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<TITLE>S-1</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">As filed with the Securities and Exchange
Commission on October&nbsp;5, 2005</FONT></B>
</DIV>

<DIV align="right">
<B><FONT size="2">Registration
No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>
</DIV>

<DIV align="left">
<HR size="4" noshade color="#000000" style="margin-top: -5px">
</DIV>

<DIV align="left">
<HR size="1" noshade color="#000000" style="margin-top: -10px">
</DIV>

<P align="center">
<B><FONT size="4">UNITED STATES SECURITIES AND EXCHANGE
COMMISSION</FONT></B>

<DIV align="center">
<B>Washington,&nbsp;D.C. 20549</B>
</DIV>

<P align="center">
<B><FONT size="5">Form&nbsp;S-1</FONT></B>

<P align="center">
<B>REGISTRATION STATEMENT</B>

<DIV align="center">
<B>UNDER</B>
</DIV>

<DIV align="center">
<B>THE SECURITIES ACT OF 1933</B>
</DIV>

<DIV align="center">
<B><FONT size="6">Charter Communications, Inc.</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Exact name of registrant as specified in its
Charter)</FONT></I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Delaware</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">4841</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">43-1857213</FONT></B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I><FONT size="2">(State or other jurisdiction of<BR>
    incorporation or organization)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(Primary Standard Industrial<BR>
    Classification Code Number)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(I.R.S. Employer<BR>
    Identification Number)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center">
<B><FONT size="2">12405 POWERSCOURT DRIVE</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">ST. LOUIS, MISSOURI 63131</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(314)&nbsp;965-0555</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Address, including zip code, and telephone
number, including area code,</FONT></I>
</DIV>

<DIV align="center">
<I><FONT size="2">of registrant principal executive
offices)</FONT></I>
</DIV>

<DIV align="center">
<B><FONT size="2">Paul E. Martin</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Senior Vice President, Interim Chief Financial
Officer, Principal Accounting Officer and Corporate
Controller</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">12405 Powerscourt Drive</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">St.&nbsp;Louis, Missouri 63131</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(314)&nbsp;965-0555</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Name, address, including zip code, and
telephone number,</FONT></I>
</DIV>

<DIV align="center">
<I><FONT size="2">including area code, of agent for
service)</FONT></I>
</DIV>

<DIV align="center">
<B><I><FONT size="2">Copies to:</FONT></I></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Dennis J. Friedman<BR>
    Gibson, Dunn &#38; Crutcher LLP<BR>
    200 Park Avenue<BR>
    New York, NY 10166<BR>
    (212) 351-4000</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">Jeremy W. Dickens<BR>
    Brian A. Haskel<BR>
    Weil, Gotshal &#38; Manges LLP<BR>
    767 Fifth Avenue<BR>
    New York, NY 10153<BR>
    (212) 310-8000</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Approximate date of commencement of proposed
sale to the public:</FONT></B><FONT size="2"> As soon as
practicable after this Registration Statement becomes effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of the securities being registered on this
form are to be offered on a delayed or continuous basis pursuant
to Rule&nbsp;415 under the Securities Act of 1933, check the
following
box.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this form is filed to register additional
securities for an offering pursuant to Rule&nbsp;462(b) under
the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this form is a post-effective amendment filed
pursuant to Rule&nbsp;462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If delivery of the prospectus is expected to be
made pursuant to Rule&nbsp;434, please check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="center">
<B><FONT size="2">CALCULATION OF REGISTRATION FEE</FONT></B>

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<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="21%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="19%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Title of Each Class of</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed Maximum</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed Maximum</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount of Registration</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Securities to be Registered</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount to be Registered</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Offering Price Per Unit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Aggregate Offering Price</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Fee(1)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Class&nbsp;A Common Stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">122,830,000&nbsp;shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$1.58
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$193,457,250
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$22,770
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Calculated pursuant to Rule&nbsp;457(c) under the
    Securities Act solely for the purpose of calculating the
    registration fee on the basis of the average of the high and low
    prices of the Class&nbsp;A Common Stock as reported on the
    Nasdaq National Market on October&nbsp;3, 2005.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section&nbsp;8(a) of the Securities Act of 1933, as amended, or
until this Registration Statement shall become effective on such
date as the Commission, acting pursuant to said
Section&nbsp;8(a), may determine.</FONT></B>

<P align="left">
<HR size="1" noshade color="#000000" style="margin-top: -2px">

<DIV align="left">
<HR size="4" noshade color="#000000" style="margin-top: -10px">
</DIV>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="1" cellpadding="5"><TR><TD>
<B><FONT size="2" color="#E8112D">The information in this
prospectus is not complete and may be changed. We may not sell
these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state or
jurisdiction where the offer or sale is not
permitted.</FONT></B><FONT size="2"> <BR>
</FONT>
</TD></TR></TABLE>

<P align="center">
<B><FONT size="2" color="#E8112D">SUBJECT TO COMPLETION, DATED
OCTOBER&nbsp;5, 2005</FONT></B>

<P align="left">
<B><FONT size="2">PROSPECTUS</FONT></B>

<P align="center">
<IMG src="y11229y1122906.gif" alt="(CHARTER COMMUNICATIONS LOGO)">

<P align="center">
<B><FONT size="5">122,830,000&nbsp;Shares</FONT></B>

<P align="center">
<B><FONT size="6">Charter Communications, Inc.</FONT></B>

<P align="center">
<B><FONT size="5">Class A Common Stock</FONT></B>

<DIV align="center">
<B><FONT size="5">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares of our Class&nbsp;A common stock
offered hereby are shares that we will loan to Citigroup Global
Markets Limited, as borrower, through Citigroup Global Markets
Inc., as agent, pursuant to a share lending agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Class A common stock is quoted on the Nasdaq
National Market under the symbol &#147;CHTR.&#148; The last
reported sale price of our Class A common stock on the Nasdaq
National Market on October&nbsp;3, 2005 was $1.50&nbsp;per share.
</FONT>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Investing in our Class&nbsp;A common stock involves risks.
See &#147;Risk Factors&#148; beginning on page&nbsp;11.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal
offense.
</FONT>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Public Offering Price
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">$&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the share lending agreement, we will
receive a loan fee of $.001 for each share that we lend. We have
been advised by Citigroup Global Markets Limited that it, or its
affiliates, intend(s) to use the short sales of the shares of
our Class&nbsp;A common stock offered pursuant to this
prospectus to facilitate transactions by which investors in our
5.875%&nbsp;convertible senior notes due 2009 issued on
November&nbsp;22, 2004 will hedge their investments in the
5.875% convertible senior notes. See &#147;Share Lending
Agreement&#148; and &#147;Underwriting&#148; on pages&nbsp;183
and&nbsp;188, respectively, of this prospectus. We will not
receive any of the proceeds from the sale of the shares of
Class&nbsp;A common stock in this offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">THE SHARES OFFERED HEREBY ARE NOT BEING OFFERED
TO, AND MAY NOT BE PURCHASED BY, ANY PERSON WHO HOLDS AN OPEN
SHORT POSITION IN OUR CLASS&nbsp;A COMMON STOCK, ANY PERSON WHO
IS PURCHASING THE SHARES ON BEHALF OF OR FOR THE ACCOUNT OF SUCH
A PERSON OR ANY PERSON WHO HAS AN ARRANGEMENT OR UNDERSTANDING
TO RESELL, LEND OR OTHERWISE TRANSFER (DIRECTLY OR INDIRECTLY)
THE SHARES TO SUCH A PERSON. PURCHASERS IN THIS OFFERING WILL BE
REQUIRED TO CERTIFY THE FOREGOING IN WRITING. SEE &#147;NOTICE
TO INVESTORS&#148; ON PAGE&nbsp;ii OF THIS PROSPECTUS.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares of our Class&nbsp;A common stock are
being offered on a &#147;best efforts&#148; basis. &#147;Best
efforts&#148; means that Citigroup Global Markets Limited is not
under any obligation to borrow and sell any of the shares
offered hereby. Citigroup Global Markets Limited has informed us
that it will use its best efforts to sell the shares offered
pursuant to this prospectus, provided that it intends to borrow
and sell the shares offered hereby only to the extent there is
interest by investors in the 5.875% convertible senior notes in
establishing hedge positions and there is corresponding demand
by purchasers for the shares. Accordingly, there is no assurance
that all or any portion of the shares offered hereby will be
sold.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The offering will be at a fixed price and will
not be conducted on a continuous or delayed basis. The offering
will terminate on or
before &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005, and the underwriter expects to deliver the shares to
purchasers on or
about &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005.
</FONT>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="center">
<B><FONT size="6">Citigroup</FONT></B>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005
</FONT>
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<DIV align="left">

</DIV>

<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should rely only on the information contained
in this prospectus. We have not authorized anyone to provide you
with information that is different from that contained in this
prospectus. We are offering to sell shares of our common stock
only in jurisdictions where offers and sales are permitted. The
information in this prospectus is complete and accurate only as
of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of shares.
</FONT>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="92%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#101'>Disclosure Regarding
    Forward-Looking Statements</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">i
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#102'>Additional Information</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">ii
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#126'>Notice to Investors</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">ii
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#103'>Summary</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">1
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#104'>Risk Factors</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">11
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#105'>Use of Proceeds</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">27
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#106'>Price Range of Common Stock
    and Dividend Policy</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">28
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#107'>Capitalization</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">29
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#108'>Unaudited Pro Forma
    Consolidated Financial Statements</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">32
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#109'>Selected Historical
    Consolidated Financial Data</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">41
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#110'>Supplementary Quarterly
    Financial Data</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">43
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#111'>Management&#146;s Discussion
    and Analysis of Financial Condition and Results of Operations</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">44
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#112'>Business</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">78
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#113'>Regulation and
    Legislation</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">95
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#114'>Management</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">100
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#115'>Security Ownership of
    Certain Beneficial Owners and Management</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">120
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#116'>Certain Relationships and
    Related Transactions</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">124
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#117'>Description of Certain
    Indebtedness</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">144
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#118'>Description of Capital Stock
    and Membership Units</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">170
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#119'>Shares Eligible for Future
    Sale</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">179
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#120'>Certain United States Tax
    Considerations for Non-United States Holders</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">181
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#121'>Share Lending Agreement</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">183
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#122'>Underwriting</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">188
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#123'>Legal Matters</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">189
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#124'>Experts</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">189
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#125'>Index to Financial
    Statements</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">F-1
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">&nbsp;<A HREF='#127'>Form of Investor
    Acknowledgment</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">A-1
    </FONT></TD>
</TR>

<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y11229exv10w43wg.txt">EX-10.43.G: AMENDMENT NO. 6 TO 2001 STOCK INCENTIVE PLAN</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y11229exv10w43wh.txt">EX-10.43.H: AMENDMENT NO. 7 TO 2001 STOCK INCENTIVE PLAN</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y11229exv21w1.htm">EX-21.1: SUBSIDIARIES</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y11229exv23w1.htm">EX-23.1: CONSENT OF KPMG LLP</A></FONT></TD></TR>
</TABLE>
</CENTER>

<DIV align="left">
<!-- /TOC -->
</DIV>

<P align="center">
<HR size="1" width="27%" align="center" noshade>

<P align="left">
<A name='101'></A>

<!-- link1 "DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS" -->

<P align="center">
<B><FONT size="2">DISCLOSURE REGARDING FORWARD-LOOKING
STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus includes forward-looking
statements within the meaning of Section&nbsp;27A of the
Securities Act and Section&nbsp;21E of the Exchange Act,
regarding, among other things, our plans, strategies and
prospects, both business and financial. Although we believe that
our plans, intentions and expectations reflected in or suggested
by these forward-looking statements are reasonable, we cannot
assure you that we will achieve or realize these plans,
intentions or expectations. Forward-looking statements are
inherently subject to risks, uncertainties and assumptions. Many
of the forward-looking statements contained in this prospectus
may be identified by the use of forward-looking words such as
&#147;believe,&#148; &#147;expect,&#148; &#147;anticipate,&#148;
&#147;should,&#148; &#147;planned,&#148; &#147;will,&#148;
&#147;may,&#148; &#147;intend,&#148; &#147;estimated&#148; and
&#147;potential,&#148; among others. Important factors that
could cause actual results to differ materially from the
forward-looking statements we make in
</FONT>

<P align="center"><FONT size="2">i
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">this prospectus are set forth in this prospectus
and in other reports or documents that we file from time to time
with the Securities and Exchange Commission, or SEC, and
include, but are not limited to:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the availability, in general, of funds to meet
    interest payment obligations under our debt and to fund our
    operations and necessary capital expenditures, either through
    cash flows from operating activities, further borrowings or
    other sources and, in particular, our ability to be able to
    provide under applicable debt instruments, such funds (by
    dividend, investment or otherwise) to the applicable obligor of
    such debt;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to sustain and grow revenues and cash
    flows from operating activities by offering video, high-speed
    Internet, telephone and other services and to maintain and grow
    a stable customer base, particularly in the face of increasingly
    aggressive competition from other service providers;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to comply with all covenants in our
    indentures and credit facilities, any violation of which would
    result in a violation of the applicable facility or indenture
    and could trigger a default of other obligations under
    cross-default provisions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to pay or refinance debt prior to or
    when it becomes due and/or to take advantage of market
    opportunities and market windows to refinance that debt in the
    capital markets, through new issuances, exchange offers or
    otherwise, including restructuring our balance sheet and
    leverage position;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to obtain programming at reasonable
    prices or to pass programming cost increases on to our customers;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">general business conditions, economic uncertainty
    or slowdown;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the effects of governmental regulation, including
    but not limited to local franchise authorities, on our business.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">All forward-looking statements attributable to us
or any person acting on our behalf are expressly qualified in
their entirety by this cautionary statement.
</FONT>

<DIV align="left">
<A name='102'></A>
</DIV>

<!-- link1 "ADDITIONAL INFORMATION" -->

<P align="center">
<B><FONT size="2">ADDITIONAL INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have filed with the SEC a registration
statement on Form&nbsp;S-1 to register the sale of the
securities covered by this prospectus. This prospectus, which
forms part of that registration statement, does not contain all
the information included in the registration statement. For
further information about us and the securities described in
this prospectus, you should refer to the registration statement
and its exhibits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Class&nbsp;A common stock is quoted on the
Nasdaq National Market under the symbol &#147;CHTR.&#148; We
file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy at
prescribed rates any document we file at the SEC&#146;s public
reference room at Room&nbsp;1200, 450&nbsp;Fifth Street, N.W.,
Washington,&nbsp;D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference
room. Our SEC filings are also available to the public at the
SEC&#146;s website at www.sec.gov.
</FONT>

<DIV align="left">
<A name='126'></A>
</DIV>

<!-- link1 "NOTICE TO INVESTORS" -->

<P align="center">
<B><FONT size="2">NOTICE TO INVESTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares offered hereby are not being offered
to, and may not be purchased by, any person who has an open
short position in Charter&#146;s Class&nbsp;A common stock at
the time of the sale, any person who is purchasing the shares on
behalf of or for the account of such a person or any person who
has an arrangement or understanding to resell, lend or otherwise
transfer (directly or indirectly) the shares to such a person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each purchaser of Charter&#146;s Class&nbsp;A
common stock in this offering must execute and deliver the
Investor Acknowledgement set forth on Annex&nbsp;A hereto to
Citigroup by facsimile to (646)&nbsp;843-3922.
</FONT>

<P align="center"><FONT size="2">ii
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="left">
<A name='103'></A>
</DIV>

<!-- link1 "SUMMARY" -->

<P align="center">
<B><FONT size="2">SUMMARY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This summary contains a general discussion of our
business, and summary financial information. It does not contain
all the information that you should consider before making an
investment decision regarding our Class&nbsp;A common stock. For
a more complete understanding of an investment in our
Class&nbsp;A common stock, you should read this entire
prospectus. Unless otherwise noted, all business data in this
summary is as of June&nbsp;30, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Unless otherwise stated, the discussion in
this prospectus of our business and operations includes the
business and operations of Charter Communications, Inc. and its
subsidiaries. Unless the context otherwise requires, the terms
&#147;we,&#148; &#147;us&#148; and &#147;our&#148; refer to
Charter Communications, Inc. and its direct and indirect
subsidiaries on a consolidated basis. The term
&#147;Charter&#148; refers to the issuer, Charter
Communications, Inc.</FONT></I>

<P align="center">
<B><FONT size="2">Our Business</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a broadband communications company
operating in the United States, with approximately
6.19&nbsp;million customers at June&nbsp;30, 2005. Through our
broadband network of coaxial and fiber optic cable, we offer our
customers traditional cable video programming (analog and
digital, which we refer to as &#147;video&#148; service),
high-speed cable Internet access, advanced broadband cable
services (such as video on demand (&#147;VOD&#148;), high
definition television service, and interactive television) and,
in some of our markets, we offer telephone service. See
&#147;Business&nbsp;&#151; Products and Services&#148; for
further description of these terms, including
&#147;customers.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At June&nbsp;30, 2005, we served approximately
5.94&nbsp;million analog video customers, of which approximately
2.69&nbsp;million were also digital video customers. We also
served approximately 2.02&nbsp;million high-speed Internet
customers (including approximately 234,600 who received only
high-speed Internet services). We also provided telephone
service to approximately 67,800 customers as of that date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal executive offices are located at
Charter Plaza, 12405&nbsp;Powerscourt Drive, St.&nbsp;Louis,
Missouri 63131. Our telephone number is (314)&nbsp;965-0555 and
we have a website accessible at www.charter.com. The information
posted or linked on our website is not part of this prospectus
and you should rely solely on the information contained in this
prospectus and the related documents to which we refer herein
when deciding to make an investment in our Class&nbsp;A common
stock.
</FONT>

<P align="center">
<B><FONT size="2">Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal financial goal is to maximize our
return on invested capital. To do so, we will focus on
increasing revenues, growing our customer base, improving
customer retention and enhancing customer satisfaction by
providing reliable, high-quality service offerings, superior
customer service and attractive bundled offerings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Specifically, in the near term, we are focusing
on:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">improving the overall value to our customers of
    our service offerings, relative to pricing;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">developing more sophisticated customer care
    capabilities through investment in our customer care and
    marketing infrastructure, including targeted marketing
    capabilities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">executing growth strategies for new services,
    including digital simulcast, VOD, telephone, and digital video
    recorder service (&#147;DVR&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">managing our operating costs by exercising
    discipline in capital and operational spending;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">identifying opportunities to continue to improve
    our balance sheet and liquidity.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have begun an internal operational improvement
initiative aimed at helping us gain new customers and retain
existing customers, which is focused on customer care, technical
operations and sales. We intend to continue efforts to focus
management attention on instilling a customer service oriented
culture throughout the company and to give those areas of our
operations priority of resources for staffing levels, training
budgets and financial incentives for employee performance in
those areas.
</FONT>
</DIV>

<P align="center"><FONT size="2">1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that our high-speed Internet service
will continue to provide a substantial portion of our revenue
growth in the near future. We also plan to continue to expand
our marketing of high-speed Internet service to the business
community, which we believe has shown an increasing interest in
high-speed Internet service and private network services.
Additionally, we plan to continue to prepare additional markets
for telephone launches in 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe we offer our customers an excellent
choice of services through a variety of bundled packages,
particularly with respect to our digital video and high-speed
Internet services, as well as telephone in certain markets. Our
digital platform enables us to offer a significant number and
variety of channels, and we offer customers the opportunity to
choose among groups of channel offerings, including premium
channels, and to combine selected programming with other
services such as high-speed Internet, high definition television
(in selected markets) and VOD (in selected markets).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We continue to pursue opportunities to improve
our liquidity. Our efforts in this regard resulted in the
completion of a number of transactions in 2004 and 2005, as
follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the September 2005 exchange by Charter
    Communications Holdings, LLC (&#147;Charter Holdings&#148;),
    CCH&nbsp;I, LLC (&#147;CCH I&#148;) and CCH I Holdings, LLC
    (&#147;CIH&#148;) of approximately $6.8&nbsp;billion in total
    principal amount of outstanding debt securities of Charter
    Holdings in a private placement for new debt securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the August 2005 sale by, our subsidiaries, CCO
    Holdings, LLC (&#147;CCO Holdings&#148;) and CCO Holdings
    Capital Corp. of $300&nbsp;million of 8 3/4% senior notes due
    2013;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the March and June 2005 issuance of
    $333&nbsp;million of Charter Communications Operating, LLC
    (&#147;Charter Operating&#148;) notes in exchange for
    $346&nbsp;million of Charter Holdings notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the March and June 2005 repurchase of
    $131&nbsp;million of our 4.75%&nbsp;convertible senior notes due
    2006 leaving $25&nbsp;million in principal amount outstanding;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the March 2005 redemption of all of CC&nbsp;V
    Holdings, LLC&#146;s outstanding 11.875% senior discount notes
    due 2008 at a total cost of $122&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the December 2004 sale by our subsidiaries, CCO
    Holdings and CCO Holdings Capital Corp. of $550&nbsp;million of
    senior floating rate notes due 2010;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the November 2004 sale of the $862.5&nbsp;million
    of 5.875% convertible senior notes due 2009 and the December
    2004 redemption of all of our outstanding 5.75% convertible
    senior notes due 2005 ($588&nbsp;million principal amount);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the April 2004 sale of $1.5&nbsp;billion of
    senior second lien notes by our subsidiary, Charter Operating,
    together with the concurrent refinancing of its credit
    facilities; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the sale in the first half of 2004 of non-core
    cable systems for a total of $735&nbsp;million, the proceeds of
    which were used to reduce indebtedness.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">Recent Events</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Charter Holdings, CCH I and CIH Exchange
    Offer</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;28, 2005, Charter Holdings and
its wholly owned subsidiaries, CCH I and CIH, completed the
exchange of approximately $6.8&nbsp;billion in total principal
amount of outstanding debt securities of Charter Holdings in a
private placement for new debt securities capturing
$545&nbsp;million of discount and extending maturities. Holders
of Charter Holdings notes due in 2009-2010 tendered
$3.4&nbsp;billion principal amount of notes for
$2.9&nbsp;billion principal amount of new 11% CCH&nbsp;I notes
due 2015. Holders of Charter Holdings notes due 2011-2012
tendered $845&nbsp;million principal amount of notes for
$662&nbsp;million principal amount of 11% CCH&nbsp;I notes due
2015. In addition, holders of Charter Holdings notes due
2011-2012 tendered $2.5&nbsp;billion principal amount of notes
for $2.5&nbsp;billion principal amount of new CIH notes. Each
series of new CIH notes have the same coupon and provisions for
payment of cash interest as the series of old Charter Holdings
notes for which such CIH notes were exchanged. In addition, the
maturities for each series were extended three years.
</FONT>
</DIV>

<P align="center"><FONT size="2">2
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">New President and Chief Executive
    Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;9, 2005, Neil Smit was appointed
as our President and Chief Executive Officer, replacing Robert
May effective August&nbsp;22, 2005, who has served in both
positions on an interim basis since January 2005. Mr.&nbsp;May
will remain on our board of directors and serve as a member of
our compensation committee and our strategic planning committee.
During the last year, we have experienced a number of other
changes in our senior management. See &#147;Risk
Factors&nbsp;&#151; Risks Related to Our Business&nbsp;&#151;
Recent management changes could disrupt operations.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">CCO Holdings Note&nbsp;Offering</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;17, 2005, CCO Holdings issued
$300&nbsp;million in debt securities, the proceeds of which will
be used for general corporate purposes, including the potential
payment of dividends or distributions to its parent companies,
including Charter Holdings, to pay interest expense.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Consummation of Prior Share Borrow
    Transaction</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;29, 2005, we issued
27,170,000&nbsp;shares of Class&nbsp;A common stock in a public
offering (the &#147;prior share borrow transaction&#148;). As
with the shares offered hereby, the shares were issued pursuant
to the share lending agreement described herein under
&#147;Share Lending Agreement,&#148; pursuant to which we had
previously agreed to loan up to 150&nbsp;million shares to
Citigroup Global Markets Limited (&#147;CGML&#148;). Because
less than the full 150&nbsp;million shares covered by the share
lending agreement were sold in the prior share borrow
transaction, we remain obligated to issue, at CGML&#146;s
request, up to an additional 122,830,000 additional loaned
shares in up to three additional subsequent registered public
offerings pursuant to the share lending agreement. Those
remaining shares constitute the shares offered hereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As with this offering, the prior share borrow
transaction was conducted to facilitate transactions by which
investors in Charter&#146;s 5.875% convertible senior notes due
2009 issued on November&nbsp;22, 2004, hedged their investments
in those convertible senior notes. Charter did not receive any
of the proceeds from the sale of shares in the prior share
borrow transaction. However, under the share lending agreement,
Charter received a loan fee of $.001 for each share that it lent
to CGML.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Approval and Funding of Litigation Settlement;
    Issuance of Shares</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;30, 2005, the Federal District Court
for the Eastern District of Missouri entered its final approval
of the Stipulation of Settlement, as amended, of certain
shareholder class action and derivative lawsuits filed against
Charter which are more fully described in
&#147;Business&nbsp;&#151; Legal Proceedings.&#148; On
July&nbsp;8, 2005, Charter delivered to the claims administrator
its portion of the settlement consideration under the
Stipulation in the form of 13.4&nbsp;million&nbsp;shares of
Class&nbsp;A common stock and approximately $63&nbsp;million in
cash, and Charter has paid $4.5&nbsp;million to its insurance
carriers to satisfy certain outstanding claims in connection
with the settlement. Two notices of appeal were filed relating
to the settlement. On September&nbsp;26, 2005, the
U.S.&nbsp;Court of Appeals for the Eighth Circuit entered
Judgment dismissing the appeals pursuant to stipulation by the
parties. See &#147;Business&nbsp;&#151; Legal Proceedings.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Hurricane Katrina</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have cable, broadband and related operations
in the parts of Louisiana, Mississippi and Georgia which were
impacted by hurricane Katrina. Approximately 3% of our total
customers lost service. Service to the majority of those
customers has since been restored. However, we have only
recently been allowed access to some service areas and are
therefore in the early stages of assessing damages. As a result,
we are not able to estimate the impact to our financial results
at this time.
</FONT>
</DIV>

<P align="center"><FONT size="2">3
</FONT>
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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">The Offering</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total shares of Class A common stock offered by
    us hereby
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">122,830,000&nbsp;shares
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Approximate number of shares of Class A common
    stock to be outstanding after the offering
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">471.4&nbsp;million shares (including the shares
    offered hereby, 27.2&nbsp;million shares issued on July&nbsp;29,
    2005 pursuant to the share lending agreement and
    13.4&nbsp;million shares issued on July&nbsp;8, 2005 in
    connection with a litigation settlement)
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Nasdaq National Market Symbol
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">CHTR
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares of our Class&nbsp;A common stock
offered hereby are shares that we will loan to Citigroup Global
Markets Limited pursuant to a share lending agreement, dated as
of November 22, 2004, which we refer to as the &#147;share
lending agreement.&#148; Under the share lending agreement, we
will receive a loan fee of $.001 per share. We will not receive
any proceeds from this offering. See &#147;Share Lending
Agreement&#148; and &#147;Underwriting.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">THE SHARES OFFERED HEREBY ARE NOT BEING OFFERED
TO, AND MAY NOT BE PURCHASED BY, ANY PERSON WHO HOLDS AN OPEN
SHORT POSITION IN OUR CLASS&nbsp;A COMMON STOCK, ANY PERSON WHO
IS PURCHASING THE SHARES ON BEHALF OF OR FOR THE ACCOUNT OF SUCH
A PERSON OR ANY PERSON WHO HAS AN ARRANGEMENT OR UNDERSTANDING
TO RESELL, LEND OR OTHERWISE TRANSFER (DIRECTLY OR INDIRECTLY)
THE SHARES TO SUCH A PERSON.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">PURCHASERS IN THE OFFERING WILL BE REQUIRED TO
CERTIFY THE FOREGOING IN WRITING. SEE &#147;NOTICE TO
INVESTORS&#148; ON PAGE&nbsp;ii AND FORM OF INVESTOR
ACKNOWLEDGMENT ON PAGE&nbsp;A-1.
</FONT>

<P align="center">
<B><FONT size="2">Risk Factors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Investing in our Class A common stock involves
substantial risk. See the &#147;Risk Factors&#148; section of
this prospectus for a description of certain of the risks you
should consider before investing in our Class&nbsp;A common
stock.
</FONT>
</DIV>

<P align="center"><FONT size="2">4
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">Organizational Structure</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The chart below sets forth the organizational
structure of Charter and its principal direct and indirect
subsidiaries. The equity ownership, voting percentages and
indebtedness amounts shown below are approximations as of
June&nbsp;30, 2005 on the pro forma basis described in
&#147;Unaudited Pro Forma Consolidated Financial
Statements&#148; (including giving effect to the issuance of the
shares offered hereby) and do not give effect to any exercise,
conversion or exchange of then outstanding options, preferred
stock, convertible notes and other convertible or exchangeable
securities.
</FONT>

<P align="center">
<IMG src="y11229y1122907.gif" alt="(ORGANIZATIONAL FLOW CHART)">

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Charter acts as the sole manager of Charter
    Holdco and its direct and indirect limited liability company
    subsidiaries. Charter&#146;s certificate of incorporation
    requires that its principal assets be securities of Charter
    Holdco, the terms of which mirror the terms of securities issued
    by Charter. See &#147;Description of Capital Stock and
    Membership Units.&#148; Also, on July&nbsp;8, 2005, Charter
    issued 13.4&nbsp;million shares of Class&nbsp;A common stock
    pursuant to a litigation settlement. See
    &#147;Business&nbsp;&#151; Legal Proceedings.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">These membership units are held by Charter
    Investment, Inc. and Vulcan Cable&nbsp;III Inc., each of which
    is 100% owned by Paul G. Allen, our Chairman and controlling
    shareholder. They are exchangeable at any time on a one-for-one
    basis for shares of Charter Class&nbsp;A common stock.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The percentages shown in this table reflect the
    issuance of the 122.8&nbsp;million shares of Class&nbsp;A common
    stock offered hereby as well as the 27.2&nbsp;million shares of
    Class&nbsp;A common stock issued on July&nbsp;29, 2005 and the
    corresponding issuance of an equal number of mirror membership
    units by Charter Holdco to Charter. However, for accounting
    purposes, Charter&#146;s common equity interest in Charter
    Holdco will remain at 47%, and Paul&nbsp;G. Allen&#146;s
    ownership of Charter Holdco will remain at 53%. These
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">5
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">percentages exclude the 150&nbsp;million mirror
    membership units issued or to be issued to Charter due to the
    required return of the issued mirror units upon return of the
    shares offered hereby pursuant to the share lending agreement.
    See &#147;Share Lending Agreement.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents 100% of the preferred membership
    interests in CC&nbsp;VIII, LLC, a subsidiary of CC&nbsp;V
    Holdings, LLC. An issue has arisen regarding the ultimate
    ownership of such CC&nbsp;VIII, LLC membership interests
    following Mr.&nbsp;Allen&#146;s acquisition of those interests
    on June&nbsp;6, 2003. See &#147;Certain Relationships and
    Related Transactions&nbsp;&#151;&nbsp;Transactions Arising out
    of Our Organizational Structure and Mr. Allen&#146;s Investment
    in Charter Communications, Inc. and Its
    Subsidiaries&nbsp;&#151;&nbsp;Equity Put
    Rights&nbsp;&#151;&nbsp;CC&nbsp;VIII.&#148;
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">6
</FONT>

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">Summary Consolidated Financial Data</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter is a holding company whose principal
assets are a controlling common equity interest in Charter
Communications Holding Company, LLC and &#147;mirror&#148; notes
that are payable by Charter Communications Holding Company, LLC
to Charter which have the same principal amount and terms as
those of Charter&#146;s convertible senior notes. Charter
Communications Holding Company, LLC is a holding company whose
primary assets are equity interests in our cable operating
subsidiaries and intercompany loan receivables. Charter
consolidates Charter Communications Holding Company, LLC on the
basis of voting control. Charter Communications Holding Company,
LLC&#146;s limited liability agreement provides that so long as
Charter&#146;s Class&nbsp;B common stock retains its special
voting rights, Charter will maintain 100% voting interest in
Charter Communications Holding Company, LLC. Voting control
gives Charter full authority and control over the operations of
Charter Communications Holding Company, LLC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents summary financial
and other data for Charter and its subsidiaries and has been
derived from the audited consolidated financial statements of
Charter and its subsidiaries for the three years ended
December&nbsp;31, 2004 and the unaudited consolidated financial
statements of Charter and its subsidiaries for the six months
ended June&nbsp;30, 2005 and 2004. The consolidated financial
statements of Charter and its subsidiaries for the years ended
December&nbsp;31, 2002 to 2004 have been audited by KPMG LLP, an
independent registered public accounting firm. The pro forma
data set forth below represent our unaudited pro forma
consolidated financial statements after giving effect to the
following transactions as if they occurred on January&nbsp;1 of
the respective period for the statement of operations data and
other financial data and as of the last day of the respective
period for the operating data and balance sheet data:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the disposition of certain assets in
    March and April 2004 for total proceeds of $735&nbsp;million and
    the use of such proceeds in each case to pay down credit
    facilities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the issuance and sale of
    $550&nbsp;million of CCO Holdings senior floating rate notes in
    December 2004 and $1.5&nbsp;billion of Charter Operating senior
    second lien notes in April 2004;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;an increase in amounts outstanding under
    the Charter Operating credit facilities in April 2004 and the
    use of such funds, together with the proceeds from the sale of
    the Charter Operating senior second lien notes, to refinance
    amounts outstanding under the credit facilities of our
    subsidiaries, CC VI Operating, CC VIII Operating and Falcon;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;the issuance and sale of
    $863&nbsp;million of 5.875% convertible senior notes in November
    2004 with proceeds used for (i)&nbsp;the purchase of certain
    U.S.&nbsp;government securities pledged as security for the
    5.875% convertible senior notes (and which we expect to use to
    fund the first six interest payments thereon),
    (ii)&nbsp;redemption of the outstanding 5.75% convertible senior
    notes due 2005 and (iii)&nbsp;general corporate purposes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;the repayment of $530&nbsp;million of
    borrowings under the Charter Operating revolving credit facility
    with net proceeds from the issuance and sale of the CCO Holdings
    senior floating rate notes in December 2004, which were included
    in our cash balance at December&nbsp;31, 2004;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;the redemption of all of CC
    V&nbsp;Holdings, LLC&#146;s outstanding 11.875% senior discount
    notes due 2008 with cash on hand;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;the issuance and sale of
    $300&nbsp;million of 8 3/4% CCO Holdings senior notes in August
    2005 and the use of a portion of such proceeds to pay financing
    costs and accrued interest in the exchange transaction
    referenced below;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(8)&nbsp;the exchange of $3.4&nbsp;billion
    principal amount of Charter Holdings&#146; notes scheduled to
    mature in 2009 and 2010 for CCH&nbsp;I notes and the exchange of
    $3.4&nbsp;billion principal amount of Charter Holdings&#146;
    notes scheduled to mature in 2011 and 2012 for CIH notes and
    CCH&nbsp;I notes; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(9)&nbsp;the issuance of 27.2&nbsp;million shares
    in July 2005 and the shares offered hereby pursuant to the share
    lending agreement, the sole effect of which is to increase
    common shares issued and outstanding. See &#147;Share Lending
    Agreement.&#148;
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">7
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following information should be read in
conjunction with &#147;Selected Historical Consolidated
Financial Data,&#148; &#147;Capitalization,&#148;
&#147;Unaudited Pro Forma Consolidated Financial
Statements,&#148; &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations,&#148;
&#147;Share Lending Agreement&#148; and the historical
consolidated financial statements and related notes included
elsewhere in this prospectus.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma(a)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma(a)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma(a)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">(Dollars in millions, except per share, share and customer data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Statement of Operations Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Video
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,420</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,461</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,352</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,674</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,703</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High-speed Internet
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">337</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">738</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">302</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">263</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">288</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">140</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">204</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">112</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">336</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Total revenues</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,819</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,948</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,424</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Costs and Expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Operating (excluding depreciation and
    amortization)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,068</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Selling, general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">967</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">479</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,436</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,495</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,489</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">728</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Impairment of franchises
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Asset impairment charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(Gain) loss on sale of assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(86</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Unfavorable contracts and other settlements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(72</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Total costs and expenses</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,888</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,023</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,347</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income (loss) from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,322</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,046</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,159</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,503</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,557</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,670</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,679</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(829</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(850</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain (loss) on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(115</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on debt to equity conversions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain (loss) on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">267</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(31</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest, income taxes and
    cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,944</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(725</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,698</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,789</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(719</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(629</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">377</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before income taxes and cumulative effect of
    accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,768</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(348</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,679</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,770</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(729</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(635</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income tax benefit (expense)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">460</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">118</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(82</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before cumulative effect of accounting
    change, net of tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,308</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,576</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,652</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(811</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(681</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss per common share, basic and diluted(d)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7.85</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.82</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11.92</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12.16</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.72</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.24</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted-average common shares outstanding, basic
    and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,440,261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,597,519</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,291,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,291,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">297,814,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">303,465,474</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Other Financial Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,167</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">854</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">924</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">542</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Deficiencies of earnings to cover fixed charges(e)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,944</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">725</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,698</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">719</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>
</DIV>

<P align="center"><FONT size="2">8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Operating Data (end of period)(f):</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Analog video customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,431,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,200,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,991,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,133,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,943,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Digital video customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,671,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,588,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,674,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,650,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,685,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Residential high-speed Internet customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,565,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,527,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,884,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,711,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,022,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Telephone customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">As of June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Dollars in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Balance Sheet Data (end of period):</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,908</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts payable and accrued expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Long-term debt(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,996</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other long-term liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest(d)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,608</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Actual revenues exceeded pro forma revenues for
    the year ended December&nbsp;31, 2004 and the six months ended
    June&nbsp;30, 2004 and 2005 by $29&nbsp;million,
    $29&nbsp;million and $0, respectively. Pro forma loss before
    cumulative effect of accounting change, net of tax exceeded
    actual loss before cumulative effect of accounting change, net
    of tax by $76&nbsp;million and $103&nbsp;million for the year
    ended December&nbsp;31, 2004 and the six months ended
    June&nbsp;30, 2004, respectively. Actual loss before cumulative
    effect of accounting change, net of tax exceeded pro forma loss
    before cumulative effect of accounting change, net of tax by
    $26&nbsp;million for the six months ended June&nbsp;30, 2005.
    The unaudited pro forma financial information required
    allocation of certain revenues and expenses and such information
    has been presented for comparative purposes and is not intended
    (a)&nbsp;to provide any indication of what our actual financial
    position or results of operations would have been had the
    transactions described above been completed on the dates
    indicated or (b)&nbsp;to project our results of operations for
    any future date.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(b)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Pro forma 2004 revenue by quarter is as follows:
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenue</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(In millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">1st Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">2nd Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">3rd Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">4th Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total pro forma revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(c)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The pro forma balance sheet amounts of CIH and
    CCH&nbsp;I notes issued in exchange for Charter Holdings notes
    are presented in accordance with generally accepted accounting
    principles (&#147;GAAP&#148;). GAAP requires that the CIH notes
    issued in exchange for Charter Holdings notes and the CCH&nbsp;I
    notes issued in exchange for the 8.625% Charter Holdings senior
    notes due 2009 be recorded at the current accreted values of the
    old Charter Holdings notes as opposed to the current accreted
    values of the new CIH or CCH&nbsp;I notes.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(d)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Minority interest represents the percentage of
    Charter Communications Holding Company, LLC not owned by
    Charter, plus preferred membership interests in CC&nbsp;VIII,
    LLC, an indirect subsidiary of Charter Holdco. Paul G. Allen
    indirectly holds the preferred membership units in CC&nbsp;VIII,
    LLC as a result of the exercise of a put right originally
    granted in connection with the Bresnan transaction in 2000. An
    issue has arisen regarding the ultimate ownership of the
    CC&nbsp;VIII, LLC membership interests following the
    consummation of the Bresnan put transaction on June&nbsp;6,
    2003. See &#147;Certain Relationships and Related
    Transactions&nbsp;&#151; Transactions Arising Out of Our
    Organizational Structure and Mr.&nbsp;Allen&#146;s Investment in
    Charter and Its Subsidiaries&nbsp;&#151; Equity Put
    Rights&nbsp;&#151; CC&nbsp;VIII.&#148; Effective January&nbsp;1,
    2005, Charter ceased recognizing minority interest in earnings
    or losses of CC&nbsp;VIII, LLC for financial reporting purposes
    until such time as the resolution of the issue is determinable
    or certain other events occur. Reported losses allocated to
    minority interest on the statement of operations are
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">limited to the extent of any remaining minority
    interest on the balance sheet related to Charter Communications
    Holding Company, LLC. Because minority interest in Charter
    Communications Holding Company, LLC was substantially eliminated
    at December&nbsp;31, 2003, beginning in 2004, Charter absorbs
    substantially all losses before income taxes that otherwise
    would have been allocated to minority interest. This resulted in
    an approximate additional $2.0&nbsp;billion of loss before
    cumulative effect of accounting change for the year ended
    December&nbsp;31, 2004. Under our existing capital structure,
    Charter will absorb substantially all future losses.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(e)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Loss per common share, basic and diluted, assumes
    none of the membership units of Charter Communications Holding
    Company, LLC are exchanged for Charter common stock and none of
    the outstanding options to purchase membership units of Charter
    Communications Holding Company, LLC that are automatically
    exchanged for Charter common stock are exercised. Basic loss per
    share equals loss before cumulative effect of accounting change
    less dividends on preferred stock-redeemable divided by weighted
    average shares outstanding. If the membership units were
    exchanged or options exercised, the effects would be
    antidilutive. Therefore, basic and diluted loss per common share
    is the same.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(f)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Earnings include net loss plus fixed charges.
    Fixed charges consist of interest expense and an estimated
    interest component of rent expense.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(g)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">See &#147;Business&nbsp;&#151; Products and
    Services&#148; for definitions of the terms contained in this
    section.
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">10
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='104'></A>
</DIV>

<!-- link1 "RISK FACTORS" -->

<P align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">An investment in our Class&nbsp;A common stock
entails the following risks. You should carefully consider these
risk factors, as well as the other information contained in this
prospectus, before making a decision to invest in our
Class&nbsp;A common stock.</FONT></I>

<P align="left">
<B><FONT size="2">Risks Related to Significant Indebtedness of
Us and Our Subsidiaries</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may not generate (or, in general, have
    available to the applicable obligor) sufficient cash flow or
    access to additional external liquidity sources to fund our
    capital expenditures, ongoing operations and debt
    obligations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ability to service our debt and to fund our
planned capital expenditures and ongoing operations will depend
on both our ability to generate cash flow and our access to
additional external liquidity sources, and in general our
ability to provide (by dividend or otherwise), such funds to the
applicable issuer of the debt obligation. Our ability to
generate cash flow is dependent on many factors, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our future operating performance;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the demand for our products and services;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">general economic conditions and conditions
    affecting customer and advertiser spending;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">competition and our ability to stabilize customer
    losses;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">legal and regulatory factors affecting our
    business.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Some of these factors are beyond our control. If
we are unable to generate sufficient cash flow and/or access
additional external liquidity sources, we may not be able to
service and repay our debt, operate our business, respond to
competitive challenges or fund our other liquidity and capital
needs. Cash flows from operating activities and amounts
available under our credit facilities may not be sufficient to
permit us to fund our operations and satisfy our interest
payment and principal repayment obligations that come due in
2006 and we believe such amounts will not be sufficient to fund
our operations and satisfy such obligations thereafter. See
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&nbsp;&#151; Liquidity and
Capital Resources.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, franchise valuations performed in
accordance with the requirements of Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No.&nbsp;142,
<I>Goodwill and Other Intangible Assets</I>, are based on the
projected cash flows derived by selling products and services to
new customers in future periods. Declines in future cash flows
could result in lower valuations which in turn may result in
impairments to the franchise assets in our financial statements.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Charter Operating may not be able to access
    funds under its credit facilities if it fails to satisfy the
    covenant restrictions in its credit facilities, which could
    adversely affect our financial condition and our ability to
    conduct our business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our subsidiaries have historically relied on
access to credit facilities in order to fund operations and to
service parent company debt, and we expect such reliance to
continue in the future. Unused availability under the Charter
Operating credit facilities was approximately $870&nbsp;million
as of June&nbsp;30, 2005. However, Charter Operating&#146;s
access to these funds is subject to its satisfaction of the
covenants and conditions to borrowing in those facilities that
are more fully described in &#147;Management&#146;s Discussion
and Analysis of Financial Condition and Results of
Operations&nbsp;&#151; Description of Our Outstanding
Debt&nbsp;&#151; Charter Operating Credit Facilities&#148; and
under &#147;Description of Certain Indebtedness&nbsp;&#151;
Charter Operating Credit Facilities&#148; in this prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An event of default under the credit facilities
or indentures, if not waived, could result in the acceleration
of those debt obligations and, consequently, other debt
obligations. Such acceleration could result in the exercise of
remedies by our creditors and could force us to seek the
protection of the bankruptcy laws, which could materially
adversely impact our ability to operate our business and to make
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">payments under our debt instruments. In addition,
an event of default under the credit facilities, such as the
failure to maintain the applicable required financial ratios,
would prevent additional borrowing under our subsidiary credit
facilities, which could materially adversely affect our ability
to operate our business and to make payments under our debt
instruments.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We and our subsidiaries have a significant
    amount of existing debt and may incur significant additional
    debt, including secured debt, in the future, which could
    adversely affect our financial health and our ability to react
    to changes in our business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter and its subsidiaries have a significant
amount of debt and may (subject to applicable restrictions in
their debt instruments) incur additional debt in the future. As
of June&nbsp;30, 2005, after giving effect to the issuance and
sale of the CCO Holdings senior notes and the exchange of
$3.4&nbsp;billion principal amount of Charter Holdings&#146;
notes scheduled to mature in 2009 and 2010 for CCH&nbsp;I notes
and the exchange of $3.4&nbsp;billion principal amount of
Charter Holdings&#146; notes scheduled to mature in 2011 and
2012 for CIH notes and CCH&nbsp;I notes, our total debt would
have been approximately $19.0&nbsp;billion, our
shareholders&#146; deficit would have been approximately
$4.6&nbsp;billion and the deficiency of earnings to cover fixed
charges for the six month period ended June&nbsp;30, 2005 would
have been approximately $629&nbsp;million. The maturities of
these obligations are set forth in &#147;Description of Certain
Indebtedness.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will need to raise additional capital and/or
receive distributions or payments from our subsidiaries in order
to satisfy our debt obligations. However, because of our
significant indebtedness, our ability to raise additional
capital at reasonable rates or at all is uncertain, and the
ability of our subsidiaries to make distributions or payments to
us is subject to availability of funds and restrictions under
our and our subsidiaries&#146; applicable debt instruments as
more fully described in &#147;Description of Certain
Indebtedness.&#148; If we were to raise capital through the
issuance of additional equity or to engage in a recapitalization
or other similar transaction, our shareholders could suffer
significant dilution.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our significant amount of debt could have other
important consequences to you. For example, the debt will or
could:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">require us to dedicate a significant portion of
    our cash flow from operating activities to payments on our debt,
    which will reduce our funds available for working capital,
    capital expenditures and other general corporate expenses;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">limit our flexibility in planning for, or
    reacting to, changes in our business, the cable and
    telecommunications industries and the economy at large;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">place us at a disadvantage as compared to our
    competitors that have proportionately less debt;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make us vulnerable to interest rate increases,
    because a significant amount of our borrowings are, and will
    continue to be, at variable rates of interest;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">expose us to increased interest expense as we
    refinance our existing lower interest rate instruments;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">adversely affect our relationship with customers
    and suppliers;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">limit our ability to borrow additional funds in
    the future, if we need them, due to applicable financial and
    restrictive covenants in our debt; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make it more difficult for us to satisfy our
    obligations to the holders of our notes and for our subsidiaries
    to satisfy their obligations to their lenders under their credit
    facilities and to their noteholders.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Due to our significant amount of debt, we did not
pay dividends on our preferred stock at March&nbsp;31 or
June&nbsp;30, 2005, because our Board of Directors was unable to
conclude with sufficient certainty that we had surplus under
Delaware law with which to pay such a dividend.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A default by one of our subsidiaries under its
debt obligations could result in the acceleration of those
obligations, the obligations of our other subsidiaries and our
obligations under our convertible notes. We and our subsidiaries
may incur substantial additional debt in the future. If current
debt levels increase, the related risks that we and you now face
will intensify.
</FONT>

<P align="center"><FONT size="2">12
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The agreements and instruments governing
    our debt and the debt of our subsidiaries contain restrictions
    and limitations that could significantly affect our ability to
    operate our business, as well as significantly affect our
    liquidity, and adversely affect you, as a
    shareholder.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating credit facilities and the
indentures governing our and our subsidiaries&#146; public debt
contain a number of significant covenants that could adversely
affect our ability to operate our business, as well as
significantly affect our liquidity, and therefore could
adversely affect our results of operations and the price of our
Class&nbsp;A common stock. These covenants restrict our and our
subsidiaries&#146; ability to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">incur additional debt;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">repurchase or redeem equity interests and debt;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">issue equity;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make certain investments or acquisitions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">pay dividends or make other distributions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">receive distributions from our subsidiaries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">dispose of assets or merge;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">enter into related party transactions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">grant liens;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">pledge assets.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Furthermore, Charter Operating&#146;s credit
facilities require our subsidiaries to, among other things,
maintain specified financial ratios, meet specified financial
tests and provide audited financial statements, with an
unqualified opinion from our independent auditors. See
&#147;Description of Certain Indebtedness&#148; for a summary of
our outstanding indebtedness and a description of our credit
facilities and other indebtedness and for details on our debt
covenants and future liquidity. Charter Operating&#146;s ability
to comply with these provisions may be affected by events beyond
our control.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The breach of any covenants or obligations in the
foregoing indentures or credit facilities, not otherwise waived
or amended, could result in a default under the applicable debt
agreement or instrument and could trigger acceleration of the
related debt, which in turn could trigger defaults under other
agreements governing our long-term indebtedness. See
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&nbsp;&#151; Liquidity and
Capital Resources.&#148; In addition, the secured lenders under
the Charter Operating credit facilities and the holders of the
Charter Operating senior second-lien notes could foreclose on
their collateral, which includes equity interests in our
subsidiaries, and exercise other rights of secured creditors.
Any default under those credit facilities, the indentures
governing our convertible notes or our subsidiaries&#146; debt
could adversely affect our growth, our financial condition and
our results of operations and our ability to make payments on
our notes and Charter Operating&#146;s credit facilities and
other debt of our subsidiaries. See &#147;Description of Certain
Indebtedness&#148; for a summary of outstanding indebtedness and
a description of credit facilities and other indebtedness.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">All of our and our subsidiaries&#146;
    outstanding debt is subject to change of control provisions. We
    may not have the ability to raise the funds necessary to fulfill
    our obligations under our indebtedness following a change of
    control, which would place us in default under the applicable
    debt instruments.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may not have the ability to raise the funds
necessary to fulfill our obligations under our convertible
senior notes and our subsidiaries&#146; senior notes, senior
discount notes, senior floating rate notes and credit facilities
following a change of control. Under the indentures governing
our convertible senior notes, upon the occurrence of specified
change of control events, we are required to offer to repurchase
all of our outstanding convertible senior notes. However,
Charter may not have sufficient funds at the time of
</FONT>

<P align="center"><FONT size="2">13
</FONT>

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<DIV align="left">
<FONT size="2">the change of control event to make the required
repurchase of its convertible senior notes, and our subsidiaries
are limited in their ability to make distributions or other
payments to us to fund any required repurchase. In addition, a
change of control under our subsidiaries&#146; credit facilities
and indentures governing our subsidiaries&#146; notes would
require the repayment of borrowings totaling $18.4&nbsp;billion
at June&nbsp;30, 2005 under those credit facilities and
indentures. Because such credit facilities and notes are
obligations of our subsidiaries, the credit facilities and our
subsidiaries&#146; notes would have to be repaid by our
subsidiaries before their assets could be available to us to
repurchase our convertible senior notes. Additionally, our
subsidiaries may not have sufficient funds at the time of the
change of control to make the required repurchases or
repayments. Our failure to make or complete a change of control
offer would place us in default under our convertible senior
notes. The failure of our subsidiaries to make a change of
control offer or repay the amounts outstanding under their
credit facilities would place them in default under these
agreements and could result in a default under the indentures
governing our convertible senior notes and our
subsidiaries&#146; credit facilities and notes.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Paul G. Allen and his affiliates are not
    obligated to purchase equity from, contribute to or loan funds
    to us or any of our subsidiaries in the future.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Paul G. Allen and his affiliates have purchased
equity, contributed funds and provided other financial support
to Charter and Charter Holdco in the past. However,
Mr.&nbsp;Allen and his affiliates are not obligated to purchase
equity from, contribute to or loan funds to us or any of our
subsidiaries in the future.
</FONT>

<P align="left">
<B><FONT size="2">Risks Related to Our Business</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We operate in a very competitive business
    environment, which affects our ability to attract and retain
    customers and can adversely affect our business and operations.
    We have lost a significant number of customers to direct
    broadcast satellite competition and further loss of customers
    could have a material negative impact on our
    business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The industry in which we operate is highly
competitive and has become more so in recent years. In some
instances, we compete against companies with fewer regulatory
burdens, easier access to financing, greater personnel
resources, greater brand name recognition and long-established
relationships with regulatory authorities and customers.
Increasing consolidation in the cable industry and the repeal of
certain ownership rules may provide additional benefits to
certain of our competitors, either through access to financing,
resources or efficiencies of scale.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal competitor for video services
throughout our territory is direct broadcast satellite
television services, also known as DBS. Competition from DBS,
including intensive marketing efforts, aggressive pricing and
the ability of DBS to provide certain services that we are in
the process of developing, has had an adverse impact on our
ability to retain customers. DBS has grown rapidly over the last
several years and continues to do so. The cable industry,
including us, has lost a significant number of subscribers to
DBS competition, and we face serious challenges in this area in
the future. We believe that competition from DBS service
providers may present greater challenges in areas of lower
population density, and that our systems service a higher
concentration of such areas than those of other major cable
service providers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local telephone companies and electric utilities
can offer video and other services in competition with us and
they increasingly may do so in the future. Certain telephone
companies have begun more extensive deployment of fiber in their
networks that will enable them to begin providing video
services, as well as telephone and high bandwidth Internet
access services, to residential and business customers. Some of
these telephone companies have obtained, and are now seeking,
franchises or operating authorizations that are less burdensome
than existing Charter franchises. The subscription television
industry also faces competition from free broadcast television
and from other communications and entertainment media.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Further loss of customers to DBS or other
alternative video and Internet services could have a material
negative impact on the value of our business and its performance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With respect to our Internet access services, we
face competition, including intensive marketing efforts and
aggressive pricing, from &#147;dial-up&#148; and digital
subscriber line (&#147;DSL&#148;). DSL&nbsp;service is
competitive
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<DIV align="left">
<FONT size="2">with high-speed Internet service over cable
systems. Telephone companies (which already have telephone lines
into the household, an existing customer base and other
operational functions in place) and other companies offer DSL
service. In addition, DBS providers have entered into joint
marketing arrangements with Internet access providers to offer
bundled video and Internet service, which competes with our
ability to provide bundled services to our customers.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to attract new customers, from time to
time we make promotional offers, including offers of temporarily
reduced-price or free service. These promotional programs result
in significant advertising, programming and operating expenses,
and also require us to make capital expenditures to acquire
additional digital set-top terminals. Customers who subscribe to
our services as a result of these offerings may not remain
customers for any significant period of time following the end
of the promotional period. A failure to retain existing
customers and customers added through promotional offerings or
to collect the amounts they owe us could have a material adverse
effect on our business and financial results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mergers, joint ventures and alliances among
franchised, wireless or private cable operators, satellite
television providers, local exchange carriers and others, may
provide additional benefits to some of our competitors, either
through access to financing, resources or efficiencies of scale,
or the ability to provide multiple services in direct
competition with us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We cannot assure you that our cable systems will
allow us to compete effectively. Additionally, as we expand our
offerings to include other telecommunications services, and to
introduce new and enhanced services, we will be subject to
competition from other providers of the services we offer. We
cannot predict the extent to which competition may affect our
business and operations in the future. See
&#147;Business&nbsp;&#151; Competition.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Charter&#146;s dispute with Paul G. Allen
    concerning the ownership of an interest in CC VIII, LLC could
    adversely impact the value of our common stock, our ability to
    repay our debt and our ability to obtain future
    financing.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of our acquisition of the cable systems
owned by Bresnan Communications Company Limited Partnership in
February 2000, CC VIII, LLC, our indirect limited liability
company subsidiary, issued, after adjustments, 24,273,943
Class&nbsp;A preferred membership units (which we refer to
collectively as the CC VIII interest) with a value and an
initial capital account of approximately $630&nbsp;million to
certain sellers affiliated with AT&#38;T Broadband, subsequently
owned by Comcast Corporation (which we refer to as the Comcast
sellers). Our controlling shareholder, Paul&nbsp;G. Allen,
granted the Comcast sellers the right to sell to him the
CC&nbsp;VIII interest for approximately $630&nbsp;million plus
4.5% interest annually from February 2000 (which we refer to as
the Comcast put right). In April 2002, the Comcast sellers
exercised the Comcast put right in full, and this transaction
was consummated on June&nbsp;6, 2003. Accordingly,
Mr.&nbsp;Allen has become the holder of the CC VIII interest,
indirectly through an affiliate.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are in a dispute with Mr.&nbsp;Allen as to
whether he is entitled to retain the CC&nbsp;VIII interest, or
whether he must exchange that interest for units of our
subsidiary, Charter Holdco. The dispute concerns whether the
documentation for the Bresnan transaction was correct and
complete with regard to the ultimate ownership of the
CC&nbsp;VIII interest following consummation of the Comcast put
right. The law firm that prepared the documents for the Bresnan
transaction brought this matter to the attention of Charter and
representatives of Mr.&nbsp;Allen in 2002. After subsequently
conducting an investigation of the relevant facts and
circumstances, a Special Committee of Charter&#146;s Board of
Directors determined that a &#147;scrivener&#146;s error&#148;
had occurred in February 2000 in connection with the preparation
of the Bresnan transaction documents, resulting in the
inadvertent deletion of a provision that would have required an
automatic exchange of the CC&nbsp;VIII interest for
24,273,943&nbsp;Charter Holdco membership units if the Comcast
sellers exercised the Comcast put right and sold the
CC&nbsp;VIII interest to Mr.&nbsp;Allen or his affiliates.
Mr.&nbsp;Allen disagrees with the Special Committee&#146;s
determinations and contends that the transaction is accurately
reflected in the transaction documentation and contemporaneous
and subsequent company public disclosures. If the Special
Committee and Mr. Allen are unable to reach a resolution through
an ongoing mediation process or to agree on an alternative
dispute resolution process, the Special Committee intends to
seek resolution of this dispute
</FONT>

