Insight Communications Announces First Quarter 2006 Results

Business Wire, May 8, 2006

NEW YORK -- Insight Communications Company today announced financial results for the quarter ended March 31, 2006.

First Quarter Highlights

--  Revenue of $301.3 million, an increase of 12% over Q1 2005

    --  Adjusted Operating Income before Depreciation and
        Amortization* of $112.3 million, an increase of 4% over Q1
        2005

    --  Capital expenditures of $57.6 million

    --  Free Cash Flow* of $28.9 million

    --  Total Customer Relationships of 1,376,800 at Q1 2006, an
        increase of 49,700 compared to 1,327,100 at Q1 2005

    --  Total Revenue Generating Units ("RGUs") of 2,481,700 at Q1
        2006, an increase of 15% from Q1 2005, comprised of:

        --  High-speed Internet ("HSI") customer net gain of 44,400,
            an increase of 19% over Q1 2005 net additions. Total HSI
            customers at quarter end were 514,800, a penetration of
            22% of HSI homes passed.

        --  Basic customer net gain of 25,100, an increase of 26,200
            customers over Q1 2005 net losses, resulting in 1,306,700
            basic customers at quarter end

        --  Digital customer net gain of 41,700, an increase of 34,000
            customers over Q1 2005 net additions, increasing digital
            customers to 560,500 at quarter end. Digital penetration
            was 45% of the company's Digital Universe.

        --  Telephone customer net gain of 9,800, an increase of 5,500
            customers over Q1 2005 net additions, bringing total
            telephone customers to 99,700 at quarter end and
            penetration to 12% of marketable homes passed

    --  As of March 31, 2006, 97% 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.

                                  (1)

Operating Results for the Three Months Ended March 31, 2006 Compared to the Three Months Ended March 31, 2005

Revenue for the three months ended March 31, 2006 totaled $301.3 million, an increase of 12% over the prior year, due primarily to customer gains in all services, as well as video rate increases. High-speed Internet service revenue increased 34% 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 44,400 high-speed Internet customers during the quarter to end at 514,800 customers. In addition, digital service revenue increased 19% over the prior year due to an increased customer base. Insight added a net 41,700 digital customers during the quarter to end at 560,500 customers.

Basic cable service revenue increased 7% due to an increased customer base and video rate increases, partially offset by promotional discounts. Insight is increasing its customer growth and retention efforts by increasing spending on sales and marketing efforts, emphasizing bundling and enhancing and differentiating its video services by providing video-on-demand, high definition television and digital video recorders. The company is also continuing to focus on improving customer satisfaction through higher service levels and increased education of product offerings.

Revenue by service offering was as follows for the three months
ended March 31 (dollars in thousands):


                          Revenue by Service Offering
                   ---------------------------------------------------
                    Three                Three
                    Months               Months
                    Ended                Ended               % Change
                   March 31, % of Total March 31, % of Total    in
                     2006      Revenue    2005      Revenue   Revenue
                   --------- ---------- --------- ---------- ---------
Basic              $158,207       52.5% $147,632       54.8%      7.2%
High-Speed Internet  56,497       18.8%   42,113       15.6%     34.2%
Digital              31,723       10.5%   26,761        9.9%     18.5%
Advertising          17,697        5.9%   16,988        6.3%      4.2%
Premium              13,394        4.4%   14,344        5.3%     -6.6%
Telephone            11,355        3.8%    7,732        2.9%     46.9%
Franchise fees        7,354        2.4%    7,420        2.8%     -0.8%
Other                 5,054        1.7%    6,337        2.4%    -20.2%
                   --------- ---------- --------- ---------- ---------
Total              $301,281      100.0% $269,327      100.0%     11.9%
                   ========= ========== ========= ========== =========

Total Customer Relationships were 1,376,800 as of March 31, 2006, an increase of 49,700 from 1,327,100 as of March 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. RGUs, which represent the sum of basic, digital, high-speed Internet and telephone customers, as of March 31, 2006 increased 15% as compared to March 31, 2005.