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Insight Announces Second Quarter 2003 Results

New York – July 31, 2003 –

Insight Communications Company (Nasdaq: ICCI) today announced financial results for the quarter ended June 30, 2003.

Revenue for the three months ended June 30, 2003 totaled $223.0 million, an increase of 11% over the prior year, due primarily to customer gains in high-speed data and digital services as well as basic rate increases. Operating cash flow ("OCF") increased to $94.5 million for the three months ended June 30, 2003 from $89.3 million for the three months ended June 30, 2002, an increase of 6%. A reconciliation of operating cash flow to operating income appears below in the discussion of operating data results.

Revenue Generating Units ("RGUs"), representing the sum of basic, digital, high-speed data and telephone customers as defined by the NCTA Standard Reporting Categories, increased by 7,500 during the quarter to 1,877,500. High-speed data net additions were 11,200; digital net additions were 4,800; and telephone additions were 4,500. These gains were offset by the seasonal reduction of 13,000 basic customers, reflecting the large number of university communities served and the Company's history of reporting such net losses during the second quarter of the year when students leave for the summer.

"This quarter marks an important milestone for Insight Communications. Having completed our planned system upgrades, 95% of our customers are now served by an upgraded network of 750MHz or higher," said Michael S. Willner, Vice Chairman and Chief Executive Officer of Insight Communications. "Despite our usual second quarter weaknesses, we posted RGU growth of 10% year-over-year, driven by the gains in new products. Second quarter average monthly revenue per basic customer increased 11% over the prior year to $57.10, driven by the continued successful rollout of new products and by basic rate increases. We continue to see the power of the upgraded platform and are excited by the vast potential it offers for growth."

Capital expenditures totaled $43.6 million in the second quarter, a 39% reduction over the prior year's quarter. Of the total, approximately 47% was for Customer Premise Equipment and 24% was for Upgrade/Rebuild costs, as defined by the NCTA Standard Reporting Categories. For the three months ended June 30, 2003, capital expenditures per customer totaled approximately $33.62. Capital was funded through cash generated from operations as well as through bank borrowings.

"This quarter was largely in line with our expectations, with the exception of telephony," said Kim D. Kelly, President and Chief Operating Officer of Insight Communications. "While we experienced delays in the rollout of telephony in the first half of the year, we continue to believe that the product will be a strong performer in the second half."

"Due to reduced spending in telephony as well as in our upgrade program, we are reducing capital expenditure guidance for the year to $200 million," continued Kelly. "This represents a year-over-year decline of 30% in capital expenditures and enhances our free cash flow position."

Monthly operating cash flow margin per basic customer decreased to 42.4% for the quarter ended June 30, 2003, down from 44.5% for the prior year's quarter.

The Company recently announced its plan to refinance all of the indebtedness of its Ohio operating subsidiary. In connection with the refinancing plan, the Company expects to acquire the outstanding equity of Coaxial Communications, which holds 800,000 shares of the Company's outstanding common stock and which the Company expects to retire.

"This transaction represents the Company's continued focus on strengthening the balance sheet, achieving positive free cash flow, and reducing structural complexity," said Dinni Jain, Senior Vice President and Chief Financial Officer. "Simplifying our capital structure allows us to reduce costs and maintain our focus on operations."


Operating results for the three months ended June 30, 2003, compared to the three months ended June 30, 2002

The $22.2 million or 11% increase in revenue was primarily a result of gains in high-speed data and digital services, which increased 59% and 21% over the prior year's quarter. In addition, basic cable service revenue increased 7% primarily due to basic rate increases.

RGUs were approximately 1,877,500 as of June 30, 2003 compared to approximately 1,707,000 as of June 30, 2002. This represents a growth rate of 10%. On a same store basis, RGUs grew 9% from the prior year quarter.

Average monthly revenue per basic customer, including management fee revenue and SourceSuite revenue, was $57.10 for the three months ended June 30, 2003, compared to $51.63 for the three months ended June 30, 2002 primarily reflecting the continued successful rollout of new product offerings in all markets. Average monthly revenue per basic customer for high-speed data and digital service increased to $10.85 for the three months ended June 30, 2003, up from $7.87 for the three months ended June 30, 2002.

Programming and other operating costs increased $11.7 million or 17%. The increase is primarily attributable to a 10% increase in programming costs, due to increased programming and rates, reduced programming launch support, increased customers served, and additional programming added in the newly rebuilt systems. The increase in Programming and other operating costs is also attributable to a 73% increase in high-speed data costs due to increased customers served. Additionally, other operating costs increased as a result of a decrease in the amount of technical employee salaries capitalized due to the near completion of rebuild activity and increases in plant maintenance costs.

Selling, general and administrative expenses increased $5.4 million or 13%, primarily as a result of increased costs related to annual salary increases and increases in payroll related costs for existing employees as well as the addition of new employees. Additionally, the increase is related to increased marketing costs to promote new and existing services and a decrease in funds received for marketing support (recorded as a reduction to selling, general and administrative expenses) for new channel launches.

Depreciation and amortization expense increased $10.8 million or 22% primarily as a result of additional capital expenditures through June 30, 2003 to support the continued rebuild of the Illinois systems, extend the plant and continue the rollout of digital, high-speed data and telephone services to existing and new service areas.

OCF increased $5.2 million or 6%, primarily due to increased basic, digital and high-speed data revenue, offset by increases in programming and other operating costs and selling, general and administrative costs. The following is a reconciliation of operating income to OCF:

Three months ended June 30,
	2003	2002
(in thousands)
Operating income	$ 34,183	$ 39,824
Adjustment:
Depreciation and amortization	60,275	49,481
Operating Cash Flow	$ 94,458	$ 89,305

Interest expense remained relatively flat quarter over quarter. The decrease of $261,000 or 1% is primarily as a result of lower interest rates, which averaged 7.7% for the three months ended June 30, 2003, versus 7.9% for the three months ended June 30, 2002. Partially offsetting this decrease was higher outstanding debt, which averaged $2.63 billion for the three months ended June 30, 2003, versus $2.56 billion for the three months ended June 30, 2002.

Minority interest increased $4.3 million or 104% as a direct result of the increase in the net loss attributable to common interests recorded by Insight Midwest.

For the three months ended June 30, 2003, the net loss was $7.5 million.


Insight Communications (NASDAQ: ICCI) is the 9th largest cable operator in the United States, serving approximately 1.4 million customers in the four contiguous states of Illinois, Kentucky, Indiana and Ohio. Insight specializes in offering bundled, state-of-the-art services in mid-sized communities, delivering basic and digital video, high-speed data and the recent deployment of voice telephony in selected markets 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, as amended. 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 Communications anticipates. Factors that could have a material and adverse impact on actual results include competition, increasing programming costs, changes in laws and regulations, our substantial debt and the other risk factors described in Insight Communications' annual report on Form 10-K, as amended, for the year ended December 31, 2002. All forward-looking statements in this press release are qualified by reference to the cautionary statements included in Insight Communications' Form 10-K.

Supplemental Information & Quarterly Operating Statistics (MS Word)