<P align="center"><FONT size="2">15
</FONT>

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<DIV align="left">
<FONT size="2">through judicial proceedings in an action that
would be commenced, after appropriate notice, in the Delaware
Court of Chancery against Mr. Allen and his affiliates seeking
contract reformation, declaratory relief as to the respective
rights of the parties regarding this dispute and alternative
forms of legal and equitable relief. This dispute and related
matters (including certain issues associated with the ultimate
disposition of the interest in CC&nbsp;VIII) are more fully
described in &#147;Certain Relationships and Related
Transactions&nbsp;&#151; Transactions Arising Out of Our
Organizational Structure and Mr. Allen&#146;s Investment in
Charter and Its Subsidiaries&nbsp;&#151; Equity Put
Rights&nbsp;&#151; CC&nbsp;VIII.&#148;
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If it is determined that Mr.&nbsp;Allen is
entitled to retain the CC&nbsp;VIII interest, then our indirect
interest in CC&nbsp;VIII would continue to exclude the value of
Mr.&nbsp;Allen&#146;s interest in CC&nbsp;VIII, consistent with
our current treatment of the CC&nbsp;VIII interest in our
financial statements. As a result, the amounts available for
repayment of our creditors, including creditors of our
subsidiaries, would not include the value represented by
Mr.&nbsp;Allen&#146;s CC&nbsp;VIII interest, and the value of
our Class&nbsp;A common stock similarly would not reflect any
value attributable to Mr.&nbsp;Allen&#146;s CC&nbsp;VIII
interest. Further, such retained interest in CC&nbsp;VIII could
reduce our borrowing capacity (due to a portion of the equity
interest being held by a party other than Charter or a Charter
subsidiary) or make it more difficult for us to secure financing
for our CC&nbsp;VIII subsidiary due to concerns as to possible
claims that could be asserted by Mr.&nbsp;Allen as the holder of
a minority interest in CC&nbsp;VIII. In addition, if it is
determined that Mr.&nbsp;Allen is entitled to retain the
CC&nbsp;VIII interest, such retention could complicate efforts
to sell our CC&nbsp;VIII subsidiary or its assets to a third
party, and Mr.&nbsp;Allen could be entitled to receive a portion
of the proceeds of such a sale, thereby reducing the amount of
such proceeds that would otherwise be available to us and our
security holders.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are currently the subject of certain
    lawsuits and other legal matters, the unfavorable outcome of
    which could adversely affect our business and financial
    condition.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A number of putative federal class action
lawsuits were filed in the U.S.&nbsp;District Court for the
Eastern District of Missouri against Charter and certain of our
former and present officers and directors alleging violations of
securities laws, and were consolidated for pretrial purposes. In
addition, a number of shareholder derivative lawsuits were filed
against us in the same and other jurisdictions. A shareholders
derivative suit was filed in the U.S.&nbsp;District Court for
the Eastern District of Missouri against Charter and our then
current directors. Also, three shareholder derivative suits were
filed in Missouri state court against Charter, our then current
directors and our former independent auditor. These state court
actions were consolidated. The federal shareholder derivative
suit and the consolidated derivative suit each alleged that the
defendants breached their fiduciary duties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter entered into Stipulations of Settlement
setting forth proposed terms of settlement for the
above-described class actions and derivative suits. On
May&nbsp;23, 2005 the United States District Court for the
Eastern District of Missouri conducted the final fairness
hearing for the actions, and it issued its final order approving
the settlement on June&nbsp;30, 2005. Members of the class had
30&nbsp;days from the issuance of that order to file an appeal
challenging the approval. Two notices of appeal were filed
relating to the settlement. Those appeals were directed to the
amount of fees that the attorneys for the class were to receive
and to the fairness of the settlement. On September&nbsp;26,
2005, the U.S.&nbsp;Court of Appeals for the Eighth Circuit
entered Judgment dismissing the appeals pursuant to stipulation
by the parties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Furthermore, we are also a party to, or otherwise
involved in, other lawsuits, claims, proceedings and legal
matters that have arisen in the ordinary course of conducting
our business, certain of which are described in
&#147;Business&nbsp;&#151; Legal Proceedings.&#148; In addition,
our restatement of our 2000, 2001 and 2002 financial statements
could lead to additional or expanded claims or investigations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We cannot predict with certainty the ultimate
outcome of any of the lawsuits, claims, proceedings and other
legal matters to which we are a party, or in which we are
otherwise involved, due to, among other things, (i)&nbsp;the
inherent uncertainties of litigation and legal matters
generally, (ii)&nbsp;the remaining conditions to the
finalization of certain litigation and other settlements and
resolutions to which we are parties, (iii)&nbsp;the outcome of
appeals and (iv)&nbsp;the need for us to comply with, and/or
otherwise implement, certain covenants, conditions,
undertakings, procedures and other obligations that would be, or
have been, imposed under the terms of settlements and
resolutions of legal matters we have entered into.
</FONT>

<P align="center"><FONT size="2">16
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An unfavorable outcome in any of the lawsuits
pending against us, or in any other legal matter, including
those described herein, or our failure to comply with or
properly implement the terms of the settlements and resolutions
of legal matters we have entered into, could result in
substantial potential liabilities and otherwise have a material
adverse effect on our business, consolidated financial condition
and results of operations, in our liquidity, our operations,
and/or our ability to comply with any debt covenants. Further,
these legal matters, and our actions in response to them, could
result in substantial potential liabilities, additional defense
and other costs, increase our indemnification obligations,
divert management&#146;s attention, and/or adversely affect our
ability to execute our business and financial strategies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See &#147;Business&nbsp;&#151;&nbsp;Legal
Proceedings&#148; for additional information concerning these
and other litigation matters.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We have a history of net losses and expect
    to continue to experience net losses. Consequently, we may not
    have the ability to finance future operations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have had a history of net losses and expect to
continue to report net losses for the foreseeable future. Our
net losses are principally attributable to insufficient revenue
to cover the interest costs on our debt, the depreciation
expenses that we incur resulting from the capital investments we
have made in our cable properties, and the amortization and
impairment of our franchise intangibles. We expect that these
expenses (other than amortization and impairment of franchises)
will remain significant, and we expect to continue to report net
losses for the foreseeable future. We reported losses before
cumulative effect of accounting change of $2.3&nbsp;billion for
2002, $238&nbsp;million for 2003 and $3.6&nbsp;billion for 2004
and $708&nbsp;million and $707&nbsp;million for the six months
ended June&nbsp;30, 2004 and 2005, respectively. Continued
losses would reduce our cash available from operations to
service our indebtedness, as well as limit our ability to
finance our operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may not have the ability to pass our
    increasing programming costs on to our customers, which would
    adversely affect our cash flow and operating
    margins.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Programming has been, and is expected to continue
to be, our largest operating expense item. In recent years, the
cable industry has experienced a rapid escalation in the cost of
programming, particularly sports programming. We expect
programming costs to continue to increase because of a variety
of factors, including inflationary or negotiated annual
increases, additional programming being provided to customers
and increased costs to purchase programming. The inability to
fully pass these programming cost increases on to our customers
would have an adverse impact on our cash flow and operating
margins. As measured by programming costs, and excluding premium
services (substantially all of which were renegotiated and
renewed in 2003), as of July&nbsp;7, 2005, approximately 9% of
our current programming contracts were expired, and
approximately another 21% were scheduled to expire at or before
the end of 2005. There can be no assurance that these agreements
will be renewed on favorable or comparable terms. Our
programming costs increased by approximately 6% in 2004 and we
expect our programming costs in 2005 to increase at a higher
rate than in 2004. To the extent that we are unable to reach
agreement with certain programmers on terms that we believe are
reasonable we may be forced to remove such programming channels
from our line-up, which could result in a further loss of
customers.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
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    <TD></TD>
    <TD>
    <B><I><FONT size="2">If our required capital expenditures exceed
    our projections, we may not have sufficient funding, which could
    adversely affect our growth, financial condition and results of
    operations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the six months ended June&nbsp;30, 2005,
we spent approximately $542&nbsp;million on capital
expenditures. During 2005, we expect capital expenditures to be
approximately $1&nbsp;billion. The actual amount of our capital
expenditures depends on the level of growth in high-speed
Internet customers and in the delivery of other advanced
services, as well as the cost of introducing any new services.
We may need additional capital if there is accelerated growth in
high-speed Internet customers or in the delivery of other
advanced services. If we cannot obtain such capital from
increases in our cash flow from operating activities, additional
borrowings or other sources, our growth, financial condition and
results of operations could suffer materially.
</FONT>

<P align="center"><FONT size="2">17
</FONT>

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<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our inability to respond to technological
    developments and meet customer demand for new products and
    services could limit our ability to compete
    effectively.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our business is characterized by rapid
technological change and the introduction of new products and
services. We cannot assure you that we will be able to fund the
capital expenditures necessary to keep pace with unanticipated
technological developments, or that we will successfully
anticipate the demand of our customers for products and services
requiring new technology. Our inability to maintain and expand
our upgraded systems and provide advanced services in a timely
manner, or to anticipate the demands of the marketplace, could
materially adversely affect our ability to attract and retain
customers. Consequently, our growth, financial condition and
results of operations could suffer materially.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may not be able to carry out our
    strategy to improve operating results by standardizing and
    streamlining operations and procedures.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In prior years, we experienced rapid growth
through acquisitions of a number of cable operators and the
rapid rebuild and rollout of advanced services. Our future
success will depend in part on our ability to standardize and
streamline our operations. The failure to implement a consistent
corporate culture and management, operating or financial systems
or procedures necessary to standardize and streamline our
operations and effectively operate our enterprise could have a
material adverse effect on our business, results of operations
and financial condition.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Recent management changes could disrupt
    operations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since August 2004, we have experienced a number
of changes in our senior management, including changes in our
Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer, Executive Vice President of Finance and
Strategy and Interim co-Chief Financial Officer and our
Executive Vice President, General Counsel and Secretary. The
individual currently serving as Chief Financial Officer is
serving in an interim capacity. In addition, Neil Smit assumed
the positions of President and Chief Executive Officer effective
August&nbsp;22, 2005 and on September&nbsp;26, 2005, it was
announced that Grier Raclin will become the Executive Vice
President, General Counsel and Corporate Secretary. These senior
management changes could disrupt our ability to manage our
business as we transition to and integrate a new management
team, and any such disruption could adversely affect our
operations, growth, financial condition and results of
operations.
</FONT>

<DIV>&nbsp;</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Malicious and abusive Internet practices
    could impair our high-speed Internet services.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our high-speed Internet customers utilize our
network to access the Internet and, as a consequence, we or they
may become victim to common malicious and abusive Internet
activities, such as unsolicited mass advertising
(i.e.,&nbsp;&#147;spam&#148;) and dissemination of viruses,
worms and other destructive or disruptive software. These
activities could have adverse consequences on our network and
our customers, including degradation of service, excessive call
volume to call centers and damage to our or our customers&#146;
equipment and data. Significant incidents could lead to customer
dissatisfaction and, ultimately, loss of customers or revenue,
in addition to increased costs to us to service our customers
and protect our network. Any significant loss of high-speed
Internet customers or revenue or significant increase in costs
of serving those customers could adversely affect our growth,
financial condition and results of operations.
</FONT>

<DIV>&nbsp;</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We could be deemed an &#147;investment
    company&#148; under the Investment Company Act of 1940. This
    would impose significant restrictions on us and would be likely
    to have a material adverse impact on our growth, financial
    condition and results of operation.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal assets are our equity interests in
Charter Holdco and certain indebtedness of Charter Holdco. If
our membership interest in Charter Holdco were to constitute
less than 50% of the voting securities issued by Charter Holdco,
then our interest in Charter Holdco could be deemed an
&#147;investment security&#148; for purposes of the Investment
Company Act. This may occur, for example, if a court determines
that the Class&nbsp;B common stock is no longer entitled to
special voting rights and, in accordance with the
</FONT>

<P align="center"><FONT size="2">18
</FONT>

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<DIV align="left">
<FONT size="2">terms of the Charter Holdco limited liability
company agreement, our membership units in Charter Holdco were
to lose their special voting privileges. A determination that
such interest was an investment security could cause us to be
deemed to be an investment company under the Investment Company
Act, unless an exemption from registration were available or we
were to obtain an order of the Securities and Exchange
Commission excluding or exempting us from registration under the
Investment Company Act.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If anything were to happen which would cause us
to be deemed an investment company, the Investment Company Act
would impose significant restrictions on us, including severe
limitations on our ability to borrow money, to issue additional
capital stock and to transact business with affiliates. In
addition, because our operations are very different from those
of the typical registered investment company, regulation under
the Investment Company Act could affect us in other ways that
are extremely difficult to predict. In sum, if we were deemed to
be an investment company it could become impractical for us to
continue our business as currently conducted and our growth, our
financial condition and our results of operations could suffer
materially.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If a court determines that the Class&nbsp;B
    common stock is no longer entitled to special voting rights, we
    would lose our rights to manage Charter Holdco. In addition to
    the investment company risks discussed above, this could
    materially impact the value of the Class&nbsp;A common
    stock.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a court determines that the Class&nbsp;B
common stock is no longer entitled to special voting rights,
Charter would no longer have a controlling voting interest in,
and would lose its right to manage, Charter Holdco. If this were
to occur:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">we would retain our proportional equity interest
    in Charter Holdco but would lose all of our powers to direct the
    management and affairs of Charter Holdco and its subsidiaries;
    and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">we would become strictly a passive investment
    vehicle and would be treated under the Investment Company Act as
    an investment company.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This result, as well as the impact of being
treated under the Investment Company Act as an investment
company, could materially adversely impact:
</FONT>
<P>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the liquidity of the Class&nbsp;A common stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">how the Class&nbsp;A common stock trades in the
    marketplace;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the price that purchasers would be willing to pay
    for the Class&nbsp;A common stock in a change of control
    transaction or otherwise;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the market price of the Class&nbsp;A common stock.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Uncertainties that may arise with respect to the
nature of our management role and voting power and
organizational documents as a result of any challenge to the
special voting rights of the Class&nbsp;B common stock,
including legal actions or proceedings relating thereto, may
also materially adversely impact the value of the Class&nbsp;A
common stock.
</FONT>

<P align="left">
<B><FONT size="2">Risks Related to Mr.&nbsp;Allen&#146;s
Controlling Position</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The failure by Mr.&nbsp;Allen to maintain a
    minimum voting and economic interest in us could trigger a
    change of control default under our subsidiary&#146;s credit
    facilities.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating credit facilities provide
that the failure by Mr.&nbsp;Allen to maintain a 35% direct or
indirect voting interest in the applicable borrower would result
in a change of control default. Such a default could result in
the acceleration of repayment of our and our subsidiaries&#146;
indebtedness, including borrowings under the Charter Operating
credit facilities.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Mr.&nbsp;Allen controls our stockholder
    voting and may have interests that conflict with your
    interests.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen has the ability to control us.
Through his control as of August&nbsp;31, 2005 of approximately
91% of the voting power of our capital stock prior to completion
of this offering, Mr.&nbsp;Allen is entitled to elect all but
one of our board members and effectively has the voting power to
elect the remaining board member as well. Mr.&nbsp;Allen thus
has the ability to control fundamental corporate transactions
requiring
</FONT>

<P align="center"><FONT size="2">19
</FONT>

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<DIV align="left">
<FONT size="2">equity holder approval, including, but not
limited to, the election of all of our directors, approval of
merger transactions involving us and the sale of all or
substantially all of our assets.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen is not restricted from investing
in, and has invested and engaged in, other businesses involving
or related to the operation of cable television systems, video
programming, high-speed Internet service, telephone or business
and financial transactions conducted through broadband
interactivity and Internet services. Mr.&nbsp;Allen may also
engage in other businesses that compete or may in the future
compete with us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen&#146;s control over our management
and affairs could create conflicts of interest if he is faced
with decisions that could have different implications for him,
us and the holders of our Class&nbsp;A common stock. Further,
Mr.&nbsp;Allen could effectively cause us to enter into
contracts with another entity in which he owns an interest or to
decline a transaction into which he (or another entity in which
he owns an interest) ultimately enters.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Current and future agreements between us and
either Mr.&nbsp;Allen or his affiliates may not be the result of
arm&#146;s-length negotiations. Consequently, such agreements
may be less favorable to us than agreements that we could
otherwise have entered into with unaffiliated third parties. See
&#147;Certain Relationships and Related Transactions.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are not permitted to engage in any
    business activity other than the cable transmission of video,
    audio and data unless Mr.&nbsp;Allen authorizes us to pursue
    that particular business activity, which could adversely affect
    our ability to offer new products and services outside of the
    cable transmission business and to enter into new businesses,
    and could adversely affect our growth, financial condition and
    results of operations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation and Charter
Holdco&#146;s limited liability company agreement provide that
Charter and Charter Holdco and our subsidiaries, cannot engage
in any business activity outside the cable transmission business
except for specified businesses. This will be the case unless we
first offer the opportunity to pursue the particular business
activity to Mr.&nbsp;Allen, he decides not to pursue it and he
consents to our engaging in the business activity. The cable
transmission business means the business of transmitting video,
audio (including telephone services), and data over cable
television systems owned, operated or managed by us from time to
time. These provisions may limit our ability to take advantage
of attractive business opportunities.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The loss of Mr.&nbsp;Allen&#146;s services
    could adversely affect our ability to manage our
    business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen is Chairman of our board of
directors and provides strategic guidance and other services to
us. If we were to lose his services, our growth, financial
condition and results of operations could be adversely impacted.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">The special tax allocation provisions of
    the Charter Holdco limited liability company agreement may cause
    us in some circumstances to pay more taxes than if the special
    tax allocation provisions were not in effect.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdco&#146;s limited liability company
agreement provided that through the end of 2003, net tax losses
of Charter Holdco that would otherwise have been allocated to us
based generally on our percentage ownership of outstanding
common membership units of Charter Holdco would instead be
allocated to the membership units held by Vulcan Cable&nbsp;III
Inc. and Charter Investment, Inc. The purpose of these special
tax allocation provisions was to allow Mr.&nbsp;Allen to take
advantage for tax purposes of the losses generated by Charter
Holdco. However, beginning in 2002, due to tax capital account
limitations, certain net tax losses of Charter Holdco were
allocated to us and have continued to be so allocated since that
time. The limited liability company agreement further provides
that beginning at the time that Charter Holdco generates net tax
profits (as determined under the applicable federal income tax
rules for determining book profits), the net tax profits that
would otherwise have been allocated to us based generally on our
percentage of outstanding common membership units of Charter
Holdco will instead generally be allocated to membership units
held by Vulcan Cable&nbsp;III Inc. and Charter Investment, Inc.
In some situations, the special tax allocation provisions could
result in our having to pay taxes in an amount that is more or
less than if Charter Holdco had allocated net tax losses and net
tax profits to its members
</FONT>

<P align="center"><FONT size="2">20
</FONT>

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<DIV align="left">
<FONT size="2">based generally on the percentage of outstanding
common membership units owned by such members from the time of
the completion of the offering. See &#147;Description of Capital
Stock and Membership Units&nbsp;&#151; Special Tax Allocation
Provisions.&#148; For further discussion on the details of the
tax allocation provisions see &#147;Management&#146;s Discussion
and Analysis of Financial Condition and Results of
Operations&nbsp;&#151;&nbsp;Critical Accounting Policies and
Estimates&nbsp;&#151;&nbsp;Income Taxes.&#148;
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">The issuance of our Class&nbsp;A common
    stock offered hereby pursuant to the share lending agreement, as
    well as possible future conversions of our convertible notes,
    significantly increase the risk that we will experience an
    ownership change in the future for tax purposes, resulting in a
    material limitation on the use of a substantial amount of our
    existing net operating loss carryforwards.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, Charter had
approximately $5.7&nbsp;billion of tax net operating losses
(resulting in a gross deferred tax asset of approximately
$2.3&nbsp;billion) expiring in the years 2010 through 2025. Due
to uncertainties in projected future taxable income, valuation
allowances have been established against the gross deferred tax
assets for book accounting purposes except for deferred benefits
available to offset certain deferred tax liabilities. Currently,
such tax net operating losses can accumulate and be used to
offset any future taxable income of Charter. An &#147;ownership
change&#148; as defined in Section&nbsp;382 of the Internal
Revenue Code of 1986, as amended, would place significant
limitations, on an annual basis, on the use of such net
operating losses to offset any future taxable income we may
generate. Such limitations, in conjunction with the net
operating loss expiration provisions, could effectively
eliminate our ability to use a substantial portion of our net
operating losses to offset future taxable income. The shares
issued hereby are being issued pursuant to a share lending
agreement. See &#147;Share Lending Agreement.&#148; While the
tax treatment of the issuance of shares offered hereby pursuant
to a borrowing transaction under the share lending agreement is
uncertain, we do not believe that this issuance would result in
our experiencing an ownership change. However, future
transactions and the timing of such transactions could cause an
ownership change. Such transactions include additional issuances
of common stock by us (including but not limited to issuances
upon future conversion of our 5.875%&nbsp;convertible senior
notes or as contemplated in the proposed settlement of
derivative class action litigation), reacquisitions of the
borrowed shares by us, or acquisitions or sales of shares by
certain holders of our shares, including persons who have held,
currently hold, or accumulate in the future five percent or more
of our outstanding stock (including upon an exchange by Paul
Allen or his affiliates, directly or indirectly, of membership
units of Charter Holdco into our Class&nbsp;A common stock).
Many of the foregoing transactions are beyond our control.
</FONT>

<P align="left">
<B><FONT size="2">Risks Related to Regulatory and Legislative
Matters</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our business is subject to extensive
    governmental legislation and regulation, which could adversely
    affect our business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Regulation of the cable industry has increased
cable operators&#146; administrative and operational expenses
and limited their revenues. Cable operators are subject to,
among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">rules governing the provision of cable equipment
    and compatibility with new digital technologies;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">rules and regulations relating to subscriber
    privacy;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">limited rate regulation;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">requirements governing when a cable system must
    carry a particular broadcast station and when it must first
    obtain consent to carry a broadcast station;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">rules for franchise renewals and
    transfers;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other requirements covering a variety of
    operational areas such as equal employment opportunity,
    technical standards and customer service requirements.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, many aspects of these regulations
are currently the subject of judicial proceedings and
administrative or legislative proposals. There are also ongoing
efforts to amend or expand the federal, state and local
regulation of some of our cable systems, which may compound the
regulatory risks we already
</FONT>

<P align="center"><FONT size="2">21
</FONT>

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<DIV align="left">
<FONT size="2">face. Certain states and localities are
considering new telecommunications taxes that could increase
operating expenses.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our cable systems are operated under
    franchises that are subject to non-renewal or termination. The
    failure to renew a franchise in one or more key markets could
    adversely affect our business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our cable systems generally operate pursuant to
franchises, permits and similar authorizations issued by a state
or local governmental authority controlling the public
rights-of-way. Many franchises establish comprehensive
facilities and service requirements, as well as specific
customer service standards and monetary penalties for
non-compliance. In many cases, franchises are terminable if the
franchisee fails to comply with significant provisions set forth
in the franchise agreement governing system operations.
Franchises are generally granted for fixed terms and must be
periodically renewed. Local franchising authorities may resist
granting a renewal if either past performance or the prospective
operating proposal is considered inadequate. Franchise
authorities often demand concessions or other commitments as a
condition to renewal. In some instances, franchises have not
been renewed at expiration, and we have operated and are
operating under either temporary operating agreements or without
a license while negotiating renewal terms with the local
franchising authorities. Approximately 11% of our franchises,
covering approximately 11% of our video customers, were expired
as of June&nbsp;30, 2005. Approximately 4% of additional
franchises, covering approximately an additional 5% of our video
customers, will expire on or before December&nbsp;31, 2005, if
not renewed prior to expiration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We cannot assure you that we will be able to
comply with all significant provisions of our franchise
agreements and certain of our franchisors have from time to time
alleged that we have not complied with these agreements.
Additionally, although historically we have renewed our
franchises without incurring significant costs, we cannot assure
you that we will be able to renew, or to renew as favorably, our
franchises in the future. A termination of or a sustained
failure to renew a franchise in one or more key markets could
adversely affect our business in the affected geographic area.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our cable systems are operated under
    franchises that are non-exclusive. Accordingly, local
    franchising authorities can grant additional franchises and
    create competition in market areas where none existed
    previously, resulting in overbuilds, which could adversely
    affect results of operations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our cable systems are operated under
non-exclusive franchises granted by local franchising
authorities. Consequently, local franchising authorities can
grant additional franchises to competitors in the same
geographic area or operate their own cable systems. In addition,
certain telephone companies are seeking authority to operate in
local communities without first obtaining a local franchise. As
a result, competing operators may build systems in areas in
which we hold franchises. In some cases municipal utilities may
legally compete with us without obtaining a franchise from the
local franchising authority.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Different legislative proposals have been
introduced in the United States Congress and in some state
legislatures that would greatly streamline cable franchising.
This legislation is intended to facilitate entry by new
competitors, particularly local telephone companies. Such
legislation has already passed in at least one state but is now
subject to court challenge. Although various legislative
proposals provide certain regulatory relief for incumbent cable
operators, these proposals are generally viewed as being more
favorable to new entrants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The existence of more than one cable system
operating in the same territory is referred to as an overbuild.
These overbuilds could adversely affect our growth, financial
condition and results of operations by creating or increasing
competition. As of June&nbsp;30, 2005, we are aware of overbuild
situations impacting approximately 5% of our estimated homes
passed, and potential overbuild situations in areas servicing
approximately 2% of our estimated homes passed. Additional
overbuild situations may occur in other systems.
</FONT>

<P align="center"><FONT size="2">22
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Local franchise authorities have the
    ability to impose additional regulatory constraints on our
    business, which could further increase our
    expenses.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the franchise agreement, cable
authorities in some jurisdictions have adopted cable regulatory
ordinances that further regulate the operation of cable systems.
This additional regulation increases the cost of operating our
business. We cannot assure you that the local franchising
authorities will not impose new and more restrictive
requirements. Local franchising authorities also have the power
to reduce rates and order refunds on the rates charged for basic
services.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Further regulation of the cable industry
    could cause us to delay or cancel service or programming
    enhancements or impair our ability to raise rates to cover our
    increasing costs, resulting in increased losses.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Currently, rate regulation is strictly limited to
the basic service tier and associated equipment and installation
activities. However, the Federal Communications Commission
(&#147;FCC&#148;) and the U.S.&nbsp;Congress continue to be
concerned that cable rate increases are exceeding inflation. It
is possible that either the FCC or the U.S.&nbsp;Congress will
again restrict the ability of cable system operators to
implement rate increases. Should this occur, it would impede our
ability to raise our rates. If we are unable to raise our rates
in response to increasing costs, our losses would increase.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There has been considerable legislative interest
recently in requiring cable operators to offer historically
bundled programming services on an &#225; la carte basis.
Although the FCC last year made a recommendation to Congress
against the imposition of an &#225; la carte mandate, it is
still possible that new marketing restrictions could be adopted
in the future. Such restrictions could adversely affect our
operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Actions by pole owners might subject us to
    significantly increased pole attachment costs.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pole attachments are cable wires that are
attached to poles. Cable system attachments to public utility
poles historically have been regulated at the federal or state
level, generally resulting in favorable pole attachment rates
for attachments used to provide cable service. The FCC clarified
that a cable operator&#146;s favorable pole rates are not
endangered by the provision of Internet access, and that
approach ultimately was upheld by the Supreme Court of the
United States. Despite the existing regulatory regime, utility
pole owners in many areas are attempting to raise pole
attachment fees and impose additional costs on cable operators
and others. In addition, the favorable pole attachment rates
afforded cable operators under federal law can be increased by
utility companies if the operator provides telecommunications
services, as well as cable service, over cable wires attached to
utility poles. Any significant increased costs could have a
material adverse impact on our profitability and discourage
system upgrades and the introduction of new products and
services.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may be required to provide access to our
    networks to other Internet service providers, which could
    significantly increase our competition and adversely affect our
    ability to provide new products and services.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A number of companies, including independent
Internet service providers, or ISPs, have requested local
authorities and the FCC to require cable operators to provide
non-discriminatory access to cable&#146;s broadband
infrastructure, so that these companies may deliver Internet
services directly to customers over cable facilities. In a June
2005 ruling, commonly referred to as <I>Brand&nbsp;X</I>, the
Supreme Court upheld an FCC decision (and overruled a
conflicting Ninth Circuit opinion) making it much less likely
that any non-discriminatory &#147;open access&#148; requirements
(which are generally associated with common carrier regulation
of &#147;telecommunications services&#148;) will be imposed on
the cable industry by local, state or federal authorities. The
Supreme Court held that the FCC was correct in classifying cable
provided Internet service as an &#147;information service,&#148;
rather than a &#147;telecommunications service.&#148; This
favorable regulatory classification limits the ability of
various governmental authorities to impose open access
requirements on cable-provided Internet service. Given how
recently <I>Brand&nbsp;X</I> was decided, however, the nature of
any legislative or regulatory response remains uncertain. The
imposition of open access requirements could materially affect
our business.
</FONT>

<P align="center"><FONT size="2">23
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we were required to allocate a portion of our
bandwidth capacity to other Internet service providers, we
believe that it would impair our ability to use our bandwidth in
ways that would generate maximum revenues.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Changes in channel carriage regulations
    could impose significant additional costs on us.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cable operators also face significant regulation
of their channel carriage. They currently can be required to
devote substantial capacity to the carriage of programming that
they would not carry voluntarily, including certain local
broadcast signals, local public, educational and government
access programming, and unaffiliated commercial leased access
programming. This carriage burden could increase in the future,
particularly if cable systems were required to carry both the
analog and digital versions of local broadcast signals (dual
carriage) or to carry multiple program streams included with a
single digital broadcast transmission (multicast carriage).
Additional government-mandated broadcast carriage obligations
could disrupt existing programming commitments, interfere with
our preferred use of limited channel capacity and limit our
ability to offer services that would maximize customer appeal
and revenue potential. Although the FCC issued a decision in
February 2005, confirming an earlier ruling against mandating
either dual carriage or multicast carriage, that decision has
been appealed. In addition, the FCC could reverse its own ruling
or Congress could legislate additional carriage obligations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Offering voice communications service may
    subject us to additional regulatory burdens, causing us to incur
    additional costs.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2002, we began to offer voice communications
services on a limited basis over our broadband network. We
continue to explore development and deployment of Voice over
Internet Protocol or VoIP services. The regulatory requirements
applicable to VoIP service are unclear although the FCC has
declared that certain VoIP services are not subject to
traditional state public utility regulation. The full extent of
the FCC&nbsp;preemption of VoIP services is not yet clear.
Expanding our offering of these services may require us to
obtain certain authorizations, including federal, state and
local licenses. We may not be able to obtain such authorizations
in a timely manner, or conditions could be imposed upon such
licenses or authorizations that may not be favorable to us.
Furthermore, telecommunications companies generally are subject
to significant regulation, including payments to the Federal
Universal Service Fund and the intercarrier compensation regime,
and it may be difficult or costly for us to comply with such
regulations, were it to be determined that they applied to VoIP
offerings such as ours. The FCC has already determined that VoIP
providers must comply with traditional 911 emergency service
obligations (&#147;E911&#148;) and has imposed a specific
timeframe for VoIP providers to accommodate law enforcement
wiretaps. Based on a recent FCC release, we are now seeking
subscriber acknowledgement of E911 limitations so as to minimize
the risk of potential sanctions. In addition, pole attachment
rates are higher for providers of telecommunications services
than for providers of cable service. If there were to be a final
legal determination by the FCC, a state Public Utility
Commission, or appropriate court that VoIP services are subject
to these higher rates, our pole attachment costs could increase
significantly, which could adversely affect our financial
condition and results of operations.
</FONT>

<P align="left">
<B><FONT size="2">Additional Risks Related to this
Offering</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The market price of our Class&nbsp;A common
    stock may be volatile, which could cause the value of your
    investment to decline.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is impossible to predict whether the price of
our Class&nbsp;A common stock will rise or fall. Trading prices
of our Class&nbsp;A common stock will be influenced by our
operating results and prospects and by economic, financial,
regulatory and other factors. In addition, general market
conditions, including the level of, and fluctuations in, the
trading prices of stocks generally, and sales of substantial
amounts of our Class&nbsp;A common stock by us in the market
after this offering, or the perception that such sales may
occur, could affect the price of our Class&nbsp;A common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The price of our Class&nbsp;A common stock also
could be affected by any sales of our Class&nbsp;A common stock
by investors who view our recently issued
5.875%&nbsp;convertible senior notes as a more attractive means
</FONT>

<P align="center"><FONT size="2">24
</FONT>

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<DIV align="left">
<FONT size="2">of equity participation in our company. Some
investors in our Class&nbsp;A common stock may decide to sell
some or all of their shares and purchase our 5.875% convertible
senior notes instead. Such sales of our Class&nbsp;A common
stock could cause the trading price to decline. The hedging or
arbitrage trading activity that has developed and could further
develop with respect to our Class&nbsp;A common stock as a
result of the November&nbsp;2004 issuance of our
5.875%&nbsp;convertible senior notes could also cause a decline
or retard any increase in the trading price of our Class&nbsp;A
common stock since investors in the convertible senior notes may
sell short our Class&nbsp;A common stock in order to establish
initial hedge positions, and may increase those positions,
particularly as the trading price of our Class&nbsp;A common
stock increases, in order to hedge their 5.875% convertible
senior notes. See &#147;Share Lending Agreement.&#148;
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the hedging transactions that were
facilitated by the prior share borrow transaction, we understand
that many holders of our 5.875%&nbsp;convertible senior notes
have also been able to borrow shares of our Class&nbsp;A common
stock for the purpose of establishing short positions in the
stock. To the extent that those same holders seek to establish
short positions with Citigroup through private hedging
transactions in connection with this offering, we believe such
holders are likely to seek to close out their existing share
borrow arrangements using shares purchased in the open market.
Such purchases could cause extreme volatility in the trading
price of our Class&nbsp;A common stock, including temporary
increases in the price as short term demand increases.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The market price of our Class&nbsp;A common
    stock could be adversely affected by the large number of
    additional shares of Class&nbsp;A common stock eligible for
    issuance in the future.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, 304,941,082&nbsp;shares
of Class&nbsp;A common stock were issued and outstanding, and
50,000&nbsp;shares of Class&nbsp;B common stock were issued and
outstanding. An additional 27,170,000&nbsp;shares of
Class&nbsp;A common stock were subsequently issued in the prior
share borrow transaction. An additional 339,132,031&nbsp;shares
of Class&nbsp;A common stock were issuable upon conversion of
outstanding units of Charter Holdco (increasing by
24,273,943&nbsp;shares if Mr.&nbsp;Allen is required to
contribute his CC&nbsp;VIII membership interest to Charter
Holdco), and 29,067,828&nbsp;shares were issuable upon the
exercise of outstanding options under our option plans. Also,
approximately 356&nbsp;million shares are now issuable upon
conversion of our recently issued 5.875% convertible senior
notes due 2009. Furthermore, 13.4&nbsp;million additional shares
have been issued in connection with the settlement of certain
outstanding litigation matters and will be available for
immediate resale if and when released from escrow, as more fully
described in &#147;Business&nbsp;&#151; Legal Proceedings.&#148;
All of the 339,132,031&nbsp;shares of Class&nbsp;A common stock
issuable upon exchange of Charter Holdco membership units and
all shares of the Class&nbsp;A common stock issuable upon
conversion of shares of our Class&nbsp;B common stock will have
&#147;demand&#148; and/or &#147;piggyback&#148; registration
rights attached to them. All of the 356&nbsp;million shares
issuable upon conversion of the 5.875%&nbsp;convertible senior
notes are eligible for resale pursuant to a shelf registration
statement. If less than all of the remaining
122,830,000&nbsp;shares of Class&nbsp;A common stock covered by
the share lending agreement are sold in this offering, Citigroup
will have the right under the share lending agreement to borrow
the unsold portion of those shares in the future, and a
registration rights agreement will obligate Charter to file, at
Citigroup&#146;s request, up to three additional registration
statements with respect to these unsold shares until
November&nbsp;16, 2006. The sale of a substantial number of
shares of Class&nbsp;A common stock or the perception that such
sales could occur could adversely affect the market price for
the Class&nbsp;A common stock because the sale could cause the
amount of the Class&nbsp;A common stock available for sale in
the market to exceed the demand for the Class&nbsp;A common
stock and could also make it more difficult for us to sell
equity securities or equity-related securities in the future at
a time and price that we deem appropriate. This could adversely
affect our ability to fund our current and future obligations.
See &#147;Shares Eligible for Future Sale.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The failure to maintain a minimum share
    price of $1.00&nbsp;per share of Class&nbsp;A common stock could
    result in delisting of our shares on the Nasdaq National Market,
    which would harm the market price of our Class&nbsp;A common
    stock.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to retain our listing on the Nasdaq
National Market we are required to maintain a minimum bid price
of $1.00 per share. Although, as of October&nbsp;3, 2005, the
trading price of our Class&nbsp;A common stock was
$1.50&nbsp;per share, our stock has traded below this $1.00
minimum in the recent past. If the bid price falls below the
$1.00 minimum for more than 30 consecutive trading days, we will
have
</FONT>

<P align="center"><FONT size="2">25
</FONT>
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<DIV align="left">
<FONT size="2">180&nbsp;days to satisfy the $1.00 minimum bid
price for a period of at least 10 trading days. If we are unable
to take action to increase the bid price per share (either by
reverse stock split or otherwise), we could be subject to
delisting from the Nasdaq National Market.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The failure to maintain our listing on the Nasdaq
National Market would harm the liquidity of our Class&nbsp;A
common stock and would have adverse effect on the market price
of our common stock. If the stock were to trade it would likely
trade on the OTC &#147;pink sheets,&#148; which provide
significantly less liquidity than does Nasdaq. As a result, the
liquidity of our common stock would be impaired, not only in the
number of shares which could be bought and sold, but also
through delays in the timing of transactions, reduction in
security analysts&#146; and news media&#146;s coverage and lower
prices for our common stock than might otherwise be attained. In
addition, our common stock would become subject to the
low-priced security or so-called &#147;penny stock&#148; rules
that impose additional sales practice requirements on
broker-dealers who sell such securities.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The effect of the issuance of our shares of
    Class&nbsp;A common stock pursuant to the share lending
    agreement and upon conversion of our 5.875% convertible notes,
    including sales of our Class&nbsp;A common stock in short sale
    transactions by the holders of the 5.875% convertible notes, may
    have a negative effect on the market price of our Class&nbsp;A
    common stock.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed pursuant to a share lending
agreement to lend to Citigroup Global Markets Limited up to
150&nbsp;million shares of our common stock, including the
122.8&nbsp;million shares that are being offered pursuant to
this prospectus and the 27.2&nbsp;million shares issued in July
2005. In addition, in November 2004, we sold $862.5&nbsp;million
original aggregate principal amount of 5.875% convertible senior
notes due 2009, which are currently convertible into
approximately 356&nbsp;million shares of our Class&nbsp;A common
stock. We have been advised by Citigroup Global Markets Limited
that it or an affiliate intends to facilitate the establishment
by holders of those convertible notes of hedged positions in the
convertible notes. While issuance of shares upon the conversion
of the convertible notes may result in a reduction of an equal
number in the outstanding borrowed shares under the share
lending agreement, the increase in the number of shares of our
Class&nbsp;A common stock issued or issuable pursuant to the
share lending agreement or upon conversion of the
5.875%&nbsp;convertible senior notes could have a negative
effect on the market price of our Class&nbsp;A common stock.
Since there will be more shares sold or available for sale, the
market price of our Class&nbsp;A common stock may decline or not
increase as much as it might have without the availability of
such shares. The market price of our Class&nbsp;A common stock
also could decline as a result of other short sales of our
Class&nbsp;A common stock by the purchasers of the
5.875%&nbsp;convertible senior notes to hedge their investment
in the convertible notes. In addition to the hedging
transactions facilitated by the prior share borrow transaction,
we understand that many investors in our 5.875% convertible
senior notes have also already hedged their investment by
selling additional shares of our Class&nbsp;A common stock short
in order to establish initial hedge positions. This offering may
result in establishment of hedged positions by other holders or
in replacement of existing hedged position by those holders who
are already hedged. We expect that all such hedged parties may
increase those positions as the market price of the Class&nbsp;A
common stock increases, since such price increases will increase
the likelihood that such holders will convert their 5.875%
convertible senior notes and receive Class&nbsp;A common stock.
Therefore, such short sales could retard any increase in the
market price of our Class&nbsp;A common stock or cause a
decline. See &#147;Business&nbsp;&#151; Legal Proceedings,&#148;
&#147;Share Lending Agreement&#148; and &#147;Underwriting.&#148;
</FONT>

<P align="center"><FONT size="2">26
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='105'></A>
</DIV>

<!-- link1 "USE OF PROCEEDS" -->

<P align="center">
<B><FONT size="2">USE OF PROCEEDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None of the proceeds from the sale of our
Class&nbsp;A common stock offered by this prospectus will be
received by us. However, pursuant to the share lending
agreement, we will receive a loan fee of $0.001 for each share
that we lend to Citigroup Global Markets Limited, which will be
used for general corporate purposes. See &#147;Share Lending
Agreement.&#148;
</FONT>

<P align="center"><FONT size="2">27
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='106'></A>
</DIV>

<!-- link1 "PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY" -->

<P align="center">
<B><FONT size="2">PRICE RANGE OF COMMON STOCK AND DIVIDEND
POLICY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Class&nbsp;A common stock is quoted on the
Nasdaq National Market under the symbol &#147;CHTR.&#148; The
following table sets forth, for the periods indicated, the range
of high and low last reported sale price per share of
Class&nbsp;A common stock on the Nasdaq National Market. There
is no established trading market for our Class&nbsp;B common
stock.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">First Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Second Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Third Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Fourth Quarter through October&nbsp;3
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="81%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">First Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Second Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Third Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Fourth Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="81%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">First Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Second Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Third Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Fourth Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">First Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Second Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Third Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Fourth Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, there were
3,797&nbsp;holders of record of our Class&nbsp;A common stock,
one holder of our Class&nbsp;B common stock, and 10&nbsp;holders
of record of our Series&nbsp;A Convertible Redeemable Preferred
Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The last reported sale price of our Class&nbsp;A
common stock on the Nasdaq National Market on October&nbsp;3,
2005 was $1.50&nbsp;per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have never paid and do not expect to pay any
cash dividends on our Class&nbsp;A common stock in the
foreseeable future. Charter Holdco is required under certain
circumstances to pay distributions pro rata to all its common
members to the extent necessary for any common member to pay
taxes incurred with respect to its share of taxable income
attributed to Charter Holdco. Covenants in the indentures and
credit agreements governing the debt of our subsidiaries
restrict their ability to make distributions to us and,
accordingly, limit our ability to declare or pay cash dividends.
We intend to cause Charter Holdco and its subsidiaries to retain
future earnings, if any, to finance the operation of the
business of Charter Holdco and its subsidiaries. In addition, we
may only pay dividends from legally available surplus under
Delaware law. Charter elected not to declare the March&nbsp;31
and June&nbsp;30, 2005 dividends on its Series&nbsp;A
Convertible Redeemable Preferred Stock because it was unable to
conclude with certainty that it had such surplus. Under the
Certificate of Designation governing the Series&nbsp;A
Convertible Redeemable Preferred Stock, we may not pay dividends
on our common stock unless and until the full cumulative
dividends on all outstanding shares of the Series&nbsp;A
Preferred Stock have been paid for all past dividend periods and
sufficient funds shall have been set aside for payment of the
dividend on the Series&nbsp;A Convertible Redeemable Preferred
Stock for the then current dividend period.
</FONT>

<P align="center"><FONT size="2">28
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='107'></A>
</DIV>

<!-- link1 "CAPITALIZATION" -->

<P align="center">
<B><FONT size="2">CAPITALIZATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth as of
June&nbsp;30, 2005, on a consolidated basis:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">cash and cash equivalents;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the actual (historical)&nbsp;capitalization of
    Charter;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the capitalization of Charter, on a pro forma
    basis to reflect:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the issuance and sale of
    $300&nbsp;million principal amount of CCO Holdings 8 3/4% senior
    notes due 2013 and the use of a portion of such proceeds to pay
    financing costs and accrued interest in the exchange transaction
    referenced below; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the exchange of $3.4&nbsp;billion
    principal amount of Charter Holdings&#146; notes scheduled to
    mature in 2009 and 2010 for CCH I notes and the exchange of
    $3.4&nbsp;billion principal amount of Charter Holdings&#146;
    notes scheduled to mature in 2011 and 2012 for CIH notes and
    CCH&nbsp;I notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following information should be read in
conjunction with &#147;Selected Historical Consolidated
Financial Data,&#148; &#147;Unaudited Pro Forma Consolidated
Financial Statements,&#148; &#147;Management&#146;s Discussion
and Analysis of Financial Condition and Results of
Operations&#148; and the historical consolidated financial
statements and related notes included elsewhere in this
prospectus.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="64%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Historical</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Dollars in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Long-term debt:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Communications, Inc.:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">5.875%&nbsp;convertible senior notes due 2009(a)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">4.75%&nbsp;convertible senior notes due 2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Holdings:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Senior and senior discount notes(b)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,339</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,728</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CIH:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Senior and senior discount notes(c)(d)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CCH&nbsp;I:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.00% senior notes due 2015(d)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,686</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CCH&nbsp;II:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.250%&nbsp;senior notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CCO Holdings:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8 3/4%&nbsp;senior notes due 2013
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">794</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Senior floating rate notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Operating:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8.000%&nbsp;senior second lien notes due 2012
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8 3/8%&nbsp;senior second lien notes due 2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">733</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">733</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Renaissance:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.00%&nbsp;senior discount notes due 2008
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Credit facilities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Operating(e)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,445</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,445</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,996</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Preferred stock&nbsp;&#151;
    redeemable(f)</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Minority interest(g)</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Shareholders&#146; deficit:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Class&nbsp;A common stock; $.001&nbsp;par value;
    1.75&nbsp;billion shares authorized; 304,941,082&nbsp;shares
    issued and outstanding(h)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Class&nbsp;B common stock; $.001&nbsp;par value;
    750&nbsp;million shares authorized; 50,000&nbsp;shares issued
    and outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Preferred stock; $.001&nbsp;par value;
    250&nbsp;million shares authorized; no non-redeemable shares
    issued and outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">29
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="67%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Historical</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Dollars in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Additional paid-in-capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,802</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,802</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accumulated deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,905</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,411</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accumulated other comprehensive loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,102</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,608</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total capitalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,859</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Represents $863&nbsp;million of 5.875%
    convertible senior notes of which $30&nbsp;million, related to
    certain provisions of the 5.875% convertible senior notes that
    for accounting purposes were derivatives which required
    bifurcation, was recorded as accounts payable and accrued
    expenses and other long-term liabilities with the resulting
    long-term debt of $832&nbsp;million. The debt has accreted to
    $838&nbsp;million at June&nbsp;30, 2005 and will accrete to the
    $863&nbsp;million face value over three years, the duration of
    our pledged securities.
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Historical</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Dollars in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(b)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Represents the following Charter Holdings notes:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">8.250%&nbsp;senior notes due 2007
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">8.625%&nbsp;senior notes due 2009
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">9.920%&nbsp;senior discount notes due 2011
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">198</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">10.000%&nbsp;senior notes due 2009
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">154</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">10.250%&nbsp;senior notes due 2010
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">11.750%&nbsp;senior discount notes due 2010
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">10.750%&nbsp;senior notes due 2009
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">11.125%&nbsp;senior notes due 2011
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">13.500%&nbsp;senior discount notes due 2011
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">9.625%&nbsp;senior notes due 2009
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">10.000%&nbsp;senior notes due 2011
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">708</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">11.750%&nbsp;senior discount notes due 2011
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">851</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">12.125%&nbsp;senior discount notes due 2012
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">275</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    &nbsp;&nbsp;<FONT size="2">Total
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,339</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,728</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Dollars in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Represents the following CIH notes:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">11.125%&nbsp;senior notes due 2014
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">151</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">9.920%&nbsp;senior discount notes due 2014
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">471</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">10.000%&nbsp;senior notes due 2014
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">299</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">11.750%&nbsp;senior discount notes due 2014
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">737</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">13.500%&nbsp;senior discount notes due 2014
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">541</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">12.125%&nbsp;senior discount notes due 2015
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">181</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    &nbsp;&nbsp;<FONT size="2">Total
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(d)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The pro forma balance sheet amounts of CIH and
    CCH&nbsp;I notes issued in exchange for Charter Holdings notes
    are presented in accordance with GAAP. GAAP requires that the
    CIH notes issued in exchange for Charter Holdings notes and the
    CCH&nbsp;I notes issued in exchange for the 8.625% Charter
    Holdings senior notes due 2009 be recorded at the current
    accreted values of the old Charter Holdings notes as opposed to
    the current accreted values of the new CIH or CCH&nbsp;I notes.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(e)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Unused total potential availability under our
    credit facilities was $870&nbsp;million as of June&nbsp;30,
    2005. However, Charter Operating&#146;s access to these funds is
    subject to its satisfaction of the covenants and conditions to
    borrowing in those facilities that are more fully described in
    &#147;Management&#146;s Discussion and Analysis of Financial
    Condition and Results of Operations&nbsp;&#151; Description of
    Our Outstanding Debt&nbsp;&#151; Charter Operating Credit
    Facilities&#148; and &#147;Description of Certain
    Indebtedness&nbsp;&#151; Charter Operating Credit
    Facilities.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(f)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">In connection with Charter&#146;s acquisition of
    Cable USA, Inc. and certain cable system assets from affiliates
    of Cable USA, Inc., Charter issued 545,259&nbsp;shares of
    Series&nbsp;A Convertible Redeemable Preferred Stock valued at
    and with a liquidation preference of $55&nbsp;million. Holders
    of the preferred
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">30
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">stock have no voting rights but are entitled to
    receive cumulative cash dividends at an annual rate of 5.75%,
    payable quarterly or 7.75% if not paid but accrued. Beginning
    January&nbsp;1, 2005, Charter is accruing the dividend on its
    Series&nbsp;A Convertible Redeemable Preferred Stock. The
    preferred stock is redeemable by Charter at its option on or
    after August&nbsp;31, 2004 and must be redeemed by Charter at
    any time upon a change of control, or if not previously redeemed
    or converted, on August&nbsp;31, 2008. The preferred stock is
    convertible, in whole or in part, at the option of the holders
    from April&nbsp;1, 2002 through August&nbsp;31, 2008, into
    shares of Class&nbsp;A common stock at an initial conversion
    rate equal to a conversion price of $24.71&nbsp;per share of
    Class&nbsp;A common stock, subject to certain customary
    adjustments.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(g)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Minority interest consists of preferred
    membership interests in CC VIII, LLC, an indirect subsidiary of
    Charter Communications Holding Company, LLC. Paul G. Allen
    indirectly holds the preferred membership units in CC VIII as a
    result of the exercise of put rights originally granted in
    connection with the Bresnan transaction in 2000. An issue has
    arisen regarding the ultimate ownership of the CC&nbsp;VIII
    membership interests following the consummation of the Bresnan
    put transaction on June&nbsp;6, 2003. See &#147;Certain
    Relationships and Related Transactions&nbsp;&#151; Transactions
    Arising Out of Our Organizational Structure and
    Mr.&nbsp;Allen&#146;s Investment in Charter and its
    Subsidiaries&nbsp;&#151; Equity Put Rights&nbsp;&#151; CC
    VIII.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(h)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Although the shares offered by this prospectus
    and issued in July 2005 will be considered issued and
    outstanding, we do not expect they will impact our earnings per
    share under current accounting literature. See &#147;Share
    Lending Agreement&#148; for further discussion related to the
    accounting of the share lending agreement. Pro forma for the
    issuance of these shares, at June&nbsp;30, 2005 there were
    454,941,082&nbsp;shares issued and outstanding.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">31
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='108'></A>
</DIV>

<!-- link1 "UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS" -->

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following unaudited pro forma consolidated
financial statements are based on the historical consolidated
financial statements of Charter, adjusted on a pro forma basis
to reflect the following transactions as if they had occurred on
January&nbsp;1, 2004 (for the unaudited pro forma consolidated
statement of operations) and as of June&nbsp;30, 2005 for the
unaudited pro forma consolidated balance sheet:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the disposition of certain assets in
    March and April 2004 for total proceeds of $735&nbsp;million and
    the use of such proceeds in each case to pay down credit
    facilities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the issuance and sale of
    $550&nbsp;million of CCO Holdings senior floating rate notes in
    December 2004 and $1.5&nbsp;billion of Charter Operating senior
    second lien notes in April 2004;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;an increase in amounts outstanding under
    the Charter Operating credit facilities in April 2004 and the
    use of such funds, together with the proceeds from the sale of
    the Charter Operating senior second lien notes, to refinance
    amounts outstanding under the credit facilities of our
    subsidiaries, CC&nbsp;VI Operating, CC&nbsp;VIII Operating and
    Falcon;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;the issuance and sale of
    $863&nbsp;million of 5.875% convertible senior notes in November
    2004 with proceeds used for (i)&nbsp;the purchase of certain
    U.S.&nbsp;government securities pledged as security for the
    5.875% convertible senior notes (and which we expect to use to
    fund the first six interest payments thereon),
    (ii)&nbsp;redemption of outstanding 5.75% convertible senior
    notes due 2005 and (iii)&nbsp;general corporate purposes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;the repayment of $530&nbsp;million of
    borrowings under the Charter Operating revolving credit facility
    with net proceeds from the issuance and sale of the CCO Holdings
    senior floating rate notes in December 2004, which were included
    in our cash balance at December&nbsp;31, 2004;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;the redemption of all of CC&nbsp;V
    Holdings, LLC&#146;s outstanding 11.875% senior discount notes
    due 2008 with cash on hand;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;the issuance and sale of
    $300&nbsp;million of 8 3/4% CCO Holdings senior notes in August
    2005 and the use of a portion of such proceeds to pay financing
    costs and accrued interest in the exchange transaction
    referenced below;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(8)&nbsp;the exchange of $3.4&nbsp;billion
    principal amount of Charter Holdings&#146; notes scheduled to
    mature in 2009 and 2010 for CCH I notes and the exchange of
    $3.4&nbsp;billion principal amount of Charter Holdings&#146;
    notes scheduled to mature in 2011 and 2012 for CIH notes and
    CCH&nbsp;I notes; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(9)&nbsp;the issuance of 27.2&nbsp;million shares
    in July&nbsp;2005 and the shares offered hereby pursuant to a
    share lending agreement, the sole effect of which is to increase
    common shares issued and outstanding. See &#147;Share Lending
    Agreement.&#148;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited pro forma adjustments are based on
information available to us as of the date of this prospectus
and certain assumptions that we believe are reasonable under the
circumstances such adjustments may be subject to change based on
the finalization of the accounting for the above transactions.
The Unaudited Pro Forma Consolidated Financial Statements
required allocation of certain revenues and expenses and such
information has been presented for comparative purposes and is
not intended (a)&nbsp;to provide any indication of what our
actual financial position or results of operations would have
been had the transactions described above been completed on the
dates indicated or (b)&nbsp;to project our results of operations
for any future date.
</FONT>

