiary of Comcast Corporation it will face
new challenges as a smaller company; 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.
(Page 9)
Insight Communications Company, Inc.
Consolidated Balance Sheets
(dollars in thousands, except share and per share amounts)
June 30, December 31,
2007 2006
----------- ------------
(unaudited)
Assets
Cash and cash equivalents $ 45,890 $ 43,573
Trade accounts receivable, net of allowance
for doubtful accounts of $1,171 and $1,148
as of June 30, 2007 and December 31, 2006 30,414 31,060
Prepaid expenses and other current assets 8,698 8,828
----------- ------------
Total current assets 85,002 83,461
Fixed assets, net 1,144,441 1,151,260
Goodwill 187,982 72,430
Franchise costs 2,361,959 2,361,959
Deferred financing costs, net of accumulated 17,698 19,053
amortization of $31,240 and $29,473 as of
June 30, 2007 and December 31, 2006
Investments 7,000 7,000
Other non-current assets 3,368 2,941
----------- ------------
Total assets $ 3,807,450 $ 3,813,656
=========== ============
(Page 10)
Insight Communications Company, Inc.
Consolidated Balance Sheets
(dollars in thousands, except share and per share amounts)
June 30, December 31,
2007 2006
----------- ------------
(unaudited)
Liabilities and stockholders' equity
Accounts payable $ 36,977 $ 43,772
Accrued expenses and other current
liabilities 56,911 45,521
Accrued property taxes 19,780 13,595
Accrued programming costs (inclusive of
$34,614 and $30,677 due to related parties
as of June 30, 2007 and December 31, 2006) 52,668 45,880
Deferred revenue 991 2,076
Interest payable 59,952 49,518
----------- ------------
Total current liabilities 227,279 200,362
Deferred revenue 292 683
Deferred tax liability 216,466 212,648
Debt 2,762,825 2,805,722
Minority interest 259,878 245,634
Stockholders' equity:
Voting preferred stock, $.01 par value:
Series A - 1,000,000 shares authorized;
848,945 shares issued and outstanding as
of June 30, 2007 and December 31, 2006 8 8
Series B - 1,000,000 shares authorized;
517,836 shares issued and outstanding as
of June 30, 2007 and December 31, 2006 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 June 30, 2007 and December 31, 2006 134 134
Series D - 50,000,000 shares authorized;
47,015,659 shares issued and outstanding
as of June 30, 2007 and December 31, 2006 470 470
Non-voting common stock, $.01 par value:
Series E - 5,000,000 shares authorized;
3,480,497 and 3,536,247 shares issued and
outstanding as of June 30, 2007 and
December 31, 2006 35 35
Series F - 100,000 shares authorized;
95,020 and 93,250 shares issued and
outstanding as of June 30, 2007 and
December 31, 2006 1 1
Voting common stock, $.01 par value:
Series G - 10,000,000 shares authorized; 0
shares issued and outstanding as of June
30, 2007 and December 31, 2006 - -
Additional paid-in-capital 827,221 826,509
Accumulated deficit (487,164) (478,861)
Accumulated other comprehensive income (loss) - 306
----------- ------------
Total stockholders' equity 340,710 348,607
----------- ------------
Total liabilities and stockholders' equity $3,807,450 $3,813,656
=========== ============
(Page 11)
Insight Communications Company, Inc.
Consolidated Statements of Operations
(unaudited)
(dollars in thousands)
Three Months Ended Six months ended
June 30, June 30,
-------------------- ---------------------
2007 2006 2007 2006
--------- ---------- ---------- ----------
As As
restated restated
Revenue $355,503 $ 311,717 $ 694,972 $ 612,998
Operating costs and
expenses:
Programming and other
operating costs
(exclusive of
depreciation and
amortization)
(inclusive of $51,638
and $102,927, and
$44,257 and $87,338 of
programming expense
incurred through
related parties for the
three and six months
ended June 30, 2007 and
2006)
122,306 112,956 242,161 224,370
Selling, general and
administrative
(inclusive of $323 and
$714, and $334 and $884
of stock-based
compensation for the
three and six months
ended June 30, 2007 and
2006) 97,979 81,524 188,652 159,690
Depreciation and
amortization 71,954 67,343 141,233 131,655
--------- ---------- ---------- ----------
Total operating costs and
expenses 292,239 261,823 572,046 515,715
--------- ---------- ---------- ----------
Operating income 63,264 49,894 122,926 97,283
Other income (expense):
Interest expense (56,502) (61,208) (114,399) (122,283)
Interest income 251 369 571 881
Other income (expense) 389 20 782 (50)
--------- ---------- ---------- ----------
Total other expense, net (52,862) (60,819) (113,046) (121,452)
Income (loss) before
minority interest and
income taxes 7,402 (10,925) 9,880 (24,169)
Minority interest income
(expense) (13,691) 2,110 (14,244) 4,615
--------- ---------- ---------- ----------
Loss before income taxes (6,289) (8,815) (4,364) (19,554)
Provision for income taxes (1,909) (1,989) (3,939) (3,978)
--------- ---------- ---------- ----------
Net loss $ (8,198) $ (10,804) $ (8,303) $ (23,532)
========= ========== ========== ==========
(Page 12)
Insight Communications Company, Inc.
