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Cable Operators

A Privately Proud Pair

2/02/2007 7:00 PM Eastern

Two privately held cable operators released bare-bones fourth-quarter financial data last week, one in conjunction with an attempt to amend its bank credit facilities and the other to tout its new president’s first year on the job.

Insight Midwest, the 50-50 partnership between privately owned Insight Communications and Comcast, released preliminary fourth quarter and year-end results last Wednesday, showing a deceleration in basic-subscriber growth but a robust rise in revenue and cash flow.

And on Jan. 30, Cox Communications — which went private in 2004 in an $8.9 billion deal — said it added 30,000 basic customers in 2006, ending the year with 5.4 million basic subscribers. Cox also said high-speed Internet customers rose 16% for the year to 3.3 million and telephone customers increased by more than 21% to over 2 million subscribers.

Snapshot: Insight Midwest
Selected financial results:
4Q2006 Full Year 2006
Revenue $325 million to $335 million $1.255 billion to $1.265 billion
Cash flow $125 million to $130 million $471 million to $476 million
Capital spending $65 million to $75 million $280 million to $290 million
Basic subscriber additions +4,000 +41,000
Source: Insight

INSIGHT REVENUE

Insight filed the preliminary results with the Securities and Exchange Commission on Jan. 31, ahead of a planned conference call with lenders held later that same day to discuss an amendment to its $2.45 billion credit facility. In the filing, Insight said it expects fourth-quarter revenue to be in the $325 million to $335 million range and operating income before depreciation and amortization to be between $125 million and $130 million. There were no comparable fourth-quarter 2005 results released.

Insight also said it added about 4,000 basic-video subscribers in the period, down from the 16,000 basic customers the operator added in the third quarter

For the year, Insight said it expects revenue to be between $1.255 billion and $1.265 billion (a 12.4% to 13.2% increase) and operating income before depreciation and amortization, a measure of cash flow, to be between $471 million and $476 million (a 3.2% to 4.3% rise). Basic subscribers are expected to increase by more than 41,000 customers for the year, a 3.2% increase.

Insight went private in a $710 million deal in 2005, but because it still has public debt, it is required to file financial statements with the SEC. Insight has not yet set a date for the release of actual fourth-quarter 2006 and year-end results.

COX UNDER ESSER

The Cox release said the growth comes during president Patrick Esser’s first full year on the job. Esser replaced the retiring CEO Jim Robbins on Jan. 1, 2006.

Cox said that its success with the triple-play bundle of voice, video and data was the main driver for the increases. Cox ended the year with more than 3.4 million bundled customers — a 15% increase over 2005. The company also has been pushing a two-product bundle of voice and data services for customers who receive video service from another provider. Cox ended the year with 448,666 nonvideo customers, a 20% increase over the previous year.

“There’s no question about it, the bundle is our best offense and defense,” Esser said in a statement.

 

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