<P align="center"><FONT size="2">32
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC.</FONT></B>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF
OPERATIONS</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Six Months Ended June&nbsp;30,
2004</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Asset</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Financing</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Historical</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Dispositions(a)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transactions(b)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(Dollars in millions, except per share and share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Revenues</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Video
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,695</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,674</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High-speed Internet
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">112</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(29</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,424</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Costs and Expenses</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Operating (excluding depreciation and
    amortization)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Selling, general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">479</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">728</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(Gain) loss on sale of assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(104</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,263</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,347</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(113</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(803</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(30</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(829</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on debt to equity conversions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(791</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(796</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest, income taxes, and
    cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(601</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(109</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(719</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before income taxes and cumulative effect of
    accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(611</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(109</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(729</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income tax benefit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(97</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(82</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(708</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(94</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(811</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss per common share, basic and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.72</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted average common shares outstanding, basic
    and diluted(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">297,814,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">297,814,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">33
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(a)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents the elimination of operating results
    related to the disposition of certain assets in March and April
    2004 and a reduction of interest expense related to the use of
    the net proceeds from such sales to repay a portion of our
    subsidiaries&#146; credit facilities.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(b)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents adjustment to interest expense
    associated with the completion of the financing transactions
    discussed in pro forma assumptions two through eight (in
    millions):
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on the Charter Operating senior second
    lien notes issued in April 2004 and the amended and restated
    Charter Operating credit facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Amortization of deferred financing costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151; Historical interest expense for
    Charter Operating credit facilities and on subsidiary credit
    facilities repaid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(83</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on $863&nbsp;million of 5.875%
    convertible senior notes issued in November 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Amortization of deferred financing costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151; Interest from $144&nbsp;million
    of securities pledged for interest payments on convertible notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Historical interest expense on $588&nbsp;million
    of 5.75% convertible senior notes retired with proceeds
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on $550&nbsp;million of CCO Holdings
    senior floating rate notes issued in December 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Amortization of deferred financing costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151; Historical interest expense for
    Charter Operating&#146;s revolving credit facility repaid with
    cash on hand in February 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(13</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Historical interest expense for the CC V
    Holdings, LLC 11.875% senior discount notes repaid with cash on
    hand in March 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on $300&nbsp;million of CCO Holdings 8
    3/4% senior notes issued in August 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="10"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on new CCH I notes issued in September
    2005 in exchange for CCH notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">186</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Amortization of deferred financing costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151; Historical interest expense on
    CCH notes exchanged for CCH I notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(217</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(28</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net increase in interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Adjustment to loss on extinguishment of debt
    represents the elimination of the write-off of deferred
    financing fees and third party costs related to the Charter
    Operating refinancing in April 2004.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(c)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Loss per common share, basic and diluted assumes
    none of the membership units of Charter Communications Holding
    Company, LLC are exchanged for Charter common stock and none of
    the outstanding options to purchase membership units of Charter
    Communications Holding Company, LLC that are automatically
    exchanged for Charter common stock are exercised. Basic loss per
    share equals loss before cumulative effect of accounting change
    less dividends on preferred stock-redeemable divided by weighted
    average shares outstanding. If the membership units were
    exchanged or options exercised, the effects would be
    antidilutive. Therefore, basic and diluted loss per common share
    is the same. Although the shares offered by this prospectus will
    be considered issued and outstanding, we do not expect they will
    impact our earnings per share under current accounting
    literature. See &#147;Share Lending Agreement&#148; for further
    discussion related to the accounting of the share lending
    agreement.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">34
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC.</FONT></B>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF
OPERATIONS</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended December&nbsp;31,
2004</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Asset</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Financing</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Historical</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Dispositions(a)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transactions(b)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(Dollars in millions, except per share and share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Revenues</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Video
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,352</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High-speed Internet
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">738</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">288</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">336</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(29</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Costs and Expenses</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Operating (excluding depreciation and
    amortization)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,068</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Selling, general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">967</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,495</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,489</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Impairments of franchises
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain (loss) on sale of assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(86</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Unfavorable contracts and other settlements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,023</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,046</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(113</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,159</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,670</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(13</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,679</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on debt to equity conversions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(31</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,652</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,630</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest, income taxes, and
    cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,698</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(109</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,789</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before income taxes and cumulative effect of
    accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,679</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(109</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,770</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income tax benefit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">118</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,576</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(94</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,652</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss per common share, basic and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11.92</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12.16</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted average common shares outstanding, basic
    and diluted(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,291,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,291,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">35
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(a)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents the elimination of operating results
    related to the disposition of certain assets in March and April
    2004 and a reduction of interest expense related to the use of
    the net proceeds from such sales to repay a portion of our
    subsidiaries&#146; credit facilities.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(b)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents adjustment to interest expense
    associated with the completion of the financing transactions
    discussed in pro forma assumptions two through eight (in
    millions):
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on the Charter Operating senior second
    lien notes issued in April&nbsp;2004 and the amended and
    restated Charter Operating credit facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Amortization of deferred financing costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151; Historical interest expense for
    Charter Operating credit facilities and on subsidiary credit
    facilities repaid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(83</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on $863&nbsp;million of 5.875%
    convertible senior notes issued in November&nbsp;2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Amortization of deferred financing costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151; Interest from $144&nbsp;million
    of securities pledged for interest payments on convertible notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Historical interest expense on $588&nbsp;million
    of 5.75% convertible senior notes retired with proceeds
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(37</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on $550&nbsp;million of CCO Holdings
    senior floating rate notes issued in December&nbsp;2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Amortization of deferred financing costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151; Historical interest expense for
    Charter Operating&#146;s revolving credit facility repaid with
    cash on hand in February&nbsp;2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(30</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Historical interest expense for the CC&nbsp;V
    Holdings, LLC 11.875% senior discount notes repaid with cash on
    hand in March&nbsp;2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(13</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on $300&nbsp;million of CCO Holdings 8
    3/4% senior notes issued in August&nbsp;2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on new CCH&nbsp;I notes issued in
    September&nbsp;2005 in exchange for CCH notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">372</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Amortization of deferred financing costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151; Historical interest expense on
    CCH notes exchanged for CCH&nbsp;I notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(435</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(57</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net increase in interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Adjustment to loss on extinguishment of debt
    represents the elimination of the write-off of deferred
    financing fees and third party costs related to the Charter
    Operating refinancing in April 2004 and the elimination of the
    premium paid to retire the 5.75% convertible senior notes and
    the write-off of the related deferred financing fees.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(c)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Loss per common share, basic and diluted assumes
    none of the membership units of Charter Communications Holding
    Company, LLC are exchanged for Charter common stock and none of
    the outstanding options to purchase membership units of Charter
    Communications Holding Company, LLC that are automatically
    exchanged for Charter common stock are exercised. Basic loss per
    share equals loss before cumulative effect of accounting change
    less dividends on preferred stock-redeemable divided by weighted
    average shares outstanding. If the membership units were
    exchanged or options exercised, the effects would be
    antidilutive. Therefore, basic and diluted loss per common share
    is the same. Although the shares offered by this prospectus will
    be considered issued and outstanding, we do not expect they will
    impact our earnings per share under current accounting
    literature. See &#147;Share Lending Agreement&#148; for further
    discussion related to the accounting of the share lending
    agreement.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">36
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC.</FONT></B>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF
OPERATIONS</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Six Months Ended June&nbsp;30,
2005</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Financing</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Historical</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transactions(a)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">(Dollars&nbsp;in&nbsp;millions,&nbsp;except&nbsp;per&nbsp;share&nbsp;and&nbsp;share&nbsp;amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Revenues</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Video
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,703</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,703</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High-speed Internet
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">140</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">140</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Costs and Expenses</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Operating (excluding depreciation and
    amortization)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Selling, general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Asset impairment charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on sale of assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(871</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(850</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(816</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(790</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest and income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(655</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(629</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(661</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(635</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income tax expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(707</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(681</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss per common share, basic and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.34</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.24</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted average common shares outstanding, basic
    and diluted(b)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">303,465,474</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">303,465,474</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">37
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(a)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents adjustment to interest expense
    associated with the completion of the financing transactions
    discussed in pro forma assumptions five through eight (in
    millions):
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="78%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151; Historical interest expense for
    Charter Operating&#146;s revolving credit facility repaid with
    cash on hand in February 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Historical interest expense for the CC V Holdings
    11.875%&nbsp;senior discount notes repaid with cash on hand in
    March 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on $300&nbsp;million of CCO Holdings
    8&nbsp;3/4% senior notes issued in August 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest on new CCH I notes issued in September
    2005 in exchange for CCH notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">186</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Amortization of deferred financing costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151; Historical interest expense on
    CCH notes exchanged for CCH I notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(217</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(28</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net increase in interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Adjustment to loss on extinguishment of debt
    represents the elimination of losses related to the redemption
    of CC V Holdings, LLC 11.875% notes due 2008.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(b)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Loss per common share, basic and diluted assumes
    none of the membership units of Charter Communications Holding
    Company, LLC are exchanged for Charter common stock and none of
    the outstanding options to purchase membership units of Charter
    Communications Holding Company, LLC that are automatically
    exchanged for Charter common stock are exercised. Basic loss per
    share equals loss before cumulative effect of accounting change
    less dividends on preferred stock-redeemable divided by weighted
    average shares outstanding. If the membership units were
    exchanged or options exercised, the effects would be
    antidilutive. Therefore, basic and diluted loss per common share
    is the same. Although the shares offered by this prospectus will
    be considered issued and outstanding, we do not expect they will
    impact our earnings per share under current accounting
    literature. See &#147;Share Lending Agreement&#148; for further
    discussion related to the accounting of the share lending
    agreement.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">38
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC.</FONT></B>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA CONSOLIDATED BALANCE
SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">As of June&nbsp;30, 2005</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Financing</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Historical</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transactions</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">(Dollars in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="15" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Current assets:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">117</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts receivable, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Prepaid expenses and other current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">305</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">422</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Investment in cable properties:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Property, plant and equipment, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,075</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,075</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Franchises, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,839</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,839</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total investment in cable properties, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,914</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,914</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Other noncurrent assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">560</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">572</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Total assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">129</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,908</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="15"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="15" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146;
    DEFICIT</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Current liabilities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts payable and accrued expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(114</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(114</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Long-term debt</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(251</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(d)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,996</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Deferred management fees&nbsp;&#151; related
    party</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Other long-term liabilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Minority interest</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Preferred stock&nbsp;&#151;
    redeemable</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Shareholders&#146; deficit:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Class&nbsp;A common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Class&nbsp;B common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Preferred stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Additional paid-in capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,802</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,802</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accumulated deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,905</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">494</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(e)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,411</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accumulated other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,102</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,608</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Total liabilities and shareholders&#146;
    deficit</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">129</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,908</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(a)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents increase in cash as a result of
    $289&nbsp;million of net proceeds from the issuance of
    $300&nbsp;million principal amount of 8 3/4% CCO&nbsp;Holdings
    senior notes in August 2005 and the use of $172&nbsp;million of
    cash to repay $114&nbsp;million of accrued interest on CCH notes
    tendered for CCH&nbsp;I notes and to pay $58&nbsp;million of
    estimated financing fees in connection with the exchange offer.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">39
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(b)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents $5&nbsp;million of deferred financing
    fees related to the CCO&nbsp;Holdings offering and
    $39&nbsp;million of deferred financing fees related to the
    exchange offer offset by $32&nbsp;million of deferred financing
    fees related to the old CCH notes tendered for CCH&nbsp;I notes
    that will be written off.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(c)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents accrued interest as of June&nbsp;30,
    2005 on CCH notes tendered for CCH&nbsp;I notes to be paid at
    closing of the exchange offer.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(d)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents the adjustment to debt as a result of
    the completion of the exchange offer and the issuance of
    $300&nbsp;million principal amount of 8 3/4% CCO&nbsp;Holdings
    senior notes.
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CCH notes tendered
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,611</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151;&nbsp;New CCH&nbsp;I notes issued
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,686</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Book value of new CIH notes issued
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,380</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net decrease in debt from exchange offer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151;&nbsp;Issuance of
    $300&nbsp;million of 8 3/4% CCO&nbsp;Holdings senior notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(294</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net decrease in debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">251</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The pro forma balance sheet amounts of CIH and
    CCH&nbsp;I notes issued in exchange for Charter Holdings notes
    are presented in accordance with GAAP. GAAP requires that the
    CIH notes issued in exchange for Charter Holdings notes and the
    CCH&nbsp;I notes issued in exchange for the 8.625% Charter
    Holdings senior notes due 2009 be recorded at the current
    accreted values of the old Charter Holdings notes as opposed to
    the current accreted values of the new CIH or CCH&nbsp;I notes.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(e)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents the adjustment to accumulated deficit
    as a result of the expected gain on extinguishment of debt
    related to the exchange offers.
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net discount captured on exchange offer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less&nbsp;&#151;&nbsp;CCH deferred financing fees
    associated with notes tendered for CCH&nbsp;I notes to be
    written off
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(32</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Financing fees associated with CIH and CCH&nbsp;I
    notes not capitalizable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Expected gain on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">40
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='109'></A>
</DIV>

<!-- link1 "SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA" -->

<P align="center">
<B><FONT size="2">SELECTED HISTORICAL CONSOLIDATED FINANCIAL
DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents summary financial
and other data for Charter and its subsidiaries, and has been
derived from (i)&nbsp;the audited consolidated financial
statements of Charter and its subsidiaries for the five years
ended December&nbsp;31, 2004 and (ii)&nbsp;the unaudited
consolidated financial statements of Charter and its
subsidiaries for the six months ended June&nbsp;30, 2004 and
2005. The consolidated financial statements of Charter and its
subsidiaries for each of the years ended December&nbsp;31, 2000
to 2004 have been audited by KPMG LLP, an independent registered
public accounting firm. The following information should be read
in conjunction with &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations&#148;
and the historical consolidated financial statements and related
notes included elsewhere in this prospectus.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="26%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(Dollars in millions, except share and per share amounts)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">Statement of Operations Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,141</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,807</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,566</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,819</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,977</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,453</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,594</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Costs and Expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Operating (excluding depreciation and
    amortization)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,187</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,486</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,807</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,952</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,080</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,027</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,128</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Selling, general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">606</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">826</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">963</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">940</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">971</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">483</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">493</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,398</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,683</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,436</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,453</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,495</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">734</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">759</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Impairment of franchises
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,638</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,433</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Asset impairment charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">(Gain) loss on sale of assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(86</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(104</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Option compensation expense (income), net
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">38</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">31</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">26</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">18</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">36</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">21</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">104</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">97</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Unfavorable contracts and other settlements
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(72</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,229</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,018</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8,888</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,303</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7,023</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,263</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,433</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Income (loss) from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,088</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,211</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(4,322</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">516</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2,046</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">190</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">161</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,040</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,310</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,503</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,557</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,670</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(803</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(871</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Gain (loss) on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(50</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(115</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">65</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">69</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">56</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">26</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Loss on debt to equity conversions
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Gain (loss) on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">267</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(31</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Other, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(59</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(16</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">21</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Loss before minority interest, income taxes and
    cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2,148</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2,630</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(5,944</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(725</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(3,698</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(601</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(655</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Minority interest(a)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,280</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,461</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,176</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">377</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Loss before income taxes and cumulative effect of
    accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(868</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,169</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2,768</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(348</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(3,679</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(611</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(661</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Income tax benefit (expense)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">12</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">460</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">110</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">103</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(97</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Loss before cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(858</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,157</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2,308</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(3,576</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(708</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(707</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Cumulative effect of accounting change, net of tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(206</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(765</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(858</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,167</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2,514</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(4,341</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(708</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(707</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Dividends on preferred stock&nbsp;&#151;
    redeemable
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Net loss applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(858</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,168</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(242</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(4,345</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(710</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(709</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Loss per common share, basic and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(3.80</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(4.33</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(8.55</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(0.82</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(14.47</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2.34</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Weighted-average common shares outstanding, basic
    and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">225,697,775</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">269,594,386</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">294,440,261</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">294,597,519</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">300,291,877</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">297,814,091</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">303,465,474</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">41
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="29%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(Dollars in millions, except share and per share amounts)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">Other Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Deficiencies of earnings to cover fixed charges(a)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,148</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,630</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,944</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">725</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,698</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">601</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">655</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">Balance Sheet Data (end of period):</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">24,352</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">26,463</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">22,384</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">21,364</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">17,673</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">20,519</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">16,779</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">13,061</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">16,343</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">18,671</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">18,647</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,464</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">18,411</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,247</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Minority interest(b)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,571</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,434</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,050</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">689</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">648</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">713</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">659</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Redeemable securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,104</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Preferred stock&nbsp;&#151; redeemable
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">51</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">51</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">55</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">55</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">55</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">55</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Shareholders&#146; equity (deficit)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,767</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,585</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">41</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(175</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(4,406</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(797</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(5,102</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Earnings include net loss plus fixed charges.
    Fixed charges consist of interest expense and an estimated
    interest component of rent expense.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(b)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Minority interest represents the percentage of
    Charter Communications Holding Company, LLC not owned by
    Charter, plus preferred membership interests in CC VIII, LLC, an
    indirect subsidiary of Charter. Paul G. Allen indirectly holds
    the preferred membership units in CC VIII, LLC as a result of
    the exercise of a put right originally granted in connection
    with the Bresnan transaction in 2000. An issue has arisen
    regarding the ultimate ownership of the CC VIII, LLC membership
    interest following the consummation of the Bresnan put
    transaction on June&nbsp;6, 2003. See &#147;Certain
    Relationships and Related Transactions&nbsp;&#151; Transactions
    Arising Out of Our Organizational Structure and
    Mr.&nbsp;Allen&#146;s Investment in Charter and Its
    Subsidiaries&nbsp;&#151; Equity Put Rights&nbsp;&#151; CC
    VIII.&#148; Effective January&nbsp;1, 2005, Charter ceased
    recognizing minority interest in earnings and losses of
    CC&nbsp;VIII, LLC for financial reporting purposes until such
    time as the resolution of the issue is determinable or other
    events occur. Reported losses allocated to minority interest on
    the statement of operations are limited to the extent of any
    remaining minority interest on the balance sheet related to
    Charter Communications Holding Company, LLC. Because minority
    interest in Charter Communications Holding Company, LLC was
    substantially eliminated at December&nbsp;31, 2003, beginning in
    2004, Charter began to absorb substantially all losses before
    income taxes that otherwise would have been allocated to
    minority interest. As a result of negative equity at Charter
    Communications Holding Company, LLC, during the year ended
    December&nbsp;31, 2004, no additional losses were allocated to
    minority interest, resulting in an approximate additional
    $2.4&nbsp;billion of net losses. Under our existing capital
    structure, Charter will absorb substantially all future losses.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">42
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='110'></A>
</DIV>

<!-- link1 "SUPPLEMENTARY QUARTERLY FINANCIAL DATA" -->

<P align="center">
<B><FONT size="2">SUPPLEMENTARY QUARTERLY FINANCIAL
DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following tables present quarterly financial
data for the periods presented on the consolidated statements of
operations (Dollars in millions, except share and per share
amounts):
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">March&nbsp;31, 2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2005</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,323</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest and income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(334</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(321</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(353</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Basic and diluted loss per common share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.16</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.18</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted-average shares outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">303,308,880</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">303,620,347</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31, 2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">First Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Second Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Third Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth Quarter</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income (loss)&nbsp;from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,344</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest, income taxes and
    cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(235</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(366</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,776</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(321</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(294</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(416</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,295</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(340</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Basic and diluted loss per common share before
    cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8.36</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Basic and diluted loss per common share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10.89</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted-average shares outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">295,106,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,522,815</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">302,604,978</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">302,934,348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31, 2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">First Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Second Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Third Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth Quarter</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,178</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,207</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">112</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income (loss)&nbsp;before minority interest and
    income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(301</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(286</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(161</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net income (loss)&nbsp;applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(182</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(38</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(58</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Basic income (loss)&nbsp;per common share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.62</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.13</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Diluted Income (loss)&nbsp;per common share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.62</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.13</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted-average shares outstanding, basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,466,137</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,474,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,566,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,875,504</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted-average shares outstanding, diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,466,137</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,474,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">637,822,843</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,875,504</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">43
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='111'></A>
</DIV>

<!-- link1 "MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" -->

<P align="center">
<B><FONT size="2">MANAGEMENT&#146;S DISCUSSION AND
ANALYSIS</FONT></B>

<DIV align="center">
<B><FONT size="2">OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Reference is made to &#147;Disclosure Regarding
Forward-Looking Statements,&#148; which describes important
factors that could cause actual results to differ from
expectations and non-historical information contained herein. In
addition, the following discussion should be read in conjunction
with the audited consolidated financial statements of Charter
Communications, Inc. and subsidiaries as of and for the years
ended December&nbsp;31, 2004, 2003 and 2002 and the unaudited
consolidated financial statements of Charter Communications,
Inc. and subsidiaries as of and for the six months ended
June&nbsp;30, 2005.
</FONT>

<P align="left">
<B><FONT size="2">Introduction</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2004 and 2005, we completed several
transactions that improved our liquidity. Our efforts in this
regard resulted in the completion of a number of transactions in
2004 and 2005, as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the September 2005 exchange by Charter Holdings,
    CCH&nbsp;I and CIH of approximately $6.8&nbsp;billion in total
    principal amount of outstanding debt securities of Charter
    Holdings in a private placement for new debt securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the August 2005 sale by our subsidiaries,
    CCO&nbsp;Holdings and CCO&nbsp;Holdings Capital Corp., of
    $300&nbsp;million of 8 3/4% senior notes due 2013;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the March and June&nbsp;2005 issuance of
    $333&nbsp;million of Charter Operating notes in exchange for
    $346&nbsp;million of Charter Holdings notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the March and June 2005 repurchase of
    $131&nbsp;million of our 4.75% convertible senior notes due 2006
    leaving $25&nbsp;million in principal amount outstanding;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the March 2005 redemption of all of CC&nbsp;V
    Holdings, LLC&#146;s outstanding 11.875% senior discount notes
    due 2008 at a total cost of $122&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the December&nbsp;2004 sale by our subsidiaries,
    CCO Holdings and CCO Holdings Capital Corp., of
    $550&nbsp;million of senior floating rate notes due 2010;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the November&nbsp;2004 sale of
    $862.5&nbsp;million of 5.875% convertible senior notes due 2009
    and the December&nbsp;2004 redemption of all of our outstanding
    5.75% convertible senior notes due 2005 ($588&nbsp;million
    principal amount);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the April&nbsp;2004 sale of $1.5&nbsp;billion of
    senior second-lien notes by our subsidiary, Charter Operating,
    together with the concurrent refinancing of its credit
    facilities;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the sale in the first half of 2004 of non-core
    cable systems for a total of $735 million, the proceeds of which
    were used to reduce indebtedness.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the years 1999 through 2001, we grew
significantly, principally through acquisitions of other cable
businesses financed by debt and, to a lesser extent, equity. We
have no current plans to pursue any significant acquisitions.
However, we may pursue exchanges of non-strategic assets or
divestitures, such as the sale of cable systems to Atlantic
Broadband Finance, LLC discussed under
&#147;&#151;&nbsp;Liquidity and Capital Resources&nbsp;&#151;
Sale of Assets,&#148; below. We therefore do not believe that
our historical growth rates are accurate indicators of future
growth.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The industry&#146;s and our most significant
operational challenges in 2004 and 2003 included competition
from DBS providers and DSL service providers. See
&#147;Business&nbsp;&#151; Competition.&#148; We believe that
competition from DBS has resulted in net analog video customer
losses and decreased growth rates for digital video customers.
Competition from DSL providers combined with limited
opportunities to expand our customer base now that approximately
30% of our analog video customers subscribe to our high-speed
Internet services has resulted in decreased growth rates for
high-speed Internet customers. In the recent past, we have grown
revenues by offsetting video customer losses with price
increases and sales of incremental advanced services such as
high-speed Internet, video on demand, digital video recorders
and high definition television. We expect to continue to grow
revenues through continued growth in high-speed Internet and
incremental new services including telephone, high definition
television, VOD and DVR service.
</FONT>

<P align="center"><FONT size="2">44
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, our ability to fund operations and
investing activities has depended on our continued access to
credit under our credit facilities. We expect we will continue
to borrow under our credit facilities from time to time to fund
cash needs. The occurrence of an event of default under our
credit facilities could result in borrowings from these
facilities being unavailable to us and could, in the event of a
payment default or acceleration, trigger events of default under
the indentures governing our outstanding notes and would have a
material adverse effect on us. Approximately $15&nbsp;million of
indebtedness under our credit facilities is scheduled to mature
during the remainder of 2005. We expect to fund payment of such
indebtedness through borrowings under our revolving credit
facility. See &#147;&#151;&nbsp;Liquidity and Capital
Resources.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Acquisitions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth information
regarding our significant acquisitions from January&nbsp;1, 2000
to December&nbsp;31, 2002 (none in 2003, 2004 or 2005):
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Purchase Price</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Acquired</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Acquisition</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Cash</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Assumed</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issued/Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Customers</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Paid</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Debt</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consideration</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(approx)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">(Dollars in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interlake
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Bresnan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,014</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">695,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Capital Cable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Farmington
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Kalamazoo
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">171</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total 2000 Acquisitions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,336</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">781,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">AT&#38;T Systems
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6/01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,736</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">551,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cable USA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8/01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(d)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total 2001 Acquisitions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,756</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,836</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">581,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High Speed Access Corp.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Enstar Limited Partnership Systems
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Enstar Income Program&nbsp;II-1, L.P.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total 2002 Acquisitions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">141</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">141</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total 2000-2002 Acquisitions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,085</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,265</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,313</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,391,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Comprised of $385&nbsp;million in equity in
    Charter Holdco and $629&nbsp;million of equity in CC VIII.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(b)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">In connection with this transaction, we acquired
    all of the outstanding stock of Cablevision of Michigan in
    exchange for 11,173,376&nbsp;shares of Charter Class&nbsp;A
    common stock.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(c)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Comprised of approximately $1.7&nbsp;billion, as
    adjusted, in cash and a cable system located in Florida valued
    at approximately $25&nbsp;million, as adjusted.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(d)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">In connection with this transaction, at the
    closing we and Charter Holdco acquired all of the outstanding
    stock of Cable USA and the assets of related affiliates in
    exchange for cash and 505,664&nbsp;shares of Charter
    Series&nbsp;A convertible redeemable preferred stock. In the
    first quarter of 2003, an additional $0.34&nbsp;million in cash
    was paid and 39,595 additional shares of Charter Series&nbsp;A
    convertible redeemable preferred stock were issued to certain
    sellers.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All acquisitions were accounted for under the
purchase method of accounting and results of operations were
included in our consolidated financial statements from their
respective dates of acquisition.
</FONT>

<P align="center"><FONT size="2">45
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have no current plans to pursue any
significant acquisitions. However, we will continue to evaluate
opportunities to consolidate our operations through the sale of
cable systems to, or exchange of like-kind assets with, other
cable operators as such opportunities arise, and on a very
limited basis, consider strategic new acquisitions. Our primary
criteria in considering these opportunities are the
rationalization of our operations into geographic clusters and
the potential financial benefits we expect to ultimately realize
as a result of the sale, exchange, or acquisition.
</FONT>

<P align="left">
<B><FONT size="2">Overview of Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Approximately 86% of our revenues for both the
six months ended June&nbsp;30, 2005 and for the year ended
December&nbsp;31, 2004, respectively, are attributable to
monthly subscription fees charged to customers for our video,
high-speed Internet, telephone and commercial services provided
by our cable systems. Generally, these customer subscriptions
may be discontinued by the customer at any time. The remaining
14% of revenue is derived primarily from advertising revenues,
franchise fee revenues, which are collected by us but then paid
to local franchising authorities, pay-per-view and VOD
programming where users are charged a fee for individual
programs viewed, installation or reconnection fees charged to
customers to commence or reinstate service, and commissions
related to the sale of merchandise by home shopping services. We
have increased revenues during the past three years, primarily
through the sale of digital video and high-speed Internet
services to new and existing customers and price increases on
video services offset in part by dispositions of systems. Going
forward, our goal is to increase revenues by stabilizing our
analog video customer base, implementing price increases on
certain services and packages and increasing the number of our
customers who purchase high-speed Internet services, digital
video and new products and services such as telephone, VOD, high
definition television and DVR service. To accomplish this, we
are increasing prices for certain services and we are offering
new bundling of services combining digital video and our
advanced services (such as high-speed Internet service and high
definition television) at what we believe are attractive price
points. See &#147;Business&nbsp;&#151; Sales and Marketing&#148;
for more details.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our success in our efforts to grow revenues and
improve margins will be impacted by our ability to compete
against companies with often fewer regulatory burdens, easier
access to financing, greater personnel resources, greater brand
name recognition and long-established relationships with
regulatory authorities and customers. Additionally, controlling
our cost of operations is critical, particularly cable
programming costs, which have historically increased at rates in
excess of inflation and are expected to continue to increase.
See &#147;Business&nbsp;&#151; Programming&#148; for more
details. We are attempting to control our costs of operations by
maintaining strict controls on expenses. More specifically, we
are focused on managing our cost structure by renegotiating
programming agreements to reduce the rate of historical
increases in programming cost, managing our workforce to control
increases and improve productivity, and leveraging our size in
purchasing activities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our expenses primarily consist of operating
costs, selling, general and administrative expenses,
depreciation and amortization expense and interest expense.
Operating costs primarily include programming costs, the cost of
our workforce, cable service related expenses, advertising sales
costs, franchise fees and expenses related to customer billings.
Our income from operations decreased from $190&nbsp;million for
the six months ended June&nbsp;30, 2004 to $161&nbsp;million for
the six months ended June&nbsp;30, 2005. We had a positive
operating margin (defined as income (loss) from operations
divided by revenues) of 6% and 8% for the six months ended
June&nbsp;30, 2005 and 2004, respectively. The decline in income
from operations and operating margin for the six months ended
June&nbsp;30, 2005 is principally due to the one-time gain as a
result of the sale of certain cable systems in Florida,
Pennsylvania, Maryland, Delaware and West Virginia to Atlantic
Broadband Finance, LLC of approximately $106&nbsp;million,
recognized in the six months ended June&nbsp;30, 2004 offset by
$85&nbsp;million recorded in special charges as part of the
terms set forth in memoranda of understanding regarding
settlement of the consolidated Federal Class Action and Federal
Derivative Action which did not recur in 2005. For the years
ended December&nbsp;31, 2004 and 2002, loss from operations was
$2.0&nbsp;billion and $4.3&nbsp;billion, respectively. For the
year ended December&nbsp;31, 2003, income from operations was
$516&nbsp;million. Operating margin was 11% for the year ended
December&nbsp;31, 2003, whereas for the years ending
December&nbsp;31, 2004 and 2002, we had negative operating
margin of
</FONT>

<P align="center"><FONT size="2">46
</FONT>

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<DIV align="left">
<FONT size="2">41% and 95%, respectively. The improvement in
income from operations and operating margin from 2002 to 2003
was principally due to a $4.6&nbsp;billion franchise impairment
charge in the fourth quarter of 2002 which did not recur in 2003
and the recognition of gains in 2003 of $93&nbsp;million related
to unfavorable contracts and other settlements and gain on sale
of systems. Although we do not expect charges for impairment in
the future of comparable magnitude, potential charges could
occur due to changes in market conditions.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a history of net losses. Further, we
expect to continue to report net losses for the foreseeable
future. Our net losses are principally attributable to
insufficient revenue to cover the interest costs on our high
level of debt, the depreciation expenses that we incur resulting
from the capital investments we have made in our cable
properties and the amortization and impairment of our franchise
intangibles. We expect that these expenses (other than
impairment of franchises) will remain significant, and we
therefore expect to continue to report net losses for the
foreseeable future. Additionally, because minority interest in
Charter Holdco was substantially eliminated at December&nbsp;31,
2003, beginning in the first quarter of 2004, we began to absorb
substantially all future losses before income taxes that
otherwise would have been allocated to minority interest. This
resulted in an additional $2.4&nbsp;billion of net loss for the
year ended December&nbsp;31, 2004. Under our existing capital
structure, future losses will continue to be absorbed by
Charter. Effective January&nbsp;1, 2005, we ceased recognizing
minority interest in earnings or losses of CC&nbsp;VIII, LLC for
financial reporting purposes until the dispute between Charter
and Mr.&nbsp;Allen regarding the preferred membership interests
in CC&nbsp;VIII, LLC is determinable or other events occur.
</FONT>

<P align="left">
<B><FONT size="2">Critical Accounting Policies and
Estimates</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain of our accounting policies require our
management to make difficult, subjective or complex judgments.
Management has discussed these policies with the Audit Committee
of Charter&#146;s board of directors and the Audit Committee has
reviewed the following disclosure. We consider the following
policies to be the most critical in understanding the estimates,
assumptions and judgments that are involved in preparing our
financial statements and the uncertainties that could affect our
results of operations, financial condition and cash flows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Capitalization of labor and overhead costs;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Useful lives of property, plant and equipment;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Impairment of property, plant, and equipment,
    franchises, and goodwill;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Income taxes;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Litigation.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, there are other items within our
financial statements that require estimates or judgment but are
not deemed critical, such as the allowance for doubtful
accounts, but changes in judgment, or estimates in these other
items could also have a material impact on our financial
statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Capitalization of labor and overhead
costs.</FONT></I><FONT size="2"> The cable industry is capital
intensive, and a large portion of our resources are spent on
capital activities associated with extending, rebuilding, and
upgrading our cable network. As of June&nbsp;30, 2005 and
December&nbsp;31, 2004 and 2003, the net carrying amount of our
property, plant and equipment (consisting primarily of cable
network assets) was approximately $6.1&nbsp;billion
(representing 36% of total assets), $6.3&nbsp;billion
(representing 36% of total assets) and $7.0&nbsp;billion
(representing 33% of total assets), respectively. Total capital
expenditures for the six months ended June&nbsp;30, 2005 and the
years ended December&nbsp;31, 2004, 2003 and 2002 were
approximately $542&nbsp;million, $924&nbsp;million,
$854&nbsp;million and $2.2&nbsp;billion, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Costs associated with network construction,
initial customer installations, installation refurbishments and
the addition of network equipment necessary to provide advanced
services are capitalized. Costs capitalized as part of initial
customer installations include materials, direct labor, and
certain indirect costs. These indirect costs are associated with
the activities of personnel who assist in connecting and
activating the new service and consist of compensation and
overhead costs associated with these support functions.
</FONT>

<P align="center"><FONT size="2">47
</FONT>

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<DIV align="left">
<FONT size="2">The costs of disconnecting service at a
customer&#146;s dwelling or reconnecting service to a previously
installed dwelling are charged to operating expense in the
period incurred. Costs for repairs and maintenance are charged
to operating expense as incurred, while equipment replacement
and betterments, including replacement of cable drops from the
pole to the dwelling, are capitalized.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We make judgments regarding the installation and
construction activities to be capitalized. We capitalize direct
labor and certain indirect costs (&#147;overhead&#148;) using
standards developed from actual costs and applicable operational
data. We calculate standards for items such as the labor rates,
overhead rates and the actual amount of time required to perform
a capitalizable activity. For example, the standard amounts of
time required to perform capitalizable activities are based on
studies of the time required to perform such activities.
Overhead rates are established based on an analysis of the
nature of costs incurred in support of capitalizable activities
and a determination of the portion of costs that is directly
attributable to capitalizable activities. The impact of changes
that resulted from these studies were not significant in the
periods presented.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Labor costs directly associated with capital
projects are capitalized. We capitalize direct labor costs
associated with personnel based upon the specific time devoted
to network construction and customer installation activities.
Capitalizable activities performed in connection with customer
installations include such activities as:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Scheduling a &#147;truck roll&#148; to the
    customer&#146;s dwelling for service connection;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Verification of serviceability to the
    customer&#146;s dwelling (i.e., determining whether the
    customer&#146;s dwelling is capable of receiving service by our
    cable network and/or receiving advanced or Internet services);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Customer premise activities performed by in-house
    field technicians and third-party contractors in connection with
    customer installations, installation of network equipment in
    connection with the installation of expanded services and
    equipment replacement and betterment;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Verifying the integrity of the customer&#146;s
    network connection by initiating test signals downstream from
    the headend to the customer&#146;s digital set-top terminal.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Judgment is required to determine the extent to
which overhead is incurred as a result of specific capital
activities, and therefore should be capitalized. The primary
costs that are included in the determination of the overhead
rate are (i)&nbsp;employee benefits and payroll taxes associated
with capitalized direct labor, (ii)&nbsp;direct variable costs
associated with capitalizable activities, consisting primarily
of installation and construction vehicle costs, (iii)&nbsp;the
cost of support personnel, such as dispatch, that directly
assist with capitalizable installation activities, and
(iv)&nbsp;indirect costs directly attributable to capitalizable
activities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While we believe our existing capitalization
policies are appropriate, a significant change in the nature or
extent of our system activities could affect management&#146;s
judgment about the extent to which we should capitalize direct
labor or overhead in the future. We monitor the appropriateness
of our capitalization policies, and perform updates to our
internal studies on an ongoing basis to determine whether facts
or circumstances warrant a change to our capitalization
policies. We capitalized direct labor and overhead of
$91&nbsp;million, $164&nbsp;million, $174&nbsp;million and
$335&nbsp;million for the six months ended June&nbsp;30, 2005
and the years ended December&nbsp;31, 2004, 2003 and 2002,
respectively. Capitalized internal direct labor and overhead
costs significantly decreased in 2004 and 2003 compared to 2002
primarily due to the substantial completion of the upgrade of
our systems and a decrease in the amount of capitalizable
installation costs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Useful lives of property, plant and
equipment.</FONT></I><FONT size="2"> We evaluate the
appropriateness of estimated useful lives assigned to our
property, plant and equipment, based on annual studies of such
useful lives, and revise such lives to the extent warranted by
changing facts and circumstances. Any changes in estimated
useful lives as a result of these studies, which were not
significant in the periods presented, will be reflected
prospectively beginning in the period in which the study is
completed. The effect of a one-year decrease in the weighted
average remaining useful life of our property, plant and
equipment would be an increase in
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">depreciation expense for the year ended
December&nbsp;31, 2004 of approximately $296&nbsp;million. The
effect of a one-year increase in the weighted average useful
life of our property, plant and equipment would be a decrease in
depreciation expense for the year ended December&nbsp;31, 2004
of approximately $198&nbsp;million.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation expense related to property, plant
and equipment totaled $753&nbsp;million, $1.5&nbsp;billion,
$1.5&nbsp;billion and $1.4&nbsp;billion, representing
approximately 31%, 21%, 34% and 16% of costs and expenses, for
the six months ended June&nbsp;30, 2005 and for the years ended
December&nbsp;31, 2004, 2003 and 2002, respectively.
Depreciation is recorded using the straight-line composite
method over management&#146;s estimate of the estimated useful
lives of the related assets as listed below:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cable distribution systems
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7-20&nbsp; years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Customer equipment and installations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3-5&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Vehicles and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1-5&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Buildings and leasehold improvements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5-15&nbsp; years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Furniture and fixtures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Impairment of property, plant and equipment,
franchises and goodwill.</FONT></I><FONT size="2"> As discussed
above, the net carrying value of our property, plant and
equipment is significant. We also have recorded a significant
amount of cost related to franchises, pursuant to which we are
granted the right to operate our cable distribution network
throughout our service areas. The net carrying value of
franchises as of June&nbsp;30, 2005, December&nbsp;31, 2004 and
2003 was approximately $9.8&nbsp;billion (representing 59% of
total assets), $9.9&nbsp;billion (representing 56% of total
assets) and $13.7&nbsp;billion (representing 64% of total
assets), respectively. Furthermore, our noncurrent assets
included approximately $52&nbsp;million of goodwill.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We adopted SFAS&nbsp;No.&nbsp;142 on
January&nbsp;1, 2002. SFAS&nbsp;No.&nbsp;142 requires that
franchise intangible assets that meet specified indefinite-life
criteria no longer be amortized against earnings, but instead
must be tested for impairment annually based on valuations, or
more frequently as warranted by events or changes in
circumstances. In determining whether our franchises have an
indefinite-life, we considered the exclusivity of the franchise,
the expected costs of franchise renewals, and the technological
state of the associated cable systems with a view to whether or
not we are in compliance with any technology upgrading
requirements. We have concluded that as of June&nbsp;30, 2005,
December&nbsp;31, 2004, 2003 and 2002 more than 99% of our
franchises qualify for indefinite-life treatment under
SFAS&nbsp;No.&nbsp;142, and that less than one percent of our
franchises do not qualify for indefinite-life treatment due to
technological or operational factors that limit their lives.
Costs of finite-lived franchises, along with costs associated
with franchise renewals, are amortized on a straight-line basis
over 10&nbsp;years, which represents management&#146;s best
estimate of the average remaining useful lives of such
franchises. Franchise amortization expense was $2&nbsp;million
and $4&nbsp;million for the six months ended June&nbsp;30, 2005
and for the year ended December&nbsp;31, 2004, respectively, and
$9&nbsp;million for each of the years ended December&nbsp;31,
2003 and 2002. We expect that amortization expense on franchise
assets will be approximately $3&nbsp;million annually for each
of the next five years. Actual amortization expense in future
periods could differ from these estimates as a result of new
intangible asset acquisitions or divestitures, changes in useful
lives and other relevant factors. Our goodwill is also deemed to
have an indefinite life under SFAS&nbsp;No.&nbsp;142.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SFAS&nbsp;No.&nbsp;144, <I>Accounting for
Impairment or Disposal of Long-Lived Assets</I>, requires that
we evaluate the recoverability of our property, plant and
equipment and franchise assets which did not qualify for
indefinite-life treatment under SFAS&nbsp;No.&nbsp;142 upon the
occurrence of events or changes in circumstances which indicate
that the carrying amount of an asset may not be recoverable.
Such events or changes in circumstances could include such
factors as the impairment of our indefinite life franchises
under SFAS&nbsp;No.&nbsp;142, changes in technological advances,
fluctuations in the fair value of such assets, adverse changes
in relationships with local franchise authorities, adverse
changes in market conditions or poor operating results. Under
SFAS&nbsp;No.&nbsp;144, a long-lived asset is deemed impaired
when the carrying amount of the asset exceeds the projected
undiscounted future cash flows associated with the asset. No
impairments of long-lived assets were recorded in the years
ended December&nbsp;31, 2004, 2003 or 2002. We were also
required to evaluate the recoverability of our indefinite-life
franchises, as well as goodwill, as of
</FONT>

<P align="center"><FONT size="2">49
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<DIV align="left">
<FONT size="2">January&nbsp;1, 2002 upon adoption of
SFAS&nbsp;No.&nbsp;142, and on an annual basis or more
frequently as deemed necessary.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under both SFAS&nbsp;No.&nbsp;144 and
SFAS&nbsp;No.&nbsp;142, if an asset is determined to be
impaired, it is required to be written down to its estimated
fair market value. We determine fair market value based on
estimated discounted future cash flows, using reasonable and
appropriate assumptions that are consistent with internal
forecasts. Our assumptions include these and other factors:
penetration rates for analog and digital video and high-speed
Internet, revenue growth rates, expected operating margins and
capital expenditures. Considerable management judgment is
necessary to estimate future cash flows, and such estimates
include inherent uncertainties, including those relating to the
timing and amount of future cash flows and the discount rate
used in the calculation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on the guidance prescribed in Emerging
Issues Task Force (&#147;EITF&#148;) Issue No.&nbsp;02-7,
<I>Unit of Accounting for Testing of Impairment of
Indefinite-Lived Intangible Assets</I>, franchises were
aggregated into essentially inseparable asset groups to conduct
the valuations. The asset groups generally represent geographic
clustering of our cable systems into groups by which such
systems are managed. Management believes such groupings
represent the highest and best use of those assets. We
determined that our franchises were impaired upon adoption of
SFAS&nbsp;No.&nbsp;142 on January&nbsp;1, 2002 and as a result
recorded the cumulative effect of a change in accounting
principle of $206&nbsp;million (approximately $572&nbsp;million
before minority interest effects of $306&nbsp;million and tax
effects of $60&nbsp;million). As required by
SFAS&nbsp;No.&nbsp;142, the standard has not been retroactively
applied to results for the period prior to adoption.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our valuations, which are based on the present
value of projected after tax cash flows, result in a value of
property, plant and equipment, franchises, customer
relationships and our total entity value. The value of goodwill
is the difference between the total entity value and amounts
assigned to the other assets. The use of different valuation
assumptions or definitions of franchises or customer
relationships, such as our inclusion of the value of selling
additional services to our current customers within customer
relationships versus franchises, could significantly impact our
valuations and any resulting impairment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Franchises, for valuation purposes, are defined
as the future economic benefits of the right to solicit and
service potential customers (customer marketing rights), and the
right to deploy and market new services such as interactivity
and telephone to the potential customers (service marketing
rights). Fair value is determined based on estimated discounted
future cash flows using assumptions consistent with internal
forecasts. The franchise after-tax cash flow is calculated as
the after-tax cash flow generated by the potential customers
obtained and the new services added to those customers in future
periods. The sum of the present value of the franchises&#146;
after-tax cash flow in years 1 through 10 and the continuing
value of the after-tax cash flow beyond year 10 yields the fair
value of the franchise. Prior to the adoption of EITF Topic
D-108, <I>Use of the Residual Method to Value Acquired Assets
Other than Goodwill</I>, discussed below, we followed a residual
method of valuing our franchise assets, which had the effect of
including goodwill with the franchise assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We follow the guidance of EITF Issue&nbsp;02-17,
<I>Recognition of Customer Relationship Intangible Assets
Acquired in a Business Combination</I>, in valuing customer
relationships. Customer relationships, for valuation purposes,
represent the value of the business relationship with our
existing customers and are calculated by projecting future
after-tax cash flows from these customers including the right to
deploy and market additional services such as interactivity and
telephone to these customers. The present value of these
after-tax cash flows yields the fair value of the customer
relationships. Substantially all our acquisitions occurred prior
to January&nbsp;1, 2002. We did not record any value associated
with the customer relationship intangibles related to those
acquisitions. For acquisitions subsequent to January&nbsp;1,
2002, we did assign a value to the customer relationship
intangible, which is amortized over its estimated useful life.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 2004, EITF Topic D-108, <I>Use of
the Residual Method to Value Acquired Assets Other than
Goodwill,</I> was issued, which requires the direct method of
separately valuing all intangible assets and does not permit
goodwill to be included in franchise assets. We performed an
impairment assessment as of September&nbsp;30, 2004, and adopted
Topic D-108 in that assessment resulting in a total franchise
impairment of approximately $3.3&nbsp;billion. We recorded a
cumulative effect of accounting change of $765&nbsp;million
</FONT>

<P align="center"><FONT size="2">50
</FONT>

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<DIV align="left">
<FONT size="2">(approximately $875&nbsp;million before tax
effects of $91&nbsp;million and minority interest effects of
$19&nbsp;million) for the year ended December&nbsp;31, 2004
representing the portion of our total franchise impairment
attributable to no longer including goodwill with franchise
assets. The effect of the adoption was to increase net loss and
loss per share by $765&nbsp;million and $2.55 for the year ended
December&nbsp;31, 2004. The remaining $2.4&nbsp;billion of the
total franchise impairment was attributable to the use of lower
projected growth rates and the resulting revised estimates of
future cash flows in our valuation and was recorded as
impairment of franchises in our consolidated statements of
operations for the year ended December&nbsp;31, 2004. Sustained
analog video customer losses by us and our industry peers in the
third quarter of 2004 primarily as a result of increased
competition from DBS providers and decreased growth rates in our
and our industry peers&#146; high speed Internet customers in
the third quarter of 2004, in part as a result of increased
competition from DSL providers, led us to lower our projected
growth rates and accordingly revise our estimates of future cash
flows from those used at October&nbsp;1, 2003. See
&#147;Business&nbsp;&#151; Competition.&#148;
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The valuation completed at October&nbsp;1, 2003
showed franchise values in excess of book value and thus
resulted in no impairment. Our annual impairment assessment as
of October&nbsp;1, 2002, based on revised estimates from
January&nbsp;1, 2002 of future cash flows and projected
long-term growth rates in our valuation, led to the recognition
of a $4.6&nbsp;billion impairment charge in the fourth quarter
of 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The valuations used in our impairment assessments
involve numerous assumptions as noted above. While economic
conditions, applicable at the time of the valuation, indicate
the combination of assumptions utilized in the valuations are
reasonable, as market conditions change so will the assumptions
with a resulting impact on the valuation and consequently the
potential impairment charge.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Sensitivity Analysis.
</FONT></I><FONT size="2">The effect on the impairment charge
recognized in the third quarter of 2004 of the indicated
increase/decrease in the selected assumptions is shown below:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage/</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage Point</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Impairment Charge</FONT></B></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Assumption</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Increase/(Decrease)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Dollars in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Annual Operating Cash Flow(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">+/- 5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(890)/$921</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Long-Term Growth Rate(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">+/- 1 pts</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,579)/1,232</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Discount Rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">+/- 0.5 pts</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,336/(1,528)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Operating Cash Flow is defined as revenues less
    operating expenses and selling general and administrative
    expenses.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Long-Term Growth Rate is the rate of cash flow
    growth beyond year ten.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">A percentage point change of one point equates to
    100&nbsp;basis points.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Income Taxes.</FONT></I><FONT size="2"> All
operations are held through Charter Holdco and its direct and
indirect subsidiaries. Charter Holdco and the majority of its
subsidiaries are not subject to income tax. However, certain of
these subsidiaries are corporations and are subject to income
tax. All of the taxable income, gains, losses, deductions and
credits of Charter Holdco are passed through to its members:
Charter, Charter Investment, Inc. and Vulcan Cable&nbsp;III Inc.
Charter is responsible for its share of taxable income or loss
of Charter Holdco allocated to it in accordance with the Charter
Holdco limited liability company agreement (&#147;LLC
Agreement&#148;) and partnership tax rules and regulations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The LLC Agreement provided for certain special
allocations of net tax profits and net tax losses (such net tax
profits and net tax losses being determined under the applicable
federal income tax rules for determining capital accounts).
Under the LLC Agreement, through the end of 2003, net tax losses
of Charter Holdco that would otherwise have been allocated to
Charter based generally on its percentage ownership of
outstanding common units were allocated instead to membership
units held by Vulcan Cable&nbsp;III Inc. and Charter Investment,
Inc. (the &#147;Special Loss Allocations&#148;) to the extent of
their respective capital account balances. After 2003, under the
LLC Agreement, net tax losses of Charter Holdco are allocated to
Charter, Vulcan Cable&nbsp;III Inc. and Charter Investment, Inc.
based generally on their respective percentage ownership of
outstanding common units to the extent of their respective
capital
</FONT>

<P align="center"><FONT size="2">51
</FONT>

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<DIV align="left">
<FONT size="2">account balances. The LLC Agreement further
provides that, beginning at the time Charter Holdco generates
net tax profits, the net tax profits that would otherwise have
been allocated to Charter based generally on its percentage
ownership of outstanding common membership units will instead
generally be allocated to Vulcan Cable&nbsp;III Inc. and Charter
Investment, Inc. (the &#147;Special Profit Allocations&#148;).
The Special Profit Allocations to Vulcan Cable&nbsp;III Inc. and
Charter Investment, Inc. will generally continue until the
cumulative amount of the Special Profit Allocations offsets the
cumulative amount of the Special Loss Allocations. The amount
and timing of the Special Profit Allocations are subject to the
potential application of, and interaction with, the Curative
Allocation Provisions described in the following paragraph. The
LLC Agreement generally provides that any additional net tax
profits are to be allocated among the members of Charter Holdco
based generally on their respective percentage ownership of
Charter Holdco common membership units.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because the respective capital account balance of
each of Vulcan Cable&nbsp;III Inc. and Charter Investment, Inc.
was reduced to zero by December&nbsp;31, 2002, certain net tax
losses of Charter Holdco that were to be allocated for 2002,
2003, 2004 and possibly later years, subject to resolution of
the issue described in &#147;Certain Relationships and Related
Transactions&nbsp;&#151; Transactions Arising out of Our
Organizational Structure and Mr.&nbsp;Allen&#146;s Investment in
Charter Communications, Inc. and Its Subsidiaries&nbsp;&#151;
Equity Put Rights&nbsp;&#151; CC VIII,&#148; to Vulcan
Cable&nbsp;III Inc. and Charter Investment, Inc. instead have
been and will be allocated to Charter (the &#147;Regulatory
Allocations&#148;). The LLC Agreement further provides that, to
the extent possible, the effect of the Regulatory Allocations is
to be offset over time pursuant to certain curative allocation
provisions (the &#147;Curative Allocation Provisions&#148;) so
that, after certain offsetting adjustments are made, each
member&#146;s capital account balance is equal to the capital
account balance such member would have had if the Regulatory
Allocations had not been part of the LLC Agreement. The
cumulative amount of the actual tax losses allocated to Charter
as a result of the Regulatory Allocations through the year ended
December&nbsp;31, 2004 is approximately $4.0&nbsp;billion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the Special Loss Allocations and
the Regulatory Allocations referred to above, the cumulative
amount of losses of Charter Holdco allocated to Vulcan
Cable&nbsp;III Inc. and Charter Investment, Inc. is in excess of
the amount that would have been allocated to such entities if
the losses of Charter Holdco had been allocated among its
members in proportion to their respective percentage ownership
of Charter Holdco common membership units. The cumulative amount
of such excess losses was approximately $2.1&nbsp;billion
through December&nbsp;31, 2003 and $1.0&nbsp;billion through
December&nbsp;31, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In certain situations, the Special Loss
Allocations, Special Profit Allocations, Regulatory Allocations
and Curative Allocation Provisions described above could result
in Charter paying taxes in an amount that is more or less than
if Charter Holdco had allocated net tax profits and net tax
losses among its members based generally on the number of common
membership units owned by such members. This could occur due to
differences in (i)&nbsp;the character of the allocated income
(e.g., ordinary versus capital), (ii)&nbsp;the allocated amount
and timing of tax depreciation and tax amortization expense due
to the application of section&nbsp;704(c) under the Internal
Revenue Code, (iii)&nbsp;the potential interaction between the
Special Profit Allocations and the Curative Allocation
Provisions, (iv)&nbsp;the amount and timing of alternative
minimum taxes paid by Charter, if any, (v)&nbsp;the
apportionment of the allocated income or loss among the states
in which Charter Holdco does business, and (vi)&nbsp;future
federal and state tax laws. Further, in the event of new capital
contributions to Charter Holdco, it is possible that the tax
effects of the Special Profit Allocations, Special Loss
Allocations, Regulatory Allocations and Curative Allocation
Provisions will change significantly pursuant to the provisions
of the income tax regulations or the terms of a contribution
agreement with respect to such contributions. Such change could
defer the actual tax benefits to be derived by Charter with
respect to the net tax losses allocated to it or accelerate the
actual taxable income to Charter with respect to the net tax
profits allocated to it. As a result, it is possible under
certain circumstances, that Charter could receive future
allocations of taxable income in excess of its currently
allocated tax deductions and available tax loss carryforwards.
The ability to utilize net operating loss carryforwards is
potentially subject to certain limitations as discussed below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, under their exchange agreement with
Charter, Vulcan Cable&nbsp;III Inc. and Charter Investment, Inc.
may exchange some or all of their membership units in Charter
Holdco for Charter&#146;s
</FONT>

