8-K 1 insightmidwest8k-2.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 31, 2007 Insight Midwest, L.P. Insight Capital, Inc. -------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 333-33540 13-4079232 Delaware 333-33540-1 13-4079679 ----------------- ---------------- ------------------- (State or other (Commission File (I.R.S. Employer jurisdiction of Number) Identification No.) incorporation) 810 7th Avenue New York, New York 10019 -------------------------------------------------- ------------ (Address of principal executive offices) (Zip Code) (917) 286-2300 ----------------------- (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. Insight Midwest Holdings, LLC has invited lenders under its $2.445 billion senior credit facility to participate in a conference call on January 31, 2007 to discuss an amendment to the facility. During the conference call, we will disclose the following preliminary results for Insight Midwest, L.P.:

~~SECURITIES~~Fourth ~~AND~~Quarter ~~EXCHANGE~~Full ~~COMMISSION~~Year ~~Washington,~~2006 ~~D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 6,~~ 2006 ~~Insight Midwest, L.P. Insight Capital, Inc.~~ (~~Exact~~$ ~~name of registrant as specified~~ in ~~its charter~~millions) ~~Delaware~~Revenue ~~333-33540~~range ~~13-4079232~~$325 ~~Delaware 333~~-~~33540-1~~ ~~13-4079679~~335 ~~----------------- ------------------ ------------------ (State or other (Commission File Number) (I.R.S. Employer jurisdiction of Identification No.) incorporation) 810 7th Avenue New York~~$1,255 ~~New York 10019~~ -~~-------------------------------------------------~~ ------------ (Address of principal executive offices) (Zip Code) (917) 286-2300 ----------------------- (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01. Entry into a Material Definitive Agreement. The information included pursuant to Item 2.03 of this report is incorporated herein by reference. Item 1.02. Termination of a Material Definitive Agreement. Insight Midwest,265 ~~L.P.~~Operating ~~("Insight~~Income ~~Midwest")~~before isDepreciation ~~a partnership owned 50% by Insight Communications Company, Inc. ("ICCI")~~ and ~~50%~~Amortization byrange ~~an indirect subsidiary of Comcast Cable Holdings, LLC, which is a subsidiary of Comcast Corporation. Insight Midwest Holdings, LLC~~ (~~"Holdings"~~1) is$125 a direct, wholly owned subsidiary of Insight Midwest and is the owner of substantially all of the equity interests of the operating subsidiaries holding the systems serving all of our customers. ICCI serves as the sole general partner of Insight Midwest and as the manager of each of its systems. On October 6, 2006, in connection with Holdings' entry into the new credit facilities described in Item 2.03 hereof, Holdings terminated its existing credit facilities. Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-~~Balance~~ ~~Sheet~~130 ~~Arrangement~~$471 ~~of a Registrant. On October 6, 2006, Holdings entered into new senior secured credit facilities with J.P. Morgan Securities Inc. and Bank of America, N.A., as Co~~-~~Syndication~~ ~~Agents,~~476 ~~Morgan Stanley Senior Funding, Inc., General Electric~~ Capital ~~Corporation,~~expenditures ~~Wachovia~~range ~~Bank,~~$65 ~~National Association and The Royal Bank of Scotland plc, as Co~~-~~Documentation~~ ~~Agents,~~75 ~~and The Bank of New York, as Administrative Agent, and the other agents and lenders party thereto, pursuant to which the lenders have agreed to provide Holdings with an aggregate of~~ $~~2.445~~280 ~~billion~~- in290 ~~total~~Change borrowing capacity, consisting of a $385 million A Term Loan facility, a $1.8 billion B Term Loan facility and a $260 million revolving credit facility. On October 6, 2006, Holdings borrowed $1.35 billion under the B Term Loan facility and $81 million under the revolving credit facility to repay the outstanding principal amounts and accrued interest under its old credit facilities and to pay related transaction costs. We expect to draw the entire amount of the A Term Loan facility and the undrawn balance of the B Term Loan facility in ~~connection~~Revenue ~~with~~Generating the redemptions described in Item 2.04 below. The A Term Loan facility is scheduled to terminate on October 6, 2013, the B Term Loan facility is scheduled to terminate on April 6, 2014, and the lending commitments under the revolving credit facility are scheduled to terminate on October 6, 2012, or in each case if such date is not a business day, on the next business day. Obligations under the credit facilities are secured by a pledge of the outstanding equity interests of Holdings and its subsidiaries. Borrowings under the new credit facilities will bear interest at a base rate selected by Holdings from two alternatives plus an interest margin. The interest rate may be based on the London Interbank Offered Rate or an alternate base rate. The alternate base rate will be based on the greater of the prime rate or the Federal funds rate plus 0.50%. The applicable interest margin may be increased or reduced based on Holdings' then current leverage ratio. Holdings will pay a commitment fee on the unused portion of the total amount