Consolidated Statement of Cash Flows
(unaudited)
(dollars in thousands)
Six Months Ended June 30,
-------------------------
2007 2006
------------ ------------
As restated
Operating activities:
Net loss $ (8,303) $ (23,532)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 141,233 131,655
Stock-based compensation 714 884
Minority interest 14,244 (4,615)
Provision for losses on trade accounts
receivable 6,906 7,026
Amortization of note discount 2,103 6,571
Deferred income taxes 3,818 3,818
Changes in operating assets and
liabilities:
Trade accounts receivable (6,260) (4,604)
Prepaid expenses and other assets (303) (2,697)
Accounts payable (6,795) 37
Interest payable 10,434 16,220
Accrued expenses and other liabilities 22,580 2,569
------------ ------------
Net cash provided by operating activities 180,371 133,332
------------ ------------
Investing activities:
Purchase of fixed assets (132,680) (141,765)
Sale of fixed assets 39 504
Purchase of investments - (518)
------------ ------------
Net cash used in investing activities (132,641) (141,779)
------------ ------------
Financing activities:
Repayment of credit facilities (55,000) (41,750)
Net proceeds from borrowings under credit
facilities 10,000 25,000
Debt issuance costs (412) -
Other (1) 1
------------ ------------
Net cash used in financing activities (45,413) (16,749)
------------ ------------
Net increase (decrease) in cash and cash
equivalents 2,317 (25,196)
Cash and cash equivalents, beginning of
period 43,573 29,782
------------ ------------
Cash and cash equivalents, end of period $ 45,890 $ 4,586
============ ============
(Page 13)
Insight Communications Company, Inc.
Operating Statistics
(in thousands, except per customer and penetration data)
Q2 Q1 Q2
2007 2007 2006
--------- --------- ---------
Customer Relationships 1,424.1 1,426.3 1,375.1
Total Average Monthly Revenue per Basic
Customer $ 88.27 $ 84.86 $ 79.65
Basic Cable
- ----------------------------------------
Homes Passed 2,483.9 2,472.7 2,445.9
Basic Cable Customers 1,341.0 1,344.0 1,302.4
Basic Cable Penetration 54.0% 54.4% 53.2%
Cable Revenue $169,891 $168,151 $160,328
Average Monthly Cable Revenue per
Basic Customer $ 42.18 $ 42.03 $ 40.97
High-Speed Internet ("HSI")
- ----------------------------------------
HSI Homes Passed 2,458.0 2,446.8 2,398.2
HSI Customers 674.9 656.0 534.5
HSI Penetration 27.5% 26.8% 22.3%
HSI Revenue $ 73,260 $ 69,531 $ 58,616
Average Monthly HSI Revenue per Basic
Customer $ 18.19 $ 17.38 $ 14.98
Average Monthly HSI Revenue per HSI
Customer $ 36.70 $ 36.58 $ 37.24
Digital Cable
- ----------------------------------------
Digital Universe 1,281.3 1,282.2 1,243.9
Digital Customers 661.5 653.8 572.2
Digital Cable Penetration 51.6% 51.0% 46.0%
Digital Revenue $ 42,954 $ 40,540 $ 34,307
Average Monthly Digital Revenue per
Basic Customer $ 10.66 $ 10.13 $ 8.77
Average Monthly Digital Revenue per
Digital Customer $ 21.77 $ 21.19 $ 20.19
Telephone
- ----------------------------------------
Telephone Universe (marketable homes) 1,973.6 1,957.7 871.8
Telephone Customers 177.2 147.8 107.2
Telephone Penetration (to marketable
homes) 9.0% 7.5% 12.3%
Telephone Revenue $ 20,083 $ 15,803 $ 12,528
Average Monthly Telephone Revenue per
Basic Customer $ 4.99 $ 3.95 $ 3.20
Average Monthly Telephone Revenue per
Telephone Customer $ 41.20 $ 38.86 $ 40.37
Advertising Revenue
- ----------------------------------------
Advertising Revenue $ 21,674 $ 17,385 $ 20,020
Average Monthly Advertising Revenue
per Basic Customer $ 5.38 $ 4.35 $ 5.12
Other Revenue
- ----------------------------------------
Other Revenue $ 27,641 $ 28,059 $ 25,918
Average Monthly Other Revenue per
Basic Customer $ 6.87 $ 7.02 $ 6.61
(Page 14)
Insight Communications Company, Inc.
NCTA Standard Reporting Categories
Capital Expenditures
(unaudited)
(in thousands)
Three Months Three Months
Ended Ended Year Ended
Insight Consolidated June 30, June 30, December 31,
2007 2006 2006
- -------------------------- ------------ ------------ ------------
Customer Premise Equipment $ 32,907 $ 49,036 $ 158,769
Scaleable Infrastructure 7,553 8,170 37,820
Line Extensions 5,665 6,830 29,208
Upgrade/Rebuild 3,538 4,737 16,709
Support Capital 6,090 15,363 43,883
------------ ------------ ------------
Total Insight Consolidated $ 55,753 $ 84,136 $ 286,389
------------ ------------ ------------
(Page 15)
CONTACT: Insight Communications
Sandy Colony, 917-286-2300
SVP, Communications