<P align="center"><FONT size="2">52
</FONT>

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<DIV align="left">
<FONT size="2">Class&nbsp;B common stock, be merged with
Charter, or be acquired by Charter in a non-taxable
reorganization. If such an exchange were to take place prior to
the date that the Special Profit Allocation provisions had fully
offset the Special Loss Allocations, Vulcan Cable&nbsp;III Inc.
and Charter Investment, Inc. could elect to cause Charter Holdco
to make the remaining Special Profit Allocations to Vulcan
Cable&nbsp;III Inc. and Charter Investment, Inc. immediately
prior to the consummation of the exchange. In the event Vulcan
Cable&nbsp;III Inc. and Charter Investment, Inc. choose not to
make such election or to the extent such allocations are not
possible, Charter would then be allocated tax profits
attributable to the membership units received in such exchange
pursuant to the Special Profit Allocation provisions.
Mr.&nbsp;Allen has generally agreed to reimburse Charter for any
incremental income taxes that Charter would owe as a result of
such an exchange and any resulting future Special Profit
Allocations to Charter. The ability of Charter to utilize net
operating loss carryforwards is potentially subject to certain
limitations (see &#147;Risk Factors&nbsp;&#151; Risks Related to
Mr. Allen&#146;s Controlling Position&#148;). If Charter were to
become subject to such limitations (whether as a result of an
exchange described above or otherwise), and as a result were to
owe taxes resulting from the Special Profit Allocations, then
Mr.&nbsp;Allen may not be obligated to reimburse Charter for
such income taxes.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005 and December&nbsp;31,
2004 and 2003, we have recorded net deferred income tax
liabilities of $259&nbsp;million, $216&nbsp;million and
$417&nbsp;million, respectively. Additionally, as of
June&nbsp;30, 2005, December&nbsp;31, 2004 and 2003, we have
deferred tax assets of $3.8&nbsp;billion, $3.5&nbsp;billion and
$1.7&nbsp;billion, respectively, which primarily relate to
financial and tax losses allocated to Charter from Charter
Holdco. We are required to record a valuation allowance when it
is more likely than not that some portion or all of the deferred
income tax assets will not be realized. Given the uncertainty
surrounding our ability to utilize our deferred tax assets,
these items have been offset with a corresponding valuation
allowance of $3.4&nbsp;billion, $3.2&nbsp;billion and
$1.3&nbsp;billion at June&nbsp;30, 2005, December&nbsp;31, 2004
and 2003, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdco is currently under examination by
the Internal Revenue Service for the tax years ending
December&nbsp;31, 2000, 2002 and 2003. Our results (excluding
Charter and our indirect corporate subsidiaries) for these years
are subject to this examination. Management does not expect the
results of this examination to have a material adverse effect on
our consolidated financial condition, results of operations or
our liquidity, including our ability to comply with our debt
covenants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Litigation.</FONT></I><FONT size="2"> Legal
contingencies have a high degree of uncertainty. When a loss
from a contingency becomes estimable and probable, a reserve is
established. The reserve reflects management&#146;s best
estimate of the probable cost of ultimate resolution of the
matter and is revised accordingly as facts and circumstances
change and, ultimately when the matter is brought to closure. We
have established reserves for certain matters including those
described in &#147;Business&nbsp;&#151; Legal Proceedings.&#148;
If any of the litigation matters pending against us, including
those described in &#147;Business&nbsp;&#151; Legal
Proceedings&#148; is resolved unfavorably resulting in payment
obligations in excess of management&#146;s best estimate of the
outcome, such resolution could have a material adverse effect on
our consolidated financial condition, results of operations or
our liquidity.
</FONT>

<P align="center"><FONT size="2">53
</FONT>

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<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<P align="left">
<B><FONT size="2">Six Months Ended June&nbsp;30, 2005 Compared
to Six Months Ended June&nbsp;30, 2004</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the percentages of
revenues that items in the accompanying consolidated statements
of operations constituted for the periods presented (dollars in
millions, except per share and share data):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Six Months Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Costs and expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Operating (excluding depreciation and
    amortization)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Selling, general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Asset impairment charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(Gain) loss on sale of assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(104</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,263</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(871</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(803</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on debt to equity conversions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain (loss)&nbsp;on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(816</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(791</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest and income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(655</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(601</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(661</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(611</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income tax expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(97</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(707</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(708</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Dividends on preferred stock &#150; redeemable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(709</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(710</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss per common share, basic and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.34</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted average common shares outstanding, basic
    and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">303,465,474</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">297,814,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Revenues.</FONT></I><FONT size="2"> Revenues
increased by $141&nbsp;million, or 6%, from $2.5&nbsp;billion
for the six months ended June&nbsp;30, 2004 to $2.6&nbsp;billion
for the six months ended June 30, 2005. This increase is
principally the result of an increase of 310,800 and 35,400
high-speed Internet and digital video customers, respectively,
as well as price increases for video and high-speed Internet
services, and is offset partially by a decrease of 190,100
analog video customers. The cable system sales to Atlantic
Broadband Finance, LLC, which closed in March and April 2004
(referred to in this section as the &#147;System Sales&#148;)
reduced the increase in revenues by $29 million. Our goal is to
increase revenues by improving customer service which we believe
will stabilize our analog video customer base, implementing
price increases on certain services and packages and increasing
the number of customers who purchase high-speed Internet
services, digital video and advanced products and services such
as telephone, VOD, high definition television and digital video
recorder service.
</FONT>

<P align="center"><FONT size="2">54
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Average monthly revenue per analog video customer
increased to $72.38 for the six months ended June&nbsp;30, 2005
from $65.39 for the six months ended June&nbsp;30, 2004
primarily as a result of incremental revenues from advanced
services and price increases. Average monthly revenue per analog
video customer represents total revenue for the six months ended
during the respective period, divided by six, divided by the
average number of analog video customers during the respective
period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues by service offering were as follows
(dollars in millions):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Six Months Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2005 over 2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%&nbsp;of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%&nbsp;of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Video
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,703</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,695</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High-speed Internet
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">140</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">141</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Video revenues consist primarily of revenues from
analog and digital video services provided to our non-commercial
customers. Video revenues increased by $8&nbsp;million for the
six months ended June&nbsp;30, 2005 compared to the six months
ended June&nbsp;30, 2004. Approximately $68&nbsp;million of the
increase was the result of price increases and incremental video
revenues from existing customers and approximately
$8&nbsp;million resulted from an increase in digital video
customers. The increases were offset by decreases of
approximately $21&nbsp;million resulting from the System Sales
and approximately an additional $47&nbsp;million related to a
decrease in analog video customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues from high-speed Internet services
provided to our non-commercial customers increased
$92&nbsp;million, or 26%, from $349&nbsp;million for the six
months ended June&nbsp;30, 2004 to $441&nbsp;million for the six
months ended June&nbsp;30, 2005. Approximately $68&nbsp;million
of the increase related to the increase in the average number of
customers receiving high-speed Internet services, whereas
approximately $27&nbsp;million related to the increase in
average price of the service. The increase in high-speed
Internet revenues was reduced by approximately $3&nbsp;million
as a result of the System Sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising sales revenues consist primarily of
revenues from commercial advertising customers, programmers and
other vendors. Advertising sales increased $8&nbsp;million, or
6%, from $132&nbsp;million for the six months ended June 30,
2004 to $140&nbsp;million for the six months ended June&nbsp;30,
2005, primarily as a result of an increase in new advertising
sales customers and in advertising rates. The increase was
offset by a decrease of $1&nbsp;million as a result of the
System Sales. For the six months ended June&nbsp;30, 2005 and
2004, we received $7 million and $6&nbsp;million in advertising
sales revenues from vendors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Commercial revenues consist primarily of revenues
from cable video and high-speed Internet services to our
commercial customers. Commercial revenues increased
$20&nbsp;million, or 18%, from $114&nbsp;million for the six
months ended June 30, 2004 to $134&nbsp;million for the six
months ended June&nbsp;30, 2005, primarily as a result of an
increase in commercial high-speed Internet revenues. The
increase was reduced by approximately $2&nbsp;million as a
result of the System Sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other revenues consist of revenues from franchise
fees, telephone revenue, equipment rental, customer
installations, home shopping, dial-up Internet service, late
payment fees, wire maintenance fees and other miscellaneous
revenues. Other revenues increased $13&nbsp;million, or 8%, from
$163&nbsp;million for the six months ended June&nbsp;30, 2004 to
$176&nbsp;million for the six months ended June&nbsp;30, 2005.
The increase was primarily the result of an increase in
telephone revenue of $6&nbsp;million, installation revenue of
$5&nbsp;million and franchise fees of $4&nbsp;million and was
partially offset by approximately $2 million as a result of the
System Sales.
</FONT>

<P align="center"><FONT size="2">55
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Operating
Expenses.&nbsp;&nbsp;</FONT></I><FONT size="2">Operating
expenses increased $101&nbsp;million, or 10%, from
$1.0&nbsp;billion for the six months ended June&nbsp;30, 2004 to
$1.1&nbsp;billion for the six months ended June&nbsp;30, 2005.
The increase in operating expenses was reduced by
$12&nbsp;million as a result of the System Sales. Programming
costs included in the accompanying condensed consolidated
statements of operations were $709&nbsp;million and
$663&nbsp;million, representing 29% of total costs and expenses
for each of the six months ended June&nbsp;30, 2005 and 2004,
respectively. Key expense components as a percentage of revenues
were as follows (dollars in millions):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Six Months Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2005 over 2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Programming
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">709</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Service
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">369</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">316</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Programming costs consist primarily of costs paid
to programmers for analog, premium, digital channels, VOD and
pay-per-view programming. The increase in programming costs of
$46&nbsp;million, or 7%, for the six months ended June&nbsp;30,
2005 over the six months ended June&nbsp;30, 2004 was a result
of price increases, particularly in sports programming,
partially offset by decreases in analog video customers.
Additionally, the increase in programming costs was reduced by
$9&nbsp;million as a result of the System Sales. Programming
costs were offset by the amortization of payments received from
programmers in support of launches of new channels of
$18&nbsp;million and $28&nbsp;million for the six months ended
June&nbsp;30, 2005 and 2004, respectively. Programming costs for
the six months ended June&nbsp;30, 2004 also include a
$4&nbsp;million reduction related to the settlement of a dispute
with TechTV, Inc. See Note 17 to the condensed consolidated
financial statements included elsewhere in this prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our cable programming costs have increased in
every year we have operated in excess of U.S. inflation and
cost-of-living increases, and we expect them to continue to
increase because of a variety of factors, including inflationary
or negotiated annual increases, additional programming being
provided to customers and increased costs to purchase
programming. In 2005, programming costs have increased and we
expect they will continue to increase at a higher rate than in
2004. These costs will be determined in part on the outcome of
programming negotiations in 2005 and will likely be subject to
offsetting events or otherwise affected by factors similar to
the ones mentioned in the preceding paragraph. Our increasing
programming costs will result in declining operating margins for
our video services to the extent we are unable to pass on cost
increases to our customers. We expect to partially offset any
resulting margin compression from our traditional video services
with revenue from advanced video services, increased high-speed
Internet revenues, advertising revenues and commercial service
revenues.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising sales expenses consist of costs
related to traditional advertising services provided to
advertising customers, including salaries, benefits and
commissions. Advertising sales expenses increased
$2&nbsp;million, or 4%, primarily as a result of increased
salary, benefit and commission costs. Service costs consist
primarily of service personnel salaries and benefits, franchise
fees, system utilities, Internet service provider fees,
maintenance and pole rent expense. The increase in service costs
of $53&nbsp;million, or 17%, resulted primarily from increased
labor and maintenance costs to support our infrastructure,
increased equipment maintenance, an increase in franchise fees
as a result of increased revenues and higher fuel prices. The
increase in service costs was reduced by $3&nbsp;million as a
result of the System Sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Selling, General and Administrative
Expenses.&nbsp;&nbsp;</FONT></I><FONT size="2">Selling, general
and administrative expenses increased by $10&nbsp;million, or
2%, from $483&nbsp;million for the six months ended
June&nbsp;30, 2004 to $493&nbsp;million for the six months ended
June&nbsp;30, 2005. The increase in selling, general and
administrative expenses was reduced
</FONT>

<P align="center"><FONT size="2">56
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">by $4&nbsp;million as a result of the System
Sales. Key components of expense as a percentage of revenues
were as follows (dollars in millions):
</FONT>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Six Months Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2005 over 2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">General and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">427</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">416</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Marketing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">General and administrative expenses consist
primarily of salaries and benefits, rent expense, billing costs,
call center costs, internal network costs, bad debt expense and
property taxes. The increase in general and administrative
expenses of $11&nbsp;million, or 3%, resulted primarily from
increases in professional fees of $15&nbsp;million and salaries
and benefits of $13&nbsp;million, offset by the System Sales of
$4&nbsp;million and decreases in bad debt expense of
$10&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Marketing expenses decreased $1&nbsp;million, or
1%, as a result of a decrease in expenditures as a result of
disciplined spending and more targeted marketing tactics. We
expect marketing expenditures to increase for the remainder of
2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Depreciation and
Amortization.</FONT></I><FONT size="2"> Depreciation and
amortization expense increased by $25&nbsp;million, or 3%, from
$734&nbsp;million for the six months ended June&nbsp;30, 2004 to
$759&nbsp;million for the six months ended June&nbsp;30, 2005.
The increase in depreciation was related to an increase in
capital expenditures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Asset Impairment
Charges.</FONT></I><FONT size="2"> Asset impairment charges for
the six months ended June&nbsp;30, 2005 represent the write-down
of assets related to three pending cable asset sales to fair
value less costs to sell. See Note 3 to the condensed
consolidated financial statements included elsewhere in this
prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">(Gain) Loss on Sale of Assets, Net.
</FONT></I><FONT size="2">Loss on sale of assets of
$4&nbsp;million for the six months ended June&nbsp;30, 2005
primarily represents the loss recognized on the disposition of
plant and equipment. Gain on sale of assets of $104&nbsp;million
for the six months ended June&nbsp;30, 2004 primarily represents
the pretax gain realized on the sale of systems to Atlantic
Broadband Finance, LLC which closed on March 1 and
April&nbsp;30, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Option Compensation Expense,
Net.</FONT></I><FONT size="2"> Option compensation expense of
$8&nbsp;million for the six months ended June&nbsp;30, 2005
primarily represents options expensed in accordance with SFAS
No.&nbsp;123, <I>Accounting for Stock-Based Compensation</I>.
Option compensation expense of $26&nbsp;million for the six
months ended June&nbsp;30, 2004 primarily represents the expense
of approximately $8&nbsp;million related to a stock option
exchange program, under which our employees were offered the
right to exchange all stock options (vested and unvested) issued
under the 1999 Charter Communications Option Plan and 2001 Stock
Incentive Plan that had an exercise price over $10 per share for
shares of restricted Charter Class&nbsp;A common stock or, in
some instances, cash. The exchange offer closed in February
2004. Additionally, during the six months ended June&nbsp;30,
2004, we recognized approximately $6&nbsp;million related to the
performance shares granted under the Charter Long-Term Incentive
Program and approximately $12&nbsp;million related to options
granted following the adoption of SFAS No.&nbsp;123.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Special Charges,
Net.</FONT></I><FONT size="2"> Special charges of
$2&nbsp;million for the six months ended June&nbsp;30, 2005
represents $4&nbsp;million of severance and related costs of our
management realignment offset by approximately $2&nbsp;million
related to an agreed upon cash discount on settlement of the
consolidated Federal Class&nbsp;Action and Federal Derivative
Action. See &#147;&#151; Legal Proceedings.&#148; Special
charges of $97 million for the six months ended June&nbsp;30,
2004 represents approximately $85&nbsp;million as part of the
terms set forth in memoranda of understanding regarding
settlement of the consolidated Federal Class&nbsp;Action and
Federal Derivative Action and approximately $9&nbsp;million of
litigation costs related to the tentative settlement of the
South Carolina national class action suit, which settlements are
subject to final
</FONT>

<P align="center"><FONT size="2">57
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">documentation and court approval and
approximately $3&nbsp;million of severance and related costs of
our workforce reduction.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest Expense,
Net.</FONT></I><FONT size="2"> Net interest expense increased by
$68&nbsp;million, or 8%, from $803&nbsp;million for the six
months ended June&nbsp;30, 2004 to $871&nbsp;million for the six
months ended June&nbsp;30, 2005. The increase in net interest
expense was a result of approximately $9&nbsp;million of
liquidated damages on our 5.875% convertible senior notes
combined with an increase in our average borrowing rate from
8.50% in the six months ended June&nbsp;30, 2004 to 8.89% in the
six months ended June&nbsp;30, 2005 and an increase of
$997&nbsp;million in average debt outstanding from
$18.4&nbsp;billion for the six months ended June&nbsp;30, 2004
compared to $19.4&nbsp;billion for the six months ended
June&nbsp;30, 2005. This was offset partially by
$27&nbsp;million in gains related to embedded derivatives in
Charter&#146;s 5.875% convertible senior notes issued in
November 2004. See Note 9 to the condensed consolidated
financial statements included elsewhere in this prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gain on Derivative Instruments and Hedging
Activities, Net.</FONT></I><FONT size="2"> Net gain on
derivative instruments and hedging activities decreased
$30&nbsp;million from $56 million for the six months ended
June&nbsp;30, 2004 to $26&nbsp;million for the six months ended
June&nbsp;30, 2005. The decrease is primarily a result of a
decrease in gains on interest rate agreements, which do not
qualify for hedge accounting under SFAS No.&nbsp;133, which
decreased from $54&nbsp;million for the six months ended
June&nbsp;30, 2004 to $25&nbsp;million for the six months ended
June&nbsp;30, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss on debt to equity
conversions.</FONT></I><FONT size="2"> Loss on debt to equity
conversions of $23 million for the six months ended
June&nbsp;30, 2004 represents the loss recognized from privately
negotiated exchanges in the aggregate of $30&nbsp;million
principal amount of Charter&#146;s 5.75% convertible senior
notes held by two unrelated parties for shares of Charter
Class&nbsp;A common stock, which resulted in the issuance of
more shares in the exchange transaction than would have been
issued under the original terms of the convertible senior notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gain (loss)&nbsp;on extinguishment of
debt.</FONT></I><FONT size="2"> Gain on extinguishment of debt
of $8 million for the six months ended June&nbsp;30, 2005
primarily represents approximately $10&nbsp;million related to
the issuance of Charter Operating notes in exchange for Charter
Holdings notes and approximately $4&nbsp;million related to the
repurchase of $131&nbsp;million principal amount of our 4.75%
convertible senior notes due 2006. These gains were offset by
approximately $5&nbsp;million of losses related to the
redemption of our subsidiary&#146;s, CC V Holdings, LLC, 11.875%
notes due 2008. See Note 6 to the condensed consolidated
financial statements included elsewhere in this prospectus. Loss
on extinguishment of debt of $21&nbsp;million for the six months
ended June 30, 2004 represents the write-off of deferred
financing fees and third party costs related to the Charter
Operating refinancing in April 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gain on investments.</FONT></I><FONT size="2">
Gain on investments of $21&nbsp;million for the six months ended
June&nbsp;30, 2005 primarily represents a gain realized on an
exchange of our interest in an equity investee for an investment
in a larger enterprise.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Minority Interest.</FONT></I><FONT size="2">
Minority interest represents the 2% accretion of the preferred
membership interests in our indirect subsidiary, CC VIII, LLC,
and in 2004, the pro rata share of the profits and losses of CC
VIII, LLC. Effective January&nbsp;1, 2005, we ceased recognizing
minority interest in earnings or losses of CC VIII for financial
reporting purposes until the dispute between Charter and
Mr.&nbsp;Allen regarding the preferred membership interests in
CC VIII is resolved. See Note 7 to the condensed consolidated
financial statements included elsewhere in this prospectus.
Additionally, reported losses allocated to minority interest on
the statement of operations are limited to the extent of any
remaining minority interest on the balance sheet related to
Charter Holdco. Because minority interest in Charter Holdco is
substantially eliminated, Charter absorbs substantially all
losses before income taxes that otherwise would be allocated to
minority interest. Subject to any changes in Charter
Holdco&#146;s capital structure, future losses will continue to
be substantially absorbed by Charter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Income Tax
Expense.&nbsp;&nbsp;</FONT></I><FONT size="2">Income tax expense
of $46&nbsp;million and $97&nbsp;million was recognized for the
six months ended June&nbsp;30, 2005 and 2004, respectively. The
income tax expense is recognized through increases in deferred
tax liabilities related to our investment in Charter Holdco, as
well as through current
</FONT>

<P align="center"><FONT size="2">58
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">federal and state income tax expense and
increases in the deferred tax liabilities of certain of our
indirect corporate subsidiaries. Additionally, the sale of
certain systems to Atlantic Broadband Finance, LLC on
March&nbsp;1, 2004 resulted in income tax expense of
$15&nbsp;million for the six months ended June&nbsp;30, 2004.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Net Loss.</FONT></I><FONT size="2"> Net loss
decreased by $1&nbsp;million, from $708&nbsp;million for the six
months ended June&nbsp;30, 2004 to $707&nbsp;million for the six
months ended June&nbsp;30, 2005 as a result of the factors
described above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Preferred stock
dividends.</FONT></I><FONT size="2"> On August&nbsp;31, 2001,
Charter issued 505,664 shares (and on February&nbsp;28, 2003
issued an additional 39,595 shares) of Series&nbsp;A Convertible
Redeemable Preferred Stock in connection with the Cable USA
acquisition, on which Charter pays quarterly cumulative cash
dividends at an annual rate of 5.75% if paid or 7.75% if accrued
on a liquidation preference of $100 per share. Beginning
January&nbsp;1, 2005, Charter is accruing the dividend on its
Series&nbsp;A Convertible Redeemable Preferred Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss Per Common
Share.</FONT></I><FONT size="2"> The loss per common share
decreased by $0.05, from $2.39 per common share for the six
months ended June&nbsp;30, 2004 to $2.34 per common share for
the six months ended June&nbsp;30, 2005 as a result of the
factors described above.
</FONT>

<P align="left">
<B><FONT size="2">Year Ended December&nbsp;31, 2004,
December&nbsp;31, 2003 and December&nbsp;31, 2002</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the percentages of
revenues that items in the accompanying consolidated statements
of operations constitute for the indicated periods (dollars in
millions, except per share and share data):
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,819</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Costs and Expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Operating (excluding depreciation and
    amortization)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Selling, general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,495</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,436</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Impairment of franchises
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(Gain) loss on sale of assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(86</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Unfavorable contracts and other settlements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(72</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,023</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">141</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,888</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">195</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income (loss) from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,046</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(41</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,322</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(95</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,670</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,557</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,503</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain (loss) on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(115</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on debt to equity conversions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain (loss) on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(31</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">267</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest, income taxes and
    cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,698</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(725</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,944</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">377</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before income taxes and cumulative effect of
    accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,679</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(348</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,768</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income tax benefit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">460</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,576</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,308</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cumulative effect of accounting change, net of tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(765</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(206</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">59
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,341</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,514</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Dividends on preferred stock&nbsp;&#151;
    redeemable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,345</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(242</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss per common share, basic and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14.47</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.82</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8.55</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted average common shares outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,291,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,597,519</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,440,261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Year Ended December&nbsp;31, 2004 Compared to
Year Ended December&nbsp;31, 2003</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Revenues.</FONT></I><FONT size="2"> Revenues
increased by $158&nbsp;million, or 3%, from $4.8&nbsp;billion
for the year ended December&nbsp;31, 2003 to $5.0&nbsp;billion
for the year ended December&nbsp;31, 2004. This increase is
principally the result of an increase of 318,800 and
2,800&nbsp;high-speed Internet customers and digital video
customers, respectively, as well as price increases for video
and high-speed Internet services, and is offset partially by a
decrease of 439,800 analog video customers. Included in the
reduction in analog video customers and reducing the increase in
digital video and high-speed Internet customers are 230,800
analog video customers, 83,300 digital video customers and
37,800 high-speed Internet customers sold in the cable system
sales to Atlantic Broadband Finance, LLC, which closed in March
and April 2004 (collectively, with the cable system sale to
WaveDivision Holdings, LLC in October 2003, referred to in this
section as the &#147;System Sales&#148;). The System Sales
reduced the increase in revenues by $160&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Average monthly revenue per analog video customer
increased from $61.92 for the year ended December&nbsp;31, 2003
to $68.02 for the year ended December&nbsp;31, 2004 primarily as
a result of price increases and incremental revenues from
advanced services. Average monthly revenue per analog video
customer represents total annual revenue, divided by twelve,
divided by the average number of analog video customers during
the respective period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues by service offering were as follows
(dollars in millions):
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004 over 2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%&nbsp;of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%&nbsp;of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Video
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,461</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(88</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High-speed Internet
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">263</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">204</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">336</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,819</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Video revenues consist primarily of revenues from
analog and digital video services provided to our non-commercial
customers. Video revenues decreased by $88&nbsp;million, or 3%,
from $3.5&nbsp;billion for the year ended December&nbsp;31, 2003
to $3.4&nbsp;billion for the year ended December&nbsp;31, 2004.
Approximately $116&nbsp;million of the decrease was the result
of the System Sales and approximately an additional
$65&nbsp;million related to a decline in analog video customers.
These decreases were offset by increases of approximately
$66&nbsp;million resulting from price increases and incremental
video revenues from existing customers and approximately
$27&nbsp;million resulting from an increase in digital video
customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues from high-speed Internet services
provided to our non-commercial customers increased
$185&nbsp;million, or 33%, from $556&nbsp;million for the year
ended December&nbsp;31, 2003 to $741&nbsp;million for the year
ended December&nbsp;31, 2004. Approximately $163&nbsp;million of
the increase related to the increase in the average number of
customers receiving high-speed Internet services, whereas
approximately $35&nbsp;million related to the increase in
average price of the service. The increase in high-speed
Internet revenues was reduced by approximately $12&nbsp;million
as a result of the System Sales.
</FONT>

<P align="center"><FONT size="2">60
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising sales revenues consist primarily of
revenues from commercial advertising customers, programmers and
other vendors. Advertising sales increased $26&nbsp;million, or
10%, from $263&nbsp;million for the year ended December&nbsp;31,
2003 to $289&nbsp;million for the year ended December&nbsp;31,
2004 primarily as a result of an increase in national
advertising campaigns and election related advertising. The
increase was offset by a decrease of $7&nbsp;million as a result
of the System Sales. For the years ended December&nbsp;31, 2004
and 2003, we received $16&nbsp;million and $15&nbsp;million,
respectively, in advertising revenue from vendors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Commercial revenues consist primarily of revenues
from cable video and high-speed Internet services to our
commercial customers. Commercial revenues increased
$34&nbsp;million, or 17%, from $204&nbsp;million for the year
ended December&nbsp;31, 2003, to $238&nbsp;million for the year
ended December&nbsp;31, 2004, primarily as a result of an
increase in commercial high-speed Internet revenues. The
increase was reduced by approximately $14&nbsp;million as a
result of the System Sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other revenues consist of revenues from franchise
fees, telephone revenue, equipment rental, customer
installations, home shopping, dial-up Internet service, late
payment fees, wire maintenance fees and other miscellaneous
revenues. For the year ended December&nbsp;31, 2004 and 2003,
franchise fees represented approximately 49% and 48%,
respectively, of total other revenues. Other revenues increased
$1&nbsp;million from $335&nbsp;million for the year ended
December&nbsp;31, 2003 to $336&nbsp;million for the year ended
December&nbsp;31, 2004. The increase was primarily the result of
an increase in home shopping and infomercial revenue and was
partially offset by approximately $11&nbsp;million as a result
of the System Sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Operating expenses.
</FONT></I><FONT size="2">Operating expenses increased
$128&nbsp;million, or 7%, from $2.0&nbsp;billion for the year
ended December&nbsp;31, 2003 to $2.1&nbsp;billion for the year
ended December&nbsp;31, 2004. The increase in operating expenses
was reduced by approximately $59&nbsp;million as a result of the
System Sales. Programming costs included in the accompanying
consolidated statements of operations were $1.3&nbsp;billion and
$1.2&nbsp;billion, representing 63% and 64% of total operating
expenses for the years ended December&nbsp;31, 2004 and 2003,
respectively. Key expense components as a percentage of revenues
were as follows (dollars in millions):
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004 over 2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%&nbsp;of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%&nbsp;of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Programming
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,249</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">98</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Service
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">615</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Programming costs consist primarily of costs paid
to programmers for analog, premium and digital channels and
pay-per-view programming. The increase in programming costs of
$70&nbsp;million, or 6%, for the year ended December&nbsp;31,
2004 over the year ended December&nbsp;31, 2003 was a result of
price increases, particularly in sports programming, an
increased number of channels carried on our systems, and an
increase in digital video customers, partially offset by a
decrease in analog video customers. Additionally, the increase
in programming costs was reduced by $42&nbsp;million as a result
of the System Sales. Programming costs were offset by the
amortization of payments received from programmers in support of
launches of new channels of $59&nbsp;million and
$62&nbsp;million for the years ended December&nbsp;31, 2004 and
2003, respectively. Programming costs for the year ended
December&nbsp;31, 2004 also include a $5&nbsp;million reduction
related to the settlement of a dispute with TechTV, Inc., a
related party. See Note&nbsp;22 to the consolidated financial
statements included elsewhere in this prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising sales expenses consist of costs
related to traditional advertising services provided to
advertising customers, including salaries, benefits and
commissions. Advertising sales expenses increased
$10&nbsp;million, or 11%, primarily as a result of increased
salary, benefit and commission costs. The increase in
advertising sales expenses was reduced by $2&nbsp;million as a
result of the System Sales. Service costs consist primarily of
service personnel salaries and benefits, franchise fees, system
utilities, Internet service provider fees, maintenance and pole
rental expense. The increase in service costs of
$48&nbsp;million, or 8%, resulted
</FONT>

<P align="center"><FONT size="2">61
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">primarily from additional activity associated
with ongoing infrastructure maintenance. The increase in service
costs was reduced by $15&nbsp;million as a result of the System
Sales.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Selling, general and administrative
expenses.</FONT></I><FONT size="2"> Selling, general and
administrative expenses increased by $31&nbsp;million, or 3%,
from $940&nbsp;million for the year ended December&nbsp;31, 2003
to $971&nbsp;million for the year ended December&nbsp;31, 2004.
The increase in selling, general and administrative expenses was
reduced by $22&nbsp;million as a result of the System Sales. Key
components of expense as a percentage of revenues were as
follows (dollars in millions):
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004 over 2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">General and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">849</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Marketing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">General and administrative expenses consist
primarily of salaries and benefits, rent expense, billing costs,
call center costs, internal network costs, bad debt expense and
property taxes. The increase in general and administrative
expenses of $16&nbsp;million, or 2%, resulted primarily from
increases in costs associated with our commercial business of
$21&nbsp;million, third party call center costs resulting from
increased emphasis on customer service of $10&nbsp;million and
bad debt expense of $10&nbsp;million offset by decreases in
costs associated with salaries and benefits of $21&nbsp;million
and rent expense of $3&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Marketing expenses increased $15&nbsp;million, or
14%, as a result of an increased investment in marketing and
branding campaigns.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Depreciation and
amortization.</FONT></I><FONT size="2"> Depreciation and
amortization expense increased by $42&nbsp;million, or 3%, to
$1.5&nbsp;billion in 2004. The increase in depreciation related
to an increase in capital expenditures, which was partially
offset by lower depreciation as the result of the System Sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Impairment of
franchises.</FONT></I><FONT size="2"> We performed an impairment
assessment during the third quarter of 2004. The use of lower
projected growth rates and the resulting revised estimates of
future cash flows in our valuation, primarily as a result of
increased competition, led to the recognition of a
$2.4&nbsp;billion impairment charge for the year ended
December&nbsp;31, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">(Gain) loss on sale of assets,
net.</FONT></I><FONT size="2"> Gain on sale of assets of
$86&nbsp;million for the year ended December&nbsp;31, 2004
primarily represents the pretax gain of $106&nbsp;million
realized on the sale of systems to Atlantic Broadband Finance,
LLC which closed in March and April&nbsp;2004 offset by losses
recognized on the disposition of plant and equipment. Loss on
sale of assets of $5&nbsp;million for the year ended
December&nbsp;31, 2003 represents the loss recognized on the
disposition of plant and equipment offset by a gain of
$21&nbsp;million recognized on the sale of cable systems in Port
Orchard, Washington which closed on October&nbsp;1, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Option compensation expense,
net.</FONT></I><FONT size="2"> Option compensation expense of
$31&nbsp;million for the year ended December&nbsp;31, 2004
primarily represents $22&nbsp;million related to options granted
and expensed in accordance with SFAS&nbsp;No.&nbsp;123,
<I>Accounting for Stock-Based Compensation</I>. Additionally,
during the year ended December&nbsp;31, 2004, we expensed
approximately $8&nbsp;million related to a stock option exchange
program, under which our employees were offered the right to
exchange all stock options (vested and unvested) issued under
the 1999 Charter Communications Option Plan and 2001 Stock
Incentive Plan that had an exercise price over $10&nbsp;per
share for shares of restricted Charter Class&nbsp;A common stock
or, in some instances, cash. The exchange offer closed in
February 2004. Option compensation expense of $4&nbsp;million
for the year ended December&nbsp;31, 2003 primarily represents
options expensed in accordance with SFAS&nbsp;No.&nbsp;123,
<I>Accounting for Stock-Based Compensation</I>. See Note&nbsp;19
to our consolidated financial statements included elsewhere in
this prospectus for more information regarding our option
compensation plans.
</FONT>

<P align="center"><FONT size="2">62
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Special charges,
net.</FONT></I><FONT size="2"> Special charges of
$104&nbsp;million for the year ended December&nbsp;31, 2004
represents approximately $85&nbsp;million of aggregate value of
the Charter Class&nbsp;A common stock and warrants to purchase
Charter Class&nbsp;A common stock contemplated to be issued as
part of a settlement of the consolidated federal class actions,
state derivative actions and federal derivative action lawsuits,
approximately $10&nbsp;million of litigation costs related to
the tentative settlement of a South Carolina national class
action suit, all of which settlements are subject to final
documentation and court approval and approximately
$12&nbsp;million of severance and related costs of our workforce
reduction and realignment. Special charges for the year ended
December&nbsp;31, 2004 were offset by $3&nbsp;million received
from a third party in settlement of a dispute. Special charges
of $21&nbsp;million for the year ended December&nbsp;31, 2003
represents approximately $26&nbsp;million of severance and
related costs of our workforce reduction partially offset by a
$5&nbsp;million credit from a settlement from the Internet
service provider Excite@Home related to the conversion of about
145,000 high-speed Internet customers to our Charter Pipeline
service in 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Unfavorable contracts and other settlements.
</FONT></I><FONT size="2">Unfavorable contracts and other
settlements of $5&nbsp;million for the year ended
December&nbsp;31, 2004 relates to changes in estimated legal
reserves established in connection with prior business
combinations, which based on an evaluation of current facts and
circumstances, are no longer required.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unfavorable contracts and other settlements of
$72&nbsp;million for the year ended December&nbsp;31, 2003
represents the settlement of estimated liabilities recorded in
connection with prior business combinations. The majority of
this benefit (approximately $52&nbsp;million) is due to the
renegotiation in 2003 of a major programming contract, for which
a liability had been recorded for the above market portion of
that agreement in connection with a 1999 and a 2000 acquisition.
The remaining benefit relates to the reversal of previously
recorded liabilities, which are no longer required.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest expense,
net.</FONT></I><FONT size="2"> Net interest expense increased by
$113&nbsp;million, or 7%, from $1.6&nbsp;billion for the year
ended December&nbsp;31, 2003 to $1.7&nbsp;billion for the year
ended December&nbsp;31, 2004. The increase in net interest
expense was a result of an increase in our average borrowing
rate from 7.99% in the year ended December&nbsp;31, 2003 to
8.66% in the year ended December&nbsp;31, 2004 partially offset
by a decrease of $306&nbsp;million in average debt outstanding
from $18.9&nbsp;billion in 2003 to $18.6&nbsp;billion in 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gain (loss) on derivative instruments and
hedging activities, net.</FONT></I><FONT size="2"> Net gain on
derivative instruments and hedging activities increased
$4&nbsp;million from a gain of $65&nbsp;million for the year
ended December&nbsp;31, 2003 to a gain of $69&nbsp;million for
the year ended December&nbsp;31, 2004. The increase is primarily
the result of an increase in gains on interest rate agreements
that do not qualify for hedge accounting under
SFAS&nbsp;No.&nbsp;133, <I>Accounting for Derivative Instruments
and Hedging Activities</I>, which increased from a gain of
$57&nbsp;million for the year ended December&nbsp;31, 2003 to a
gain of $65&nbsp;million for the year ended December&nbsp;31,
2004. This was coupled with a decrease in gains on interest rate
agreements, as a result of hedge ineffectiveness on designated
hedges, which decreased from $8&nbsp;million for the year ended
December&nbsp;31, 2003 to $4&nbsp;million for the year ended
December&nbsp;31, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss on debt to equity conversions.
</FONT></I><FONT size="2">Loss on debt to equity conversions of
$23&nbsp;million for the year ended December&nbsp;31, 2004
represents the loss recognized from privately negotiated
exchanges of a total of $30&nbsp;million principal amount of
Charter&#146;s 5.75%&nbsp;convertible senior notes held by two
unrelated parties for shares of Charter Class&nbsp;A common
stock. The exchange resulted in the issuance of more shares in
the exchange transaction than would have been issuable under the
original terms of the convertible senior notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gain (loss) on extinguishment of
debt.</FONT></I><FONT size="2"> Loss on extinguishment of debt
of $31&nbsp;million for the year ended December&nbsp;31, 2004
represents the write-off of deferred financing fees and third
party costs related to the Charter Communications Operating
refinancing in April 2004 and the redemption of our
5.75%&nbsp;convertible senior notes due 2005 in
December&nbsp;2004. Gain on extinguishment of debt of
$267&nbsp;million for the year ended December&nbsp;31, 2003
represents the gain realized on the purchase of an aggregate
$609&nbsp;million principal amount of our outstanding
convertible senior notes and $1.3&nbsp;billion principal amount
of Charter Holdings&#146; senior notes and senior discount notes
in consideration for an aggregate of $1.6&nbsp;billion principal
amount of 10.25%&nbsp;notes due
</FONT>

<P align="center"><FONT size="2">63
</FONT>

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<DIV align="left">
<FONT size="2">2010 issued by our indirect subsidiary,
CCH&nbsp;II. The gain is net of the write-off of deferred
financing costs associated with the retired debt of
$27&nbsp;million.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Other, net.</FONT></I><FONT size="2"> Net
other expense decreased by $19&nbsp;million from
$16&nbsp;million in 2003 to income of $3&nbsp;million in 2004.
Other expense in 2003 included $11&nbsp;million associated with
amending a revolving credit facility of our subsidiaries and
costs associated with terminated debt transactions that did not
recur in 2004. In addition, gains on equity investments
increased $7&nbsp;million in 2004 over 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Minority interest.</FONT></I><FONT size="2">
Minority interest represents the 2% accretion of the preferred
membership interests in our indirect subsidiary, CC&nbsp;VIII,
LLC, and since June&nbsp;6, 2003, the pro rata share of the
profits and losses of CC&nbsp;VIII, LLC. See &#147;Certain
Relationships and Related Transactions&nbsp;&#151; Transactions
Arising out of Our Organizational Structure and
Mr.&nbsp;Allen&#146;s Investment in Charter Communications, Inc.
and Its Subsidiaries&nbsp;&#151; Equity Put Rights&nbsp;&#151;
CC&nbsp;VIII.&#148; Reported losses allocated to minority
interest on the statement of operations are limited to the
extent of any remaining minority interest on the balance sheet
related to Charter Holdco. Because minority interest in Charter
Holdco was substantially eliminated at December&nbsp;31, 2003,
beginning in the first quarter of 2004, Charter began to absorb
substantially all future losses before income taxes that
otherwise would have been allocated to minority interest. For
the year ended December&nbsp;31, 2003, 53.5% of our losses were
allocated to minority interest. As a result of negative equity
at Charter Holdco during the year ended December&nbsp;31, 2004,
no additional losses were allocated to minority interest,
resulting in an additional $2.4&nbsp;billion of net losses.
Under our existing capital structure, future losses will be
substantially absorbed by Charter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Income tax benefit.</FONT></I><FONT size="2">
Income tax benefit of $103&nbsp;million and $110&nbsp;million
was recognized for the years ended December&nbsp;31, 2004 and
2003, respectively. The income tax benefits were realized as a
result of decreases in certain deferred tax liabilities related
to our investment in Charter Holdco as well as decreases in the
deferred tax liabilities of certain of our indirect corporate
subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The income tax benefit recognized in the year
ended December&nbsp;31, 2004 was directly related to the
impairment of franchises as discussed above. The deferred tax
liabilities decreased as a result of the write-down of franchise
assets for financial statement purposes, but not for tax
purposes. We do not expect to recognize a similar benefit
associated with the impairment of franchises in future periods.
However, the actual tax provision calculations in future periods
will be the result of current and future temporary differences,
as well as future operating results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The income tax benefit recognized in the year
ended December&nbsp;31, 2003 was directly related to the tax
losses allocated to Charter from Charter Holdco. In the second
quarter of 2003, Charter started receiving tax loss allocations
from Charter Holdco. Previously, the tax losses had been
allocated to Vulcan Cable&nbsp;III Inc. and Charter Investment,
Inc. in accordance with the Special Loss Allocations provided
under the Charter Holdco limited liability company agreement. We
do not expect to recognize a similar benefit related to our
investment in Charter Holdco after 2003 related to tax loss
allocations received from Charter Holdco, due to limitations
associated with our ability to offset future tax benefits
against the remaining deferred tax liabilities. However, the
actual tax provision calculations in future periods will be the
result of current and future temporary differences, as well as
future operating results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cumulative effect of accounting change, net of
tax.</FONT></I><FONT size="2"> Cumulative effect of accounting
change of $765&nbsp;million (net of minority interest effects of
$19&nbsp;million and tax effects of $91&nbsp;million) in 2004
represents the impairment charge recorded as a result of our
adoption of EITF Topic&nbsp;D-108.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Net loss.</FONT></I><FONT size="2"> Net loss
increased by $4.1&nbsp;billion from $238&nbsp;million in 2003 to
$4.3&nbsp;billion in 2004 as a result of the factors described
above. The impact to net loss in 2004 of the impairment of
franchises, cumulative effect of accounting change and the
reduction in losses allocated to minority interest was to
increase net loss by approximately $3.7&nbsp;billion. The impact
to net loss in 2003 of the gain on the sale of systems,
unfavorable contracts and settlements and gain on debt exchange,
net of income tax impact, was to decrease net loss by
$168&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Preferred stock
dividends.</FONT></I><FONT size="2"> On August&nbsp;31, 2001, in
connection with the Cable USA acquisition, Charter issued
505,664&nbsp;shares (and on February&nbsp;28, 2003 issued an
additional 39,595&nbsp;shares) of Series&nbsp;A
</FONT>

<P align="center"><FONT size="2">64
</FONT>

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<DIV align="left">
<FONT size="2">Convertible Redeemable Preferred Stock, on which
it pays or accrues a quarterly cumulative cash dividend at an
annual rate of 5.75% if paid or 7.75% if accrued on a
liquidation preference of $100&nbsp;per share.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss per common
share.</FONT></I><FONT size="2"> The loss per common share
increased by $13.65, from $0.82&nbsp;per common share for the
year ended December&nbsp;31, 2003 to $14.47&nbsp;per common
share for the year ended December&nbsp;31, 2004 as a result of
the factors described above.
</FONT>

<P align="left">
<B><FONT size="2">Year Ended December&nbsp;31, 2003 Compared to
Year Ended December&nbsp;31, 2002</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Revenues.</FONT></I><FONT size="2"> Revenues
increased by $253&nbsp;million, or 6%, from $4.6&nbsp;billion
for the year ended December&nbsp;31, 2002 to $4.8&nbsp;billion
for the year ended December&nbsp;31, 2003. This increase is
principally the result of an increase of 427,500 high-speed
Internet customers, as well as price increases for video and
high-speed Internet services, and is offset partially by a
decrease of 147,500 and 10,900 in analog and digital video
customers, respectively. Included within the decrease of analog
and digital video customers and reducing the increase of
high-speed Internet customers are 25,500 analog video customers,
12,500 digital video customers and 12,200 high-speed Internet
customers sold in the Port Orchard, Washington sale on
October&nbsp;1, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Average monthly revenue per analog video customer
increased from $56.91 for the year ended December&nbsp;31, 2002
to $61.92 for the year ended December&nbsp;31, 2003 primarily as
a result of price increases and incremental revenues from
advanced services. Average monthly revenue per analog video
customer represents total annual revenue, divided by twelve,
divided by the average number of analog video customers during
the respective period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues by service offering were as follows
(dollars in millions):
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003 over 2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% Change</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Video
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,461</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,420</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High-speed Internet
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">337</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">219</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">263</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">302</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(13</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">204</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,819</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Video revenues consist primarily of revenues from
analog and digital video services provided to our non-commercial
customers. Video revenues increased by $41&nbsp;million, or 1%,
for the year ended December&nbsp;31, 2003 compared to the year
ended December&nbsp;31, 2002. Video revenues increased
approximately $65&nbsp;million due to price increases and
incremental video revenues from existing customers and
$82&nbsp;million as a result of increases in the average number
of digital video customers, which were partially offset by a
decrease of approximately $106&nbsp;million as a result of a
decline in analog video customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues from high-speed Internet services
provided to our non-commercial customers increased
$219&nbsp;million, or 65%, from $337&nbsp;million for the year
ended December&nbsp;31, 2002 to $556&nbsp;million for the year
ended December&nbsp;31, 2003. Approximately $206&nbsp;million of
the increase related to the increase in the average number of
customers, whereas approximately $13&nbsp;million related to the
increase in the average price of the service. The increase in
customers was primarily due to the addition of high-speed
Internet customers in our existing service areas. We were also
able to offer this service to more of our customers, as the
estimated percentage of homes passed that could receive
high-speed Internet service increased from 82% as of
December&nbsp;31, 2002 to 87% as of December&nbsp;31, 2003 as a
result of our system upgrades.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising sales revenues consist primarily of
revenues from commercial advertising customers, programmers and
other vendors. Advertising sales decreased $39&nbsp;million, or
13%, from $302&nbsp;million for the year ended December&nbsp;31,
2002, to $263&nbsp;million for the year ended December&nbsp;31,
2003, primarily as a
</FONT>

<P align="center"><FONT size="2">65
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">result of a decrease in advertising from vendors
of approximately $64&nbsp;million offset partially by an
increase in local advertising sales revenues of approximately
$25&nbsp;million. For the years ended December&nbsp;31, 2003 and
2002, we received $15&nbsp;million and $79&nbsp;million,
respectively, in advertising revenue from vendors.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Commercial revenues consist primarily of revenues
from video and high-speed Internet services to our commercial
customers. Commercial revenues increased $43&nbsp;million, or
27%, from $161&nbsp;million for the year ended December&nbsp;31,
2002, to $204&nbsp;million for the year ended December&nbsp;31,
2003, primarily due to an increase in commercial high-speed
Internet revenues.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other revenues consist of revenues from franchise
fees, equipment rental, customer installations, home shopping,
dial-up Internet service, late payment fees, wire maintenance
fees and other miscellaneous revenues. For the years ended
December&nbsp;31, 2003 and 2002, franchise fees represented
approximately 48% and 46%, respectively, of total other
revenues. Other revenues decreased $11&nbsp;million, or 3%, from
$346&nbsp;million for the year ended December&nbsp;31, 2002 to
$335&nbsp;million for the year ended December&nbsp;31, 2003. The
decrease was due primarily to a decrease in franchise fees after
an FCC ruling in March 2002, no longer requiring the collection
of franchise fees for high-speed Internet services. Franchise
fee revenues are collected from customers and remitted to
franchise authorities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The decrease in accounts receivable of 27%
compared to the increase in revenues of 6% is primarily due to
the timing of collection of receivables from programmers for
fees associated with the launching of their networks coupled
with our tightened credit and collections policy. These fees
from programmers are not recorded as revenue but, rather, are
recorded as reductions of programming expense on a straight-line
basis over the term of the contract. Programmer receivables
decreased $40&nbsp;million, or 57%, from $70&nbsp;million as of
December&nbsp;31, 2002 to $30&nbsp;million as of
December&nbsp;31, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Operating expenses.
</FONT></I><FONT size="2">Operating expenses increased
$145&nbsp;million, or 8%, from $1.8&nbsp;billion for the year
ended December&nbsp;31, 2002 to $2.0&nbsp;billion for the year
ended December&nbsp;31, 2003. Programming costs included in the
accompanying consolidated statements of operations were
$1.2&nbsp;billion and $1.2&nbsp;billion, representing 64% and
65% of total operating expenses for the years ended
December&nbsp;31, 2003 and 2002, respectively. Key expense
components as a percentage of revenues were as follows (dollars
in millions):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003 over 2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Programming
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,249</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,166</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Service
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">615</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">554</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Programming costs consist primarily of costs paid
to programmers for analog, premium and digital channels and
pay-per-view programs. The increase in programming costs of
$83&nbsp;million, or 7%, was due to price increases,
particularly in sports programming, and due to an increased
number of channels carried on our systems, partially offset by
decreases in analog and digital video customers. Programming
costs were offset by the amortization of payments received from
programmers in support of launches of new channels against
programming costs of $62&nbsp;million and $57&nbsp;million for
the years ended December&nbsp;31, 2003 and 2002, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising sales expenses consist of costs
related to traditional advertising services provided to
advertising customers, including salaries and benefits and
commissions. Advertising sales expenses increased
$1&nbsp;million, or 1%, primarily due to increased sales
commissions, taxes and benefits. Service costs consist primarily
of service personnel salaries and benefits, franchise fees,
system utilities, Internet service provider fees, maintenance
and pole rental expense. The increase in service costs of
$61&nbsp;million, or 11%, resulted primarily from additional
activity associated with ongoing infrastructure maintenance and
customer service, including activities associated with our
promotional programs.
</FONT>

<P align="center"><FONT size="2">66
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Selling, general and administrative
expenses.</FONT></I><FONT size="2"> Selling, general and
administrative expenses decreased by $23&nbsp;million, or 2%,
from $963&nbsp;million for the year ended December&nbsp;31, 2002
to $940&nbsp;million for the year ended December&nbsp;31, 2003.
Key components of expense as a percentage of revenues were as
follows (dollars in millions):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003 over 2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">General and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">810</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Marketing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(30</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">General and administrative expenses consist
primarily of salaries and benefits, rent expense, billing costs,
call center costs, internal network costs, bad debt expense and
property taxes. The increase in general and administrative
expenses of $23&nbsp;million, or 3%, resulted primarily from
increases in salaries and benefits of $4&nbsp;million, call
center costs of $25&nbsp;million and internal network costs of
$16&nbsp;million. These increases were partially offset by a
decrease in bad debt and collection expense of $27&nbsp;million
as a result of our strengthened credit policies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Marketing expenses decreased $46&nbsp;million, or
30%, due to reduced promotional activity related to our service
offerings including reductions in advertising, telemarketing and
direct sales activities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Depreciation and
amortization.</FONT></I><FONT size="2"> Depreciation and
amortization expense increased by $17&nbsp;million, or 1%, from
$1.4&nbsp;billion in 2002 to $1.5&nbsp;billion in 2003 due
primarily to an increase in depreciation expense related to
additional capital expenditures in 2003 and 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Impairment of
franchises.</FONT></I><FONT size="2"> We performed our annual
impairment assessments as of October&nbsp;1, 2002 and 2003.
Revised estimates of future cash flows and the use of a lower
projected long-term growth rate in our valuation led to a
$4.6&nbsp;billion impairment charge in the fourth quarter of
2002. Our 2003 assessment performed on October&nbsp;1, 2003 did
not result in an impairment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss on sale of assets,
net.</FONT></I><FONT size="2"> Loss on sale of assets for the
year ended December&nbsp;31, 2003 represents $26 million of
losses related to the disposition of fixed assets offset by the
$21&nbsp;million gain recognized on the sale of cable systems in
Port Orchard, Washington on October&nbsp;1, 2003. Loss on sale
of assets for the year ended December&nbsp;31, 2002 represents
losses related to the disposition of fixed assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Option compensation expense,
net.</FONT></I><FONT size="2"> Option compensation expense
decreased by $1&nbsp;million for the year ended
December&nbsp;31, 2003 compared to the year ended
December&nbsp;31, 2002. Option compensation expense includes
expense related to exercise prices on certain options that were
issued prior to our initial public offering in 1999 that were
less than the estimated fair values of our common stock at the
time of grant. Compensation expense was recognized over the
vesting period of such options and was recorded until the last
vesting period lapsed in April 2004. On January&nbsp;1, 2003, we
adopted SFAS&nbsp;No.&nbsp;123, <I>Accounting for Stock-Based
Compensation</I>, using the prospective method under which we
will recognize compensation expense of a stock-based award to an
employee over the vesting period based on the fair value of the
award on the grant date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Special charges,
net.</FONT></I><FONT size="2"> Special charges of
$21&nbsp;million for the year ended December&nbsp;31, 2003
represent approximately $26&nbsp;million of severance and
related costs of our ongoing initiative to reduce our workforce
partially offset by a $5&nbsp;million credit from a settlement
from the Internet service provider Excite@Home related to the
conversion of about 145,000 high-speed Internet customers to our
Charter Pipeline service in 2001. In the fourth quarter of 2002,
we recorded a special charge of $35&nbsp;million, of which
$31&nbsp;million was associated with our workforce reduction
program. The remaining $4&nbsp;million is related to legal and
other costs associated with our shareholder lawsuits and
governmental investigations.
</FONT>

<P align="center"><FONT size="2">67
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Unfavorable contracts and other
settlements.</FONT></I><FONT size="2"> Unfavorable contracts and
other settlements of $72&nbsp;million for the year ended
December&nbsp;31, 2003 represents the settlement of estimated
liabilities recorded in connection with prior business
combinations. The majority of this benefit (approximately
$52&nbsp;million) is due to the renegotiation in 2003 of a major
programming contract, for which a liability had been recorded
for the above market portion of that agreement in connection
with a 1999 and a 2000 acquisition. The remaining benefit
relates to the reversal of previously recorded liabilities,
which, based on an evaluation of current facts and
circumstances, are no longer required.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest expense,
net.</FONT></I><FONT size="2"> Net interest expense increased by
$54&nbsp;million, or 4%, from $1.5&nbsp;billion for the year
ended December&nbsp;31, 2002 to $1.6&nbsp;billion for the year
ended December&nbsp;31, 2003. The increase in net interest
expense was a result of increased average debt outstanding in
2003 of $18.9&nbsp;billion compared to $17.8&nbsp;billion in
2002, partially offset by a decrease in our average borrowing
rate from 8.02% in 2002 to 7.99% in 2003. The increased debt was
primarily used for capital expenditures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gain (loss) on derivative instruments and
hedging activities, net.</FONT></I><FONT size="2"> Net gain on
derivative instruments and hedging activities increased
$180&nbsp;million from a loss of $115&nbsp;million for the year
ended December&nbsp;31, 2002 to a gain of $65&nbsp;million for
the year ended December&nbsp;31, 2003. The increase is primarily
due to an increase in gains on interest rate agreements, which
do not qualify for hedge accounting under
SFAS&nbsp;No.&nbsp;133, <I>Accounting for Derivative Instruments
and Hedging Activities</I>, which increased from a loss of
$101&nbsp;million for the year ended December&nbsp;31, 2002 to a
gain of $57&nbsp;million for the year ended December&nbsp;31,
2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gain (loss) on extinguishment of
debt.</FONT></I><FONT size="2"> Net gain on extinguishment of
debt of $267&nbsp;million for the year ended December&nbsp;31,
2003 represents the gain realized on the purchase, in a
non-monetary transaction, of a total of $609&nbsp;million
principal amount of our outstanding convertible senior notes and
$1.3&nbsp;billion principal amount of Charter Holdings&#146;
senior notes and senior discount notes in consideration for a
total of $1.6&nbsp;billion principal amount of 10.25%&nbsp;notes
due 2010 issued by our indirect subsidiary, CCH&nbsp;II. The
gain is net of the write-off of deferred financing costs
associated with the retired debt of $27&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Other expense, net.</FONT></I><FONT size="2">
Other expense increased by $12&nbsp;million from $4&nbsp;million
in 2002 to $16&nbsp;million in 2003. This increase is primarily
due to increases in costs associated with amending a revolving
credit facility of our subsidiaries and costs associated with
terminated debt transactions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Minority interest.</FONT></I><FONT size="2">
Minority interest represents the allocation of losses to the
minority interest based on ownership of Charter Holdco, the 10%
dividend on preferred membership units in our indirect
subsidiary, Charter Helicon, LLC and the 2% accretion of the
preferred membership interests in our indirect subsidiary, CC
VIII, LLC, and since June&nbsp;6, 2003, the pro rata share of
the profits of CC VIII, LLC. See &#147;Certain Relationships and
Related Transactions&nbsp;&#151; Transactions Arising Out of Our
Organizational Structure and Mr.&nbsp;Allen&#146;s Investment in
Charter Communications, Inc. and Its Subsidiaries&nbsp;&#151;
Equity Put Rights&nbsp;&#151; CC VIII.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Income tax benefit.</FONT></I><FONT size="2">
Income tax benefit of $110&nbsp;million and $460&nbsp;million
was recognized for the years ended December&nbsp;31, 2003 and
2002, respectively. The income tax benefits were realized as a
result of decreases in certain deferred tax liabilities related
to our investment in Charter Holdco as well as decreases in the
deferred tax liabilities of certain of our indirect corporate
subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The income tax benefit recognized in the year
ended December&nbsp;31, 2003 was directly related to the tax
losses allocated to Charter from Charter Holdco. In the second
quarter of 2003, Charter started receiving tax loss allocations
from Charter Holdco. Previously, the tax losses had been
allocated to Vulcan Cable&nbsp;III Inc. and Charter Investment,
Inc. in accordance with the Special Loss Allocations provided
under the Charter Holdco limited liability company agreement. We
do not expect to recognize a similar benefit after 2003 related
to tax loss allocations received from Charter Holdco, due to
limitations associated with our ability to offset future tax
benefits against the remaining deferred tax liabilities.
However, the actual tax provision calculations in future periods
will be the result of current and future temporary differences,
as well as future operating results.
</FONT>