available under its credit facilities based on Holdings' leverage ratio. The credit facilities require Holdings to maintain an interest coverage ratio Units(~~as defined in the credit agreement~~2) initially not to be less than 1.50:1.00 and a leverage ratio (as defined in the credit agreement) initially not to exceed 6.25:1.00. The interest coverage ratio steps up and the leverage ratio steps down incrementally over the term of the credit facilities. Additionally+70,000 ~~the credit agreement contains customary affirmative and negative covenants concerning the conduct of Holdings' business operations~~+318,000 ~~such~~Change as limitations on the incurrence of indebtedness, the granting of liens, mergers, consolidations and dispositions of assets, restricted payments, payment of dividends, investments, hedging arrangements, transactions with affiliates and the entry into certain restrictive agreements. The credit facilities permit the division of assets and liabilities of Insight Midwest under the terms of its partnership agreement or an alternative division mutually agreed to by its partners subject to certain requirements, including the provision of a certificate demonstrating financial covenant pro forma compliance and specified minimum levels of remaining cash flow remaining in ~~Insight~~basic Midwest following the division. The credit agreement also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or default under other material debt, misrepresentation or breach of warranty, violation of certain covenants, a change of control, the commencement of a bankruptcy proceeding, the insolvency of Holdings or certain of its affiliates, the rendering of a judgment in excess of $25 million against Holdings or certain of its affiliates and the failure to complete the redemptions described in Item 2.04 below on or before November 20, 2006. Upon the occurrence of an event of default under the credit agreement, Holdings obligations under the credit facilities may be accelerated and the lending commitments under the credit facilities terminated. The description of Holdings' new credit facilities set forth in this Item 2.03 is qualified in its entirety by reference to the full text of the credit agreement incorporated by reference in this report as Exhibit 10.1. Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement. On October 6, 2006, notices of redemption customers(~~the "Notices") were delivered to the holders of the 10 1/2% Senior Notes due 2010 (the "10 1/2% Notes") and the 9~~ 3~~/4% Senior Notes due 2009 (the "9 3/4% Notes" and, together with the 10 1/2% Notes, the "Notes"~~) originally issued by Insight Midwest and Insight Capital, Inc. (collectively, the "Issuers"), in accordance with the terms and conditions of the Notes. In accordance with the Notices, the Issuers will redeem all $630 million outstanding principal amount of the 10 1/2% Notes at a redemption price of 103.5% of the principal amount, plus accrued and unpaid interest, and $185 million of the total outstanding $385 million of the 9 3/+4~~% Notes at a redemption price of 101.625% of the principal amount redeemed~~,000 ~~plus accrued and unpaid interest. The 9 3/4% Notes will be redeemed on a pro rata basis~~+41,000 and the Issuers will continue to make scheduled interest payments in accordance with, and otherwise comply with, the indenture governing the 9 3/4% Notes with respect to the 9 3/4% Notes that will remain outstanding following this redemption. The aggregate redemption price, including applicable premium and accrued interest, for the Notes being redeemed will be approximately $843 million and will be paid on November 7, 2006. - 1 - Item 9.01 Financial Statements and Exhibits. (a4) Not applicable. (b) Not applicable. (c) Not applicable. (d) Exhibits: 10.1 Credit Agreement, dated as of October 6, 2006, among J.P. Morgan Securities Inc. and Bank of America, N.A., as Co-Syndication Agents, Morgan Stanley Senior Funding, Inc., General Electric Capital Corporation, Wachovia Bank, National Association and The Royal Bank of Scotland plc, as Co-Documentation Agents, and The Bank of New York, as Administrative Agent, and the other agents and lenders party thereto (incorporated by reference to Exhibit 10.1 filed by ICCI with its Form 8-K, dated October 6, 2006). 10.2 Guarantee Agreement, dated as of October 6, 2006, among Insight Midwest Holdings, LLC, Insight Midwest, L.P., each of the subsidiaries of Insight Midwest Holdings, LLC signatory thereto, and The Bank of New York (incorporated by reference to Exhibit 10.2 filed by ICCI with its Form 8-K, dated October 6, 2006). 10.3 Security Agreement, dated as of October 6, 2006, among Insight Midwest Holdings, LLC, Insight Midwest, L.P., each of the subsidiaries of Insight Midwest Holdings, LLC signatory thereto, and The Bank of New York (incorporated by reference to Exhibit 10.3 filed by ICCI with its Form 8-K, dated October 6, 2006). - 2 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. INSIGHT MIDWEST, L.P. Date: October 13, 2006 By: /s/Elliot Brecher ------------------------------------ Name: Elliot Brecher Title: Senior Vice President and General Counsel INSIGHT CAPITAL, INC. Date: October 13, 2006 By: /s/Elliot Brecher ------------------------------------- Name: Elliot Brecher Title: Senior Vice President and General Counsel_____________________________