<P align="center"><FONT size="2">68
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The income tax benefit recognized in the year
ended December&nbsp;31, 2002 was directly related to the
impairment of franchises associated with the adoption of
SFAS&nbsp;No.&nbsp;142.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cumulative effect of accounting change, net of
tax.</FONT></I><FONT size="2"> Cumulative effect of accounting
change in 2002 represents the impairment charge recorded as a
result of adopting SFAS&nbsp;No.&nbsp;142.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Net loss.</FONT></I><FONT size="2"> Net loss
decreased by $2.3&nbsp;billion, or 91%, from $2.5&nbsp;billion
in 2002 to $238&nbsp;million in 2003 as a result of the factors
described above. The impact of the gain on sale of system,
unfavorable contracts and settlements and gain on debt exchange,
net of minority interest and income tax impacts, was to decrease
net loss by $168&nbsp;million in 2003. The impact of the
impairment of franchises and the cumulative effect of accounting
change, net of minority interest and income tax impacts, was to
increase net loss by $1.6&nbsp;billion in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Preferred stock
dividends.</FONT></I><FONT size="2"> On August&nbsp;31, 2001, in
connection with the Cable USA acquisition, Charter issued
505,664&nbsp;shares (and on February&nbsp;28, 2003 issued an
additional 39,595&nbsp;shares) of Series&nbsp;A Convertible
Redeemable Preferred Stock on which it pays or accrues a
quarterly cumulative cash dividend at an annual rate of 5.75% if
paid or 7.75% if accrued on a liquidation preference of
$100&nbsp;per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss per common
share.</FONT></I><FONT size="2"> Loss per common share decreased
by $7.73, from $8.55&nbsp;per common share for the year ended
December&nbsp;31, 2002 to $0.82&nbsp;per common share for the
year ended December&nbsp;31, 2003 as a result of the factors
described above.
</FONT>

<P align="left">
<B><FONT size="2">Liquidity and Capital Resources</FONT></B>

<P align="left">
<B><FONT size="2">Introduction</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This section contains a discussion of our
liquidity and capital resources, including a discussion of our
cash position, sources and uses of cash, access to credit
facilities and other financing sources, historical financing
activities, cash needs, capital expenditures and outstanding
debt.
</FONT>

<P align="left">
<B><FONT size="2">Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a significant level of debt. For the
remainder of 2005, $15&nbsp;million of our debt matures, and in
2006, an additional $55&nbsp;million matures. In 2007 and
beyond, significant additional amounts will become due under our
remaining long-term debt obligations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;28, 2005, Charter Holdings and
its wholly owned subsidiaries, CCH&nbsp;I and CIH, completed the
exchange of approximately $6.8&nbsp;billion total principal
amount of outstanding debt securities of Charter Holdings in a
private placement for new debt securities. Holders of Charter
Holdings notes due in 2009-2010 tendered $3.4&nbsp;billion
principal amount of notes for $2.9&nbsp;billion principal amount
of new 11%&nbsp;CCH&nbsp;I notes due 2015. Holders of Charter
Holdings notes due 2011-2012 tendered $845&nbsp;million
principal amount of notes for $662&nbsp;million principal amount
of 11%&nbsp;CCH&nbsp;I notes due 2015. In addition, holders of
Charter Holdings notes due 2011-2012 tendered $2.5&nbsp;billion
principal amount of notes for $2.5&nbsp;billion principal amount
of new CIH notes. Each series of new CIH notes have the same
coupon and provisions for payment of cash interest as the series
of old Charter Holdings notes for which such CIH notes were
exchanged. In addition, the maturities for each series were
extended three years. On August&nbsp;17, 2005, CCO Holdings
issued $300&nbsp;million in debt securities, the proceeds of
which will be used for general corporate purposes, including the
potential payment of dividends or distributions to its parent
companies, including Charter Holdings, to pay interest expense.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our business requires significant cash to fund
debt service costs, capital expenditures and ongoing operations.
We have historically funded our debt service costs, operating
activities and capital requirements through cash flows from
operating activities, borrowings under the credit facilities,
sales of assets, issuances of debt and equity securities and
cash on hand. However, the mix of funding sources changes from
period to period. For the six&nbsp;months ended June&nbsp;30,
2005, we generated $181&nbsp;million of net cash flows from
operating activities after paying cash interest of
$744&nbsp;million. In addition, we used approximately
$542&nbsp;million for purchases of property, plant and
equipment. Finally, we had net cash flows used in financing
activities of $314&nbsp;million, which included, among other
things, approximately $705&nbsp;million in repayment of
outstanding borrowings under the Charter Operating revolving
credit facility. This repayment was the primary reason cash on
hand decreased by $610&nbsp;million to $40&nbsp;million at
June&nbsp;30, 2005. We expect that our mix of sources of
</FONT>

<P align="center"><FONT size="2">69
</FONT>

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<DIV align="left">
<FONT size="2">funds will continue to change in the future based
on overall needs relative to our cash flow and on the
availability of funds under our credit facilities, our access to
the debt and equity markets, the timing of possible asset sales
and our ability to generate cash flows from operating
activities. We continue to explore asset dispositions as one of
several possible actions that we could take in the future to
improve our liquidity, but we do not presently consider future
asset sales as a significant source of liquidity.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect that cash on hand, cash flows from
operating activities and the amounts available under our credit
facilities will be adequate to meet our cash needs in 2005. Cash
flows from operating activities and amounts available under our
credit facilities may not be sufficient to permit us to fund our
operations and satisfy our interest and principal repayment
obligations that come due in 2006 and, we believe, such amounts
will not be sufficient to fund our operations and satisfy such
interest and principal repayment obligations thereafter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is likely that we will require additional
funding to repay debt maturing after 2006. We are working with
our financial advisors to address such funding requirements.
However, there can be no assurance that such funding will be
available to us. Although Mr.&nbsp;Allen and his affiliates have
purchased equity from us in the past, Mr.&nbsp;Allen and his
affiliates are not obligated to purchase equity from, contribute
to or loan funds to us in the future.
</FONT>

<P align="left">
<B><FONT size="2">Credit Facilities and Covenants</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ability to operate depends upon, among other
things, our continued access to capital, including credit under
the Charter Operating credit facilities. These credit
facilities, along with our indentures, contain certain
restrictive covenants, some of which require us to maintain
specified financial ratios and meet financial tests and to
provide audited financial statements with an unqualified opinion
from our independent auditors. As of June&nbsp;30, 2005, we are
in compliance with the covenants under our indentures and credit
facilities and we expect to remain in compliance with those
covenants for the next twelve months. As of June&nbsp;30, 2005,
we had borrowing availability under our credit facilities of
$870&nbsp;million, none of which was restricted due to
covenants. Continued access to our credit facilities is subject
to our remaining in compliance with the covenants of these
credit facilities, including covenants tied to our operating
performance. If our operating performance results in
non-compliance with these covenants, or if any of certain other
events of non-compliance under these credit facilities or
indentures governing our debt occurs, funding under the credit
facilities may not be available and defaults on some or
potentially all of our debt obligations could occur. An event of
default under the covenants governing any of our debt
instruments could result in the acceleration of our payment
obligations under that debt and, under certain circumstances, in
cross-defaults under our other debt obligations, which could
have a material adverse effect on our consolidated financial
condition and results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating credit facilities required
us to redeem the CC V Holdings, LLC notes as a result of the
Charter Holdings leverage ratio becoming less than 8.75 to 1.0.
In satisfaction of this requirement, in March 2005, CC V
Holdings, LLC redeemed all of its outstanding notes, at 103.958%
of principal amount, plus accrued and unpaid interest to the
date of redemption. The total cost of the redemption including
accrued and unpaid interest was approximately $122&nbsp;million
and was funded with borrowings under the Charter Operating
credit facilities.
</FONT>

<P align="left">
<B><FONT size="2">Specific Limitations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ability to make interest payments on our
convertible senior notes, and, in 2006 and 2009, to repay the
outstanding principal of our convertible senior notes of
$25&nbsp;million and $863&nbsp;million, respectively, will
depend on our ability to raise additional capital and/or on
receipt of payments or distributions from Charter Holdco or its
subsidiaries, including CIH, CCH&nbsp;I, CCH&nbsp;II, CCO
Holdings and Charter Operating. Distributions by Charter&#146;s
subsidiaries to a parent company (including Charter and Charter
Holdco) for payment of principal on Charter&#146;s convertible
senior notes, however, are restricted by the indentures
governing the CIH notes, the CCH&nbsp;I notes, the CCH&nbsp;II
notes, CCO Holdings notes and Charter Operating notes, unless
under their respective indentures there is no default and a
specified leverage ratio test is met at the time of such event.
During the six months ended June&nbsp;30, 2005, Charter Holdings
distributed $60&nbsp;million to Charter Holdco. As of
June&nbsp;30, 2005, Charter Holdco was owed $62&nbsp;million in
intercompany
</FONT>

<P align="center"><FONT size="2">70
</FONT>

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<DIV align="left">
<FONT size="2">loans from its subsidiaries, which were available
to pay interest and principal on Charter&#146;s convertible
senior notes. In addition, Charter has $122&nbsp;million of
governmental securities pledged as security for the next five
semi-annual interest payments on Charter&#146;s 5.875%
convertible senior notes.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the Charter Holdings
notes permit Charter Holdings to make distributions to Charter
Holdco for payment of interest or principal on the convertible
senior notes, only if, after giving effect to the distribution,
Charter Holdings can incur additional debt under the leverage
ratio of 8.75 to 1.0, there is no default under Charter
Holdings&#146; indentures and other specified tests are met. For
the quarter ended June&nbsp;30, 2005, there was no default under
Charter Holdings&#146; indentures and other specified tests were
met. However, Charter Holdings did not meet the leverage ratio
of 8.75 to 1.0 based on June&nbsp;30, 2005 financial results. As
a result, distributions from Charter Holdings to Charter or
Charter Holdco are currently restricted and will continue to be
restricted until that test is met. During this restriction
period, the indentures governing the Charter Holdings notes
permit Charter Holdings and its subsidiaries to make specified
investments in Charter Holdco or Charter, up to an amount
determined by a formula, as long as there is no default under
the indentures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with the registration rights
agreement entered into with our initial sale, we were required
to register for resale by April&nbsp;21, 2005 our 5.875%
convertible senior notes due 2009, issued in November 2004.
Since these convertible notes were not registered by that date,
we paid or will pay liquidated damages totaling $0.5 million
through July&nbsp;14, 2005, the day prior to the effective date
of the registration statement. In addition, in accordance with
the share lending agreement entered into in connection with the
initial sale of our 5.875% convertible senior notes due 2009, we
were required to register by April&nbsp;1, 2005 150 million
shares of our Class&nbsp;A common stock that Charter was
obligated to lend to Citigroup Global Markets Limited
(&#147;CGML&#148;) at CGML&#146;s request. Because this
registration statement was not declared effective by such date,
we paid liquidated damages totaling $11&nbsp;million from
April&nbsp;2, 2005 through July&nbsp;17, 2005, the day before
the effective date of the registration statement. The liquidated
damages were recorded as interest expense in the condensed
consolidated statements of operations included elsewhere in this
prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our significant amount of debt could negatively
affect our ability to access additional capital in the future.
No assurances can be given that we will not experience liquidity
problems if we do not obtain sufficient additional financing on
a timely basis as our debt becomes due or because of adverse
market conditions, increased competition or other unfavorable
events. If, at any time, additional capital or borrowing
capacity is required beyond amounts internally generated or
available under our credit facilities or through additional debt
or equity financings, we would consider:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">issuing equity that would significantly dilute
    existing shareholders;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">issuing convertible debt or some other securities
    that may have structural or other priority over our existing
    notes and may also significantly dilute Charter&#146;s existing
    shareholders;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">further reducing our expenses and capital
    expenditures, which may impair our ability to increase revenue;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">selling assets; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">requesting waivers or amendments with respect to
    our credit facilities, the availability and terms of which would
    be subject to market conditions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the above strategies are not successful, we
could be forced to restructure our obligations or seek
protection under the bankruptcy laws. In addition, if we need to
raise additional capital through the issuance of equity or find
it necessary to engage in a recapitalization or other similar
transaction, our shareholders could suffer significant dilution
and our noteholders might not receive principal and interest
payments to which they are contractually entitled.
</FONT>

<P align="left">
<B><FONT size="2">Issuance of Charter Operating Notes in
Exchange for Charter Holdings Notes; Repurchase of Convertible
Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March and June 2005, our subsidiary, Charter
Operating, consummated exchange transactions with a small number
of institutional holders of Charter Holdings 8.25%&nbsp;senior
notes due 2007 pursuant to
</FONT>

<P align="center"><FONT size="2">71
</FONT>

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<DIV align="left">
<FONT size="2">which Charter Operating issued, in private
placement transactions, approximately $333&nbsp;million
principal amount of new notes with terms identical to Charter
Operating&#146;s 8.375%&nbsp;senior second lien notes due 2014
in exchange for approximately $346&nbsp;million of the Charter
Holdings 8.25%&nbsp;senior notes due 2007. In addition, during
the six months ended June&nbsp;30, 2005, we repurchased, in
private transactions, from a small number of institutional
holders, a total of $131&nbsp;million principal amount of our
4.75% convertible senior notes due 2006. Approximately
$25&nbsp;million principal amount of these notes remain
outstanding.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Sale of Assets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March&nbsp;2004, we closed the sale of certain
cable systems in Florida, Pennsylvania, Maryland, Delaware and
West Virginia to Atlantic Broadband Finance, LLC. We closed the
sale of an additional cable system in New York to Atlantic
Broadband Finance, LLC in April&nbsp;2004. The total net
proceeds from the sale of all of these systems were
approximately $735&nbsp;million. The proceeds were used to repay
a portion of our revolving credit facilities.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Summary of Outstanding Contractual
    Obligations</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes our payment
obligations as of December&nbsp;31, 2004 under our long-term
debt and certain other contractual obligations and commitments
(dollars in millions).
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Payments by Period</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Less than</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1-3</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">3-5</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">More than</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1&nbsp;Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Years</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Years</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">5&nbsp;Years</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Contractual Obligations</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Long-Term Debt Principal Payments(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">917</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,946</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Long-Term Debt Interest Payments(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,109</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,332</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,975</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Payments on Interest Rate Instruments(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Capital and Operating Lease Obligations(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Programming Minimum Commitments(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,579</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">719</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">542</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,937</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,142</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,835</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The table presents maturities of long-term debt
    outstanding as of December&nbsp;31, 2004 and does not reflect
    the effects of the March 2005 redemption of the CC&nbsp;V
    Holdings, LLC notes. Refer to &#147;Description of Certain
    Indebtedness&#148; and Notes&nbsp;9 and 23 to our
    December&nbsp;31, 2004 consolidated financial statements
    included in this prospectus for a description of our long-term
    debt and other contractual obligations and commitments.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Interest payments on variable debt are estimated
    using amounts outstanding at December&nbsp;31, 2004 and the
    average implied forward London Interbank Offering Rate (LIBOR)
    rates applicable for the quarter during the interest rate reset
    based on the yield curve in effect at December&nbsp;31, 2004.
    Actual interest payments will differ based on actual LIBOR rates
    and actual amounts outstanding for applicable periods.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents amounts we will be required to pay
    under our interest rate hedge agreements estimated using the
    average implied forward LIBOR rates applicable for the quarter
    during the interest rate reset based on the yield curve in
    effect at December&nbsp;31, 2004.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">We pay programming fees under multi-year
    contracts ranging generally from three to six years typically
    based on a flat fee per customer, which may be fixed for the
    term or may in some cases, escalate over the term. Programming
    costs included in the accompanying statements of operations were
    $1.3&nbsp;billion, $1.2&nbsp;billion and $1.2&nbsp;billion for
    the years ended December&nbsp;31, 2004, 2003 and 2002,
    respectively. Certain of our programming agreements are based on
    a flat fee per month or have guaranteed minimum payments. The
    table sets forth the aggregate guaranteed minimum commitments
    under our programming contracts.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">72
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">&#147;Other&#148; represents other guaranteed
    minimum commitments, which consist primarily of commitments to
    our billing services vendors.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following items are not included in the
contractual obligations table because the obligations are not
fixed and/ or determinable due to various factors discussed
below. However, we incur these costs as part of our operations:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">We also rent utility poles used in our
    operations. Generally, pole rentals are cancelable on short
    notice, but we anticipate that such rentals will recur. Rent
    expense incurred for pole rental attachments for the years ended
    December&nbsp;31, 2004, 2003 and 2002, was $43&nbsp;million,
    $40&nbsp;million and $41&nbsp;million, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">We pay franchise fees under multi-year franchise
    agreements based on a percentage of revenues earned from video
    service per year. We also pay other franchise related costs,
    such as public education grants under multi-year agreements.
    Franchise fees and other franchise-related costs included in the
    accompanying statements of operations were $164&nbsp;million,
    $162&nbsp;million and $160&nbsp;million for the years ended
    December&nbsp;31, 2004, 2003 and 2002, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">We also have $166&nbsp;million in letters of
    credit, primarily to our various worker&#146;s compensation,
    property casualty and general liability carriers as collateral
    for reimbursement of claims. These letters of credit reduce the
    amount we may borrow under our credit facilities.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Historical Operating, Financing and
    Investing Activities</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We held $40&nbsp;million in cash and cash
equivalents as of June&nbsp;30, 2005 compared to
$650&nbsp;million as of December&nbsp;31, 2004. The decrease in
cash and cash equivalents reflects the repayment of
approximately $705&nbsp;million of outstanding borrowings under
the Charter Operating revolving credit facility through a series
of transactions in February&nbsp;2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Operating
Activities.</FONT></I><FONT size="2"> Net cash provided by
operating activities increased $13&nbsp;million, or 8%, from
$168&nbsp;million for the six months ended June&nbsp;30, 2004 to
$181&nbsp;million for the six months ended June&nbsp;30, 2005.
For the six months ended June&nbsp;30, 2005, net cash provided
by operating activities increased primarily as a result of
changes in operating assets and liabilities that used
$92&nbsp;million less cash during the six months ended
June&nbsp;30, 2005 than the corresponding period in 2004
combined with an increase in revenue over cash costs year over
year partially offset by an increase in cash interest expense of
$117&nbsp;million over the corresponding prior period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash provided by operating activities
decreased $293&nbsp;million, or 38%, from $765&nbsp;million for
the year ended December&nbsp;31, 2003 to $472&nbsp;million for
the year ended December&nbsp;31, 2004. For the year ended
December&nbsp;31, 2004, net cash provided by operating
activities decreased primarily as a result of changes in
operating assets and liabilities that provided $83&nbsp;million
less cash during the year ended December&nbsp;31, 2004 than the
corresponding period in 2003 and an increase in cash interest
expense of $203&nbsp;million over the corresponding prior
period. The change in operating assets and liabilities is
primarily the result of the benefit in the year ended
December&nbsp;31, 2003 from collection of receivables from
programmers related to network launches, while accounts
receivable remained essentially flat in the year ended
December&nbsp;31, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash provided by operating activities for the
years ended December&nbsp;31, 2003 and 2002 was
$765&nbsp;million and $748&nbsp;million, respectively. Operating
activities provided $17&nbsp;million more cash in 2003 than in
2002 primarily due to an increase in revenue over cash costs
year over year partially offset by changes in operating assets
and liabilities that provided $82&nbsp;million less cash in 2003
than in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Investing
Activities.</FONT></I><FONT size="2"> Net cash used by investing
activities for the six months ended June&nbsp;30, 2005 was
$477&nbsp;million and net cash provided by investing activities
for the six months ended June&nbsp;30, 2004 was
$273&nbsp;million. Investing activities used $750&nbsp;million
more cash during the six months ended June&nbsp;30, 2005 than
the corresponding period in 2004 primarily as a result of
proceeds from the sale of certain cable
</FONT>

<P align="center"><FONT size="2">73
</FONT>

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<DIV align="left">
<FONT size="2">systems to Atlantic Broadband Finance, LLC in
2004 offset by increased cash used for capital expenditures in
2005.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash used in investing activities for the
year ended December&nbsp;31, 2004 and 2003 was $243&nbsp;million
and $817&nbsp;million, respectively. Investing activities used
$574&nbsp;million less cash during the year ended
December&nbsp;31, 2004 than the corresponding period in 2003
primarily as a result of cash provided by proceeds from the sale
of certain cable systems to Atlantic Broadband Finance, LLC and
increased cash used for capital expenditures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash used in investing activities for the
years ended December&nbsp;31, 2003 and 2002 was
$817&nbsp;million and $2.4&nbsp;billion, respectively. Investing
activities used $1.5&nbsp;billion less cash in 2003 than in 2002
primarily as a result of reductions in capital expenditures and
acquisitions. Purchases of property, plant and equipment used
$1.3&nbsp;billion less cash in 2003 than in 2002 as a result of
reduced rebuild and upgrade activities and our efforts to reduce
capital expenditures. Payments for acquisitions used
$139&nbsp;million less cash in 2003 than in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Financing
Activities.</FONT></I><FONT size="2"> Net cash used in financing
activities decreased $130&nbsp;million from $444&nbsp;million
for the six months ended June&nbsp;30, 2004 to $314&nbsp;million
for the six months ended June&nbsp;30, 2005. The decrease in
cash used during the six months ended June&nbsp;30, 2005 as
compared to the corresponding period in 2004, was primarily the
result of a decrease in payments for debt issuance costs and in
net repayments of long-term debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash provided by financing activities for the
year ended December&nbsp;31, 2004 was $294&nbsp;million and the
net cash used in financing activities for the year ended
December&nbsp;31, 2003 was $142&nbsp;million. The increase in
cash provided during the year ended December&nbsp;31, 2004, as
compared to the corresponding period in 2003, was primarily the
result of an increase in borrowings of long-term debt and
proceeds from issuance of debt reduced by repayments of
long-term debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash used in financing activities was
$142&nbsp;million for the year ended December&nbsp;31, 2003,
whereas net cash provided by financing activities for the year
ended December&nbsp;31, 2002 was $1.9&nbsp;billion. Financing
activities provided $2.1&nbsp;billion less cash in 2003 than in
2002. The decrease in cash provided in 2003 compared to 2002 was
primarily due to a decrease in borrowings of long-term debt.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Capital Expenditures</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have significant ongoing capital expenditure
requirements. However, we experienced a significant decline in
such requirements starting in 2003. This decline was primarily
the result of a substantial reduction in rebuild costs as our
network had been largely upgraded and rebuilt in prior years.
Capital expenditures, excluding acquisitions of cable systems,
were $542&nbsp;million, $390&nbsp;million, $924&nbsp;million,
$854&nbsp;million and $2.2&nbsp;billion for the six months ended
June&nbsp;30, 2005 and 2004 and the years ended
December&nbsp;31, 2004, 2003 and 2002, respectively. The
majority of the capital expenditures in 2004 and 2003 related to
our customer premise equipment costs. The majority of the
capital expenditures in 2002 related to our rebuild and upgrade
program and purchases of customer premise equipment. Capital
expenditures for the six months ended June&nbsp;30, 2005
increased as compared to the six months ended June&nbsp;30, 2004
as a result of increased spending on support capital related to
our investment in service improvements; scalable infrastructure
related to telephone services, VOD and digital simulcast; and
customer premise equipment primarily related to the continued
demand for advanced digital set-top terminals. See the table
below for more details.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upgrading our cable systems has enabled us to
offer digital television, high-speed Internet services, VOD,
interactive services, additional channels and tiers, expanded
pay-per-view options and telephone services to a larger customer
base. Our capital expenditures are funded primarily from cash
flows from operating activities, the issuance of debt and
borrowings under credit facilities. In addition, during the six
months ended June&nbsp;30, 2005 and 2004 and the years ended
December&nbsp;31, 2004, 2003 and 2002, our liabilities related
to capital expenditures increased $45&nbsp;million and decreased
$52&nbsp;million, $43&nbsp;million, $33&nbsp;million and
$55&nbsp;million, respectively.
</FONT>

<P align="center"><FONT size="2">74
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2005, we expect capital expenditures to be
approximately $1&nbsp;billion. The increase in capital
expenditures for 2005 compared to 2004 is the result of expected
increases in telephone services and deployment of advanced
digital set-top terminals. We expect that the nature of these
expenditures will continue to be composed primarily of purchases
of customer premise equipment, support capital and for scalable
infrastructure costs. We expect to fund capital expenditures for
2005 primarily from cash flows from operating activities and
borrowings under our credit facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have adopted capital expenditure disclosure
guidance, which was developed by eleven publicly traded cable
system operators, including Charter, with the support of the
National Cable&nbsp;&#38; Telecommunications Association
(&#147;NCTA&#148;). The disclosure is intended to provide more
consistency in the reporting of operating statistics in capital
expenditures and customers among peer companies in the cable
industry. These disclosure guidelines are not required
disclosure under GAAP, nor do they impact our accounting for
capital expenditures under GAAP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents our major capital
expenditures categories in accordance with NCTA disclosure
guidelines for the six months ended June&nbsp;30, 2005 and 2004
and the years ended December&nbsp;31, 2004, 2003 and 2002
(dollars in millions):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months</FONT></B></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">For the Years Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Customer premise equipment(a)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">226</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Scalable infrastructure(b)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Line extensions(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Upgrade/ Rebuild(d)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Support capital(e)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">144</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total capital expenditures(f)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">542</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">390</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">924</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">854</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,167</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Customer premise equipment includes costs
    incurred at the customer residence to secure new customers,
    revenue units and additional bandwidth revenues. It also
    includes customer installation costs in accordance with
    SFAS&nbsp;51 and customer premise equipment (e.g., set-top
    terminals and cable modems, etc.).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(b)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Scalable infrastructure includes costs, not
    related to customer premise equipment or our network, to secure
    growth of new customers, revenue units and additional bandwidth
    revenues or provide service enhancements (e.g., headend
    equipment).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(c)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Line extensions include network costs associated
    with entering new service areas (e.g., fiber/coaxial cable,
    amplifiers, electronic equipment, make-ready and design
    engineering).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(d)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Upgrade/rebuild includes costs to modify or
    replace existing fiber/coaxial cable networks, including
    betterments.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(e)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Support capital includes costs associated with
    the replacement or enhancement of non-network assets due to
    technological and physical obsolescence (e.g., non-network
    equipment, land, buildings and vehicles).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(f)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Represents all capital expenditures made during
    the six&nbsp;months ended June&nbsp;30, 2005 and 2004 and the
    years ended December&nbsp;31, 2004, 2003 and 2002, respectively.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Interest Rate Risk</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are exposed to various market risks, including
fluctuations in interest rates. We use interest rate risk
management derivative instruments, such as interest rate swap
agreements and interest rate collar agreements (collectively
referred to herein as interest rate agreements) as required
under the terms of the credit facilities of our subsidiaries.
Our policy is to manage interest costs using a mix of fixed and
variable rate debt. Using interest rate swap agreements, we
agree to exchange, at specified intervals through 2007,
</FONT>

<P align="center"><FONT size="2">75
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">the difference between fixed and variable
interest amounts calculated by reference to an agreed-upon
notional principal amount. Interest rate collar agreements are
used to limit our exposure to, and to derive benefits from,
interest rate fluctuations on variable rate debt to within a
certain range of rates. Interest rate risk management agreements
are not held or issued for speculative or trading purposes.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005 and December&nbsp;31,
2004, our long-term debt totaled approximately
$19.2&nbsp;billion and $19.5&nbsp;billion, respectively. This
debt was comprised of approximately $5.4&nbsp;billion and
$5.5&nbsp;billion of credit facility debt, $12.9&nbsp;billion
and $13.0&nbsp;billion accreted value of high-yield notes and
$863&nbsp;million and $990&nbsp;million accreted value of
convertible senior notes, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005 and December&nbsp;31,
2004, the weighted average interest rate on the credit facility
debt was approximately 7.2% and 6.8%, the weighted average
interest rate on the high-yield notes was approximately 9.9% and
9.9%, and the weighted average interest rate on the convertible
senior notes was approximately 5.8% and 5.7%, respectively,
resulting in a blended weighted average interest rate of 9.0%
and 8.8%, respectively. The interest rate on approximately 81%
and 83% of the total principal amount of our debt was
effectively fixed, including the effects of our interest rate
hedge agreements as of June&nbsp;30, 2005 and December&nbsp;31,
2004, respectively. The fair value of our high-yield notes was
$10.9&nbsp;billion and $12.2&nbsp;billion at June&nbsp;30, 2005
and December&nbsp;31, 2004, respectively. The fair value of our
convertible senior notes was $562&nbsp;million and
$1.1&nbsp;billion at June&nbsp;30, 2005 and December&nbsp;31,
2004, respectively. The fair value of our credit facilities was
$5.4&nbsp;billion and $5.5&nbsp;billion at June&nbsp;30, 2005
and December&nbsp;31, 2004, respectively. The fair value of
high-yield and convertible notes is based on quoted market
prices, and the fair value of the credit facilities is based on
dealer quotations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not hold or issue derivative instruments
for trading purposes. We do, however, have certain interest rate
derivative instruments that have been designated as cash flow
hedging instruments. Such instruments effectively convert
variable interest payments on certain debt instruments into
fixed payments. For qualifying hedges, SFAS No.&nbsp;133 allows
derivative gains and losses to offset related results on hedged
items in the consolidated statement of operations. We have
formally documented, designated and assessed the effectiveness
of transactions that receive hedge accounting. For the six
months ended June&nbsp;30, 2005 and 2004 and the years ended
December&nbsp;31, 2004, 2003 and 2002, net gain (loss) on
derivative instruments and hedging activities includes gains of
$1&nbsp;million, $2&nbsp;million, $4&nbsp;million and
$8&nbsp;million and losses of $14&nbsp;million, respectively,
which represent cash flow hedge ineffectiveness on interest rate
hedge agreements arising from differences between the critical
terms of the agreements and the related hedged obligations.
Changes in the fair value of interest rate agreements designated
as hedging instruments of the variability of cash flows
associated with floating-rate debt obligations that meet the
effectiveness criteria of SFAS No.&nbsp;133 are reported in
accumulated other comprehensive loss. For the six months ended
June&nbsp;30, 2005 and 2004 and the years ended
December&nbsp;31, 2004, 2003 and 2002, a gain of
$9&nbsp;million, $29&nbsp;million, $42&nbsp;million and
$48&nbsp;million and losses of $65&nbsp;million, respectively,
related to derivative instruments designated as cash flow
hedges, was recorded in accumulated other comprehensive loss and
minority interest. The amounts are subsequently reclassified
into interest expense as a yield adjustment in the same period
in which the related interest on the floating-rate debt
obligations affects earnings (losses).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain interest rate derivative instruments are
not designated as hedges as they do not meet the effectiveness
criteria specified by SFAS No.&nbsp;133. However, management
believes such instruments are closely correlated with the
respective debt, thus managing associated risk. Interest rate
derivative instruments not designated as hedges are marked to
fair value, with the impact recorded as gain (loss)&nbsp;on
derivative instruments and hedging activities in our statements
of operations. For the six months ended June&nbsp;30, 2005 and
2004 and the years ended December&nbsp;31, 2004, 2003 and 2002,
net gain (loss)&nbsp;on derivative instruments and hedging
activities includes gains of $25&nbsp;million, $54&nbsp;million,
$65&nbsp;million and $57&nbsp;million and losses of
$101&nbsp;million, respectively, for interest rate derivative
instruments not designated as hedges.
</FONT>

<P align="center"><FONT size="2">76
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The table set forth below summarizes the fair
values and contract terms of financial instruments subject to
interest rate risk maintained by us as of December&nbsp;31, 2004
(dollars in millions):
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fair Value at</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2006</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2007</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2008</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2009</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Thereafter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Fixed Rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,260</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,631</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,726</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Average Interest Rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.75</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.25</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.93</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.85</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.32</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Variable Rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">630</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">780</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,315</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,065</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Average Interest Rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.47</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.08</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.17</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.45</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.73</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.40</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest Rate Instruments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Variable to Fixed Swaps
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">873</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(69</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Average Pay Rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.94</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.04</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.07</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Average Receive Rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.36</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.08</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.85</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notional amounts of interest rate instruments
do not represent amounts exchanged by the parties and, thus, are
not a measure of our exposure to credit loss. The amounts
exchanged are determined by reference to the notional amount and
the other terms of the contracts. The estimated fair value
approximates the costs (proceeds)&nbsp;to settle the outstanding
contracts. Interest rates on variable debt are estimated using
the average implied forward London Interbank Offering Rate
(LIBOR)&nbsp;rates for the year of maturity based on the yield
curve in effect at December&nbsp;31, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At June&nbsp;30, 2005 and December&nbsp;31, 2004,
we had outstanding $2.2&nbsp;billion and $2.7&nbsp;billion and
$20&nbsp;million and $20&nbsp;million, respectively, in notional
amounts of interest rate swaps and collars, respectively. The
notional amounts of interest rate instruments do not represent
amounts exchanged by the parties and, thus, are not a measure of
exposure to credit loss. The amounts exchanged are determined by
reference to the notional amount and the other terms of the
contracts.
</FONT>

<P align="left">
<B><FONT size="2">Recently Issued Accounting Standards</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 2004, the Financial Accounting
Standards Board (&#147;FASB&#148;) issued SFAS No.&nbsp;153,
<I>Exchanges of Non-monetary Assets&nbsp;&#151; An Amendment of
APB&nbsp;No.&nbsp;29</I>. This statement eliminates the
exception to fair value for exchanges of similar productive
assets and replaces it with a general exception for exchange
transactions that do not have commercial substance&nbsp;&#151;
that is, transactions that are not expected to result in
significant changes in the cash flows of the reporting entity.
We adopted this pronouncement effective April&nbsp;1, 2005. The
exchange transaction discussed in Note&nbsp;3 to our
consolidated financial statements included elsewhere in this
prospectus, was accounted for under this standard.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December&nbsp;2004, the Financial Accounting
Standards Board issued the revised SFAS No.&nbsp;123,
<I>Share-Based Payment</I>, which addresses the accounting for
share-based payment transactions in which a company receives
employee services in exchange for (a)&nbsp;equity instruments of
that company or (b)&nbsp;liabilities that are based on the fair
value of the company&#146;s equity instruments or that may be
settled by the issuance of such equity instruments. This
statement will be effective for us beginning January&nbsp;1,
2006. Because we adopted the fair value recognition provisions
of SFAS No.&nbsp;123 on January&nbsp;1, 2003, we do not expect
this revised standard to have a material impact on our financial
statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not believe that any other recently issued,
but not yet effective accounting pronouncements, if adopted,
would have a material effect on our accompanying financial
statements.
</FONT>

<P align="center"><FONT size="2">77
</FONT>

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<DIV align="left">
<A name='112'></A>
</DIV>

<!-- link1 "BUSINESS" -->

<P align="center">
<B><FONT size="2">BUSINESS</FONT></B>

<P align="left">
<B><FONT size="2">Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a broadband communications company
operating in the United States, with approximately
6.19&nbsp;million customers at June&nbsp;30, 2005. Through our
broadband network of coaxial and fiber optic cable, we offer our
customers traditional cable video programming (analog and
digital, which we refer to as &#147;video&#148; service),
high-speed cable Internet access, advanced broadband cable
services (such as video on demand (&#147;VOD&#148;), high
definition television service and interactive television) and,
in some of our markets, we offer telephone service. See
&#147;Business&nbsp;&#151; Products and Services&#148; for
further description of these terms, including
&#147;customers.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At June&nbsp;30, 2005, we served approximately
5.94&nbsp;million analog video customers, of which approximately
2.69&nbsp;million were also digital video customers. We also
served approximately 2.02&nbsp;million high-speed Internet
customers (including approximately 234,600 who received only
high-speed Internet services). We also provided telephone
service to approximately 67,800&nbsp;customers as of that date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At June&nbsp;30, 2005, our investment in cable
properties, long-term debt, accumulated deficit and total
shareholders&#146; deficit were $15.9&nbsp;billion,
$19.2&nbsp;billion, $9.9&nbsp;billion and $5.1&nbsp;billion,
respectively. Our working capital deficit was $919&nbsp;million
at June&nbsp;30, 2005. For the six months ended June&nbsp;30,
2005, our revenues, net loss applicable to common stock and loss
per common share were approximately $2.6&nbsp;billion,
$709&nbsp;million and $2.34, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a history of net losses. Further, we
expect to continue to report net losses for the foreseeable
future. Our net losses are principally attributable to
insufficient revenue to cover the interest costs we incur
because of our high level of debt, the depreciation expenses
that we incur resulting from the capital investments we have
made in our cable properties, and the amortization and
impairment of our franchise intangibles. We expect that these
expenses (other than impairment of franchises) will remain
significant, and we therefore expect to continue to report net
losses for the foreseeable future. Additionally, because
minority interest in Charter Holdco was substantially eliminated
at December&nbsp;31, 2003, beginning in the first quarter of
2004, we absorb substantially all future losses before income
taxes that otherwise would have been allocated to minority
interest. This resulted in an additional $2.4&nbsp;billion of
net loss for the year ended December&nbsp;31, 2004. Under our
existing capital structure, future losses will continue to be
absorbed by Charter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter was organized as a Delaware corporation
in 1999 and completed an initial public offering of its
Class&nbsp;A common stock in November 1999. Charter is a holding
company whose principal assets are an approximate 47% equity
interest and a 100% voting interest in Charter Holdco, the
direct parent of Charter Holdings. Charter also holds certain
preferred equity and indebtedness of Charter Holdco that mirror
the terms of securities issued by Charter. Charter&#146;s only
business is to act as the sole manager of Charter Holdco and its
subsidiaries. As sole manager, Charter controls the affairs of
Charter Holdco and its subsidiaries. Certain of our subsidiaries
commenced operations under the &#147;Charter
Communications&#148; name in 1994, and our growth to date has
been primarily due to acquisitions and business combinations,
most notably acquisitions completed from 1999 through 2001,
pursuant to which we acquired a total of approximately
5.5&nbsp;million customers. We do not expect to make any
significant acquisitions in the foreseeable future, but plan to
evaluate opportunities to consolidate our operations through
exchanges of cable systems with other cable operators, as they
arise. We may also sell certain assets from time to time.
Paul&nbsp;G. Allen owns approximately 53% of Charter Holdco
through affiliated entities. His membership units are
convertible at any time for shares of our Class&nbsp;A common
stock on a one-for-one basis. Paul&nbsp;G. Allen controls
Charter with an as-converted common equity interest of
approximately 57% and a beneficial voting control interest of
approximately 93% as of June&nbsp;30, 2005.
</FONT>

<P align="left">
<B><FONT size="2">Business Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal financial goal is to maximize our
return on invested capital. To do so, we will focus on
increasing revenues, growing our customer base, improving
customer retention and enhancing customer
</FONT>

<P align="center"><FONT size="2">78
</FONT>

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<DIV align="left">
<FONT size="2">satisfaction by providing reliable, high-quality
service offerings, superior customer service and attractive
bundled offerings.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Specifically, in the near term, we are focusing
on:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">improving the overall value to our customers of
    our service offerings, relative to pricing;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">developing more sophisticated customer care
    capabilities through investment in our customer care and
    marketing infrastructure, including targeted marketing
    capabilities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">executing growth strategies for new services,
    including digital simulcast, VOD, telephone, and digital video
    recorder service (&#147;DVR&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">managing our operating costs by exercising
    discipline in capital and operational spending;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">identifying opportunities to continue to improve
    our balance sheet and liquidity.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have begun an internal operational improvement
initiative aimed at helping us gain new customers and retain
existing customers, which is focused on customer care, technical
operations and sales. We intend to increase efforts to focus
management attention on instilling a customer service oriented
culture throughout the company and to give those areas of our
operations increased priority of resources for staffing levels,
training budgets and financial incentives for employee
performance in those areas.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that our high-speed Internet service
will continue to provide a substantial portion of our revenue
growth in the near future. We also plan to continue to expand
our marketing of high-speed Internet service to the business
community, which we believe has shown an increasing interest in
high-speed Internet service and private network services.
Additionally, we plan to continue to prepare additional markets
for telephone launches in 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe we offer our customers an excellent
choice of services through a variety of bundled packages,
particularly with respect to our digital video and high-speed
Internet services as well as telephone in certain markets. Our
digital platform enables us to offer a significant number and
variety of channels, and we offer customers the opportunity to
choose among groups of channel offerings, including premium
channels, and to combine selected programming with other
services such as high-speed Internet, high definition television
(in selected markets) and VOD (in selected markets).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We continue to pursue opportunities to improve
our liquidity. Our efforts in this regard resulted in the
completion of a number of transactions in 2004 and 2005, as
follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the September 2005 exchange by Charter Holdings,
    CCH I and CIH of approximately $6.8&nbsp;billion in total
    principal amount of outstanding debt securities of Charter
    Holdings in a private placement for new debt securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the August 2005 sale by our subsidiaries, CCO
    Holdings and CCO Holdings Capital Corp., of $300&nbsp;million of
    8 3/4% senior notes due 2013;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the March and June 2005 issuance of
    $333&nbsp;million of Charter Operating notes in exchange for
    $346&nbsp;million of Charter Holdings notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the March and June 2005 repurchase of
    $131&nbsp;million of our 4.75%&nbsp;convertible senior notes due
    2006 leaving $25&nbsp;million in principal amount outstanding;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the March 2005 redemption of all of CC&nbsp;V
    Holdings, LLC&#146;s outstanding 11.875% senior discount notes
    due 2008 at a total cost of $122&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the December 2004 sale by our subsidiaries, CCO
    Holdings and CCO Holdings Capital Corp. of $550&nbsp;million of
    senior floating rate notes due 2010;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the November 2004 sale of $862.5&nbsp;million of
    5.875% convertible senior notes due 2009 and the December 2004
    redemption of all of our outstanding 5.75% convertible senior
    notes due 2005 ($588&nbsp;million principal amount);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the April 2004 sale of $1.5&nbsp;billion of
    senior second lien notes by our subsidiary, Charter Operating,
    together with the concurrent refinancing of its credit
    facilities;&nbsp;and
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">79
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the sale in the first half of 2004 of non-core
    cable systems for $735&nbsp;million, the proceeds of which were
    used to reduce indebtedness.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Charter Background</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1998, Mr.&nbsp;Allen acquired approximately
99% of the non-voting economic interests in Marcus Cable, which
owned various operating subsidiaries that served approximately
1.1&nbsp;million customers. Thereafter, in December 1998, Mr.
Allen acquired, through a series of transactions, approximately
94% of the equity interests of Charter Investment, Inc., which
controlled various operating subsidiaries that serviced
approximately 1.2&nbsp;million customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March and April of 1999, Mr.&nbsp;Allen
acquired the remaining interests in Marcus Cable and, through a
series of transactions, combined the Marcus companies with the
Charter companies. As a consequence, the former operating
subsidiaries of Marcus Cable and all of the cable systems they
owned came under the ownership of Charter Holdings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 1999, Charter was formed as a wholly
owned subsidiary of Charter Investment, Inc., and in November
1999, Charter completed its initial public offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1999 and 2000, Charter completed 16 cable
system acquisitions for a total purchase price of
$14.7&nbsp;billion including $9.1&nbsp;billion in cash, $3.3
billion of assumed debt, $1.9&nbsp;billion of equity interests
issued and Charter cable systems valued at $420&nbsp;million.
These transactions resulted in a net total increase of
approximately 3.9&nbsp;million customers as of their respective
dates of acquisition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 2001, Charter entered into several
agreements with AT&#38;T Broadband, LLC involving several
strategic cable system transactions that resulted in a net
addition of customers for our systems. In the AT&#38;T
transactions, which closed in June 2001, Charter acquired cable
systems from AT&#38;T Broadband serving approximately 551,000
customers for a total of $1.74 billion consisting of
$1.71&nbsp;billion in cash and a Charter cable system valued at
$25&nbsp;million. In 2001, Charter also acquired all of the
outstanding stock of Cable USA, Inc. and the assets of certain
of its related affiliates in exchange for consideration valued
at $100&nbsp;million (consisting of Series&nbsp;A preferred
stock with a face amount of $55&nbsp;million and the remainder
in cash and assumed debt).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2002, Charter purchased additional cable
systems in Illinois serving approximately 28,000 customers, for
a total cash purchase price of approximately $63&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For additional information regarding
Charter&#146;s acquisitions see &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations &#151; Acquisitions.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2003 and 2004, Charter sold certain non-core
cable systems serving approximately 264,100 customers in
Florida, Pennsylvania, Maryland, Delaware, West Virginia and
Washington for an aggregate consideration of approximately
$826&nbsp;million.
</FONT>

<P align="left">
<B><FONT size="2">Products and Services</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We offer our customers traditional cable video
programming (analog and digital video) as well as high-speed
Internet services and in some areas advanced broadband services
such as high definition television, VOD and interactive
television. We sell our video programming and high-speed
Internet services on a subscription basis, with prices and
related charges, that vary primarily based on the types of
service selected, whether the services are sold as a
&#147;bundle&#148; versus on an &#147;&#224; la carte&#148;
basis, and the equipment necessary to receive the services, with
some variation in prices depending on geographic location. In
addition, we offer telephone service to a limited number of
customers.
</FONT>

<P align="center"><FONT size="2">80
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes our customer
statistics for analog and digital video, residential high-speed
Internet, and residential telephone as of June&nbsp;30, 2005 and
2004:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="62%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Approximate as of</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005(a)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004(a)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Cable Video Services:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Analog Video:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Residential (non-bulk) analog video customers(b)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,683,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,892,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Multi-dwelling (bulk)&nbsp;and commercial unit
    customers(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">259,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">240,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Analog video customers(b)(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,943,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,133,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Digital Video:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Digital video customers(d)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,685,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,650,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Non-Video Cable Services:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Residential high-speed Internet customers(e)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,022,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,711,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Telephone customers(f)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#147;Customers&#148; include all persons our
    corporate billing records show as receiving service (regardless
    of their payment status), except for complimentary accounts
    (such as our employees). In addition, at June&nbsp;30, 2005 and
    2004, &#147;customers&#148; include approximately 45,100 and
    58,700 persons whose accounts were over 60&nbsp;days past due in
    payment, approximately 8,200 and 6,300 persons whose accounts
    were over 90&nbsp;days past due in payment, and approximately
    4,500 and 2,000 of which were over 120&nbsp;days past due in
    payment, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(b)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#147;Residential (non-bulk) analog video
    customers&#148; include all customers who receive video
    services, except for complimentary accounts (such as our
    employees).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(c)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Included within &#147;video customers&#148; are
    those in commercial and multi-dwelling structures, which are
    calculated on an equivalent bulk unit (&#147;EBU&#148;) basis.
    EBU is calculated for a system by dividing the bulk price
    charged to accounts in an area by the most prevalent price
    charged to non-bulk residential customers in that market for the
    comparable tier of service. The EBU method of estimating analog
    video customers is consistent with the methodology used in
    determining costs paid to programmers and has been consistently
    applied year over year. As we increase our effective analog
    prices to residential customers without a corresponding increase
    in the prices charged to commercial service or multi-dwelling
    customers, our EBU count will decline even if there is no real
    loss in commercial service or multi-dwelling customers.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(d)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#147;Digital video customers&#148; include all
    households that have one or more digital set-top terminals.
    Included in &#147;digital video customers&#148; on June&nbsp;30,
    2005 and 2004 are approximately 9,700 and 11,400 customers,
    respectively, that receive digital video service directly
    through satellite transmission.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(e)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#147;High-speed Internet customers&#148;
    represent those customers who subscribe to our high-speed
    Internet service. At June&nbsp;30, 2005 and 2004, approximately
    1,787,600 and 1,543,000 of these high-speed Internet customers,
    respectively, also receive video services from us and are
    included within our video statistics above.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(f)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#147;Telephone customers&#148; include all
    households receiving telephone service.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Video Services</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our video service offerings include the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Basic Analog Video.</FONT></I><FONT size="2">
    All of our video customers receive a package of basic
    programming, which generally consists of local broadcast
    television, local community programming, including governmental
    and public access, and limited satellite-delivered or
    non-broadcast channels, such as weather, shopping and religious
    services. Our basic channel line-up generally has between 15 and
    30&nbsp;channels.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">81
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Expanded Basic
    Video.</FONT></I><FONT size="2"> This expanded programming level
    includes a package of satellite-delivered or non-broadcast
    channels and generally has between 30 and 50 channels in
    addition to the basic channel line-up.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Premium Channels.</FONT></I><FONT size="2">
    These channels provide commercial-free movies, sports and other
    special event entertainment programming. Although we offer
    subscriptions to premium channels on an individual basis, we
    offer an increasing number of premium channel packages and we
    offer premium channels with our advanced services.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Pay-Per-View.</FONT></I><FONT size="2"> These
    channels allow customers to pay on a per event basis to view a
    single showing of a recently released movie, a one-time special
    sporting event, music concert or similar event on a
    commercial-free basis.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Digital Video.</FONT></I><FONT size="2"> We
    offer digital video service to our customers in several
    different service combination packages. All of our digital
    packages include a digital set-top terminal, an interactive
    electronic programming guide, an expanded menu of pay-per-view
    channels and the option to also receive digital packages which
    range from 4 to 30 additional video channels. We also offer our
    customers certain digital packages with one or more premium
    channels that give customers access to several different
    versions of the same premium channel. Some digital tier packages
    focus on the interests of a particular customer demographic and
    emphasize, for example, sports, movies, family or ethnic
    programming. In addition to video programming, digital video
    service enables customers to receive our advanced services such
    as VOD and high definition television. Other digital packages
    bundle digital television with our advanced services, such as
    high-speed Internet services.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Video On Demand and Subscription Video on
    Demand.</FONT></I><FONT size="2"> We offer VOD service, which
    allows customers to access hundreds of movies and other
    programming at any time with digital picture quality. In some
    systems we also offer subscription VOD (SVOD) for a monthly fee
    or included in a digital tier premium channel subscription.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">High Definition
    Television.</FONT></I><FONT size="2"> High definition television
    offers our digital customers video programming at a higher
    resolution than the standard analog or digital video image.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Digital Video
    Recorder.</FONT></I><FONT size="2"> DVR service enables
    customers to digitally record programming and to pause and
    rewind live programming.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">High-Speed Internet Services</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We offer high-speed Internet services to our
residential and commercial customers primarily via cable modems
attached to personal computers. We generally offer our
high-speed Internet service as Charter High-Speed
Internet<SUP>TM</SUP>. We also offer traditional dial-up
Internet access in a very limited number of our markets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We ended the second quarter of 2005 with 18%
penetration of high-speed Internet homes passed, an increase
from 16% penetration of high-speed Internet homes passed at
June&nbsp;30, 2004. This gave us a percentage increase in
high-speed Internet customers of 18% and an increase in
high-speed Internet revenues of 26% in the six months ended
June&nbsp;30, 2005 compared to the six months ended
June&nbsp;30, 2004.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Telephone Services</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We continue to deploy voice communications
services using VoIP to transmit digital voice signals over our
systems. At June&nbsp;30, 2005, our telephone service was
available to approximately 1.7&nbsp;million homes and we were
marketing to approximately 60% of those homes. We will continue
to prepare additional markets for VoIP launches in 2005.
</FONT>

<P align="center"><FONT size="2">82
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Commercial Services</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We offer integrated network solutions to
commercial and institutional customers. These solutions include
high-speed Internet and video services. In addition, we offer
high-speed Internet services to small businesses.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Sale of Advertising</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We receive revenues from the sale of local
advertising on satellite-delivered networks such as MTV&#174;,
CNN&#174; and ESPN&#174;. In any particular market, we generally
insert local advertising on up to 39 channels. Our system
rebuilds have increased the number of available channels on
which we are able to insert local advertising. We also provide
cross-channel advertising to some programmers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From time to time, certain of our vendors,
including equipment vendors, have purchased advertising from us.
For the six months ended June&nbsp;30, 2005 and the years ending
December&nbsp;31, 2004, 2003 and 2002, we had advertising
revenues from vendors of approximately $7&nbsp;million,
$16&nbsp;million, $15&nbsp;million and $79&nbsp;million,
respectively. These revenues resulted from purchases at market
rates pursuant to binding agreements.
</FONT>

<P align="left">
<B><FONT size="2">Pricing of Our Products and Services</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our revenues are derived principally from the
monthly fees our customers pay for the services we offer. A
one-time installation fee, which is sometimes waived or
discounted during certain promotional periods, is charged to new
customers. The prices we charge vary based on the level of
service the customer chooses and the geographic market. Most of
our pricing is reviewed and adjusted on an annual basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with the Federal Communications
Commission&#146;s rules, the prices we charge for cable-related
equipment, such as set-top terminals and remote control devices,
and for installation services are based on actual costs plus a
permitted rate of return.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although our cable service offerings vary across
the markets we serve because of various factors including
competition and regulatory factors, our services, when offered
on a stand-alone basis, are typically offered at monthly price
ranges, excluding franchise fees and other taxes, as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="9" align="center" nowrap><B><FONT size="1">Price Range as of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Service</FONT></B></TD>
    <TD></TD>
    <TD colspan="9" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2004</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="9" align="center" nowrap><B><FONT size="1">Price Range as of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="9" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2005</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Analog video packages
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">-
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Premium channels
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">-
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Pay-per-view events
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">-
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Digital video packages (including high-speed
    Internet service for higher tiers)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">-
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">112.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High-speed Internet service
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">-
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Video on demand (per selection)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">-
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High definition television
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">-
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Digital video recorder (&#147;DVR&#148;)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">-
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, from time to time we offer free
service or reduced-price service during promotional periods in
order to attract new customers.
</FONT>

<P align="left">
<B><FONT size="2">Our Network Technology</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the technological
capacity of our systems as of June&nbsp;30, 2005 based on a
percentage of homes passed:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">550 Megahertz</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Less than</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">750</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">870</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Two-way</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Two-way</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">550 Megahertz</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">660 Megahertz</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Megahertz</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Megahertz</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capability</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Enabled</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">42%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">45%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">92%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">87%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">83
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the upgrade of our systems over
the past several years, approximately 92% of the homes passed by
our systems have bandwidth of 550&nbsp;megahertz or greater.
This bandwidth capacity enables us to offer digital television,
high-speed Internet services and other advanced services. It
also enables us to offer up to 82&nbsp;analog channels, and even
more channels when our bandwidth is used for digital signal
transmissions. Our increased bandwidth also permits two-way
communication for Internet access, interactive services, and
potentially, telephone services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of our systems upgrade and partly as a
result of system sales, we reduced the number of headends that
serve our customers from 1,138 at January&nbsp;1, 2001 to 744 at
June&nbsp;30, 2005. Because headends are the control centers of
a cable system, where incoming signals are amplified, converted,
processed and combined for transmission to the customer,
reducing the number of headends reduces related equipment,
service personnel and maintenance expenditures. We believe that
the headend consolidation, together with our other upgrades,
allows us to provide enhanced picture quality and greater system
reliability. As a result of the upgrade, approximately 84% of
our customers were served by headends serving at least 10,000
customers as of June&nbsp;30, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, our cable systems
consisted of approximately 222,300 strand miles, including
approximately 53,600 strand miles of fiber optic cable, passing
approximately 12.3&nbsp;million households and serving
approximately 6.2&nbsp;million customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We adopted the hybrid fiber coaxial cable
(&#147;HFC&#148;) architecture as the standard for our systems
upgrades. HFC architecture combines the use of fiber optic cable
with coaxial cable. Fiber optic cable is a communication medium
that uses glass fibers to transmit signals over long distances
with minimum signal loss or distortion. Fiber optic cable has
excellent broadband frequency characteristics, noise immunity
and physical durability and can carry hundreds of video, data
and voice channels over extended distances. Coaxial cable is
less expensive and requires a more extensive signal
amplification in order to obtain the desired transmission levels
for delivering channels. In most systems, we deliver our signals
via fiber optic cable from the headend to a group of nodes, and
use coaxial cable to deliver the signal from individual nodes to
the homes passed served by that node. Our system design enables
a maximum of 500 homes passed to be served by a single node.
Currently, our average node serves approximately 385&nbsp;homes
passed. Our system design provides for six strands of fiber to
each node, with two strands activated and four strands reserved
for spares and future services. The design also provides reserve
capacity for the addition of future services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The primary advantages of HFC architecture over
traditional coaxial-only cable networks include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">increased bandwidth capacity, for more channels
    and other services;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">dedicated bandwidth for two-way services, which
    avoids reverse signal interference problems that can occur with
    two-way communication capability;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">improved picture quality and service reliability.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently maintain a national network
operations center to monitor our data networks and to further
our strategy of providing high quality service. Centralized
monitoring is increasingly important as we increase the number
of high-speed Internet customers utilizing two-way high-speed
Internet service. Our local dispatch centers focus primarily on
monitoring the HFC plant.
</FONT>

<P align="left">
<B><FONT size="2">Management of Our Systems</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Many of the functions associated with our
financial management are centralized, including accounting,
billing, finance and acquisitions, payroll, accounts payable and
benefits administration, information system design and support,
internal audit, purchasing, marketing, programming contract
administration and Internet service, network and circuits
administration. We operate with four divisions. Each division is
supported by operational, financial, marketing and engineering
functions.
</FONT>

<P align="left">
<B><FONT size="2">Customer Care</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have 36&nbsp;customer service locations,
including 14&nbsp;divisional contact centers that serve
approximately 97% of our customers. Our customer care centers
are managed divisionally by a Vice
</FONT>

<P align="center"><FONT size="2">84
</FONT>

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<DIV align="left">
<FONT size="2">President of Customer Care and are supported by a
corporate care team, which oversees and supports deployment and
execution of care strategies and initiatives on a company-wide
basis. This reflects a substantial consolidation of our customer
care function from over 300&nbsp;service centers in 2001. We
believe that this consolidation will allow us to improve the
consistency of our service delivery and customer satisfaction by
reducing or eliminating the logistical challenges and poor
economies of scale inherent in maintaining and supervising a
larger number of separately managed service centers.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Specifically, through this consolidation, we are
now able to service our customers 24&nbsp;hours a day, seven
days a week and utilize technologically advanced equipment that
we believe enhances interactions with our customers through more
intelligent call routing, data management, and forecasting and
scheduling capabilities. We believe this consolidation also
allows us to more effectively provide our customer care
specialists with ongoing training intended to improve complaint
resolution, equipment troubleshooting, sales of new and
additional services, and customer retention.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that, despite our consolidation, we
have not yet sufficiently improved in the area of customer care,
and that this lack of improvement has in part led to a continued
net loss of customers. Accordingly, we have begun an internal
operational improvement initiative aimed at helping us gain new
customers and retain existing customers, which is focused on
customer care, among other areas. We have and we intend to
continue to increase our efforts to focus management attention
on instilling a customer service oriented culture throughout the
company and to give those areas of our operations increased
priority of resources for staffing levels, training budgets and
financial incentives for employee performance in those areas.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In a further effort to better serve our
customers, we have also entered into outsource partnership
agreements with two key outsource providers. We believe the
establishment of these relationships expands our ability to
achieve our service objectives and increases our ability to
support marketing activities by providing additional capacity
available to support customer inquiries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also utilize our website to enhance customer
care by enabling customers to view and pay their bills online,
obtain useful information and perform various equipment
troubleshooting procedures.
</FONT>

<P align="left">
<B><FONT size="2">Sales and Marketing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the third quarter of 2004, Charter shifted
primary responsibility for implementing sales and marketing
strategies to the divisional and system level, with a single
corporate team to ensure compliance with guidelines established
by the corporate marketing department designed to promote
national branding consistency. Our marketing infrastructure is
intended to promote interaction, information flow and sharing of
best practices between our corporate office and our field
offices, which make strategic decisions as to when and how
marketing programs will be implemented.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Due to our focus in 2003 on certain other
operational matters and due to certain financial constraints, we
reduced spending in 2003 on marketing our products and services.
Marketing expenditures increased 14% for the year ended
December&nbsp;31, 2004 to $122&nbsp;million. Although marketing
expenditures decreased 1% to $66&nbsp;million for the six months
ended June&nbsp;30, 2005, as compared to the six months ended
June&nbsp;30, 2004, we expect marketing expenditures to increase
for the remainder of 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We monitor government regulation, customer
perception, competition, pricing and product preferences, among
other factors, to increase our responsiveness to our customers.
Our coordinated marketing strategies include door-to-door
solicitation, telemarketing, media advertising, e-marketing,
direct mail solicitation and retail locations. In 2004, we
increased our focus on marketing and selling our services
through consumer electronics retailers and other retailers that
sell televisions or cable modems.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2004, we introduced the first national
branding campaign in Charter&#146;s history. The &#147;Get
Hooked&#148; branding initiative was a key focal point of our
national marketing campaigns in 2004, with the
</FONT>

<P align="center"><FONT size="2">85
</FONT>

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<DIV align="left">
<FONT size="2">aim of promoting deeper market penetration and
increased revenue per customer. In 2004, our corporate team
produced eight national &#147;Get Hooked&#148; marketing
campaigns designed to:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Promote awareness and loyalty among existing
    customers and attract new customers;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Announce the availability of our advanced
    services as we roll them out in our systems;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Promote our advanced services (such as DVR, high
    definition television, telephone, VOD and SVOD) with the goal
    that our customers will view their cable connection as one-stop
    shopping for video, voice, high-speed Internet and interactive
    services; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Promote our bundling of digital video and
    high-speed Internet services and pricing strategies.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Programming</FONT></B>

<DIV>&nbsp;</DIV>

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    <TD>
    <B><I><FONT size="2">General</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that offering a wide variety of
programming is an important factor that influences a
customer&#146;s decision to subscribe to and retain our cable
services. We rely on market research, customer demographics and
local programming preferences to determine channel offerings in
each of our markets. We obtain basic and premium programming
from a number of suppliers, usually pursuant to a written
contract. Our programming contracts generally continue for a
fixed period of time, usually from three to ten years, and are
subject to negotiated renewal. Some program suppliers offer
financial incentives to support the launch of a channel and
ongoing marketing support or launch fees. We also negotiate
volume discount pricing structures. Programming costs are
usually payable each month based on calculations performed by us
and are subject to adjustment based on the results of periodic
audits by the programmers.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD>
    <B><I><FONT size="2">Costs</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Programming tends to be made available to us for
a license fee, which is generally paid based on the number of
customers to whom we make such programming available. Such
license fees may include &#147;volume&#148; discounts available
for higher numbers of customers, as well as discounts for
channel placement or service penetration. Some channels are
available without cost to us for a limited period of time, after
which we pay for the programming. For home shopping channels, we
receive a percentage of the amount our customers spend on home
shopping purchases.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our cable programming costs have increased, in
every year we have operated, in excess of customary inflationary
and cost-of-living type increases. We expect them to continue to
increase due to a variety of factors, including annual increases
imposed by programmers and additional programming being provided
to customers as a result of system rebuilds and bandwidth
reallocation, both of which increase channel capacity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In particular, sports programming costs have
increased significantly over the past several years. In
addition, contracts to purchase sports programming sometimes
contain built-in cost increases for programming added during the
term of the contract.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, we have absorbed increased
programming costs in large part through increased prices to our
customers. However, with the impact of competition and other
marketplace factors, there is no assurance that we will be able
to continue to do so. In order to maintain or mitigate
reductions of margins despite increasing programming costs, we
plan to continue to migrate certain program services from our
analog level of service to our digital tiers. As we migrate our
programming to our digital tier packages, certain programming
that was previously available to all of our customers via an
analog signal, may be part of an elective digital tier package.
As a result, the customer base upon which we pay programming
fees will proportionately decrease, and the overall expense for
providing that service would likewise decrease. Reductions in
the size of certain programming customer bases may result in the
loss of specific volume discount benefits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As measured by programming costs, and excluding
premium services (substantially all of which were renegotiated
and renewed in 2003), as of July&nbsp;7, 2005 approximately 9%
of our current programming contracts were expired, and
approximately another 21% are scheduled to expire at or before
the end of 2005. We plan to seek to renegotiate the terms of our
agreements with certain programmers as these
</FONT>

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<FONT size="2">agreements come due for renewal. There can be no
assurance that these agreements will be renewed on favorable or
comparable terms. To the extent that we are unable to reach
agreement with certain programmers on terms that we believe are
reasonable, we may be forced to remove such programming channels
from our line-up, which could result in a further loss of
customers. In addition, our inability to fully pass these
programming cost increases on to our customers would have an
adverse impact on our cash flow and operating margins.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Franchises</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, our systems operated
pursuant to a total of approximately 4,100 franchises, permits
and similar authorizations issued by local and state
governmental authorities. Each franchise, permit or similar
authorization is awarded by a governmental authority and such
governmental authority often must approve a transfer to another
party. Most franchises are subject to termination proceedings in
the event of a material breach. In addition, most franchises
require us to pay the granting authority a franchise fee of up
to 5.0% of revenues as defined in the various agreements, which
is the maximum amount that may be charged under the applicable
federal law. We are entitled to and generally do pass this fee
through to the customer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to the scheduled expiration of most
franchises, we initiate renewal proceedings with the granting
authorities. This process usually takes three years but can take
a longer period of time. The Communications Act provides for an
orderly franchise renewal process in which granting authorities
may not unreasonably withhold renewals. In connection with the
franchise renewal process, many governmental authorities require
the cable operator to make certain commitments. Historically we
have been able to renew our franchises without incurring
significant costs, although any particular franchise may not be
renewed on commercially favorable terms or otherwise. Our
failure to obtain renewals of our franchises, especially those
in the major metropolitan areas where we have the most
customers, could have a material adverse effect on our
consolidated financial condition, results of operations or our
liquidity, including our ability to comply with our debt
covenants. Approximately 11% of our franchises, covering
approximately 11% of our analog video customers were expired as
of June&nbsp;30, 2005. Approximately 4% of additional
franchises, covering approximately 5% of additional analog video
customers will expire on or before December&nbsp;31, 2005, if
not renewed prior to expiration. We expect to renew
substantially all of these franchises.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the Telecommunications Act of 1996 (the
&#147;1996 Telecom Act&#148;), state and local authorities are
prohibited from limiting, restricting or conditioning the
provision of telecommunications services. They may, however,
impose &#147;competitively neutral&#148; requirements and manage
the public rights-of-way. Granting authorities may not require a
cable operator to provide telecommunications services or
facilities, other than institutional networks, as a condition of
an initial franchise grant, a franchise renewal, or a franchise
transfer. The 1996 Telecom Act also limits franchise fees to an
operator&#146;s cable-related revenues and clarifies that they
do not apply to revenues that a cable operator derives from
providing new telecommunications services. In a March 2002
decision, the Federal Communications Commission
(&#147;FCC&#148;) held that revenue derived from the provision
of cable modem service should not be added to franchise fee
payments already limited by federal law to 5% of traditional
cable service revenue. The same decision tentatively limited
local franchising authority regulation of cable modem service.
The FCC decision was appealed and ultimately affirmed by the
Supreme Court in a June 2005 ruling.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Different legislative proposals have been
introduced in the United States Congress and in some state
legislatures that would greatly streamline cable franchising.
This legislation is intended to facilitate entry by new
competitors, particularly local telephone companies. Such
legislation has already passed in at least one state but is now
subject to court challenge. Although various legislative
proposals provide certain regulatory relief for incumbent cable
operators, these proposals are generally viewed as being more
favorable to new entrants.
</FONT>

<P align="left">
<B><FONT size="2">Competition</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We face competition in the areas of price,
service offerings, and service reliability. We compete with
other providers of television signals and other sources of home
entertainment. In addition, as we continue
</FONT>

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<DIV align="left">
<FONT size="2">to expand into additional services such as
high-speed Internet access and telephone, we face competition
from other providers of each type of service. We operate in a
very competitive business environment, which can adversely
affect our business and operations.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In terms of competition for customers, we view
ourselves as a member of the broadband communications industry,
which encompasses multi-channel video for television and related
broadband services, such as high-speed Internet and other
interactive video services. In the broadband industry, our
principal competitor for video services throughout our territory
is direct broadcast satellite (&#147;DBS&#148;), and in markets
where it is available, our principal competitor for Internet
services is digital subscriber line (&#147;DSL&#148;). We do not
consider other cable operators to be significant one-on-one
competitors in the market overall, as traditional overbuilds are
infrequent and spotty geographically (although in a particular
market, a cable operator overbuilder would likely be a
significant competitor at the local level). As of June&nbsp;30,
2005, we are aware of traditional overbuild situations in
service areas covering approximately 5% of our total homes
passed and potential overbuilds in areas servicing approximately
2% of our total homes passed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although cable operators tend not to be direct
competitors for customers, their relative size may affect the
competitive landscape in terms of how a cable company competes
against non-cable competitors in the marketplace as well as in
relationships with vendors who deal with cable operators. For
example, a larger cable operator might have better access to and
pricing for the multiple types of services cable companies
offer. Also, a larger entity might have different access to
financial resources and acquisition opportunities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our key competitors include:
</FONT>

<DIV>&nbsp;</DIV>

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    <TD>
    <B><I><FONT size="2">Direct Broadcast Satellite</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Direct broadcast satellite (&#147;DBS&#148;) is a
significant competitor to cable systems. The DBS industry has
grown rapidly over the last several years, far exceeding the
growth rate of the cable television industry, and now serves
more than 24&nbsp;million subscribers nationwide. DBS service
allows the subscriber to receive video services directly via
satellite using a relatively small dish antenna. Consistent with
increasing consolidation in the communications industry, News
Corp., one of the world&#146;s largest media companies, acquired
a controlling interest in DIRECTV, Inc. (&#147;DirecTV&#148;) in
2003, the largest domestic DBS company. This business
combination could further strengthen DirecTV&#146;s competitive
posture, particularly through favorable programming arrangements
with various News Corp. affiliates and subsidiaries, such as the
Fox television network. Additionally, EchoStar Communications
Corporation (&#147;EchoStar&#148;) and DirecTV both have entered
into joint marketing agreements with major telecommunications
companies to offer bundled packages combining phone, data and
video services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Video compression technology and high powered
satellites allow DBS providers to offer more than 200 digital
channels from a single satellite, thereby surpassing the typical
analog cable system. In 2003, major DBS competitors offered a
greater variety of channel packages, and were especially
competitive at the lower end pricing, such as a monthly price of
approximately $30 for 75 channels compared to approximately $40
for the closest comparable package in most of our markets. In
addition, while we continue to believe that the initial
investment by a DBS customer exceeds that of a cable customer,
the initial equipment cost for DBS has decreased substantially,
as the DBS providers have aggressively marketed offers to new
customers of incentives for discounted or free equipment,
installation and multiple units. DBS providers are able to offer
service nationwide and are able to establish a national image
and branding with standardized offerings, which together with
their ability to avoid franchise fees of up to 5% of revenues
and property tax, leads to greater efficiencies and lower costs
in the lower tiers of service. However, we believe that many
consumers continue to prefer our stronger local presence in our
markets. We believe that cable-delivered VOD and SVOD service
are superior to DBS service because cable headends can store
thousands of titles which customers can access and control
independently, whereas DBS technology can only make available a
much smaller number of titles with DVR-like customer control. We
also believe that our higher tier products, particularly our
bundled premium packages, are price-competitive with DBS
packages and that many consumers prefer our ability to
economically bundle
</FONT>

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<FONT size="2">video packages with data packages. Further, cable
providers have the potential in some areas to provide a more
complete &#147;whole house&#148; communications package when
combining video, high-speed Internet and voice. We believe that
this ability to bundle, combined with the introduction of more
new products that DBS cannot readily offer (local high
definition television and local interactive television)
differentiates us from DBS competitors and could enable us to
win back some of our former customers who migrated to satellite.
However, recent joint marketing arrangements between DBS
providers and telecommunications carriers allow similar bundling
of services in certain areas. Competition from DBS service
providers may also present greater challenges in areas of lower
population density, and we believe that our systems serve a
higher concentration of such areas than those of other major
cable service providers.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DBS companies historically were prohibited from
retransmitting popular local broadcast programming. However, a
change to the copyright laws in 1999, which was continued in
2004, eliminated this legal impediment. As a result, DBS
companies now may retransmit such programming, once they have
secured retransmission consent from the popular broadcast
stations they wish to carry, and honor mandatory carriage
obligations of less popular broadcast stations in the same
television markets. In response to the legislation, DirecTV and
EchoStar have been carrying the major network stations in many
of the nation&#146;s television markets. DBS, however, is
limited in the local programming it can provide because of the
current capacity limitations of satellite technology. DBS
companies do not offer local broadcast programming in every
U.S.&nbsp;market, although the number of markets covered is
substantial and increasing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DBS providers have made attempts at widespread
deployment of high-speed Internet access services via satellite
but those services have been technically constrained and of
limited appeal. However, DBS providers have entered into joint
marketing arrangements with telecommunications carriers allowing
them to offer terrestrial DSL&nbsp;services in many markets.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD>
    <B><I><FONT size="2">DSL and Other Broadband
    Services</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Digital subscriber line (&#147;DSL&#148;) service
allows Internet access to subscribers at data transmission
speeds greater than those available over conventional telephone
lines. DSL service therefore is competitive with high-speed
Internet access over cable systems. Most telephone companies
which already have plant, an existing customer base, and other
operational functions in place (such as, billing, service
personnel, etc.) offer DSL service. DSL actively markets its
service and many providers have offered promotional pricing with
a one-year service agreement. The FCC has determined that DSL
service is an &#147;information service,&#148; which will remove
DSL service from many traditional telecommunications
regulations. It is also possible that federal legislation could
reduce regulation of Internet services offered by incumbent
telephone companies. Legislative action and the FCC&#146;s
decisions and policies in this area are subject to change. We
expect DSL to remain a significant competitor to our data
services. In addition, the further deployment of fiber by
telephone companies into their networks will enable them to
provide higher bandwidth Internet service than provided over
traditional DSL&nbsp;lines.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to terrestrially based DSL,
satellite-based delivery options are in development. Local
wireless Internet services have also begun to operate in many
markets using unlicensed radio spectrum. This service option,
popularly known as &#147;wi-fi&#148;, offers another alternative
to cable-based Internet access.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">High-speed Internet access facilitates the
streaming of video into homes and businesses. As the quality and
availability of video streaming over the Internet improves,
video streaming likely will compete with the traditional
delivery of video programming services over cable systems. It is
possible that programming suppliers will consider bypassing
cable operators and market their services directly to the
consumer through video streaming over the Internet.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that pricing for residential and
commercial Internet services on our system is generally
comparable to that for similar DSL services and that some
residential customers prefer our ability to bundle Internet
services with video services. However, DSL providers may
currently be in a better position to offer data services to
businesses since their networks tend to be more complete in
commercial areas. They also have the ability to bundle telephone
with Internet services for a higher percentage of their
customers, and that ability is appealing to many consumers.
Joint marketing arrangements between DSL
</FONT>

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<FONT size="2">providers and DBS providers may allow some
additional bundling of services. Moreover, major telephone
companies, such as SBC and Verizon, are now deploying fiber deep
into their networks that will enable them to offer high
bandwidth video services over their networks, in addition to
established voice and Internet services.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

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    <TD>
    <B><I><FONT size="2">Broadcast Television</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cable television has long competed with broadcast
television, which consists of television signals that the viewer
is able to receive without charge using an &#147;off-air&#148;
antenna. The extent of such competition is dependent upon the
quality and quantity of broadcast signals available through
&#147;off-air&#148; reception compared to the services provided
by the local cable system. Traditionally, cable television has
provided a higher picture quality and more channel offerings
than broadcast television. However, the recent licensing of
digital spectrum by the FCC will provide traditional
broadcasters with the ability to deliver high definition
television pictures and multiple digital-quality program
streams, as well as advanced digital services such as
subscription video and data transmission.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD>
    <B><I><FONT size="2">Traditional Overbuilds</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cable systems are operated under non-exclusive
franchises granted by local authorities. More than one cable
system may legally be built in the same area. It is possible
that a franchising authority might grant a second franchise to
another cable operator and that such a franchise might contain
terms and conditions more favorable than those afforded us. In
addition, entities willing to establish an open video system,
under which they offer unaffiliated programmers
non-discriminatory access to a portion of the system&#146;s
cable system, may be able to avoid local franchising
requirements. Well financed businesses from outside the cable
industry, such as public utilities that already possess fiber
optic and other transmission lines in the areas they serve, may
over time become competitors. There are a number of cities that
have constructed their own cable systems, in a manner similar to
city-provided utility services. There also has been interest in
traditional overbuilds by private companies. Constructing a
competing cable system is a capital intensive process which
involves a high degree of risk. We believe that in order to be
successful, a competitor&#146;s overbuild would need to be able
to serve the homes and businesses in the overbuilt area on a
more cost-effective basis than we can. Any such overbuild
operation would require either significant access to capital or
access to facilities already in place that are capable of
delivering cable television programming.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, we are aware of
overbuild situations impacting approximately 5% of our total
homes passed and potential overbuild situations in areas
servicing approximately 2% of our total homes passed. Additional
overbuild situations may occur in other systems. In response to
such overbuilds, these systems have been designated priorities
for the upgrade of cable plant and the launch of new and
enhanced services. As of June&nbsp;30, 2005, we have upgraded
many of these systems to at least 750 megahertz two-way HFC
architecture.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Telephone Companies and
    Utilities</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The competitive environment has been
significantly affected by technological developments and
regulatory changes enacted under the 1996 Telecom Act, which is
designed to enhance competition in the cable television and
local telephone markets. Federal cross-ownership restrictions
historically limited entry by local telephone companies into the
cable business. The 1996 Telecom Act modified this
cross-ownership restriction, making it possible for local
exchange carriers, who have considerable resources, to provide a
wide variety of video services competitive with services offered
by cable systems.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Telephone companies can lawfully enter the cable
television business, and although activity in this area
historically has been quite limited, recent announcements by
telephone companies indicate a growing interest in offering a
video product. Local exchange carriers do already provide
facilities for the transmission and distribution of voice and
data services, including Internet services, in competition with
our existing or potential interactive services ventures and
businesses. Some telephone companies have begun more extensive
deployment of fiber in their networks that will enable them to
begin providing video services, as well as telephone and
Internet access service. At least one major telephone company,
SBC, plans to provide Internet protocol video over its upgraded
network. SBC contends that its use of this technology should
allow it to
</FONT>

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<FONT size="2">provide video service without a cable franchise
as required under Title&nbsp;VI of the Communications Act.
Telephone companies deploying fiber more extensively are
attempting through various means (including federal and state
legislation) to weaken or streamline the franchising
requirements applicable to them.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If telephone companies are successful in avoiding
or weakening the franchise and other regulatory requirements
that are applicable to cable operators like Charter, their
competitive posture would be enhanced. We cannot predict the
likelihood of success of the broadband services offered by our
competitors or the impact on us of such competitive ventures.
The large scale entry of major telephone companies as direct
competitors in the video marketplace could adversely affect the
profitability and valuation of established cable systems.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As we expand our offerings to include Internet
access and other telecommunications services, we will be subject
to competition from other telecommunications providers. The
telecommunications industry is highly competitive and includes
competitors with greater financial and personnel resources, who
have brand name recognition and long-standing relationships with
regulatory authorities and customers. Moreover, mergers, joint
ventures and alliances among franchise, wireless or private
cable operators, local exchange carriers and others may result
in providers capable of offering cable television, Internet, and
telecommunications services in direct competition with us. For
example, major local exchange carriers have entered into
arrangements with EchoStar and DirecTV in which they will market
packages combining phone service, DSL and DBS services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, we are subject to competition from
utilities which possess fiber optic transmission lines capable
of transmitting signals with minimal signal distortion.
Utilities are also developing broadband over power line
technology, which will allow the provision of Internet and other
broadband services to homes and offices.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD>
    <B><I><FONT size="2">Private Cable</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additional competition is posed by satellite
master antenna television systems, or SMATV systems, serving
multiple dwelling units, or MDUs, such as condominiums,
apartment complexes, and private residential communities. These
private cable systems may enter into exclusive agreements with
such MDUs, which may preclude operators of franchise systems
from serving residents of such private complexes. Private cable
systems can offer both improved reception of local television
stations and many of the same satellite-delivered program
services that are offered by cable systems. SMATV systems
currently benefit from operating advantages not available to
franchised cable systems, including fewer regulatory burdens and
no requirement to service low density or economically depressed
communities. Exemption from regulation may provide a competitive
advantage to certain of our current and potential competitors.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Wireless Distribution</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cable systems also compete with wireless program
distribution services such as multi-channel multipoint
distribution systems or &#147;wireless cable,&#148; known as
MMDS, which uses low-power microwave frequencies to transmit
television programming over-the-air to paying customers. MMDS
services, however, require unobstructed &#147;line of
sight&#148; transmission paths and MMDS ventures have been quite
limited to date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FCC has completed its auction of Multichannel
Video Distribution&nbsp;&#38; Data Service (&#147;MVDDS&#148;)
licenses. MVDDS is a new terrestrial video and data fixed
wireless service that the FCC hopes will spur competition to the
cable and DBS industries.
</FONT>

<P align="left">
<B><FONT size="2">Properties</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal physical assets consist of cable
distribution plant and equipment, including signal receiving,
encoding and decoding devices, headend reception facilities,
distribution systems and customer drop equipment for each of our
cable systems.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our cable plant and related equipment are
generally attached to utility poles under pole rental agreements
with local public utilities and telephone companies, and in
certain locations are buried in
</FONT>

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<DIV align="left">
<FONT size="2">underground ducts or trenches. We own or lease
real property for signal reception sites and own most of our
service vehicles.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, our subsidiaries have owned the
real property and buildings for our data centers, customer
contact centers and our divisional administrative offices. Since
early 2003 we have reduced our total real estate portfolio
square footage by approximately 17% and have decreased our
operating annual lease costs by approximately 30%. We plan to
continue reducing our number of administrative offices and lease
the space, where possible, while attempting to sell those
existing locations that we believe are no longer required. Our
subsidiaries generally have leased space for business offices
throughout our operating divisions. Our headend and tower
locations are located on owned or leased parcels of land, and we
generally own the towers on which our equipment is located.
Charter Holdco owns the real property and building for our
principal executive offices.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The physical components of our cable systems
require maintenance as well as periodic upgrades to support the
new services and products we introduce. See
&#147;Business&nbsp;&#151; Our Network Technology.&#148; We
believe that our properties are generally in good operating
condition and are suitable for our business operations.
</FONT>

<P align="left">
<B><FONT size="2">Employees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, we had approximately
16,500&nbsp;full-time equivalent employees. At June&nbsp;30,
2005, approximately 100 of our employees were represented by
collective bargaining agreements. We have never experienced a
work stoppage.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The corporate office, which includes employees of
Charter and Charter Holdco, is responsible for coordinating and
overseeing our operations. The corporate office performs certain
financial and administrative functions on a centralized basis
such as accounting, taxes, billing, finance and acquisitions,
payroll and benefit administration, information system design
and support, internal audit, purchasing, marketing and
programming contract administration and oversight and
coordination of external auditors and consultants. The corporate
office performs these services on a cost reimbursement basis
pursuant to a management services agreement. See &#147;Certain
Relationships and Related Transactions&nbsp;&#151; Transactions
Arising Out of Our Organizational Structure and
Mr.&nbsp;Allen&#146;s Investment in Charter and Its
Subsidiaries&nbsp;&#151; Intercompany Management
Arrangements&#148; and &#147;&#151;&nbsp;Mutual Services
Agreements.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Legal Proceedings</FONT></B>

<DIV>&nbsp;</DIV>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Securities Class Actions and Derivative
    Suits</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Fourteen putative federal class action lawsuits
(the &#147;Federal Class Actions&#148;) were filed against
Charter and certain of its former and present officers and
directors in various jurisdictions allegedly on behalf of all
purchasers of Charter&#146;s securities during the period from
either November 8 or November&nbsp;9, 1999 through July&nbsp;17
or July&nbsp;18, 2002. Unspecified damages were sought by the
plaintiffs. In general, the lawsuits alleged that Charter
utilized misleading accounting practices and failed to disclose
these accounting practices and/or issued false and misleading
financial statements and press releases concerning
Charter&#146;s operations and prospects. The Federal Class
Actions were specifically and individually identified in public
filings made by Charter prior to the date of this prospectus. On
March&nbsp;12, 2003, the Panel transferred the six Federal Class
Actions not filed in the Eastern District of Missouri to that
district for coordinated or consolidated pretrial proceedings
with the eight Federal Class Actions already pending there. The
Court subsequently consolidated the Federal Class Actions into a
single action (the &#147;Consolidated Federal Class
Action&#148;) for pretrial purposes. On August&nbsp;5, 2004, the
plaintiff&#146;s representatives, Charter and the individual
defendants who were the subject of the suit entered into a
Memorandum of Understanding setting forth agreements in
principle to settle the Consolidated Federal Class Action. These
parties subsequently entered into Stipulations of Settlement
dated as of January&nbsp;24, 2005 (described more fully below)
which incorporate the terms of the August&nbsp;5, 2004
Memorandum of Understanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Consolidated Federal Class&nbsp;Action is
entitled:
</FONT>
<P>

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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In re Charter Communications, Inc. Securities
    Litigation, MDL Docket No.&nbsp;1506 (All Cases), StoneRidge
    Investments Partners, LLC, Individually and On Behalf of All
    Others Similarly
    </FONT></TD>
</TR>

</TABLE>

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    <TD></TD>
    <TD align="left">
    <FONT size="2">Situated,&nbsp;v. Charter Communications, Inc.,
    Paul Allen, Jerald L. Kent, Carl E. Vogel, Kent Kalkwarf, David
    G. Barford, Paul E. Martin, David L. McCall, Bill Shreffler,
    Chris Fenger, James H. Smith,&nbsp;III, Scientific-Atlanta,
    Inc., Motorola, Inc. and Arthur Andersen, LLP, Consolidated Case
    No.&nbsp;4:02-CV-1186-CAS.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;12, 2002, a shareholders
derivative suit (the &#147;State Derivative Action&#148;) was
filed in the Circuit Court of the City of St.&nbsp;Louis, State
of Missouri (the &#147;Missouri State Court&#148;), against
Charter and its then current directors, as well as its former
auditors. The plaintiffs alleged that the individual defendants
breached their fiduciary duties by failing to establish and
maintain adequate internal controls and procedures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated State Derivative Action is
entitled:
</FONT>
<P>

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    <TD width="1%"></TD>
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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Kenneth Stacey, Derivatively on behalf of Nominal
    Defendant Charter Communications, Inc.,&nbsp;v. Ronald L.
    Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman,
    William Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg,
    Arthur Andersen, LLP and Charter Communications, Inc.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;12, 2004, an action substantively
identical to the State Derivative Action was filed in the
Missouri State Court, against Charter and certain of its current
and former directors, as well as its former auditors. On
July&nbsp;14, 2004, the Court consolidated this case with the
State Derivative Action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This action is entitled:
</FONT>
<P>

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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Thomas Schimmel, Derivatively on behalf on
    Nominal Defendant Charter Communications, Inc.,&nbsp;v. Ronald
    L. Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman,
    William D. Savoy, John H. Tory, Carl E. Vogel, Larry W.
    Wangberg, and Arthur Andersen, LLP, and Charter Communications,
    Inc.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Separately, on February&nbsp;12, 2003, a
shareholders derivative suit (the &#147;Federal Derivative
Action&#148;), was filed against Charter and its then current
directors in the United States District Court for the Eastern
District of Missouri. The plaintiff in that suit alleged that
the individual defendants breached their fiduciary duties and
grossly mismanaged Charter by failing to establish and maintain
adequate internal controls and procedures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Federal Derivative Action is entitled:
</FONT>
<P>

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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Arthur Cohn, Derivatively on behalf of Nominal
    Defendant Charter Communications, Inc.,&nbsp;v. Ronald L.
    Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman,
    William Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg,
    and Charter Communications, Inc.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As noted above, Charter and the individual
defendants entered into a Memorandum of Understanding on
August&nbsp;5, 2004 setting forth agreements in principle
regarding settlement of the Consolidated Federal
Class&nbsp;Action, the State Derivative Action(s) and the
Federal Derivative Action (the &#147;Actions&#148;). Charter and
various other defendants in those actions subsequently entered
into Stipulations of Settlement dated as of January&nbsp;24,
2005, setting forth a settlement of the Actions in a manner
consistent with the terms of the Memorandum of Understanding.
The Stipulations of Settlement, along with various supporting
documentation, were filed with the Court on February&nbsp;2,
2005. On May&nbsp;23, 2005 the United States District Court for
the Eastern District of Missouri conducted the final fairness
hearing for the Actions, and on June&nbsp;30, 2005, the Court
issued its final approval of the settlements. Members of the
class had 30&nbsp;days from the issuance of the June&nbsp;30
order approving the settlement to file an appeal challenging the
approval. Two notices of appeal were filed relating to the
settlement. Those appeals were directed to the amount of fees
that the attorneys for the class were to receive and to the
fairness of the settlement. On September&nbsp;26, 2005, the
U.S.&nbsp;Court of Appeals for the Eighth Circuit entered
Judgment dismissing the appeals pursuant to stipulation by the
parties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As amended, the Stipulations of Settlement
provide that, in exchange for a release of all claims by
plaintiffs against Charter and its former and present officers
and directors named in the Actions, Charter would pay to the
plaintiffs a combination of cash and equity collectively valued
at $144&nbsp;million, which will include the fees and expenses
of plaintiffs&#146; counsel. Of this amount, $64&nbsp;million
would be paid in cash (by Charter&#146;s insurance carriers) and
the $80&nbsp;million balance was to be paid (subject to
Charter&#146;s right to
</FONT>

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<FONT size="2">substitute cash therefor described below) in
shares of Charter Class&nbsp;A common stock having an aggregate
value of $40&nbsp;million and ten-year warrants to purchase
shares of Charter Class&nbsp;A common stock having an aggregate
warrant value of $40&nbsp;million, with such values in each case
being determined pursuant to formulas set forth in the
Stipulations of Settlement. However, Charter had the right, in
its sole discretion, to substitute cash for some or all of the
aforementioned securities on a dollar for dollar basis. Pursuant
to that right, Charter elected to fund the $80&nbsp;million
obligation with 13.4&nbsp;million shares of Charter Class&nbsp;A
common stock (having an aggregate value of approximately
$15&nbsp;million pursuant to the formula set forth in the
Stipulations of Settlement) with the remaining balance (less an
agreed upon $2&nbsp;million discount in respect of that portion
allocable to plaintiffs&#146; attorneys&#146; fees) to be paid
in cash. In addition, Charter had agreed to issue additional
shares of its Class&nbsp;A common stock to its insurance carrier
having an aggregate value of $5&nbsp;million; however, by
agreement with its carrier, Charter has paid $4.5&nbsp;million
in cash in lieu of issuing such shares. Charter delivered the
settlement consideration to the claims administrator on
July&nbsp;8, 2005, and it will be held in escrow pending any
appeals of the approval. On July&nbsp;14, 2005, the Circuit
Court for the City of St.&nbsp;Louis dismissed with prejudice
the State Derivative Action.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of the settlements, Charter has committed
to a variety of corporate governance changes, internal practices
and public disclosures, some of which have already been
undertaken and none of which are inconsistent with measures
Charter is taking in connection with the recent conclusion of
the SEC investigation.
</FONT>

<DIV>&nbsp;</DIV>

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    <B><I><FONT size="2">Government Investigations</FONT></I></B></TD>
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</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2002, Charter became aware of a grand
jury investigation being conducted by the
U.S.&nbsp;Attorney&#146;s Office for the Eastern District of
Missouri into certain of its accounting and reporting practices,
focusing on how Charter reported customer numbers, and its
reporting of amounts received from digital set-top terminal
suppliers for advertising. The U.S.&nbsp;Attorney&#146;s Office
publicly stated that Charter was not a target of the
investigation. Charter was also advised by the
U.S.&nbsp;Attorney&#146;s Office that no current officer or
member of its board of directors was a target of the
investigation. On July&nbsp;24, 2003, a federal grand jury
charged four former officers of Charter with conspiracy and mail
and wire fraud, alleging improper accounting and reporting
practices focusing on revenue from digital set-top terminal
suppliers and inflated customer account numbers. Each of the
indicted former officers pled guilty to single conspiracy counts
related to the original mail and wire fraud charges and were
sentenced April&nbsp;22, 2005. Charter fully cooperated with the
investigation, and following the sentencings, the
U.S.&nbsp;Attorney&#146;s Office for the Eastern District of
Missouri announced that its investigation was concluded and that
no further indictments would issue.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD>
    <B><I><FONT size="2">Indemnification</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter was generally required to indemnify,
under certain conditions, each of the named individual
defendants in connection with the matters described above
pursuant to the terms of its bylaws and (where applicable) such
individual defendants&#146; employment agreements. In accordance
with these documents, in connection with the grand jury
investigation, a now-settled SEC investigation and the
above-described lawsuits, some of Charter&#146;s current and
former directors and current and former officers have been
advanced certain costs and expenses incurred in connection with
their defense. See &#147;Certain Relationships and Related
Transactions&nbsp;&#151; Other Miscellaneous
Relationships&nbsp;&#151; Indemnification Advances&#148;. On
February&nbsp;22, 2005, Charter filed suit against four of its
former officers who were indicted in the course of the grand
jury investigation. These suits seek to recover the legal fees
and other related expenses advanced to these individuals. One of
these former officers has counterclaimed against Charter
alleging, among other things, that Charter owes him additional
indemnification for legal fees that Charter did not pay and
another of these former officers has counterclaimed against
Charter for accrued sick leave.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Other Litigation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the matters set forth above,
Charter is also party to other lawsuits and claims that arose in
the ordinary course of conducting its business. In the opinion
of management, after taking into account recorded liabilities,
the outcome of these other lawsuits and claims are not expected
to have a material adverse effect on our consolidated financial
condition, results of operations or our liquidity.
</FONT>

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<A name='113'></A>
</DIV>

<!-- link1 "REGULATION AND LEGISLATION" -->

<P align="center">
<B><FONT size="2">REGULATION AND LEGISLATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summary addresses the key
regulatory and legislative developments affecting the cable
industry. Cable system operations are extensively regulated by
the FCC, some state governments and most local governments. A
failure to comply with these regulations could subject us to
substantial penalties. Our business can be dramatically impacted
by changes to the existing regulatory framework, whether
triggered by legislative, administrative, or judicial rulings.
Congress and the FCC have expressed a particular interest in
increasing competition in the communications field generally and
in the cable television field specifically. The 1996 Telecom Act
altered the regulatory structure governing the nation&#146;s
communications providers. It removed barriers to competition in
both the cable television market and the local telephone market.
We could be materially disadvantaged in the future if we are
subject to regulations that do not equally impact our key
competitors. Congress and the FCC have frequently revisited the
subject of communications regulation, and they are likely to do
so in the future. In addition, franchise agreements with local
governments must be periodically renewed, and new operating
terms may be imposed. Future legislative, regulatory, or
judicial changes could adversely affect our operations. We can
provide no assurance that the already extensive regulation of
our business will not be expanded in the future.
</FONT>

<P align="left">
<B><FONT size="2">Cable Rate Regulation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cable industry has operated under a federal
rate regulation regime for more than a decade. The regulations
currently restrict the prices that cable systems charge for
basic service and associated equipment. All other cable
offerings are now universally exempt from rate regulation.
Although rate regulation operates pursuant to a federal formula,
local governments, commonly referred to as local franchising
authorities, are primarily responsible for administering this
regulation. The majority of our local franchising authorities
have never certified to regulate basic cable rates, but they
retain the right to do so (and order rate reductions and
refunds), except in those specific communities facing
&#147;effective competition.&#148; Federal law defines effective
competition as existing in a variety of circumstances that
historically were rarely satisfied, but are increasingly likely
to be satisfied with the recent increase in
DBS&nbsp;competition. We already have secured official
recognition by the FCC of effective competition in many of our
communities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There have been frequent calls to impose expanded
rate regulation on the cable industry. Confronted with rapidly
increasing cable programming costs, it is possible that Congress
may adopt new constraints on the retail pricing or packaging of
cable programming. Such constraints could adversely affect our
operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The federal rate regulations also require cable
operators to maintain a &#147;geographically uniform&#148; rate
within each community, except in those communities facing
effective competition. As we attempt to respond to a changing
marketplace with competitive pricing practices, we may face
legal restraints and challenges that impede our ability to
compete.
</FONT>

<P align="left">
<B><FONT size="2">Must Carry/ Retransmission Consent</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Federal law currently includes &#147;must
carry&#148; regulations, which require cable systems to carry
certain local broadcast television stations that the cable
operator would not select voluntarily. Alternatively, popular
commercial television stations can prohibit cable carriage
unless the cable operator first negotiates for
&#147;retransmission consent,&#148; which may be conditioned on
significant payments or other concessions. Either option has a
potentially adverse effect on our business. The burden
associated with must carry could increase significantly if cable
systems were required to simultaneously carry both the analog
and digital signals of each television station (dual carriage),
as the broadcast industry transitions from an analog to a
digital format.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The burden could also increase significantly if
cable systems become required to carry multiple program streams
included within a single digital broadcast transmission
(multicast carriage). Additional government-mandated broadcast
carriage obligations could disrupt existing programming
commitments, interfere with our preferred use of limited channel
capacity and limit our ability to offer services that
</FONT>

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<DIV align="left">
<FONT size="2">would maximize customer appeal and revenue
potential. Although the FCC issued a decision in February 2005,
confirming an earlier ruling against mandating either dual
carriage or multicast carriage, that decision has been appealed.
In addition, the FCC could modify its position or Congress could
legislate additional carriage obligations. In particular,
broadcast carriage burdens may increase as Congress and the FCC
attempt to transition broadcasters to digital spectrum and
reclaim analog spectrum.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There are indications that broadcasters invoking
retransmission consent may be even more forceful in upcoming
negotiations. These negotiations could result in increased
broadcast carriage burdens or the loss of popular programming.
</FONT>

<P align="left">
<B><FONT size="2">Access Channels</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local franchise agreements often require cable
operators to set aside certain channels for public, educational
and governmental access programming. Federal law also requires
cable systems to designate a portion of their channel capacity
for commercial leased access by unaffiliated third parties.
Increased activity in this area could further burden the channel
capacity of our cable systems.
</FONT>

<P align="left">
<B><FONT size="2">Access to Programming</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FCC recently extended a regulation
prohibiting video programmers affiliated with cable companies
from favoring cable operators over new competitors and requiring
such programmers to sell their satellite-delivered programming
to other multichannel video distributors. This provision limits
the ability of vertically integrated cable programmers to offer
exclusive programming arrangements to cable companies. DBS
providers traditionally had no similar restriction on exclusive
programming, but the FCC recently imposed that restriction as
part of its approval of the DirecTV-News Corp. merger. The FCC
has also adopted regulations to avoid unreasonable conduct in
retransmission consent negotiations between broadcasters and
multichannel video programming distributors, including cable and
DBS. It imposed special conditions on the DirectTV-News Corp.
merger, including a requirement that Fox affiliated broadcast
stations enter into commercial arbitration for disputes over
retransmission consent. Given the heightened competition and
media consolidation that Charter faces, it is possible that we
will find it increasingly difficult to gain access to popular
programming at favorable terms. Such difficulty could adversely
impact our business.
</FONT>

<P align="left">
<B><FONT size="2">Ownership Restrictions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Federal regulation of the communications field
traditionally included a host of ownership restrictions, which
limited the size of certain media entities and restricted their
ability to enter into competing enterprises. Through a series of
legislative, regulatory, and judicial actions, most of these
restrictions recently were eliminated or substantially relaxed.
For example, historic restrictions on local exchange carriers
offering cable service within their telephone service area, as
well as those prohibiting broadcast stations from owning cable
systems within their broadcast service area, no longer exist.
Changes in this regulatory area could alter the business
landscape in which we operate, as formidable new competitors
(including electric utilities, local exchange carriers, and
broadcast/media companies) may increasingly choose to offer
cable services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FCC previously adopted regulations precluding
any cable operator from serving more than 30% of all domestic
multichannel video subscribers and from devoting more than 40%
of the activated channel capacity of any cable system to the
carriage of affiliated national video programming services.
These cable ownership restrictions were invalidated by the
courts, and the FCC is now considering adoption of replacement
regulations.
</FONT>

<P align="left">
<B><FONT size="2">Internet Service</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Over the past several years, proposals have been
advanced that would require cable operators offering Internet
service to provide non-discriminatory access to unaffiliated
Internet service providers. In a June 2005 ruling, commonly
referred to as <I>Brand X</I>, the Supreme Court upheld an FCC
decision (and
</FONT>

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<DIV align="left">
<FONT size="2">overruled a conflicting Ninth Circuit opinion)
making it much less likely that any non-discriminatory
&#147;open access&#148; requirements (which are generally
associated with common carrier regulation of
&#147;telecommunications services&#148;) will be imposed on the
cable industry by local, state or federal authorities. The
Supreme Court held that the FCC was correct in classifying
cable-provided Internet service as an &#147;information
service,&#148; rather than a &#147;telecommunications
service.&#148; This favorable regulatory classification limits
the ability of various governmental authorities to impose open
access requirements on cable-provided Internet service. Given
the recency of the <I>Brand X</I> decision, however, the nature
of any legislative or regulatory response remains uncertain. The
imposition of open access requirements could materially affect
our business.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As the Internet has matured, it has become the
subject of increasing regulatory interest. There is now a host
of federal laws affecting Internet service, including the
Digital Millennium Copyright Act, which affords copyright owners
certain rights against us that could adversely affect our
relationship with any customer accused of violating copyright
laws. Recently enacted Anti-Spam legislation also imposes new
obligations on our operations. The adoption of new Internet
regulations could adversely affect our business.
</FONT>

<P align="left">
<B><FONT size="2">Phone Service</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 1996 Telecom Act created a more favorable
regulatory environment for us to provide telecommunications
services. In particular, it limited the regulatory role of local
franchising authorities and established requirements ensuring
that we could interconnect with other telephone companies to
provide a viable service. Many implementation details remain
unresolved, and there are substantial regulatory changes being
considered that could impact, in both positive and negative
ways, our primary telecommunications competitors and our own
entry into the field of phone service. The FCC and state
regulatory authorities are considering, for example, whether
common carrier regulation traditionally applied to incumbent
local exchange carriers should be modified. The FCC recently
decided that alternative voice technologies, like certain types
of VoIP, should be regulated only at the federal level, rather
than by individual states. While this decision appears to be a
positive development for VoIP offerings, it is unclear whether
and how the FCC will apply certain types of common carrier
regulations, such as intercarrier compensation and universal
service obligations to alternative voice technology. The FCC
recently imposed traditional 911 emergency service obligations
(&#147;E911&#148;) on VoIP provided telephone services, as well
as certain additional notice requirements. The treatment of
these regulations and other regulatory matters will affect our
potential expansion into phone service.
</FONT>

<P align="left">
<B><FONT size="2">Pole Attachments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Communications Act requires most utilities to
provide cable systems with access to poles and conduits and
simultaneously regulates the rates charged for this access. The
Act specifies that significantly higher rates apply if the cable
plant is providing telecommunications service, as well as
traditional cable service. The FCC has clarified that a cable
operator&#146;s favorable pole rates are not endangered by the
provision of Internet access, and that determination was upheld
by the United States Supreme Court. It remains possible that the
underlying pole attachment formula, or its application to
Internet and telecommunications offerings, will be modified in a
manner that substantially increases our pole attachment costs.
</FONT>

<P align="left">
<B><FONT size="2">Cable Equipment</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FCC has undertaken several steps to promote
competition in the delivery of cable equipment and compatibility
with new digital technology. The FCC has expressly ruled that
cable customers must be allowed to purchase set-top terminals
from third parties and established a multi-year phase-in during
which security functions (which would remain in the
operator&#146;s exclusive control) would be unbundled from the
basic converter functions, which could then be provided by third
party vendors. The first phase of implementation has already
passed. A prohibition on cable operators leasing digital set-top
terminals that integrate security and basic navigation functions
was scheduled to go into effect as of July&nbsp;1, 2006, but the
FCC extended the deadline for one year to July&nbsp;1, 2007.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FCC has adopted rules implementing an
agreement between major cable operators and manufacturers of
consumer electronics on &#147;plug and play&#148; specifications
for one-way digital televisions. The rules require cable
operators to provide &#147;CableCard&#148; security modules and
support to customer owned digital televisions and similar
devices already equipped with built-in set-top terminal
functionality. Cable operators must support basic home recording
rights and copy protection rules for digital programming
content. The FCC&#146;s plug and play rules are under appeal,
although the appeal has been stayed pending FCC reconsideration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FCC adopted companion &#147;broadcast
flag&#148; rules, requiring cable carriage of a code embedded in
digital broadcast programming that will regulate the further use
of copyright programming. However, the U.S. Circuit Court of
Appeals for the D.C. Circuit recently held that the FCC lacks
jurisdiction to impose the broadcast flag rules.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FCC is conducting additional related
rulemakings, and the cable and consumer electronics industries
are currently negotiating an agreement that would establish
additional &#147;plug and play&#148; specifications for two-way
digital televisions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FCC rules are subject to challenge and
inter-industry negotiations are ongoing. It is unclear how this
process will develop and how it will affect our offering of
cable equipment and our relationship with our customers.
</FONT>

<P align="left">
<B><FONT size="2">Other Communications Act Provisions and FCC
Regulatory Matters</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the Communications Act provisions
and FCC regulations noted above, there are other statutory
provisions and FCC regulations affecting our business. The
Communications Act, for example, includes cable-specific privacy
obligations. The Act carefully limits our ability to collect and
disclose personal information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">FCC regulations include a variety of additional
areas, including, among other things: (1)&nbsp;equal employment
opportunity obligations; (2)&nbsp;customer service standards;
(3)&nbsp;technical service standards; (4)&nbsp;mandatory
blackouts of certain network, syndicated and sports programming;
(5)&nbsp;restrictions on political advertising;
(6)&nbsp;restrictions on advertising in children&#146;s
programming; (7)&nbsp;restrictions on origination cablecasting;
(8)&nbsp;restrictions on carriage of lottery programming;
(9)&nbsp;sponsorship identification obligations;
(10)&nbsp;closed captioning of video programming;
(11)&nbsp;licensing of systems and facilities;
(12)&nbsp;maintenance of public files; and (13)&nbsp;emergency
alert systems.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is possible that Congress or the FCC will
expand or modify its regulation of cable systems in the future,
and we cannot predict at this time how that might impact our
business. For example, there have been recent discussions about
imposing &#147;indecency&#148; restrictions directly on cable
programming.
</FONT>

<P align="left">
<B><FONT size="2">Copyright</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cable systems are subject to federal copyright
licensing covering carriage of television and radio broadcast
signals. The possible modification or elimination of this
compulsory copyright license is the subject of continuing
legislative review and could adversely affect our ability to
obtain desired broadcast programming. We cannot predict the
outcome of this legislative activity. Moreover, the Copyright
Office has not yet provided any guidance as to the how the
compulsory copyright license should apply to newly offered
digital broadcast signals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Copyright clearances for non-broadcast
programming services are arranged through private negotiations.
Cable operators also must obtain music rights for locally
originated programming and advertising from the major music
performing rights organizations. These licensing fees have been
the source of litigation in the past, and we cannot predict with
certainty whether license fee disputes may arise in the future.
</FONT>

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<P align="left">
<B><FONT size="2">Franchise Matters</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cable systems generally are operated pursuant to
nonexclusive franchises granted by a municipality or other state
or local government entity in order to cross public
rights-of-way. Cable franchises generally are granted for fixed
terms and in many cases include monetary penalties for
noncompliance and may be terminable if the franchisee fails to
comply with material provisions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The specific terms and conditions of cable
franchises vary materially between jurisdictions. Each franchise
generally contains provisions governing cable operations,
franchise fees, system construction, maintenance, technical
performance, and customer service standards. A number of states
subject cable systems to the jurisdiction of centralized state
government agencies, such as public utility commissions.
Although local franchising authorities have considerable
discretion in establishing franchise terms, there are certain
federal protections. For example, federal law caps local
franchise fees and includes renewal procedures designed to
protect incumbent franchisees from arbitrary denials of renewal.
Even if a franchise is renewed, however, the local franchising
authority may seek to impose new and more onerous requirements
as a condition of renewal. Similarly, if a local franchising
authority&#146;s consent is required for the purchase or sale of
a cable system, the local franchising authority may attempt to
impose more burdensome requirements as a condition for providing
its consent.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Different legislative proposals have been
introduced in the United States Congress and in some state
legislatures that would greatly streamline cable franchising.
This legislation is intended to facilitate entry by new
competitors, particularly local telephone companies. Such
legislation has already passed in at least one state but is now
subject to court challenge. Although various legislative
proposals provide certain regulatory relief for incumbent cable
operators, these proposals are generally viewed as being more
favorable to new entrants.
</FONT>

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<DIV align="left">
<A name='114'></A>
</DIV>

<!-- link1 "MANAGEMENT" -->

<P align="center">
<B><FONT size="2">MANAGEMENT</FONT></B>

<P align="left">
<B><FONT size="2">Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The persons listed below are directors of Charter.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Director</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Position(s)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Paul G. Allen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chairman of the board of directors
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">W. Lance Conn
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Nathaniel A. Davis
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Jonathan L. Dolgen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Robert P. May
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">David C. Merritt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Marc B. Nathanson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Jo Allen Patton
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Neil Smit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director, President and Chief Executive Officer
    of Charter
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">John H. Tory
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Larry W. Wangberg
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following sets forth certain biographical
information with respect to the directors listed above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Paul G. Allen, </FONT></I><FONT size="2">52,
has been Chairman of our board of directors since July 1999, and
Chairman of the board of directors of Charter Investment, Inc.
(a predecessor to, and currently an affiliate of, Charter) since
December 1998. Mr.&nbsp;Allen, co-founder of Microsoft
Corporation, has been a private investor for more than
15&nbsp;years, with interests in over 50 technology,
telecommunications, content and biotech companies.
Mr.&nbsp;Allen&#146;s investments include Vulcan Inc., Vulcan
Productions, Inc., the Portland Trail Blazers NBA and Seattle
Seahawks NFL franchises, and investments in DreamWorks LLC and
Oxygen Media. In addition, Mr.&nbsp;Allen is a director of
Vulcan Programming Inc., Vulcan Ventures, Vulcan Inc., Vulcan
Cable&nbsp;III Inc., numerous privately held companies and,
until its sale in May 2004 to an unrelated third party, TechTV
L.L.C.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">W.&nbsp;Lance Conn,</FONT></I><FONT size="2">
37, was elected to our board of directors in September 2004.
Since July 2004, Mr.&nbsp;Conn has served as Executive Vice
President, Investment Management for Vulcan Inc., the investment
and project management company that oversees a diverse
multi-billion dollar portfolio of investments by Paul G. Allen.
Prior to joining Vulcan Inc., Mr.&nbsp;Conn was employed by
America Online, Inc., an interactive online services company,
from March 1996 to May 2003. From 1997 to 2000, Mr.&nbsp;Conn
served in various senior business development roles at America
Online. In 2000, Mr.&nbsp;Conn began supervising all of America
Online&#146;s European investments, alliances and business
initiatives. In 2002, he became Senior Vice President of America
Online U.S.&nbsp;where he led a company-wide effort to
restructure and optimize America Online&#146;s operations. From
September 1994 until February 1996, Mr.&nbsp;Conn was an
attorney with the Shaw Pittman law firm in Washington,&nbsp;D.C.
Mr.&nbsp;Conn holds a J.D. degree from the University of
Virginia, a master&#146;s degree in history from the University
of Mississippi and an A.B. in history from Princeton University.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Nathaniel A. Davis,</FONT></I><FONT size="2">
51, was elected to our board of directors on August&nbsp;23,
2005. Since June 2003, Mr.&nbsp;Davis has been Managing Director
and owner of RANND Advisory Group, a technology Consulting
Group, which advises venture capital, telecom and other
technology related firms. From January 2000 through May of 2003,
he was President and Chief Operating Officer of XO
Communication, Inc. XO&nbsp;Communications filed a petition to
reorganize under Chapter&nbsp;11 of the Bankruptcy Code in June
2002 and completed its restructuring and emerged from
Chapter&nbsp;11 in January 2003. From October 1998 to December
1999 he was Executive Vice President, Network and Technical
Services of Nextel Communications, Inc. Prior to that, he worked
for MCI Communications from 1982 until 1998 in a number of
positions, including as Chief Financial Officer of MCIT from
November 1996 until October
</FONT>