(1) We utilize Operating Income before Depreciation and Amortization, among other measures, to evaluate the performance of our businesses. Operating Income before Depreciation and Amortization is considered an important indicator of the operational strength of our businesses and is a component of our annual compensation programs. In addition, our debt agreements use Operating Income before Depreciation and Amortization, adjusted for certain non-recurring items, in our leverage and other covenant calculations. We also use this measure to determine how we will allocate resources and capital. Our management finds this measure helpful because it captures all of the revenue and ongoing operating expenses of our businesses and therefore provides a means to directly evaluate the ability of our business operations to generate returns and to compare operating capabilities across our businesses. This measure is also used by equity and fixed income research analysts in their reports to investors evaluating our businesses and other companies in the cable television industry. We believe Operating Income before Depreciation and Amortization is useful to investors because it enables them to assess our performance in a manner similar to the methods used by our management and provides a measure that can be used to analyze, value and compare companies in the cable television industry, which may have different depreciation, amortization and stock-based compensation policies. A limitation of 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 our 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 Operating Income before Depreciation and Amortization is that it does not reflect income net of interest expense, which is a significant expense for us because of the substantial debt we incurred to acquire cable television systems and finance capital expenditures to upgrade our cable network. Management evaluates the impact of interest expense through measures including interest expense, free cash flow, the returns analysis discussed above and debt service covenant ratios under our credit facility. Operating Income before Depreciation and Amortization is not a financial measure calculated in accordance with accounting principles generally accepted in the United States ("GAAP"). Operating Income before Depreciation and Amortization 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 GAAP. (2) Revenue Generating Units (RGUs) represent the sum of basic, digital, high-speed Internet and telephone customers. (3) Basic customers are customers of a cable television system who receive a package of over-the-air broadcast stations, local access channels and certain satellite-delivered cable television services, other than premium services, and who are usually charged a flat monthly rate for a number of channels. (4) Represents a 3.2% increase from basic customers at December 31, 2005. At this time, we are unable to reconcile Operating Income before Depreciation and Amortization with net income (loss), the most directly comparable financial measure calculated in accordance with GAAP, without unreasonable efforts, and we will provide reconciliations when we release final fourth quarter and year end results. The results presented above are preliminary and, although based on information currently available to us, the presented results include estimates and assumptions. As we and our independent auditors continue to review and refine our results for the fourth quarter and year ended December 31, 2006, the estimates and assumptions may change, possibly materially. Item 7.01 Regulation FD Disclosure. The information required to be disclosed pursuant to Rule 100(a) of Regulation FD is being furnished under Item 2.02 in this report, and such disclosure is incorporated in this item by this reference. * * * * * Any disclosures in this report 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 "Exchange Act"). 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 we currently anticipate Factors that could have a material and adverse impact on actual results are identified in the reports and documents Insight files from time to time with the U.S. Securities and Exchange Commission. Insight undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made during this presentation to reflect events or circumstances after today or to reflect the occurrence of unanticipated events. The information being furnished pursuant to Item 2.02 and Item 7.01 of this report shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, except if we specifically incorporate it by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Insight Midwest, L.P. Dated: January 31, 2007 By:/s/Elliot Brecher ------------------------------- Elliot Brecher Senior Vice President and General Counsel Insight Capital, Inc. Dated: January 31, 2007 By:/s/Elliot Brecher ------------------------------- Elliot Brecher Senior Vice President and General Counsel

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