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<DIV align="left">
<FONT size="2">1998. Prior to that, Mr.&nbsp;Davis served in a
variety of roles that include Senior Vice President of Network
Operations, Chief Operating Officer of MCImetro,&nbsp;Sr. Vice
President of Finance, Vice President of Systems Development.
Mr.&nbsp;Davis holds a B.S. degree from Stevens Institute of
Technology, an M.S. from Moore School of Engineering and an
M.B.A. from the Wharton School at the University of
Pennsylvania. He is a member of the boards of XM Satellite Radio
Holdings, Inc. and of Mutual of America Capital Management
Corporation.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Jonathan L. Dolgen,</FONT></I><FONT size="2">
60, was elected to our board of directors in October 2004. Since
July 2004, Mr.&nbsp;Dolgen has also been a Senior Advisor to
Viacom, Inc. a worldwide entertainment and media company, where
he provides advisory services to the current Chairman and Chief
Executive of Viacom, or others designated by him, on an as
requested basis. Since July 2004, Mr.&nbsp;Dolgen has been a
private investor and since September 2004, Mr.&nbsp;Dolgen has
been a principal of Wood River Ventures, LLC, a private start-up
entity that seeks investment and other opportunities primarily
in the media sector. Mr.&nbsp;Dolgen is also a member of the
board of directors of Expedia, Inc. From April 1994 to July
2004, Mr.&nbsp;Dolgen served as Chairman and Chief Executive
Officer of the Viacom Entertainment Group, a unit of Viacom,
where he oversaw various operations of Viacom&#146;s businesses,
which during 2003 and 2004 primarily included the operations
engaged in motion picture production and distribution,
television production and distribution, regional theme parks,
theatrical exhibition and publishing. Mr.&nbsp;Dolgen began his
career in the entertainment industry in 1976, and until joining
the Viacom Entertainment Group, served in executive positions at
Columbia Pictures Industries, Inc., Twentieth Century Fox and
Fox, Inc., and Sony Pictures Entertainment. Mr.&nbsp;Dolgen
holds a B.S. degree from Cornell University and a J.D. degree
from New York University.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Robert P. May,</FONT></I><FONT size="2"> 56,
was elected to our board of directors in October 2004 and was
our Interim President and Chief Executive Officer from January
until August 2005. Mr.&nbsp;May has served on the board of
directors of HealthSouth Corporation, a national provider of
healthcare services, since October 2002, and has been its
Chairman since July 2004. Mr.&nbsp;May also served as
HealthSouth Corporation&#146;s Interim Chief Executive Officer
from March 2003 until May 2004, and as Interim President of its
Outpatient and Diagnostic Division from August 2003 to January
2004. In September 2005, Mr.&nbsp;May announced that he will
resign from the board of directors of HealthSouth Corporation
effective October&nbsp;1, 2005. Since March 2001, Mr.&nbsp;May
has been a private investor and principal of RPM Systems, which
provides strategic business consulting services. From March 1999
to March 2001, Mr.&nbsp;May served on the board of directors and
was Chief Executive of PNV Inc., a national telecommunications
company. PNV Inc. filed for bankruptcy in December 2000. Prior
to his employment at PNV Inc., Mr.&nbsp;May was Chief Operating
Officer and a member of the board of directors of Cablevision
Systems Corporation from October 1996 to February 1998, and from
1973 to 1993 he held several senior executive positions with
Federal Express Corporation, including President, Business
Logistics Services. Mr.&nbsp;May was educated at Curry College
and Boston College and attended Harvard Business School&#146;s
Program for Management Development.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">David C. Merritt,
</FONT></I><FONT size="2">51, was elected to our board of
directors in July 2003, and was also appointed as Chairman of
the Audit Committee at that time. Since October 2003,
Mr.&nbsp;Merritt has been a Managing Director of Salem Partners,
LLC, an investment banking firm. He was a Managing Director in
the Entertainment Media Advisory Group at Gerard Klauer
Mattison&nbsp;&#38; Co., Inc., a company that provided financial
advisory services to the entertainment and media industries from
January 2001 through April 2003. From July 1999 to November
2000, he served as Chief Financial Officer of CKE Associates,
Ltd., a privately held company with interests in talent
management, film production, television production, music and
news media. He also served as a director of Laser-Pacific Media
Corporation from January 2001 until October 2003 and served as
Chairman of its audit committee. In December 2003, he became a
director of Outdoor Channel Holdings, Inc. Mr.&nbsp;Merritt
joined KPMG in 1975 and served in a variety of capacities during
his years with the firm, including national partner in charge of
the media and entertainment practice and before joining CKE
Associates, Mr.&nbsp;Merritt was an audit and consulting partner
of KPMG for 14&nbsp;years. Mr.&nbsp;Merritt holds a B.S. degree
in Business and Accounting from California State
University&nbsp;&#151; Northridge.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Marc B. Nathanson,
</FONT></I><FONT size="2">60, has been a director of Charter
since January 2000 and serves as Vice Chairman of our board of
directors, a non-executive position. Mr.&nbsp;Nathanson is the
Chairman of Mapleton Investments LLC, an investment vehicle
formed in 1999. He also founded and served as Chairman and Chief
Executive
</FONT>

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<DIV align="left">
<FONT size="2">Officer of Falcon Holding Group, Inc., a cable
operator, and its predecessors, from 1975 until 1999. He served
as Chairman and Chief Executive Officer of Enstar Communications
Corporation, a cable operator, from 1988 until November 1999.
Prior to 1975, Mr.&nbsp;Nathanson held executive positions with
Teleprompter Corporation, Warner Cable and Cypress
Communications Corporation. In 1995, he was appointed by the
President of the United States to the Broadcasting Board of
Governors, and from 1998 through September 2002, served as its
Chairman. Mr.&nbsp;Nathanson holds a bachelors degree in Mass
Communications from the University of Denver and a masters
degree in Political Science from University of California/
Santa&nbsp;Barbara.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Jo Allen Patton,</FONT></I><FONT size="2"> 47,
has been a director of Charter since April 2004. Ms.&nbsp;Patton
joined Vulcan Inc. as Vice President in 1993, and since that
time she has served as an officer and director of many
affiliates of Mr.&nbsp;Allen, including her current position as
President and Chief Executive Officer of Vulcan Inc. since July
2001. Ms.&nbsp;Patton is also President of Vulcan Productions,
an independent feature film and documentary production company,
Vice Chair of First&nbsp;&#38; Goal, Inc., which developed and
operated the Seattle Seahawks NFL stadium, and serves as
Executive Director of the six Paul G. Allen Foundations.
Ms.&nbsp;Patton is a co-founder of the Experience Music Project
museum, as well as the Science Fiction Museum and Hall of Fame.
Ms.&nbsp;Patton is the sister of Mr.&nbsp;Allen.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Neil Smit,</FONT></I><FONT size="2"> 46, was
elected a director and President and Chief Executive Officer of
Charter on August&nbsp;22, 2005. He had previously worked at
Time Warner, Inc. since 2000, most recently serving as the
President of Time Warner&#146;s America Online Access Business.
He also served at America Online (&#147;AOL&#148;) as Executive
Vice President, Member Development, Senior Vice President of
AOL&#146;s product and programming team, Chief Operating Officer
of AOL Local, Chief Operating Officer of MapQuest. Prior to that
he was a regional vice president with Nabisco and was with
Pillsbury in a number of management positions. Mr.&nbsp;Smit has
a bachelor&#146;s of science degree from Duke University and a
master&#146;s degree with a focus in international business from
Tufts University&#146;s Fletcher School of Law and Diplomacy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">John H. Tory, </FONT></I><FONT size="2">51,
has been a director of Charter since December 2001.
Mr.&nbsp;Tory served as the Chief Executive Officer of Rogers
Cable Inc., Canada&#146;s largest broadband cable operator, from
1999 until 2003. From 1995 to 1999, Mr.&nbsp;Tory was President
and Chief Executive Officer of Rogers Media Inc., a broadcasting
and publishing company. Prior to joining Rogers, Mr.&nbsp;Tory
was a Managing Partner and member of the executive committee at
Tory Tory DesLauriers&nbsp;&#38; Binnington, one of
Canada&#146;s largest law firms. Mr.&nbsp;Tory serves on the
board of directors of Rogers Telecommunications Limited and Cara
Operations Limited and is Chairman of Cara Operations&#146;
Audit Committee. Mr.&nbsp;Tory was educated at University of
Toronto Schools, Trinity College (University of Toronto) and
Osgoode Hall Law School. Effective September&nbsp;18, 2004,
Mr.&nbsp;Tory was elected Leader of the Ontario Progressive
Conservative Party. On March&nbsp;17, 2005, he was elected a
Member of the Provincial Parliament and on March&nbsp;29, 2005,
became the Leader of Her Majesty&#146;s Loyal Opposition. On
June&nbsp;29, 2005, Mr.&nbsp;Tory formally notified Charter that
he intends to resign from its board of directors. The date for
his departure has not yet been determined, but he has indicated
that he will continue to serve on Charter&#146;s board, as well
as the audit committee, at least until a replacement director is
named.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Larry W. Wangberg,
</FONT></I><FONT size="2">63, has been a director of Charter
since January 2002. From August 1997 to May 2004,
Mr.&nbsp;Wangberg was a director of TechTV L.L.C., a cable
television network controlled by Paul Allen. He also served as
its Chairman and Chief Executive Officer from August 1997
through July 2002. In May 2004, TechTV L.L.C. was sold to an
unrelated party. Prior to joining TechTV L.L.C.,
Mr.&nbsp;Wangberg was Chairman and Chief Executive Officer of
StarSight Telecast Inc., an interactive navigation and program
guide company which later merged with Gemstar International,
from 1994 to 1997. Mr.&nbsp;Wangberg was Chairman and Chief
Executive Officer of Times Mirror Cable Television and Senior
Vice President of its corporate parent, Times Mirror Co., from
1983 to 1994. He currently serves on the boards of Autodesk Inc.
and ADC Telecommunications, Inc. Mr.&nbsp;Wangberg holds a
bachelor&#146;s degree in Mechanical Engineering and a
master&#146;s degree in Industrial Engineering, both from the
University of Minnesota.
</FONT>

<P align="center"><FONT size="2">102
</FONT>

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<P align="left">
<B><FONT size="2">Audit Committee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee, which has a written charter
approved by the board of directors, consisted of three directors
as of March&nbsp;28, 2005: Charles Lillis, John Tory and David
Merritt, all of whom are independent in accordance with the
applicable corporate governance listing standards of the NASDAQ
National Market. Charter&#146;s board of directors has
determined that, in its judgment, David Merritt is an audit
committee financial expert within the meaning of the applicable
federal regulations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Lillis resigned from Charter&#146;s
board of directors, effective March&nbsp;28, 2005.
Mr.&nbsp;Lillis was one of three independent members of the
Audit Committee. On August&nbsp;23, 2005, Nathaniel Davis, who
is independent in accordance with the applicable corporate
governance listing standards of the NASDAQ National Market, was
elected to the Audit Committee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;29, 2005, Mr.&nbsp;Tory formally
notified Charter that he intends to resign from its board of
directors and the board committees on which he serves. The date
for Mr.&nbsp;Tory&#146;s departure has not yet been determined,
but he has indicated that he will continue to serve on
Charter&#146;s board and its committees at least until a
replacement director is named.
</FONT>

<P align="left">
<B><FONT size="2">Director Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each non-employee member of our board receives an
annual retainer of $40,000 in cash plus restricted stock,
vesting one year after the date of grant, with a value on the
date of grant of $50,000. In addition, the Audit Committee chair
receives $25,000&nbsp;per year, and the chair of each other
committee receives $10,000&nbsp;per year. Prior to
February&nbsp;22, 2005, all committee members also received
$1,000 for attendance at each committee meeting. Beginning on
February&nbsp;22, 2005 each director also receives $1,000 for
telephonic attendance at each meeting of the full board and
$2,000 for in-person attendance. Each director of Charter is
entitled to reimbursement for costs incurred in connection with
attendance at board and committee meetings. Vulcan has informed
us that, in accordance with its internal policy, Mr.&nbsp;Conn
turns over to Vulcan all cash compensation he receives for his
participation on Charter&#146;s board of directors or committees
thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Directors who were employees did not receive
additional compensation in 2003 or 2004. Mr.&nbsp;Vogel, who was
our President and Chief Executive Officer in 2004, was the only
director who was also an employee during 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Bylaws provide that all directors are
entitled to indemnification to the maximum extent permitted by
law from and against any claims, damages, liabilities, losses,
costs or expenses incurred in connection with or arising out of
the performance by them of their duties for us or our
subsidiaries. In addition, we have been informed by Vulcan that
the bylaws of Vulcan, Inc. also provide that Ms.&nbsp;Patton and
Messrs.&nbsp;Allen and Conn are entitled to similar
indemnification in connection with their service on our Board of
Directors and committees thereof.
</FONT>

<P align="left">
<B><FONT size="2">Executive Officers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following persons are executive officers of
Charter Communications, Inc.:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Executive Officers</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Position</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Paul G. Allen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chairman of the Board of Directors
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Neil Smit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">President and Chief Executive Officer
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Wayne H. Davis
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Executive Vice President and Chief Technical
    Officer
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Sue Ann R. Hamilton
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Executive Vice President, Programming
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Thomas J. Hearity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Senior Vice President, Acting General Counsel and
    Secretary
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Michael J. Lovett
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Executive Vice President and Chief Operating
    Officer
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Paul E. Martin
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Senior Vice President, Interim Chief Financial
    Officer, Principal Accounting Officer and Corporate Controller
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Lynne F. Ramsey
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Senior Vice President, Human Resources
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">103
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information regarding our executive officers who
do not serve as directors is set forth below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Wayne H. Davis</FONT></I><FONT size="2">, 51,
Executive Vice President and Chief Technical Officer. Prior to
his current position, Mr.&nbsp;Davis served as Senior Vice
President, Engineering and Technical Operations, and as
Assistant to the President/ Vice President of Management
Services since July 2002 and prior to that, he was Vice
President of Engineering/ Operations for Charter&#146;s National
Region from December 2001. Before joining Charter,
Mr.&nbsp;Davis held the position of Vice President of
Engineering for Comcast Corporation, Inc. Prior to that, he held
various engineering positions including Vice President of
Engineering for Jones Intercable Inc. He began his career in the
cable industry in 1980. He attended the State University of New
York at Albany. Mr.&nbsp;Davis serves as an advisory board
member of Cedar Point Communications, and as a board member of
@Security Broadband Corp., a company in which Charter owns an
equity investment interest. Mr.&nbsp;Davis is also a member of
the Society of Cable Telecommunications Engineers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Sue Ann R.
Hamilton,</FONT></I><FONT size="2">&nbsp;44, Executive Vice
President, Programming. Ms. Hamilton joined Charter as Senior
Vice President of Programming in March 2003 and was promoted to
her current position in April 2005. From March 1999 to November
2002, Ms. Hamilton served as Vice President of Programming for
AT&#38;T Broadband, L.L.C. Prior to that, from October 1993 to
March 1999, Ms. Hamilton held numerous management positions at
AT&#38;T Broadband, L.L.C. and Tele-Communications, Inc. (TCI),
which was acquired by AT&#38;T Broadband, L.L.C. in 1999. Prior
to her cable television career with TCI, she was a partner with
Kirkland &#38; Ellis representing domestic and international
clients in complex commercial transactions and securities
matters. A magna cum laude graduate of Carleton College in
Northfield, Minnesota, Ms. Hamilton received a J.D. degree from
Stanford Law School, where she was Associate Managing Editor of
the <I>Stanford Law Review</I> and Editor of the <I>Stanford
Journal of International Law.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Thomas J. Hearity,</FONT></I><FONT size="2">
58, Senior Vice President, Acting General Counsel and Secretary.
Mr.&nbsp;Hearity joined Charter as Vice President and Associate
General counsel in September 2003 and was promoted to Senior
Vice President and Associate General Counsel in August 2004. He
was appointed to Acting General Counsel in April 2005 and
appointed Secretary in May&nbsp;2005. Prior to joining Charter,
Mr.&nbsp;Hearity served as outside counsel for Charter and
several other major wireline and wireless telecommunications
firms from 1996 to 2003. Mr.&nbsp;Hearity served as counsel for
the NYNEX Corporation from 1984 to 1996. Mr.&nbsp;Hearity
graduated with honors and received a B.A. degree in History and
a J.D. degree from the University of Iowa.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Michael J. Lovett</FONT></I><FONT size="2">,
44, Executive Vice President and Chief Operating Officer.
Mr.&nbsp;Lovett was promoted to his current position in April
2005. Prior to that he served as Executive Vice President,
Operations and Customer Care from September 2004 through March
2005, and as Senior Vice President, Midwest Division Operations
and as Senior Vice President of Operations Support, since
joining Charter in August 2003 until September 2004.
Mr.&nbsp;Lovett was Chief Operating Officer of Voyant
Technologies, Inc., a voice conferencing hardware/ software
solutions provider, from December 2001 to August 2003. From
November 2000 to December 2001, he was Executive Vice President
of Operations for OneSecure, Inc., a startup company delivering
management/monitoring of firewalls and virtual private networks.
Prior to that, Mr.&nbsp;Lovett was Regional Vice President at
AT&#38;T from June 1999 to November 2000 where he was
responsible for operations. Mr.&nbsp;Lovett was Senior Vice
President at Jones Intercable from October 1989 to June 1999
where he was responsible for operations in nine states.
Mr.&nbsp;Lovett began his career in cable television at Centel
Corporation where he held a number of positions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Paul E. Martin</FONT></I><FONT size="2">, 45,
Senior Vice President, Interim Chief Financial Officer,
Principal Accounting Officer and Corporate Controller.
Mr.&nbsp;Martin has been employed by Charter since March 2000,
when he joined Charter as Vice President and Corporate
Controller. In April 2002, Mr.&nbsp;Martin was promoted to
Senior Vice President, Principal Accounting Officer and
Corporate Controller and in August 2004 was named Interim
co-Chief Financial Officer and in April 2005 was named Interim
Chief Financial Officer. Prior to joining us in March 2000,
Mr.&nbsp;Martin was Vice President and Controller for Operations
and Logistics for Fort&nbsp;James Corporation, a manufacturer of
paper products. From 1995 to February 1999, Mr.&nbsp;Martin was
Chief Financial Officer of Rawlings Sporting Goods Company, Inc.
Mr.&nbsp;Martin received a B.S. degree with honors in Accounting
from the University of Missouri&nbsp;&#151; St.&nbsp;Louis.
</FONT>

<P align="center"><FONT size="2">104
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Lynne F. Ramsey</FONT></I><FONT size="2">, 48,
Senior Vice President, Human Resources. Ms. Ramsey joined
Charter&#146;s Human Resources group in March 2001 and served as
Corporate Vice President, Human Resources. She was promoted to
her current position in July 2004. Before joining Charter, Ms.
Ramsey was Executive Vice President of Human Resources for
Broadband Infrastructure Group from March 2000 through November
2000. From 1994 to 1999, Ms.&nbsp;Ramsey served as Senior Vice
President of Human Resources for Firstar Bank, previously
Mercantile Bank of St.&nbsp;Louis. She served as Vice President
of Human Resources for United Postal Savings from 1982 through
1994, when it was acquired by Mercantile Bank of St.&nbsp;Louis.
Ms. Ramsey received a bachelor&#146;s degree in Education from
Maryville College and a master&#146;s degree in Human Resources
Management from Washington University.
</FONT>

<P align="left">
<B><FONT size="2">Compensation Committee Interlocks and Insider
Participation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Until April 2004, when Mr.&nbsp;Savoy resigned
from the board of directors, Charter&#146;s Compensation
Committee was comprised of Messrs.&nbsp;Allen, Savoy and
Nathanson. In 2004, Ms. Peretsman and Mr. Merritt served as the
Option Plan Committee that administered the 1999 Charter
Communications Option Plan and the Charter Communications, Inc.
2001 Stock Incentive Plan until Mr.&nbsp;Lillis replaced
Ms.&nbsp;Peretsman on the Option Plan Committee in July 2004.
The Option Plan Committee and the Compensation Committee merged
in February 2005. The Compensation Committee is currently
comprised of Messrs. Allen, May, Merritt and Nathanson.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No member of the Compensation Committee or the
Option Plan Committee was an officer or employee of Charter or
any of its subsidiaries during 2004, except for Mr.&nbsp;Allen,
who served as a non-employee chairman of the Compensation
Committee. Also, Mr.&nbsp;Nathanson was an officer of certain of
our subsidiaries prior to their acquisition by Charter in 1999
and held the title of Vice Chairman of Charter&#146;s board of
directors, a non-executive, non-salaried position in 2004.
Mr.&nbsp;Allen is the 100% owner and a director of Vulcan Inc.
and certain of its affiliates, which employed Mr.&nbsp;Savoy,
one of our directors until April&nbsp;27, 2004, as an executive
officer in the past and currently employs Mr.&nbsp;Conn and Ms.
Patton as executive officers. Mr.&nbsp;Allen also was a director
of and indirectly owned 98% of TechTV, of which
Mr.&nbsp;Wangberg, one of our directors, was a director until
the sale of TechTV to an unrelated third party in May 2004.
Transactions between Charter and members of the Compensation
Committee are more fully described in &#147;&#151;&nbsp;Director
Compensation&#148; and in &#147;Certain Relationships and
Related Transactions&nbsp;&#151; Other Miscellaneous
Relationships.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2004, (1)&nbsp;none of our executive
officers served on the compensation committee of any other
company that has an executive officer currently serving on the
board of directors, Compensation Committee or Option Plan
Committee of Charter and (2)&nbsp;except for Carl Vogel who
served as a director of Digeo, Inc., an entity of which Paul
Allen is a director and by virtue of his position as Chairman of
the board of directors of Digeo, Inc. is also a non-employee
executive officer. None of our executive officers served as a
director of another entity, one of whose executive officers
served on the Compensation Committee or Option Plan Committee of
Charter.
</FONT>

<P align="center"><FONT size="2">105
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Executive Compensation</FONT></B>

<P align="left">
<B><FONT size="2">Summary Compensation Table</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth information
regarding the compensation to those executive officers listed
below for services rendered for the fiscal years ended
December&nbsp;31, 2002, 2003 and 2004. These officers consist of
the Chief Executive Officer, each of the other four most highly
compensated executive officers as of December&nbsp;31, 2004, and
one other highly compensated executive officer who served during
2004 but was not an executive officer on December&nbsp;31, 2004.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Long-Term</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Annual Compensation</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Compensation Award</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Restricted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">All Other</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Annual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" nowrap><B><FONT size="1">Name and Principal Position</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Dec. 31</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Salary($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Bonus($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Awards($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options(#)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">($)(1)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Carl E. Vogel(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,038,462</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(8)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,658,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(18)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">580,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,426</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(24)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Former President and
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(9)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,345</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(15)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">750,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,639</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(24)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chief Executive Officer
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">980,769</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">330,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(9)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">214,961</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(15)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,255</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(24)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Margaret A. Bellville(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">478,366</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,309</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(16)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">612,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(19)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">204,408</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(25)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Former Executive Vice
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">581,730</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">203,125</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(9)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,810</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(16)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109,139</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(25)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">President, Chief Operating
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,615</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(9)(10)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Officer
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Derek Chang(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85,700</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(11)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,255</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(17)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">395,250</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(20)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Former Executive Vice
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,385</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">192,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(20)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">350,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">President of Finance and Strategy, Interim
    co-Chief Financial Officer
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Steven A. Schumm(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">467,308</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,815</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(12)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">862,952</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(21)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Former Executive Vice
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">250,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">President and Chief
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">436,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">588,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(13)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Administrative Officer
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Curtis S. Shaw(6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">422,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,109</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">395,250</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(22)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,592</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Former Executive Vice
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">275,782</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">250,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,411</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(26)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">President, General Counsel
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">281,500</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(14)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,096</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">and Secretary
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Michael J. Lovett(7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">291,346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">241,888</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">351,570</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(23)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,150</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(27)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Executive Vice President,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">81,731</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,400</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(27)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Operations and Customer Care
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Except as noted in notes&nbsp;24 through 27
    below, these amounts consist of matching contributions under our
    401(k) plan, premiums for supplemental life insurance available
    to executives, and long-term disability available to executives.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Vogel resigned from all of his positions
    with Charter and its subsidiaries on January&nbsp;17, 2005.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Ms.&nbsp;Bellville became the Chief Operating
    Officer of Charter in December 2002 and terminated her
    employment, effective September&nbsp;30, 2004.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Chang was hired as Executive Vice
    President of Finance and Strategy in December 2003, and was
    appointed Interim co-Chief Financial Officer in August 2004.
    Mr.&nbsp;Chang resigned from all positions with Charter and its
    subsidiaries effective April&nbsp;15, 2005.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Schumm&#146;s position with Charter and
    its subsidiaries was eliminated, resulting in the termination of
    his employment on January&nbsp;28, 2005.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Shaw resigned from all positions with
    Charter and its subsidiaries effective April&nbsp;15, 2005.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(7)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Lovett joined Charter in August 2003 and
    was promoted to Executive Vice President, Chief Operating
    Officer in April 2005.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(8)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Vogel&#146;s bonus for 2004 was a
    mid-year discretionary bonus.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">106
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(9)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Vogel&#146;s and
    Ms.&nbsp;Bellville&#146;s 2002 and 2003 bonuses were determined
    in accordance with the terms of their respective employment
    agreements.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(10)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes a one-time signing bonus of $150,000
    pursuant to an employment agreement.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(11)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Chang&#146;s bonus for 2004 represents
    the 2004 portion of a $150,000 special bonus which was paid in
    connection with his continued service as Interim co-Chief
    Financial Officer through April&nbsp;15, 2005.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(12)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Schumm&#146;s bonus for 2004 was
    determined in accordance with his separation agreement.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(13)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes a &#147;stay&#148; bonus representing
    the principal and interest forgiven under employee&#146;s
    promissory note, amounting to $363,000 for 2002; and $225,000
    awarded as a bonus for services performed in 2002.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(14)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes a &#147;stay&#148; bonus representing
    the principal and interest forgiven under employee&#146;s
    promissory note, amounting to $181,500 for 2002; and $100,000
    awarded as a bonus for services performed in 2002.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(15)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Amount attributed to personal use of the
    corporate airplane in 2003 and $100,000 attributed to personal
    use and commuting in the corporate airplane in 2002 and $114,961
    for purchase of a car in 2002.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(16)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes (i)&nbsp;for 2004, reimbursement for
    taxes (on a &#147;grossed up&#148; basis) paid in respect of
    prior reimbursements for relocation expenses, and (ii)&nbsp;for
    2003, $26,010 attributed to personal use of the corporate
    airplane and $4,800 for car allowance.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(17)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes reimbursement for taxes (on a
    &#147;grossed up&#148; basis) paid in respect of prior
    reimbursements for relocation expenses.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(18)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes 340,000 performance shares granted in
    January 2004 under our Long-Term Incentive Program that were to
    vest on the third anniversary of the grant date only if Charter
    meets certain performance criteria. Also includes 680,000
    restricted shares issued in exchange for stock options held by
    the named officer pursuant to the February 2004 option exchange
    program described below, one half of which constituted
    performance shares which were to vest on the third anniversary
    of the grant date only if Charter meets certain performance
    criteria, and the other half of which were to vest over three
    years in equal one-third installments. At December&nbsp;31,
    2004, the value of all of the named officer&#146;s unvested
    restricted stock holdings (including performance shares) was
    $2,310,468, based on a per share market value (closing sale
    price) of $2.24 for our Class&nbsp;A common stock on
    December&nbsp;31, 2004. All performance shares were forfeited
    upon termination of employment. The remainder of the restricted
    shares will vest in part on the terms described below under
    &#147;Employment Arrangements.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(19)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">These restricted shares consisted solely of
    performance shares granted under our Long-Term Incentive Program
    that were to have vested on the third anniversary of the grant
    date only if Charter meets certain performance criteria. At
    December&nbsp;31, 2004, the value of all of the named
    officer&#146;s unvested restricted stock holdings (including
    performance shares) was $0, since all performance shares were
    previously forfeited upon the termination of employment.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(20)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Restricted shares granted in 2003 vest over four
    years in equal one-fourth installments. Restricted shares
    granted in 2004 represent 77,500 performance shares granted
    under our Long-Term Incentive Program that were to vest on the
    third anniversary of the grant date only if Charter meets
    certain performance criteria. At December&nbsp;31, 2004, the
    value of all of the named officer&#146;s unvested restricted
    stock holdings (including performance shares) was $257,600 based
    on a per share market value (closing sale price) of $2.24 for
    our Class&nbsp;A common stock on December&nbsp;31, 2004. All
    performance shares were forfeited upon termination of
    employment. The remainder of restricted shares will vest in part
    on the terms described below under &#147;Employment
    Arrangements.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(21)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes 77,500 performance shares granted in
    January 2004 under our Long-Term Incentive Program that were to
    vest on the third anniversary of the grant date only if Charter
    meets certain performance criteria. Also includes restricted
    shares issued in exchange for stock options held by the named
    officer pursuant to the February 2004 option exchange program
    described below. One half of
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">107
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">these restricted shares constitutes performance
    shares which were to vest on the third anniversary of the grant
    date only if Charter meets certain performance criteria and the
    other half of which were to vest over three years in equal
    one-third installments. At December&nbsp;31, 2004, the value of
    all of the named officer&#146;s unvested restricted stock
    holdings (including performance shares) was $417,240, based on a
    per share market value (closing sale price) of $2.24 for our
    Class&nbsp;A common stock on December&nbsp;31, 2004. All
    performance shares were forfeited upon the termination of
    employment. The remainder of the restricted shares will vest in
    part on the terms described below under &#147;Employment
    Arrangements.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(22)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">These restricted shares consist solely of
    performance shares granted under our Long-Term Incentive Program
    that will vest on the third anniversary of the grant date only
    if Charter meets certain performance criteria. At
    December&nbsp;31, 2004, the value of all of the named
    officer&#146;s unvested restricted stock holdings (including
    performance shares) was $173,600 based on a per share market
    value (closing sale price) of $2.24 for our Class&nbsp;A common
    stock on December&nbsp;31, 2004. All performance shares were
    forfeited upon termination of employment.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(23)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">These restricted shares consist solely of
    performance shares granted under our Long-Term Incentive Program
    that will vest on the third anniversary of the grant date only
    if Charter meets certain performance criteria. At
    December&nbsp;31, 2004, the value of all of the named
    officer&#146;s unvested restricted stock holdings (including
    performance shares) was $197,120, based on a per share market
    value (closing sale price) of $2.24 for our Class&nbsp;A common
    stock on December&nbsp;31, 2004.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(24)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In addition to items in note&nbsp;1 above,
    includes (i)&nbsp;for 2004, $28,977 attributed to personal use
    of the corporate airplane, $10,000 as reimbursement for tax
    advisory services and (ii)&nbsp;for 2003, $10,000 as
    reimbursement for tax advisory services; and (iii)&nbsp;for
    2002, $10,000 as reimbursement for tax advisory services.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(25)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In addition to items in note&nbsp;1 above,
    includes (i)&nbsp;for 2004, $183,899 for severance and accrued
    vacation at termination of employment, $10,299 for COBRA
    payments following termination, $4,650 for automobile allowance
    and $2,831 attributed to personal use of the corporate airplane,
    and (ii)&nbsp;for 2003, $5,000 as reimbursement for tax advisory
    services, $7,500 for legal services and $93,684 paid in relation
    to relocation expenses.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(26)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In addition to items in note&nbsp;1 above,
    includes for 2003, $2,287 attributed to personal use of the
    corporate airplane.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(27)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In addition to items in note&nbsp;1 above,
    includes, (i)&nbsp;for 2004, $7,200 for automobile allowance,
    and $597 attributed to personal use of the corporate airplane
    and (ii)&nbsp;for 2003, $2,400 for automobile allowance.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">108
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">2004 Option Grants</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows individual grants of
options made to individuals named in the Summary Compensation
Table during 2004. All such grants were made under the 2001
Stock Incentive Plan and the exercise price was based upon the
fair market value of Charter&#146;s Class&nbsp;A common stock on
the respective grant dates.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Potential Realizable Value at</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Assumed Annual Rate of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Stock Price Appreciation</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Granted to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">For Option Term(2)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Granted</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Employees</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expiration</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(#)(1)</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">in 2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">($/Sh)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">5%&nbsp;($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">10%&nbsp;($)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Carl E. Vogel(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">580,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">6.17%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1/27/14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,885,803</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,778,996</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Margaret A. Bellville(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">2.13%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1/27/14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">650,277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,647,930</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Derek Chang(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">1.44%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1/27/14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">438,937</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,112,353</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Steven A. Schumm(6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">1.44%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1/27/14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">438,937</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,112,353</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Curtis S. Shaw(7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">1.44%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1/27/14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">438,937</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,112,353</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Michael J. Lovett
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">0.82%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1/27/14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">251,982</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">638,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">0.13%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4/27/14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,808</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90,744</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">82,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">0.87%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.865</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10/26/14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">147,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">374,418</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Options are transferable under limited
    conditions, primarily to accommodate estate planning purposes.
    These options generally vest in four equal installments
    commencing on the first anniversary following the grant date.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">This column shows the hypothetical gains on the
    options granted based on assumed annual compound price
    appreciation of 5% and 10% over the full ten-year term of the
    options. The assumed rates of 5% and 10% appreciation are
    mandated by the SEC and do not represent our estimate or
    projection of future prices.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Vogel&#146;s employment terminated on
    January&nbsp;17, 2005. Under the terms of the separation
    agreement, his options will continue to vest until
    December&nbsp;31, 2005, and all vested options are exercisable
    until sixty (60)&nbsp;days thereafter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Ms.&nbsp;Bellville&#146;s employment terminated
    on September&nbsp;30, 2004. Under the terms of the separation
    agreement, her options will continue to vest until
    December&nbsp;31, 2005, and all vested options are exercisable
    until sixty (60)&nbsp;days thereafter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Chang resigned effective April&nbsp;15,
    2005. Mr.&nbsp;Chang&#146;s agreement provided that one half of
    his unvested restricted shares would immediately vest, and one
    half of his unvested options of the initial option grant would
    vest if he elected to terminate his employment due to a change
    in our Chief Executive Officer.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Schumm&#146;s employment terminated on
    January&nbsp;28, 2005. Under the terms of the separation
    agreement, his options will continue to vest until
    April&nbsp;28, 2006, and all vested options are exercisable
    until sixty (60)&nbsp;days thereafter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(7)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Shaw resigned, effective April&nbsp;15,
    2005. All of his options expired by June&nbsp;15, 2005.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">109
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">2004 Aggregated Option Exercises and Option
Value</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth, for the
individuals named in the Summary Compensation Table,
(i)&nbsp;information concerning options exercised during 2004,
(ii)&nbsp;the number of shares of our Class&nbsp;A common stock
underlying unexercised options at year-end 2004, and
(iii)&nbsp;the value of unexercised &#147;in-the-money&#148;
options (i.e.,&nbsp;the positive spread between the exercise
price of outstanding options and the market value of our
Class&nbsp;A common stock) on December&nbsp;31, 2004.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Number of Securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Underlying Unexercised</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Value of Unexercised In-the</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Options at December&nbsp;31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Money Options at</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004&nbsp;(#)(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2004&nbsp;($)(2)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Acquired on</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise&nbsp;(#)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Realized&nbsp;($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Carl E. Vogel(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,499,999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,230,001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Margaret A. Bellville(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">385,416</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">314,584</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">254,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,625</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Derek Chang(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">397,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Steven A. Schumm(6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">182,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">502,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Curtis S. Shaw(7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">438,833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">420,167</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Michael J. Lovett
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">247,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Options granted prior to 2001 and under the 1999
    Charter Communications Option Plan, when vested, are exercisable
    for membership units of Charter Holdco which are immediately
    exchanged on a one-for-one basis for shares of our Class&nbsp;A
    common stock upon exercise of the option. Options granted under
    the 2001 Stock Incentive Plan and after 2000 are exercisable for
    shares of our Class&nbsp;A common stock.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Based on a per share market value (closing price)
    of $2.24 as of December&nbsp;31, 2004 for our Class&nbsp;A
    common stock.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Vogel&#146;s employment terminated on
    January&nbsp;17, 2005. Under the terms of the separation
    agreement, his options will continue to vest until
    December&nbsp;31, 2005, and all vested options are exercisable
    until sixty (60)&nbsp;days thereafter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Ms.&nbsp;Bellville&#146;s employment terminated
    on September&nbsp;30, 2004. Under the terms of the separation
    agreement, her options will continue to vest until
    December&nbsp;31, 2005, and all vested options are exercisable
    until sixty (60)&nbsp;days thereafter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Chang resigned from all of his positions
    with Charter effective April&nbsp;15, 2005. One-half of the
    remainder of his options will vest on the terms described below
    under &#147;Employment Arrangements.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Schumm&#146;s employment terminated on
    January&nbsp;28, 2005. Under the terms of the separation
    agreement, his options will continue to vest until
    April&nbsp;28, 2006, and all vested options are exercisable
    until sixty (60)&nbsp;days thereafter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(7)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Shaw resigned from all of his positions
    with Charter effective April&nbsp;15, 2005. All of his options
    expired by June&nbsp;15, 2005.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">110
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<!-- link1 "Long-Term Incentive Plans -- Awards in Last Fiscal Year" -->

<P align="center">
<B><U><FONT size="2">Long-Term Incentive Plans&nbsp;&#151;
Awards in Last Fiscal Year</FONT></U></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Estimated Future Payouts Under</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Non-Stock Price-Based Plans</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Performance or</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares, Units or</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other Period Until</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Threshold</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Target</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Maximum</FONT></B></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other Rights(#)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Maturation or Payout</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(#)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(#)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(#)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Carl E. Vogel
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">340,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="bottom"><FONT size="2">3&nbsp;year performance cycle<BR>3&nbsp;year vesting</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">340,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">680,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Margaret A. Bellville
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">120,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="bottom"><FONT size="2">3&nbsp;year performance cycle<BR>3&nbsp;year vesting</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">84,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">120,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">240,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Derek Chang
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">77,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="bottom"><FONT size="2">3&nbsp;year performance cycle<BR>3&nbsp;year vesting</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Steven A. Schumm
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">77,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="bottom"><FONT size="2">3&nbsp;year performance cycle<BR>3&nbsp;year vesting</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Curtis S. Shaw
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">77,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="bottom"><FONT size="2">3&nbsp;year performance cycle<BR>3&nbsp;year vesting</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Michael J. Lovett
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">88,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="bottom"><FONT size="2">3&nbsp;year performance cycle<BR>3&nbsp;year vesting</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">176,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Option/ Stock Incentive Plans</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The Plans.</FONT></I><FONT size="2"> We have
granted stock options, restricted stock and other incentive
compensation under two plans&nbsp;&#151; the 1999 Charter
Communications Option Plan and the 2001 Stock Incentive Plan.
The 1999 Charter Communications Option Plan provided for the
grant of options to purchase membership units in Charter Holdco
to current and prospective employees and consultants of Charter
Holdco and its affiliates and to our current and prospective
non-employee directors. Membership units received upon exercise
of any options are immediately exchanged for shares of Charter
Class&nbsp;A common stock on a one-for-one basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 2001 Stock Incentive Plan provides for the
grant of non-qualified stock options, stock appreciation rights,
dividend equivalent rights, performance units and performance
shares, share awards, phantom stock and/or shares of restricted
stock (not to exceed 20,000,000&nbsp;shares) as each term is
defined in the 2001 Stock Incentive Plan. Employees, officers,
consultants and directors of Charter and its subsidiaries and
affiliates are eligible to receive grants under the 2001 Stock
Incentive Plan. Generally, options expire 10&nbsp;years from the
grant date. Unless sooner terminated by our board of directors,
the 2001 Stock Incentive Plan will terminate on
February&nbsp;12, 2011, and no option or award can be granted
thereafter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Together, the plans allow for the issuance of up
to a total of 90,000,000&nbsp;shares of our Class&nbsp;A common
stock (or units exchangeable for our Class&nbsp;A common stock).
Any shares covered by options that are terminated under the 1999
Charter Communications Option Plan will be transferred to the
2001 Stock Incentive Plan, and no new options will be granted
under the 1999 Charter Communications Option Plan. At
June&nbsp;30, 2005, 1,310,020&nbsp;shares had been issued under
the plans upon exercise of options, 685,476 had been issued upon
vesting of restricted stock granted under the plans, and
1,307,612&nbsp;shares were subject to future vesting under
restricted stock agreements. Of the remaining
86,696,892&nbsp;shares covered by the plans, as of June&nbsp;30,
2005, 26,782,312 were subject to outstanding options (32% of
which were vested), and there were 11,506,410 performance shares
granted under Charter&#146;s Long-Term Incentive Program, which
will vest on the third anniversary of the date of grant
conditional upon Charter&#146;s performance against certain
financial targets approved by Charter&#146;s board of directors
at the time of the award. As of June&nbsp;30, 2005,
48,408,170&nbsp;shares remained available for future grants
under the plans. As of June&nbsp;30, 2005, there were 5,720
participants in the plans.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The plans authorize the repricing of options,
which could include reducing the exercise price per share of any
outstanding option, permitting the cancellation, forfeiture or
tender of outstanding options in
</FONT>

<P align="center"><FONT size="2">111
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">exchange for other awards or for new options with
a lower exercise price per share, or repricing or replacing any
outstanding options by any other method.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Long-Term Incentive
Plan.</FONT></I><FONT size="2"> In January 2004, the
Compensation Committee of our board of directors approved our
Long-Term Incentive Program, or LTIP, which is a program
administered under the 2001 Stock Incentive Plan. Under the
LTIP, employees of Charter and its subsidiaries whose pay
classifications exceed a certain level are eligible to receive
stock options, and more senior level employees were eligible to
receive stock options and performance shares. The stock options
vest 25% on each of the first four anniversaries of the date of
grant. The performance shares vest on the third anniversary of
the date of grant shares of Class&nbsp;A common stock are
issued, conditional upon our performance against financial
performance measures established by our management and approved
by the board of directors or Compensation Committee as of the
time of the award. We granted 6,899,600 performance shares in
January 2004 under this program and recognized expense of
$8&nbsp;million in the first three quarters of 2004. However, in
the fourth quarter of 2004, we reversed the entire
$8&nbsp;million of expense based on our assessment of the
probability of achieving the financial performance measures
established by management and required to be met for the
performance shares to vest. In March and April 2005, Charter
granted 2.8&nbsp;million performance shares under the LTIP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 2001 Stock Incentive Plan must be
administered by, and grants and awards to eligible individuals
must be approved by our board of directors or a committee
thereof consisting solely of nonemployee directors as defined in
Section&nbsp;16b-3 under the Securities Exchange Act of 1934, as
amended. The board of directors or such committee determines the
terms of each stock option grant, restricted stock grant or
other award at the time of grant, including the exercise price
to be paid for the shares, the vesting schedule for each option,
the price, if any, to be paid by the grantee for the restricted
stock, the restrictions placed on the shares, and the time or
times when the restrictions will lapse. The board of directors
or such committee also has the power to accelerate the vesting
of any grant or extend the term thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon a change of control of Charter, the board of
directors or the administering committee can shorten the
exercise period of any option, have the survivor or successor
entity assume the options with appropriate adjustments, or
cancel options and pay out in cash. If an optionee&#146;s or
grantee&#146;s employment is terminated without
&#147;cause&#148; or for &#147;good reason&#148; following a
&#147;change in control&#148; (as those terms are defined in the
plans), unless otherwise provided in an agreement, with respect
to such optionee&#146;s or grantee&#146;s awards under the
plans, all outstanding options will become immediately and fully
exercisable, all outstanding stock appreciation rights will
become immediately and fully exercisable, the restrictions on
the outstanding restricted stock will lapse, and all of the
outstanding performance shares will vest and the restrictions on
all of the outstanding performance shares will lapse as if all
performance objectives had been satisfied at the maximum level.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">February 2004 Option
Exchange.</FONT></I><FONT size="2"> In January 2004, we offered
employees of Charter and its subsidiaries the right to exchange
all stock options (vested and unvested) under the 1999 Charter
Communications Option Plan and 2001 Stock Incentive Plan that
had an exercise price over $10&nbsp;per share for shares of
restricted Charter Class&nbsp;A common stock or, in some
instances, cash. Based on a sliding exchange ratio, which varied
depending on the exercise price of an employee&#146;s
outstanding options, if an employee would have received more
than 400&nbsp;shares of restricted stock in exchange for
tendered options, we issued to that employee shares of
restricted stock in the exchange. If, based on the exchange
ratios, an employee would have received 400 or fewer shares of
restricted stock in exchange for tendered options, we instead
paid to the employee cash in an amount equal to the number of
shares the employee would have received multiplied by $5.00. The
offer applied to options to purchase a total of
22,929,573&nbsp;shares of Class&nbsp;A common stock, or
approximately 48% of our 47,882,365 total options (vested and
unvested) issued and outstanding as of December&nbsp;31, 2003.
Participation by employees was voluntary. Non-employee members
of the board of directors of Charter or any of its subsidiaries
were not eligible to participate in the exchange offer.
</FONT>

<P align="center"><FONT size="2">112
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the closing of the exchange offer on
February&nbsp;20, 2004, we accepted for cancellation eligible
options to purchase approximately 18,137,664&nbsp;shares of our
Class&nbsp;A common stock. In exchange, we granted approximately
1,966,686&nbsp;shares of restricted stock, including 460,777
performance shares to eligible employees of the rank of senior
vice president and above, and paid a total cash amount of
approximately $4&nbsp;million (which amount includes applicable
withholding taxes) to those employees who received cash rather
than shares of restricted stock. The restricted stock was
granted on February&nbsp;25, 2004. Employees tendered
approximately 79% of the options eligible to be exchanged under
the program.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Carl E. Vogel received 680,000 restricted shares
in exchange for 3,400,000 options granted on October&nbsp;8,
2001 with an exercise price of $13.68&nbsp;per share. Steven A.
Schumm received 108,768 restricted shares in exchange for 25,000
options granted on February&nbsp;12, 2001 with an exercise price
of $23.09&nbsp;per share and 140,000 options granted on
September&nbsp;28, 2001 with an exercise price of
$11.99&nbsp;per share and 782,681 options granted on
February&nbsp;9, 1999 with an exercise price of $20.00&nbsp;per
share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cost of the stock option exchange program was
approximately $10&nbsp;million, with a 2004 cash compensation
expense of approximately $4&nbsp;million and a non-cash
compensation expense of approximately $6&nbsp;million to be
expensed ratably over the three-year vesting period of the
restricted stock issued in the exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The participation of the Named Executive Officers
in this exchange offer is reflected in the following table:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Market Price of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">New</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Length of Original</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock at Time</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Price at</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Option Term</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Exchange</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Time of Exchange</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Remaining at</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exchanged</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Date of Exchange</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Carl E. Vogel
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2/25/04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3,400,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">13.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">7&nbsp;years 7&nbsp;months</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Former President
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">and Chief Executive Officer
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Steven A. Schumm
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2/25/04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">25,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23.09</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">7&nbsp;years 0&nbsp;months</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Former Executive
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">140,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">11.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">7&nbsp;years 7&nbsp;months</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Vice President and
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">782,681</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">20.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4&nbsp;years 11&nbsp;months</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chief Administrative Officer
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">On February&nbsp;25, 2004, in exchange for
    3,400,000 options tendered, 340,000 performance shares were
    granted with a three year performance cycle and three&nbsp;year
    vesting were granted along with 340,000 restricted stock units
    with one-third of the Shares vesting on each of the first three
    anniversaries of the Date of Grant. On the grant date, the price
    of the Company&#146;s common stock was $4.37.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">On February&nbsp;25, 2004, in exchange for
    108,768 options tendered, 54,384 performance shares were granted
    with a three year performance cycle and three&nbsp;year vesting
    were granted along with 54,384 restricted stock units with
    one-third of the Shares vesting on each of the first three
    anniversaries of the Date of Grant. On the grant date, the price
    of the Company&#146;s common stock was $4.37.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">2005 Executive Cash Award
    Plan</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;9, 2005, Charter adopted the 2005
Executive Cash Award Plan to provide additional incentive to,
and retain the services of, certain officers of Charter and its
subsidiaries, to achieve the highest level of individual
performance and contribute to the success of Charter. Eligible
participants are employees of Charter or any of its
subsidiaries, who have been recommended by the CEO and
designated and approved as Plan participants by the Compensation
Committee of Charter&#146;s board of directors. At the time the
Plan was adopted, the interim CEO recommended and the
Compensation Committee designated and approved as Plan
participants the permanent President and Chief Executive Officer
position, Executive Vice President positions and selected Senior
Vice President positions.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Plan provides that each participant be
granted an award which represents an opportunity to receive cash
payments in accordance with the Plan. An award will be credited
in book entry format to a participant&#146;s account in an
amount equal to 100% of a participant&#146;s base salary on the
date of Plan approval in 2005 and 20% of participant&#146;s base
salary in each year 2006 through 2009, based on that
participant&#146;s base salary as of May&nbsp;1 of the
applicable year. The Plan awards will vest at the rate of 50% of
the plan award balance at the end of 2007 and 100% of the plan
award balance at the end of 2009. Participants will be entitled
to receive payment of the vested portion of the award if the
participant remains employed by Charter continuously from the
date of the participant&#146;s initial participation through the
end of the calendar year in which his or her award becomes
vested, subject to payment of pro-rated award balances to a
participant who terminates due to death or disability or in the
event Charter elects to terminate the Plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A participant&#146;s eligibility for, and right
to receive, any payment under the Plan (except in the case of
intervening death) is conditioned upon the participant first
executing and delivering to Charter an agreement releasing and
giving up all claims that participant may have against Charter
and related parties arising out of or based upon any facts or
conduct occurring prior to the payment date, and containing
additional restrictions on post-employment use of confidential
information, non-competition and non-solicitation and
recruitment of customers and employees.
</FONT>

<P align="left">
<B><FONT size="2">Employment Arrangements and Related
Agreements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter and Neil Smit entered into an agreement
as of August&nbsp;9, 2005 whereby Mr.&nbsp;Smit will serve as
Charter&#146;s President and Chief Executive Officer (the
&#147;Employment Agreement&#148;) for a term expiring on
December&nbsp;31, 2008, unless extended for an additional two
years at Charter&#146;s option. Under the Employment Agreement,
Mr.&nbsp;Smit will receive a $1,200,000 base salary per year,
through the third anniversary of the agreement, and thereafter
$1,440,000&nbsp;per year for the remainder of the Employment
Agreement. Mr.&nbsp;Smit shall be eligible to receive a
performance-based target bonus of 125% of annualized salary,
with a maximum bonus of 200% of annualized salary, as determined
by the Compensation Committee of Charter&#146;s Board of
Directors. However, for 2005 only, he will receive a minimum
bonus of $1,200,000, provided that he is employed by Charter on
December&nbsp;31, 2005. Under Charter&#146;s Long-Term Incentive
Plan he will receive options to
purchase&nbsp;3,333,333&nbsp;shares of Class&nbsp;A common
stock, exercisable for 10&nbsp;years, with annual vesting of
one-third of the grant in each of the three years from the
employment date; a performance share award for a maximum of
4,123,720&nbsp;shares of Class&nbsp;A common stock, to be earned
during a three-year performance cycle starting January 2006; and
a restricted stock award of 1,562,500&nbsp;shares of
Class&nbsp;A common stock, with annual vesting over three years
following employment date. In addition, Mr.&nbsp;Smit will
receive another restricted stock award for 1,250,000&nbsp;shares
of Class&nbsp;A common stock vesting on the first anniversary of
employment date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Smit will receive full reimbursement for
his relocation expenses and employee benefits consistent with
those made generally available to other senior executives. In
the event that Mr.&nbsp;Smit is terminated by Charter without
&#147;cause&#148; or for &#147;good reason termination,&#148; as
those terms are defined in the Employment Agreement, he will
receive the greater of two times base salary or salary through
the remainder to the term of the Employment Agreement; a pro
rata bonus for the year of termination; full vesting of options
and restricted shares; vesting of performance stock if targets
are achieved; and twelve months of COBRA payments. The
Employment Agreement contains non-compete provisions from six
months to two years, depending on the type of termination.
Charter will gross up federal taxes in the event that
Mr.&nbsp;Smit is subject to any additional tax under
Section&nbsp;409A of the Internal Revenue Code.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter entered into an agreement with Robert P.
May, effective January&nbsp;17, 2005, whereby Mr.&nbsp;May
served as Charter&#146;s Interim President and Chief Executive
Officer (the &#147;May Executive Services Agreement&#148;).
Under the May Executive Services Agreement, Mr.&nbsp;May
received a $1,250,000 base fee per year. Mr.&nbsp;May continued
to receive the compensation and reimbursement of expenses to
which he was entitled in his capacity as a member of the board
of directors. Mr.&nbsp;May&#146;s employment agreement provided
that Charter would provide equity incentives commensurate with
his position and responsibilities, as determined by the board of
directors. Accordingly, Mr.&nbsp;May was granted 100,000 shares
of restricted stock
</FONT>

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<DIV align="left">
<FONT size="2">under our 2001 Stock Incentive Plan. The 100,000
restricted shares vested on the date on which
Mr.&nbsp;May&#146;s interim service as President and Chief
Executive Officer terminated August&nbsp;22, 2005. Mr.&nbsp;May
served as an independent contractor and was not entitled to any
vacation or eligible to participate in any employee benefit
programs of Charter. Charter reimbursed Mr.&nbsp;May for
reasonable transportation costs from Mr.&nbsp;May&#146;s
residence in Florida or other locations to Charter&#146;s
offices and provided temporary living quarters or reimbursed
expenses related thereto.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;1, 2005, we entered into an
employment agreement with Mr. Lovett, pursuant to which he will
be employed as Executive Vice President and Chief Operating
Officer for a term commencing April&nbsp;1, 2005 and expiring on
April&nbsp;1, 2008. The contract will be reviewed every 18
months thereafter and may be extended pursuant to such reviews.
Under the agreement, Mr. Lovett will receive an annual base
salary of $575,000 and will be eligible to receive an annual
bonus targeted at 80% of his base salary under our senior
management bonus plan. We agreed to provide Mr. Lovett with
equity incentives commensurate with his position and
responsibilities, as determined by the board of directors in its
discretion. Accordingly, Mr.&nbsp;Lovett has been granted 75,000
shares of restricted stock under our 2001 Stock Incentive Plan.
The 75,000 restricted shares will vest one third on each of the
first three anniversaries of the date of grant (unless there is
an earlier termination event for Cause, as defined in the 2001
Stock Incentive Plan). If his employment is terminated without
cause or if he terminates his employment due to a change in
control or for good reason (as defined in the agreement), we
will pay Mr. Lovett an amount equal to the aggregate base salary
due to Mr. Lovett during the remainder of the term, within
fifteen days of termination. In addition, if we terminate his
employment without cause, Mr. Lovett will be entitled to receive
a pro rated bonus for the fiscal year in which he is terminated
based upon financial results through the month of termination.
Mr. Lovett&#146;s agreement includes a covenant not to compete
for the balance of the term and for two years thereafter. The
agreement further provides that Mr.&nbsp;Lovett is entitled to
receive certain relocation expenses and to participate in any
benefit plan generally afforded to, and to receive vacation and
sick pay on such terms as are offered to, our other senior
executive officers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;7, 2005, Charter entered into
an employment agreement with Wayne Davis, Executive Vice
President and Chief Technical Officer. The agreement provides
that Mr.&nbsp;Davis shall be employed in an executive capacity
to perform such duties as are assigned or delegated by the
President and Chief Executive Officer or the designee thereof,
at a salary of $450,000. The term of this agreement is two years
from the date of the agreement. Mr.&nbsp;Davis shall be eligible
to participate in Charter&#146;s Long-Term Incentive Plan, Stock
Option Plan and to receive such employee benefits as are
available to other senior executives. In the event that he is
terminated by Charter without &#147;cause&#148; or for
&#147;good reason termination,&#148; as those terms are defined
in the agreement, he will receive his salary for the remainder
of the term of the agreement or twelve months&#146; salary,
whichever is greater; a pro rata bonus for the year of
termination; twelve months of COBRA payments; and the vesting of
options and restricted stock for as long as severance payments
are made. The agreement contains one-year, non-compete
provisions (or until the end of the term of the agreement, if
longer) in a Competitive Business, as such term is defined in
the agreements, and two-year non-solicitation clauses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;2, 2005, Charter entered into
an employment agreement with Mr.&nbsp;Martin, Senior Vice
President, Interim Chief Financial Officer, Principal Accounting
Officer and Corporate Controller. The agreement provides that
Mr.&nbsp;Martin shall be employed in an executive capacity to
perform such duties as are assigned or delegated by the
President and Chief Executive Officer or the designee thereof,
at a salary of $240,625. The term of this agreement is two years
from the date of the agreement. Mr.&nbsp;Martin shall be
eligible to participate in Charter&#146;s Long-Term Incentive
Plan, Stock Option Plan and to receive such employee benefits as
are available to other senior executives. In the event that he
is terminated by Charter without &#147;cause&#148; or for
&#147;good reason termination,&#148; as those terms are defined
in the agreement, he will receive his salary for the remainder
of the term of the agreement or twelve months&#146; salary,
whichever is greater; a pro rata bonus for the year of
termination; twelve months of COBRA payments; and the vesting of
options and restricted stock for as long as severance payments
are made. The agreement contains one-year, non-compete
provisions (or until the end of the term of the agreement, if
longer) in a Competitive Business, as such term is defined in
the agreements, and two-year non-solicitation clauses.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Effective April&nbsp;15, 2005, Charter also
entered into an agreement governing the terms of the service of
Mr.&nbsp;Paul E. Martin as Interim Chief Financial Officer.
Under the terms of the agreement, Mr.&nbsp;Martin will receive
approximately $13,700 each month for his service in the capacity
of Interim Chief Financial Officer until a permanent Chief
Financial Officer is employed. Under the agreement,
Mr.&nbsp;Martin will also be eligible to receive an additional
bonus opportunity of up to approximately $13,600 per month
served as Interim Chief Financial Officer, payable in accordance
with Charter&#146;s 2005 Executive Bonus Plan. The amounts
payable to Mr.&nbsp;Martin under the agreement are in addition
to all other amounts Mr.&nbsp;Martin receives for his services
in his capacity as Senior Vice President, Principal Accounting
Officer and Corporate Controller. In addition, Mr.&nbsp;Martin
received an additional special bonus of $50,000 for his service
as Interim co-Chief Financial Officer prior to April&nbsp;15,
2005. This amount is in addition to the bonus agreed upon in
2004 for his service in that capacity through March&nbsp;31,
2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Until his resignation effective April&nbsp;15,
2005, Mr.&nbsp;Chang was employed under the terms contained in
an offer letter effective December&nbsp;2, 2003 providing for an
annual base salary of $400,000 (which was increased to
$450,000&nbsp;per year) and eligibility for an annual incentive
target of 100% of the base salary (based on a combination of
personal performance goals and overall company performance).
Mr.&nbsp;Chang was also eligible to participate in our 2001
Stock Incentive Plan. Under this plan, Mr.&nbsp;Chang was
granted 350,000 options to purchase Class&nbsp;A common stock
and 50,000 restricted shares on December&nbsp;9, 2003.
Mr.&nbsp;Chang was also entitled to participate in our LTIP.
Mr.&nbsp;Chang&#146;s agreement provided that one half of his
unvested restricted shares would immediately vest, and one half
of his unvested options of the initial option grant would vest
if he was terminated without cause or if he elected to terminate
his employment due to (1)&nbsp;a change in our Chief Executive
Officer, (2)&nbsp;a change in reporting relationship to anyone
other than the Chief Executive Officer, (3)&nbsp;a requirement
that the employee relocate, or (4)&nbsp;a change of control of
Charter, if terminated without cause. In addition,
Mr.&nbsp;Chang was entitled to eighteen months of full severance
benefits at his current compensation rate, plus the pro rata
portion of his bonus amounts within thirty days after
termination because of any of these events. In light of
Mr.&nbsp;Vogel&#146;s resignation, Charter and Mr.&nbsp;Chang
agreed that he would have until April&nbsp;15, 2005 to exercise
his right to terminate his employment and receive the foregoing
vesting, severance and other benefits. In addition, Charter
agreed that it would pay Mr.&nbsp;Chang a special $150,000
bonus, in addition to any other bonuses to which he would be
otherwise entitled, conditioned on Mr.&nbsp;Chang&#146;s
continued service as Interim co-Chief Financial Officer through
March&nbsp;31, 2005, which was paid in April 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Until his resignation in January 2005,
Mr.&nbsp;Vogel was employed as President and Chief Executive
Officer, earning a base annual salary of $1,000,000 and was
eligible to receive an annual bonus of up to $500,000, a portion
of which was based on personal performance goals and a portion
of which was based on company performance measured against
criteria established by the board of directors with
Mr.&nbsp;Vogel. Pursuant to his employment agreement,
Mr.&nbsp;Vogel was granted 3,400,000 options to purchase
Class&nbsp;A common stock and 50,000&nbsp;shares of restricted
stock under our 2001 Stock Incentive Plan. In the February 2004
option exchange, Mr.&nbsp;Vogel exchanged his 3,400,000 options
for 340,000&nbsp;shares of restricted stock and 340,000
performance shares. Mr.&nbsp;Vogel&#146;s initial 50,000
restricted shares vested 25% on the grant date, with the
remainder vesting in 36 equal monthly installments beginning
December 2002. The 340,000&nbsp;shares of restricted stock were
to vest over a three-year period, with one-third of the shares
vesting on each of the first three anniversaries of the grant
date. The 340,000 performance shares were to vest at the end of
a three-year period if certain financial criteria were met.
Mr.&nbsp;Vogel&#146;s agreement provided that, if Mr.&nbsp;Vogel
is terminated without cause or if Mr.&nbsp;Vogel terminated the
agreement for good reason, he is entitled to his aggregate base
salary due during the remainder of the term and full prorated
benefits and bonus for the year in which termination occurs.
Mr.&nbsp;Vogel&#146;s agreement included a covenant not to
compete for the balance of the initial term or any renewal term,
but no more than one year in the event of termination without
cause or by Mr.&nbsp;Vogel with good reason.
Mr.&nbsp;Vogel&#146;s agreement entitled him to participate in
any disability insurance, pensions or other benefit plans
afforded to employees generally or to our executives, including
our LTIP. We agreed to reimburse Mr.&nbsp;Vogel annually for the
cost of term life insurance in the amount of $5&nbsp;million,
although he declined this reimbursement in 2002, 2003 and 2004.
Mr.&nbsp;Vogel was entitled to reimbursement of fees and dues
for his membership in a country club of his choice, which he
declined in 2002, 2003 and 2004, and reimbursement for up to
$10,000&nbsp;per year for tax,
</FONT>

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<DIV align="left">
<FONT size="2">legal and financial planning services. His
agreement also provided for a car and associated expenses for
Mr.&nbsp;Vogel&#146;s use. Mr.&nbsp;Vogel&#146;s agreement
provided for automatic one-year renewals and also provided that
we would cause him to be elected to our board of directors
without any additional compensation.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 2005, Charter entered into an
agreement with Mr.&nbsp;Vogel setting forth the terms of his
resignation. Under the terms of the agreement, Mr.&nbsp;Vogel
received in February 2005 all accrued and unpaid base salary and
vacation pay through the date of resignation and a lump sum
payment equal to the remainder of his base salary during 2005
(totaling $953,425). In addition, he will receive a lump sum
cash payment of $500,000 at December&nbsp;31, 2005, which is
subject to reduction to the extent of compensation attributable
to certain competitive activities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Vogel will continue to receive certain
health benefits during 2005 and COBRA premiums for such health
insurance coverage for 18&nbsp;months thereafter. All of his
outstanding stock options, as well as his restricted stock
granted in 2004 (excluding 340,000&nbsp;shares of restricted
stock granted as &#147;performance units&#148;, which will
automatically be forfeited), will continue to vest through
December&nbsp;31, 2005. In addition, one-half of the remaining
unvested portion of his 2001 restricted stock grant vested upon
the effectiveness of the agreement, and the other half was
forfeited. Mr.&nbsp;Vogel had 60&nbsp;days after
December&nbsp;31, 2005 to exercise any outstanding vested stock
options. Under the agreement, Mr.&nbsp;Vogel waived any further
right to any bonus or incentive plan participation and provided
certain releases of claims against Charter and its subsidiaries
from any claims arising out of or based upon any facts occurring
prior to the date of the agreement, but Charter will continue to
provide Mr.&nbsp;Vogel certain indemnification rights and to
include Mr.&nbsp;Vogel in its director and officer liability
insurance for a period of six years. Charter and its
subsidiaries also agreed to provide releases of certain claims
against Mr.&nbsp;Vogel with certain exceptions reserved.
Mr.&nbsp;Vogel has also agreed, with limited exceptions that he
will continue to be bound by the covenant not to compete,
confidentiality and non-disparagement provisions contained in
his 2001 employment agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ms.&nbsp;Bellville was employed as Executive Vice
President, Chief Operating Officer. Until her resignation in
September 2004, she was employed under an employment agreement
entered into as of April&nbsp;27, 2003, that would have
terminated on September&nbsp;1, 2007. Her annual base salary was
$625,000 and she was eligible to receive an annual bonus in an
amount to be determined by our board of directors, with a
contractual minimum for 2003 of $203,125. Commencing in 2004,
Ms.&nbsp;Bellville would have been eligible to receive a target
annual bonus equal to 100% of her base salary for the applicable
year at the discretion of the board of directors, 50% to be
based on personal performance goals and 50% to be based on
overall company performance. Under a prior offer letter dated
December&nbsp;3, 2002, Ms.&nbsp;Bellville was granted 500,000
options to purchase shares of our Class&nbsp;A common stock,
which vested 25% on the date of the grant (December&nbsp;9,
2002), with the balance to vest in 36 equal installments
commencing January 2003. Ms.&nbsp;Bellville&#146;s employment
agreement provided that if she was terminated without cause or
if she terminated the agreement for good reason (including due
to a change in control or if Ms.&nbsp;Bellville was required to
report, directly or indirectly, to persons other than the Chief
Executive Officer), we would pay Ms.&nbsp;Bellville an amount
equal to the aggregate base salary due to Ms.&nbsp;Bellville
during the remainder of the term, or renewal term and a full
prorated bonus for the year in which the termination occurs,
within thirty days of termination. Ms.&nbsp;Bellville&#146;s
agreement included a covenant not to compete for the balance of
the initial term or any renewal term, but no more than one year,
in the event of termination without cause or by her with good
reason. Her agreement further provided that she was entitled to
participate in any disability insurance, pension or other
benefit plan afforded to employees generally or to executives of
Charter, including our LTIP. Ms.&nbsp;Bellville was entitled to
a monthly car allowance and reimbursement for all business
expenses associated with the use of such car.
Ms.&nbsp;Bellville&#146;s agreement provided that she was
entitled to the reimbursement of dues for her membership in a
country club of her choice, and reimbursement for up to
$5,000&nbsp;per year for tax, legal and financial planning
services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;16, 2004, Charter entered into
an agreement with Ms.&nbsp;Bellville governing the terms and
conditions of her resignation as an officer and employee of
Charter. Under the terms of this agreement, Ms.&nbsp;Bellville
has the right to receive 65&nbsp;weeks of base pay based on an
annual base of $625,000, plus usual compensation for all accrued
vacation and other leave time. Her options to
</FONT>

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<DIV align="left">
<FONT size="2">purchase&nbsp;700,000&nbsp;shares of Class&nbsp;A
common stock will continue to vest during the salary
continuation period. Ms.&nbsp;Bellville will have 60&nbsp;days
after the expiration of the salary continuation period to
exercise any outstanding vested options at the applicable
exercise prices established at each grant date. To date,
Ms.&nbsp;Bellville has exercised her options to
purchase&nbsp;350,000&nbsp;shares. Ms.&nbsp;Bellville was
entitled to and received relocation benefits under
Charter&#146;s current relocation policy with respect to a move
to a specified geographic area and was provided outplacement
assistance for 6&nbsp;months following the date of her
separation from Charter. Her resignation was effective
September&nbsp;30, 2004. The agreement provides that the
previously existing employment agreement would terminate, except
for certain ongoing obligations on Ms.&nbsp;Bellville&#146;s
part concerning confidentiality, non-solicitation and
non-disparagement. The contractual restriction on her ability to
solicit current Charter employees does not apply to persons who,
at the time of solicitation, have not worked for Charter in the
prior 6&nbsp;months and are not receiving severance from
Charter. In addition, the non-competition provisions of her
employment agreement were waived. Under the agreement,
Ms.&nbsp;Bellville waived a right to any bonus or incentive plan
and released Charter from any claims arising out of or based
upon any facts occurring prior to the date of the agreement, but
Charter will continue to provide Ms.&nbsp;Bellville certain
indemnification rights for that period.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the indemnification provisions
which apply to all employees under our bylaws,
Mr.&nbsp;Vogel&#146;s and Ms.&nbsp;Bellville&#146;s agreements
provide that we will indemnify and hold harmless each employee
to the maximum extent permitted by law from and against any
claims, damages, liabilities, losses, costs or expenses in
connection with or arising out of the performance by the
applicable employee of his or her duties. Each of the above
agreements also contains confidentiality and non-solicitation
provisions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Effective January&nbsp;28, 2005, we eliminated
the position of Chief Administrative Officer, resulting in the
termination of employment of Steven A. Schumm, Executive Vice
President and Chief Administrative Officer from Charter and each
of our subsidiaries for which Mr.&nbsp;Schumm served as an
officer. Pursuant to a Separation Agreement executed on
February&nbsp;8, 2005, we will continue to pay
Mr.&nbsp;Schumm&#146;s base salary for 65&nbsp;weeks at an
annual rate of $450,000, and Mr.&nbsp;Schumm was paid a bonus of
$15,815 at the time other executives received their bonuses in
April&nbsp;2005. Mr.&nbsp;Schumm&#146;s stock options will
continue to vest during the 65-week severance period, and he
will have 60&nbsp;days thereafter to exercise any vested options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Thomas A. Cullen resigned, effective
April&nbsp;30, 2005, from his position as Executive Vice
President of Advanced Services and Business Development of
Charter and each of Charter&#146;s subsidiaries for which
Mr.&nbsp;Cullen served as an officer. Pursuant to a Separation
Agreement and Release executed on March&nbsp;15, 2005, Charter
will continue to pay Mr.&nbsp;Cullen&#146;s base salary for
65&nbsp;weeks following the termination of his employment at a
rate of $5,769 per week, and Mr.&nbsp;Cullen will be paid a one
time payment of $10,347 to cover COBRA payments.
Mr.&nbsp;Cullen&#146;s stock options will continue to vest
during the 65-week severance period, and he will have
60&nbsp;days thereafter to exercise any vested options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have established separation guidelines which
generally apply to all employees in situations where management
determines that an employee is entitled to severance benefits.
Severance benefits are granted solely in management&#146;s
discretion and are not an employee entitlement or guaranteed
benefit. The guidelines provide that persons employed at the
level of Senior Vice President may be eligible to receive
between six and fifteen months of severance benefits and persons
employed at the level of Executive Vice President may be
eligible to receive between nine and eighteen months of
severance benefits in the event of separation under certain
circumstances generally including elimination of a position,
work unit or general staff reduction. Separation benefits are
contingent upon the signing of a separation agreement containing
certain provisions including a release of all claims against us.
Severance amounts paid under these guidelines are distinct and
separate from any one-time, special or enhanced severance
programs that may be approved by us from time to time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our senior executives are eligible to receive
bonuses according to our 2005 Executive Bonus Plan. Under this
plan, our executive officers and certain other management and
professional employees are eligible to receive an annual bonus.
Each participating employee would receive his or her target
bonus if
</FONT>

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</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">Charter (or such employee&#146;s division) meets
specified performance measures for revenues, operating cash
flow, free cash flow and customer satisfaction.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Limitation of Directors&#146; Liability and
Indemnification Matters</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation limits the
liability of directors to the maximum extent permitted by
Delaware law. The Delaware General Corporation Law provides that
a corporation may eliminate or limit the personal liability of a
director for monetary damages for breach of fiduciary duty as a
director, except for liability for:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;any breach of the director&#146;s duty
    of loyalty to the corporation and its shareholders;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;acts or omissions not in good faith or
    which involve intentional misconduct or a knowing violation of
    law;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;unlawful payments of dividends or
    unlawful stock purchases or redemptions; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;any transaction from which the director
    derived an improper personal benefit.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our bylaws provide that we will indemnify all
persons whom we may indemnify pursuant thereto to the fullest
extent permitted by law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers or persons controlling us pursuant to the foregoing
provisions, we have been informed that in the opinion of the
SEC, such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have reimbursed certain of our current and
former directors, officers and employees in connection with
their defense in certain legal actions. See &#147;Certain
Relationships and Related Transactions&nbsp;&#151; Other
Miscellaneous Relationships&nbsp;&#151; Indemnification
Advances.&#148;
</FONT>

<P align="center"><FONT size="2">119
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<A name='115'></A>

<!-- link1 "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" -->

<P align="center">
<B><FONT size="2">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth certain
information regarding beneficial ownership of the Company&#146;s
Class&nbsp;A common stock (&#147;Class&nbsp;A common
stock&#148;) as of August&nbsp;31, 2005 by:
</FONT>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each current director of the Company;
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the current chief executive officer and
    individuals named in the Summary Compensation Table;
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">all persons currently serving as directors and
    officers of the Company, as a group;&nbsp;and
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each person known by us to own beneficially 5% or
    more of our outstanding Class&nbsp;A common stock as of
    August&nbsp;31, 2005.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With respect to the percentage of voting power
set forth in the following table:
</FONT>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each holder of Class&nbsp;A common stock is
    entitled to one vote per share;&nbsp;and
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each holder of the Company&#146;s Class&nbsp;B
    common stock (&#147;Class&nbsp;B common stock&#148;) is entitled
    to (i)&nbsp;ten votes per share of Class&nbsp;B common stock
    held by such holder and its affiliates and (ii)&nbsp;ten votes
    per share of Class&nbsp;B Common Stock for which membership
    units in Charter Holdco held by such holder and its affiliates
    are exchangeable.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 50,000 shares of Class&nbsp;B common stock
owned by Mr.&nbsp;Allen represents 100% of the outstanding
Class&nbsp;B common stock.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="30%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Unvested</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;A Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;B</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Restricted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Receivable on</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;A</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;A</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of Class A</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Vested Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">upon</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">shares (Voting</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Voting and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Voting</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">or Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;B</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exchange or</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">and Investment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Voting</FONT></B></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Name and Address of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Investment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Power</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Convertible</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Conversion of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Power)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Power</FONT></B></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Beneficial Owner</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Power)(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Only)(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Securities(3)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Units(4)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(4)(5)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(5)(6)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Paul G. Allen(7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">29,126,463</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39,063</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">50,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">339,132,031</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">53.55</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">91.46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Charter Investment, Inc.(8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">222,818,858</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">38.99</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Vulcan Cable&nbsp;III Inc.(9)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">116,313,173</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">25.02</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Robert P. May
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">119,685</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">John H. Tory
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">30,005</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39,063</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">40,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Marc B. Nathanson
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">425,705</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39,063</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">50,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">David C. Merritt
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">25,705</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39,063</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Jo Allen Patton
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10,977</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">40,323</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">W. Lance Conn
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,231</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Jonathan L. Dolgen
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,685</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Larry W. Wangberg
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">28,705</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39,063</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">40,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Nathaniel A. Davis
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">43,215</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Neil Smit
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,812,500</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Michael J. Lovett
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7,500</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">75,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">93,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">All current directors and executive officers as a
    group (17&nbsp;persons)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">29,824,848</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,189,330</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">774,125</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">50,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">339,132,031</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">54.17</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">91.57</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Carl E. Vogel(10)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">208,126</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">226,666</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,120,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Margaret A. Bellville(11)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">179,166</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Derek Chang(12)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">41,250</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Curtis S. Shaw(12)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Steven A. Schumm(13)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">30,568</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">36,256</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">276,250</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Amaranth L.L.C.(14)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">21,322,312</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5.76</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Scott A. Bommer(15)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">18,237,744</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5.23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Glenview Capital Management, LLC(16)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,903,500</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5.71</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Glenview Capital GP, LLC(16)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,903,500</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5.71</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Lawrence M. Robbins(16)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,903,500</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5.71</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Steelhead Partners(17)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">24,835,077</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7.12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">J-K Navigator Fund, L.P.(17)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">18,447,759</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5.29</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">James Michael Johnston(17)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">24,835,077</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7.12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Brian Katz Klein(17)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">24,835,077</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7.12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">FMR Corp.(18)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">38,515,187</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11.05</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.03</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">120
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Unvested</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;A Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;B</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Restricted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Receivable on</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;A</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;A</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of Class A</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Vested Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">upon</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">shares (Voting</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Voting and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Voting</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">or Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;B</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exchange or</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">and Investment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Voting</FONT></B></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Name and Address of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Investment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Power</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Convertible</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Conversion of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Power)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Power</FONT></B></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Beneficial Owner</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Power)(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Only)(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Securities(3)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Units(4)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(4)(5)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(5)(6)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Fidelity Management &#38; Research Company(18)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,961,471</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,487,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.60</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Edward C. Johnson 3d(18)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,515,187</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.05</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.03</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">*</FONT></TD>
    <TD align="left">
    <FONT size="2">Less than 1%.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes shares for which the named person has
    sole voting and investment power; or shared voting and
    investment power with a spouse. Does not include shares that may
    be acquired through exercise of options.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes unvested shares of restricted stock
    issued under the Charter Communications, Inc. 2001 Stock
    Incentive Plan (including those issued in the February 2004
    option exchange for those eligible employees who elected to
    participate), as to which the applicable director or employee
    has sole voting power but not investment power. Excludes certain
    performance units granted under the Charter 2001 Stock Incentive
    Plan with respect to which shares will not be issued until the
    third anniversary of the grant date and then only if Charter
    meets certain performance criteria (and which consequently do
    not provide the holder with any voting rights).
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes shares of Class&nbsp;A common stock
    issuable (a)&nbsp;upon exercise of options that have vested or
    will vest on or before October&nbsp;31, 2005 under the 1999
    Charter Communications Option Plan and the 2001 Stock Incentive
    Plan or (b)&nbsp;upon conversion of other convertible securities.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Beneficial ownership is determined in accordance
    with Rule&nbsp;13d-3 under the Exchange Act. The beneficial
    owners at August&nbsp;31, 2005 of Class&nbsp;B common stock,
    Charter Holdco membership units and convertible senior notes of
    Charter are deemed to be beneficial owners of an equal number of
    shares of Class&nbsp;A common stock because such holdings are
    either convertible into Class&nbsp;A shares (in the case of
    Class&nbsp;B shares and convertible senior notes) or
    exchangeable (directly or indirectly) for Class&nbsp;A shares
    (in the case of the membership units) on a one-for-one basis.
    Unless otherwise noted, the named holders have sole investment
    and voting power with respect to the shares listed as
    beneficially owned. An issue has arisen as to whether the
    documentation for the Bresnan transaction was correct and
    complete with regard to the ultimate ownership of the CC VIII,
    LLC membership interests following the consummation of the
    Bresnan put transaction on June&nbsp;6, 2003. See &#147;Certain
    Relationships and Related Transactions&nbsp;&#151; Transactions
    Arising Out of Our Organizational Structure and
    Mr.&nbsp;Allen&#146;s Investment in Charter Communications, Inc.
    and Its Subsidiaries&nbsp;&#151; Equity Put Rights&nbsp;&#151;
    CC VIII.&#148;
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The calculation of this percentage assumes for
    each person that:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">348,551,063&nbsp;shares of Class&nbsp;A common
    stock are issued and outstanding as of August&nbsp;31, 2005;
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">50,000&nbsp;shares of Class&nbsp;B common stock
    held by Mr.&nbsp;Allen have been converted into shares of
    Class&nbsp;A common stock;
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the acquisition by such person of all shares of
    Class&nbsp;A common stock that such person or affiliates of such
    person has the right to acquire upon exchange of membership
    units in subsidiaries or conversion of Series&nbsp;A Convertible
    Redeemable Preferred Stock or 5.875% or 4.75%&nbsp;convertible
    senior notes;
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the acquisition by such person of all shares that
    may be acquired upon exercise of options to purchase shares or
    exchangeable membership units that have vested or will vest by
    October&nbsp;31, 2005;&nbsp;and
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that none of the other listed persons or entities
    has received any shares of Class&nbsp;A common stock that are
    issuable to any of such persons pursuant to the exercise of
    options or otherwise.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2"> A person is deemed to have the right to acquire
    shares of Class&nbsp;A common stock with respect to options
    vested under the 1999 Charter Communications Option Plan. When
    vested, these options are exercisable for membership units of
    Charter Holdco, which are immediately exchanged on a one-for-one
    basis for shares of Class&nbsp;A common stock. A person is also
    deemed to have the right
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">121
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">to acquire shares of Class&nbsp;A common stock
    issuable upon the exercise of vested options under the 2001
    Stock Incentive Plan.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The calculation of this percentage assumes that
    Mr.&nbsp;Allen&#146;s equity interests are retained in the form
    that maximizes voting power (i.e., the 50,000&nbsp;shares of
    Class&nbsp;B common stock held by Mr.&nbsp;Allen have not been
    converted into shares of Class&nbsp;A common stock; that the
    membership units of Charter Holdco owned by each of Vulcan
    Cable&nbsp;III Inc. and Charter Investment, Inc. have not been
    exchanged for shares of Class&nbsp;A common stock).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(7)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The total listed includes:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">222,818,858 membership units in Charter Holdco
    held by Charter Investment, Inc.;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">116,313,173 membership units in Charter Holdco
    held by Vulcan Cable&nbsp;III Inc.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2"> The listed total excludes 24,273,943&nbsp;shares
    of Class&nbsp;A common stock issuable upon exchange of units of
    Charter Holdco, which may be issuable to Charter Investment,
    Inc. (which is owned by Mr.&nbsp;Allen) as a consequence of the
    closing of his purchase of the membership interests in CC VIII,
    LLC that were put to Mr.&nbsp;Allen and were purchased by him on
    June&nbsp;6, 2003. An issue has arisen regarding the ultimate
    ownership of such CC VIII, LLC membership interests following
    the consummation of such put transaction. See &#147;Certain
    Relationships and Related Transactions&nbsp;&#151; Transactions
    Arising Out of Our Organizational Structure and
    Mr.&nbsp;Allen&#146;s Investment in Charter Communications, Inc.
    and Its Subsidiaries&nbsp;&#151; Equity Put Rights&nbsp;&#151;
    CC VIII.&#148; The address of this person is: 505 Fifth Avenue
    South, Suite&nbsp;900, Seattle, WA 98104.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(8)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes 222,818,858 membership units in Charter
    Holdco, which are exchangeable for shares of Class&nbsp;B common
    stock on a one-for-one basis, which are convertible to shares of
    Class&nbsp;A common stock on a one-for-one basis. The address of
    this person is: Charter Plaza, 12405 Powerscourt Drive,
    St.&nbsp;Louis, MO 63131.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(9)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes 116,313,173 membership units in Charter
    Holdco, which are exchangeable for shares of Class&nbsp;B common
    stock on a one-for-one basis, which are convertible to shares of
    Class&nbsp;A common stock on a one-for-one basis. The address of
    this person is: 505 Fifth Avenue South, Suite&nbsp;900, Seattle,
    WA 98104.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(10)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Vogel terminated his employment
    effective on January&nbsp;17, 2005. His stock options and
    restricted stock shown in this table continue to vest through
    December&nbsp;31, 2005, and his options will be exercisable for
    another 60&nbsp;days thereafter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(11)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Ms.&nbsp;Bellville resigned from Charter
    effective September&nbsp;30, 2004. Under the terms of her
    separation agreement, her options will continue to vest until
    December&nbsp;31, 2005, and all vested options are exercisable
    until 60&nbsp;days thereafter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(12)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Chang and Mr.&nbsp;Shaw resigned
    effective April&nbsp;15, 2005.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(13)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes 1,000&nbsp;shares for which
    Mr.&nbsp;Schumm has shared investment and voting power.
    Mr.&nbsp;Schumm&#146;s employment was terminated effective
    January&nbsp;28, 2005. His stock options and restricted stock
    shown in this table continue to vest for 65&nbsp;weeks following
    his termination, and his options will be exercisable for another
    60&nbsp;days thereafter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(14)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The equity ownership reported in this table is
    based upon holder&#146;s Schedule&nbsp;13G filed with the SEC
    February&nbsp;2, 2005. The address of this person is:
    c/o&nbsp;Amaranth Advisors L.L.C., One American Lane, Greenwich,
    Connecticut, 06831.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(15)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The equity ownership reported in this table is
    based upon the holder&#146;s Schedule&nbsp;13G filed with the
    SEC March&nbsp;28, 2005. The address of this person is
    712&nbsp;Fifth Avenue, 42nd Floor, New York, New York, 10019.
    Mr.&nbsp;Bommer is the managing member of SAB Capital Advisors,
    L.L.C., which serves as general partner of SAB Capital Partners,
    L.P. and SAB Capital Partners&nbsp;II, L.P. (which in turn
    collectively hold 10,124,695&nbsp;shares of Class&nbsp;A common
    stock). Mr.&nbsp;Bommer is also the managing member of SAB
    Capital Management, L.L.C., which serves as general partner of
    SAB Overseas Capital Management, L.P. (which in turn serves as
    investment manager to and has investment discretion over the
    securities held by a holder of 8,113,049&nbsp;shares of
    Class&nbsp;A common stock).
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">122
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(16)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The equity ownership reported in this table is
    based upon the holder&#146;s Schedule&nbsp;13G filed with the
    SEC June&nbsp;3, 2005. The address of the principal business
    office of the reporting person is: 399&nbsp;Park Avenue,
    Floor&nbsp;39, New York, New York 10022. The shares shown
    consist of: (A)&nbsp;1,669,400&nbsp;shares held for the account
    of Glenview Capital Partners; (B)&nbsp;5,991,000&nbsp;shares
    held for the account of Glenview Capital Master Fund; and
    (C)&nbsp;12,243,100&nbsp;shares held for the account of Glenview
    Institutional Partners. Glenview Capital Management serves as
    investment manager to each of Glenview Capital Partners,
    Glenview Institutional Partners, and Glenview Capital Master
    Fund. Glenview Capital&nbsp;GP is the general partner of
    Glenview Capital Partners and Glenview Institutional Partners.
    Glenview Capital&nbsp;GP also serves as the sponsor of the
    Glenview Capital Master Fund. Mr.&nbsp;Robbins is the Chief
    Executive Officer of Glenview Capital Management and Glenview
    Capital&nbsp;GP.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(17)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The equity ownership reported in this table is
    based upon the holder&#146;s Schedule&nbsp;13G filed with the
    SEC May&nbsp;23, 2005. The business address of the reporting
    person is: 1301&nbsp;First Avenue, Suite&nbsp;201, Seattle, WA
    98101. Steelhead Partners, LLC acts as general partner of J-K
    Navigator Fund, L.P., and J.&nbsp;Michael Johnston and Brian K.
    Klein act as the member-managers of Steelhead Partners, LLC.
    Accordingly, shares shown as beneficially held by Steelhead
    Partners, LLC, Mr.&nbsp;Johnston and Mr.&nbsp;Klein include
    shares beneficially held by J-K Navigator Fund, L.P.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(18)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The equity ownership reported in this table is
    based on the holder&#146;s Schedule&nbsp;13G filed with the SEC
    on September&nbsp;12, 2005. The address of the person is:
    82&nbsp;Devonshire Street, Boston, Massachusetts 02109. Fidelity
    Management&nbsp;&#38; Research Company is a wholly-owned
    subsidiary of FMR Corp. and is the beneficial owner of
    35,449,072&nbsp;shares as a result of acting as investment
    adviser to various investment companies and includes:
    20,487,601&nbsp;shares resulting from the assumed conversion of
    5.875% senior notes. Edward C. Johnson&nbsp;3d, chairman of FMR
    Corp., and FMR&nbsp;Corp. each has sole power to dispose of
    38,515,187&nbsp;shares.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Securities Authorized for Issuance under
Equity Compensation Plans</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following information is provided as of
December&nbsp;31, 2004 with respect to equity compensation plans:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of securities</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">to be issued upon</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">remaining available</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">exercise of outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">exercise price of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">for future issuance</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">options, warrants</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">outstanding options,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">under equity</FONT></B></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Plan Category</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">and rights</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">warrants and rights</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">compensation plans</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Equity compensation plans approved by security
    holders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,834,513</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,701,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Equity compensation plans not approved by
    security holders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">475,653</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">TOTAL
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,310,166</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,701,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">This total does not include 2,076,860&nbsp;shares
    issued pursuant to restricted stock grants made under our 2001
    Stock Incentive Plan, which were subject to vesting based on
    continued employment or 6,899,600 performance shares issued
    under our LTIP plan, which are subject to vesting upon
    Charter&#146;s achievement of certain performance criteria
    during a three-year performance cycle ending on
    December&nbsp;31, 2007.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes shares of Class&nbsp;A common stock to
    be issued upon exercise of options granted pursuant to an
    individual compensation agreement with a consultant. In 2003, we
    agreed to exchange&nbsp;186,385 of these options for
    18,638&nbsp;shares of Class&nbsp;A common stock, and we
    anticipate that exchange to be consummated in&nbsp;2005.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">123
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='116'></A>
</DIV>

<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" -->

<P align="center">
<B><FONT size="2">CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following sets forth certain transactions in
which we are involved and in which the directors, executive
officers and affiliates of Charter have or may have a material
interest. The transactions fall generally into three broad
categories:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Transactions in which Mr.&nbsp;Allen has an
    interest that arise directly out of Mr.&nbsp;Allen&#146;s
    investment in Charter and Charter
    Holdco.</FONT></I><FONT size="2"> A large number of the
    transactions described below arise out of Mr.&nbsp;Allen&#146;s
    direct and indirect (through Charter Investment, Inc., or the
    Vulcan entities, each of which Mr.&nbsp;Allen controls)
    investment in Charter and its subsidiaries, as well as
    commitments made as consideration for the investments themselves.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Transactions with third party providers of
    products, services and content in which Mr.&nbsp;Allen has or
    had a material interest.</FONT></I><FONT size="2">
    Mr.&nbsp;Allen has had numerous investments in the areas of
    technology and media. We have a number of commercial
    relationships with third parties in which Mr.&nbsp;Allen has or
    had an interest.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Other Miscellaneous
    Transactions.</FONT></I><FONT size="2"> We have a limited number
    of transactions in which certain of the officers, directors and
    principal shareholders of Charter and its subsidiaries, other
    than Mr.&nbsp;Allen, have an interest.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A number of our debt instruments and those of our
subsidiaries require delivery of fairness opinions for
transactions with Mr.&nbsp;Allen or his affiliates involving
more than $50&nbsp;million. Such fairness opinions have been
obtained whenever required. All of our transactions with
Mr.&nbsp;Allen or his affiliates have been considered for
approval either by the board of directors of Charter or a
committee of the board of directors. All of our transactions
with Mr.&nbsp;Allen or his affiliates have been deemed by the
board of directors or a committee of the board of directors to
be in our best interest. Related party transactions are approved
by our Audit Committee or another independent body of the board
of directors in compliance with the listing requirements
applicable to NASDAQ National Market listed companies. Except
where noted below, we do not believe that these transactions
present any unusual risks for us that would not be present in
any similar commercial transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The chart below summarizes certain information
with respect to these transactions. Additional information
regarding these transactions is provided following the chart.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Transaction</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Interested Related Party</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description of Transaction</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Intercompany Management Arrangements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Subsidiaries of Charter Holdco paid Charter
    approximately $79&nbsp;million, $84&nbsp;million,
    $90&nbsp;million and $62&nbsp;million for management services
    rendered in 2002, 2003 and 2004 and the six months ended
    June&nbsp;30, 2005, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Mutual Services Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Charter paid Charter Holdco approximately
    $70&nbsp;million, $73&nbsp;million, $74&nbsp;million and
    $42&nbsp;million for services rendered in 2002, 2003 and 2004
    and the six months ended June&nbsp;30, 2005, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Previous Management Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">No fees were paid in 2002, 2003, 2004 or 2005,
    although total management fees accrued and payable to Charter
    Investment, Inc., exclusive of interest, were approximately
    $14&nbsp;million at December&nbsp;31, 2002, 2003 and 2004 and
    June&nbsp;30, 2005.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Transaction</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Interested Related Party</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description of Transaction</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Tax Provisions of Charter Holdco&#146;s Operating
    Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">In 2002, the operating agreement of Charter
    Holdco allocated certain of our tax losses to entities
    controlled by Paul Allen.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Channel Access Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen<BR>
    W. Lance Conn<BR>
    Jo Allen Patton
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">At Vulcan Ventures&#146; request, we will provide
    Vulcan Ventures with exclusive rights for carriage on eight of
    our digital cable channels as partial consideration for a 1999
    capital contribution of approximately $1.3&nbsp;billion.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Equity Put Rights
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certain sellers of cable systems that we acquired
    were granted, or previously had the right, as described below,
    to put to Paul Allen equity in us (in the case of Rifkin and
    Falcon), Charter Holdco (in the case of Rifkin) and CC VIII, LLC
    (in the case of Bresnan) and a preferred membership interest (in
    the case of Charter Helicon, LLC) issued to such sellers in
    connection with such acquisitions.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Previous Funding Commitment of Vulcan Inc.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen<BR>
    W. Lance Conn<BR>
    Jo Allen Patton
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pursuant to a commitment letter dated
    April&nbsp;14, 2003, Vulcan Inc., which is an affiliate of Paul
    Allen, agreed to lend, under certain circumstances, or cause an
    affiliate to lend to Charter Holdings or any of its subsidiaries
    a total amount of up to $300&nbsp;million, which amount included
    a subfacility of up to $100&nbsp;million for the issuance of
    letters of credit. In November 2003, the commitment was
    terminated. We incurred expenses to Vulcan Inc. totaling
    $5&nbsp;million in connection with the commitment prior to
    termination.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Mirror Securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">To comply with the organizational documents of
    Charter and Charter Holdco, Charter Holdco issued certain mirror
    securities to Charter, redeemed certain other mirror securities,
    and paid interest and dividends on outstanding mirror notes and
    preferred units.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">125
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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Transaction</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Interested Related Party</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description of Transaction</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High Speed Access Corp. Asset Purchase Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen<BR>
    W. Lance Conn<BR>
    Jo Allen Patton
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">In February 2002, our subsidiary purchased
    certain assets of High Speed Access for $78&nbsp;million, plus
    the delivery of 37,000&nbsp;shares of High Speed Access
    Series&nbsp;D preferred stock and certain warrants. In
    connection with the transaction, High Speed Access also
    purchased 38,000&nbsp;shares of its Series&nbsp;D preferred
    stock from Vulcan Ventures for approximately $8&nbsp;million,
    and all of Vulcan Ventures&#146; shares of High Speed Access
    common stock.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High Speed Access Corp.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">In January 2002, we granted to High Speed Access
    a royalty free right to use intellectual property purchased by
    Charter Holdco. We received approximately $4&nbsp;million in
    management fees and approximately $17&nbsp;million in revenues
    and paid approximately $2&nbsp;million under agreements that
    have terminated.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">TechTV Carriage Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen<BR>
    W.&nbsp;Lance Conn<BR>
    Jo Allen Patton<BR>
    William D. Savoy<BR>
    Larry&nbsp;W. Wangberg
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We recorded approximately $4&nbsp;million,
    $1&nbsp;million, $5&nbsp;million and $0.6&nbsp;million from
    TechTV under the affiliation agreement in 2002, 2003, 2004 and
    the six months ended June&nbsp;30, 2005, respectively, related
    to launch incentives as a reduction of programming expense. We
    paid TechTV approximately $0.2&nbsp;million, $80,600,
    $2&nbsp;million and $1&nbsp;million in 2002, 2003, 2004 and the
    six months ended June&nbsp;30, 2005, respectively.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">126
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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Transaction</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Interested Related Party</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description of Transaction</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Oxygen Media Corporation Carriage Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen<BR>
    W. Lance Conn<BR>
    Jo Allen Patton
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We paid Oxygen Media approximately
    $6&nbsp;million, $9&nbsp;million, $13&nbsp;million and
    $5&nbsp;million under a carriage agreement in exchange for
    programming in 2002, 2003, 2004 and the six months ended
    June&nbsp;30, 2005, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We recorded approximately $2&nbsp;million,
    $1&nbsp;million, $1&nbsp;million and $0.1&nbsp;million in 2002,
    2003, 2004 and the six months ended June&nbsp;30, 2005,
    respectively, from Oxygen Media related to launch incentives as
    a reduction of programming expense.&nbsp;We received
    1&nbsp;million&nbsp;shares of Oxygen Preferred Stock with a
    liquidation preference of $33.10 per share in March 2005. We
    recognized approximately $6&nbsp;million, $9&nbsp;million,
    $13&nbsp;million and $2&nbsp;million as a reduction of
    programming expense in 2002, 2003, 2004 and the six months ended
    June&nbsp;30, 2005, respectively, in recognition of the
    guaranteed value of the investment.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Portland Trail Blazers Carriage Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We paid approximately $1&nbsp;million, $135,200,
    $96,100 and $116,500 for rights to carry the cable broadcast of
    certain Trail Blazers basketball games in 2002, 2003, 2004 and
    the six months ended June&nbsp;30, 2005, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Action Sports Cable Network Carriage Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We paid approximately $1&nbsp;million for rights
    to carry the programming of Action Sports Cable Network in 2002.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Click2learn, Inc. Software License Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen<BR>
    W. Lance Conn<BR>
    Jo Allen Patton
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We paid approximately $250,000, $57,100, $0 and
    $0 under the Software License Agreement in 2002, 2003, 2004 and
    the six months ended June&nbsp;30, 2005, respectively.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">127
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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Transaction</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Interested Related Party</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description of Transaction</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Digeo, Inc. Broadband Carriage Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Paul G. Allen<BR>
    William D. Savoy<BR>
    Carl E. Vogel<BR>
    Jo Allen Patton<BR>
    Lance Conn
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We paid Digeo approximately $3&nbsp;million,
    $4&nbsp;million, $3&nbsp;million and $1&nbsp;million for
    customized development of the i-channels and the local content
    tool kit in 2002, 2003, 2004 and the six months ended
    June&nbsp;30, 2005, respectively. We entered into a license
    agreement in 2004 for the Digeo software that runs DVR units
    purchased from a third party. We paid approximately
    $0.5&nbsp;million and $0.2&nbsp;million in license and
    maintenance fees in 2004 and the six months ended June&nbsp;30,
    2005, respectively. In 2004 we executed a purchase agreement for
    the purchase of up to 70,000 DVR units and a related software
    license agreement, both subject to satisfaction of certain
    conditions. We paid approximately $0 and $2&nbsp;million in
    capital purchases in 2004 and the six months ended June&nbsp;30,
    2005, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Viacom Networks
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Jonathan&nbsp;L. Dolgen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We are party to certain affiliation agreements
    with networks of Viacom, pursuant to which Viacom provides
    Charter with programming for distribution via our cable systems.
    For the years ended December&nbsp;31, 2002, 2003&nbsp;and 2004
    and for the six months ended June&nbsp;30, 2005, Charter paid
    Viacom approximately $177&nbsp;million, $188&nbsp;million,
    $194&nbsp;million and $99&nbsp;million, respectively, for
    programming, and Charter recorded as receivables approximately
    $5&nbsp;million, $5&nbsp;million, $8&nbsp;million and
    $15&nbsp;million from Viacom for launch incentives and marketing
    support for the years ended December&nbsp;31, 2002, 2003 and
    2004 and for the six months ended June&nbsp;30, 2005,
    respectively.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">ADC Telecommunications Inc.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Larry&nbsp;W. Wangberg
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We paid $759,600, $60,100, $344,800 and $241,100
    to purchase certain access/network equipment in 2002, 2003, 2004
    and for the six months ended June&nbsp;30, 2005, respectively.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">128
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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Transaction</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Interested Related Party</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description of Transaction</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">HDNet and HDNet Movies Network
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Mark Cuban
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Charter Holdco is party to an agreement to carry
    two around-the-clock, high definition networks, HDNet and HDNet
    Movies. We paid HDNet and HDNet Movies approximately $21,900,
    $609,100 and $1&nbsp;million in 2003 and 2004 and for the six
    months ended June&nbsp;30, 2005.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Affiliate leases and agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Marc B. Nathanson
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We paid approximately $76,000, $16,600, $0 and $0
    in 2002, 2003 and 2004 and for the six months ended
    June&nbsp;30, 2005, respectively, to companies controlled by
    Mr.&nbsp;Nathanson under a warehouse lease agreement.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Carriage fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">David C. Merritt
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We paid approximately $1&nbsp;million,
    $1&nbsp;million, $1&nbsp;million and $594,900 in 2002, 2003,
    2004 and for the six months ended June&nbsp;30, 2005 to carry
    The Outdoor Channel. Mr.&nbsp;Merritt is a director of an
    affiliate of this channel.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Payment for relatives&#146; services
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Carl E. Vogel
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Since June 2003, Mr.&nbsp;Vogel&#146;s
    brother-in-law has been an employee of Charter Holdco and has
    received a salary commensurate with his position in the
    engineering department.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Radio advertising
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Marc B. Nathanson
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We believe that through a third party advertising
    agency, we have paid approximately $112,700, $67,300, $49,300
    and $20,200 in 2002, 2003 and 2004 and for the six months ended
    June&nbsp;30, 2005, respectively, to Mapleton Communications, an
    affiliate of Mapleton Investments, LLC.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Enstar Limited Partnership Systems Purchase and
    Management Services
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Charter officers who were appointed by a Charter
    subsidiary (as general partner) to serve as officers of Enstar
    limited partnerships
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certain of our subsidiaries purchased certain
    assets of the Enstar Limited Partnerships for approximately
    $63&nbsp;million in 2002. We also earned approximately
    $1&nbsp;million, $469,300, $0 and $0 in 2002, 2003, 2004 and for
    the six months ended June&nbsp;30, 2005, respectively, by
    providing management services to the Enstar Limited Partnerships.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Indemnification Advances
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Directors and current and former officers named
    in certain legal proceedings
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Charter reimbursed certain of its current and
    former directors and executive officers a total of approximately
    $3&nbsp;million, $8&nbsp;million, $3&nbsp;million and $13,400
    for costs incurred in connection with litigation matters in
    2002, 2003, 2004 and for the six months ended June&nbsp;30,
    2005, respectively.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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<P align="center">
<FONT size="2">The following sets forth additional information
regarding the transactions summarized above.
</FONT>

<P align="left">
<B><FONT size="2">Transactions Arising Out of Our Organizational
Structure and Mr.&nbsp;Allen&#146;s Investment in Charter
Communications, Inc. and Its Subsidiaries</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As noted above, a number of our related party
transactions arise out of Mr.&nbsp;Allen&#146;s investment in
Charter and its subsidiaries. Some of these transactions are
with Charter Investment, Inc. and Vulcan Ventures (both owned
100% by Mr.&nbsp;Allen), Charter (controlled by Mr.&nbsp;Allen)
and Charter Holdco (approximately 47% owned by us and 53% owned
by other affiliates of Mr.&nbsp;Allen). See
&#147;Summary&nbsp;&#151; Organizational Structure&#148; for
more information regarding the ownership by Mr.&nbsp;Allen and
certain of his affiliates.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Intercompany Management
    Arrangements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter is a party to management arrangements
with Charter Holdco and certain of its subsidiaries. Under these
agreements, Charter provides management services for the cable
systems owned or operated by its subsidiaries. These management
agreements provide for reimbursement to Charter for all costs
and expenses incurred by it for activities relating to the
ownership and operation of the managed cable systems, including
overhead, administration and salary expense.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The total amount paid by Charter Holdco and all
of its subsidiaries is limited to the amount necessary to
reimburse Charter for all of its expenses, costs, losses,
liabilities and damages paid or incurred by it in connection
with the performance of its services under the various
management agreements and in connection with its corporate
overhead, administration, salary expense and similar items. The
expenses subject to reimbursement include fees Charter is
obligated to pay under the mutual services agreement with
Charter Investment, Inc. Payment of management fees by
Charter&#146;s operating subsidiaries is subject to certain
restrictions under the credit facilities and indentures of such
subsidiaries and the indentures governing the Charter Holdings
public debt. If any portion of the management fee due and
payable is not paid, it is deferred by Charter and accrued as a
liability of such subsidiaries. Any deferred amount of the
management fee will bear interest at the rate of 10%&nbsp;per
year, compounded annually, from the date it was due and payable
until the date it is paid. For the years ended December&nbsp;31,
2002, 2003 and 2004 and for the six months ended June&nbsp;30,
2005, the subsidiaries of Charter Holdco paid approximately
$79&nbsp;million, $84&nbsp;million, $90&nbsp;million and
$62&nbsp;million, respectively, in management fees to Charter.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Mutual Services Agreement</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter, Charter Holdco and Charter Investment,
Inc. are parties to a mutual services agreement whereby each
party shall provide rights and services to the other parties as
may be reasonably requested for the management of the entities
involved and their subsidiaries, including the cable systems
owned by their subsidiaries all on a cost-reimbursement basis.
The officers and employees of each party are available to the
other parties to provide these rights and services, and all
expenses and costs incurred in providing these rights and
services are paid by Charter. Each of the parties will indemnify
and hold harmless the other parties and their directors,
officers and employees from and against any and all claims that
may be made against any of them in connection with the mutual
services agreement except due to its or their gross negligence
or willful misconduct. The mutual services agreement expires on
November&nbsp;12, 2009, and may be terminated at any time by any
party upon thirty days&#146; written notice to the other. For
the years ended December&nbsp;31, 2002, 2003 and 2004 and for
the six months ended June&nbsp;30, 2005, Charter paid
approximately $70&nbsp;million, $73&nbsp;million,
$74&nbsp;million and $42&nbsp;million, respectively, to Charter
Holdco for services rendered pursuant to the mutual services
agreement. All such amounts are reimbursable to Charter pursuant
to a management arrangement with our subsidiaries. See
&#147;&#151;&nbsp;Intercompany Management Arrangements.&#148;
The accounts and balances related to these services eliminate in
consolidation. Charter Investment, Inc. no longer provides
services pursuant to this agreement.
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Previous Management Agreement with Charter
    Investment, Inc.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to November&nbsp;12, 1999, Charter
Investment, Inc. provided management and consulting services to
our operating subsidiaries for a fee equal to 3.5% of the gross
revenues of the systems then owned, plus reimbursement of
expenses. The balance of management fees payable under the
previous management agreement was accrued with payment at the
discretion of Charter Investment, Inc., with interest payable on
unpaid amounts. For the years ended December&nbsp;31, 2002, 2003
and 2004 and for the six months ended June&nbsp;30, 2005,
Charter&#146;s subsidiaries did not pay any fees to Charter
Investment, Inc. to reduce management fees payable. As of
December&nbsp;31, 2002, 2003 and 2004 and June&nbsp;30, 2005,
total management fees payable by our subsidiaries to Charter
Investment, Inc. were approximately $14&nbsp;million, exclusive
of any interest that may be charged and are included in deferred
management fees-related party on our consolidated balance sheets.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Charter Communications Holding Company, LLC
    Limited Liability Agreement&nbsp;&#151; Taxes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The limited liability company agreement of
Charter Holdco contains special provisions regarding the
allocation of tax losses and profits among its
members&nbsp;&#151; Vulcan Cable&nbsp;III Inc., Charter
Investment, Inc. and us. In some situations, these provisions
may cause us to pay more tax than would otherwise be due if
Charter Holdco had allocated profits and losses among its
members based generally on the number of common membership
units. See &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations&nbsp;&#151;
Critical Accounting Policies and Estimates&nbsp;&#151; Income
Taxes.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Vulcan Ventures Channel Access
    Agreement</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Vulcan Ventures, an entity controlled by
Mr.&nbsp;Allen, Charter, Charter Investment and Charter Holdco
are parties to an agreement dated September&nbsp;21, 1999
granting to Vulcan Ventures the right to use up to eight of our
digital cable channels as partial consideration for a prior
capital contribution of $1.325&nbsp;billion. Specifically, at
Vulcan Ventures&#146; request, we will provide Vulcan Ventures
with exclusive rights for carriage of up to eight digital cable
television programming services or channels on each of the
digital cable systems with local and to the extent available,
national control of the digital product owned, operated,
controlled or managed by Charter or its subsidiaries now or in
the future of 550 megahertz or more. If the system offers
digital services but has less than 550 megahertz of capacity,
then the programming services will be equitably reduced. Upon
request of Vulcan Ventures, we will attempt to reach a
comprehensive programming agreement pursuant to which it will
pay the programmer, if possible, a fee per digital video
customer. If such fee arrangement is not achieved, then we and
the programmer shall enter into a standard programming
agreement. The initial term of the channel access agreement was
10&nbsp;years, and the term extends by one additional year (such
that the remaining term continues to be 10&nbsp;years) on each
anniversary date of the agreement unless either party provides
the other with notice to the contrary at least 60&nbsp;days
prior to such anniversary date. To date, Vulcan Ventures has not
requested to use any of these channels. However, in the future
it is possible that Vulcan Ventures could require us to carry
programming that is less profitable to us than the programming
that we would otherwise carry and our results would suffer
accordingly.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Equity Put Rights</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">CC VIII.</FONT></I><FONT size="2"> As part of
the acquisition of the cable systems owned by Bresnan
Communications Company Limited Partnership in February 2000, CC
VIII, Charter&#146;s indirect limited liability company
subsidiary, issued, after adjustments, 24,273,943 Class&nbsp;A
preferred membership units (collectively, the &#147;CC VIII
interest&#148;) with a value and an initial capital account of
approximately $630&nbsp;million to certain sellers affiliated
with AT&#38;T Broadband, subsequently owned by Comcast
Corporation (the &#147;Comcast sellers&#148;). While held by the
Comcast sellers, the CC VIII interest was entitled to a 2%
priority return on its initial capital account and such priority
return was entitled to preferential distributions from available
cash and upon liquidation of CC VIII. While held by the Comcast
sellers, the CC VIII interest generally did not share in the
profits and losses of CC VIII. Mr.&nbsp;Allen granted the
Comcast sellers the right to sell to him the CC VIII interest
for approximately $630&nbsp;million plus 4.5% interest annually
from February 2000 (the &#147;Comcast put right&#148;). In April
2002, the Comcast sellers exercised the Comcast put right in
</FONT>

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<DIV align="left">
<FONT size="2">full, and this transaction was consummated on
June&nbsp;6, 2003. Accordingly, Mr.&nbsp;Allen has become the
holder of the CC VIII interest, indirectly through an affiliate.
Consequently, subject to the matters referenced in the next
paragraph, Mr.&nbsp;Allen generally thereafter will be allocated
his pro rata share (based on number of membership interests
outstanding) of profits or losses of CC VIII. In the event of a
liquidation of CC VIII, Mr.&nbsp;Allen would be entitled to a
priority distribution with respect to the 2% priority return
(which will continue to accrete). Any remaining distributions in
liquidation would be distributed to CC V Holdings, LLC and
Mr.&nbsp;Allen in proportion to CC V Holdings, LLC&#146;s
capital account and Mr.&nbsp;Allen&#146;s capital account (which
will equal the initial capital account of the Comcast sellers of
approximately $630&nbsp;million, increased or decreased by
Mr.&nbsp;Allen&#146;s pro rata share of CC VIII&#146;s profits
or losses (as computed for capital account purposes) after
June&nbsp;6, 2003). The limited liability company agreement of
CC VIII does not provide for a mandatory redemption of the CC
VIII interest.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An issue has arisen as to whether the
documentation for the Bresnan transaction was correct and
complete with regard to the ultimate ownership of the CC VIII
interest following consummation of the Comcast put right.
Specifically, under the terms of the Bresnan transaction
documents that were entered into in June 1999, the Comcast
sellers originally would have received, after adjustments,
24,273,943 Charter Holdco membership units, but due to an FCC
regulatory issue raised by the Comcast sellers shortly before
closing, the Bresnan transaction was modified to provide that
the Comcast sellers instead would receive the preferred equity
interests in CC VIII represented by the CC VIII interest. As
part of the last-minute changes to the Bresnan transaction
documents, a draft amended version of the Charter Holdco limited
liability company agreement was prepared, and contract
provisions were drafted for that agreement that would have
required an automatic exchange of the CC&nbsp;VIII interest for
24,273,943 Charter Holdco membership units if the Comcast
sellers exercised the Comcast put right and sold the
CC&nbsp;VIII interest to Mr.&nbsp;Allen or his affiliates.
However, the provisions that would have required this automatic
exchange did not appear in the final version of the Charter
Holdco limited liability company agreement that was delivered
and executed at the closing of the Bresnan transaction. The law
firm that prepared the documents for the Bresnan transaction
brought this matter to the attention of Charter and
representatives of Mr.&nbsp;Allen in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Thereafter, the board of directors of Charter
formed a Special Committee (currently comprised of
Messrs.&nbsp;Merritt, Tory and Wangberg) to investigate the
matter and take any other appropriate action on behalf of
Charter with respect to this matter. After conducting an
investigation of the relevant facts and circumstances, the
Special Committee determined that a &#147;scrivener&#146;s
error&#148; had occurred in February 2000 in connection with the
preparation of the last-minute revisions to the Bresnan
transaction documents and that, as a result, Charter should seek
the reformation of the Charter Holdco limited liability company
agreement, or alternative relief, in order to restore and ensure
the obligation that the CC&nbsp;VIII interest be automatically
exchanged for Charter Holdco units. The Special Committee
further determined that, as part of such contract reformation or
alternative relief, Mr.&nbsp;Allen should be required to
contribute the CC&nbsp;VIII interest to Charter Holdco in
exchange for 24,273,943 Charter Holdco membership units. The
Special Committee also recommended to the board of directors of
Charter that, to the extent the contract reformation is
achieved, the board of directors should consider whether the
CC&nbsp;VIII interest should ultimately be held by Charter
Holdco or Charter Holdings or another entity owned directly or
indirectly by them.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen disagrees with the Special
Committee&#146;s determinations described above and has so
notified the Special Committee. Mr.&nbsp;Allen contends that the
transaction is accurately reflected in the transaction
documentation and contemporaneous and subsequent company public
disclosures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The parties engaged in a process of non-binding
mediation to seek to resolve this matter, without success. The
Special Committee is evaluating what further actions or
processes it may undertake to resolve this dispute. To
accommodate further deliberation, each party has agreed to
refrain from initiating legal proceedings over this matter until
it has given at least ten days&#146; prior notice to the other.
In addition, the Special Committee and Mr.&nbsp;Allen have
determined to utilize the Delaware Court of Chancery&#146;s
program for mediation of complex business disputes in an effort
to resolve the CC&nbsp;VIII interest dispute. If the Special
Committee and Mr.&nbsp;Allen are unable to reach a resolution
through that mediation process or to
</FONT>

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<DIV align="left">
<FONT size="2">agree on an alternative dispute resolution
process, the Special Committee intends to seek resolution of
this dispute through judicial proceedings in an action that
would be commenced, after appropriate notice, in the Delaware
Court of Chancery against Mr.&nbsp;Allen and his affiliates
seeking contract reformation, declaratory relief as to the
respective rights of the parties regarding this dispute and
alternative forms of legal and equitable relief. The ultimate
resolution and financial impact of the dispute are not
determinable at this time.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Rifkin.</FONT></I><FONT size="2"> On
September&nbsp;14, 1999, Mr.&nbsp;Allen and Charter Holdco
entered into a put agreement with certain sellers of the Rifkin
cable systems that received a portion of their purchase price in
the form of 3,006,202 Class&nbsp;A preferred membership units of
Charter Holdco. This put agreement allowed these holders to
compel Charter Holdco to redeem their Class&nbsp;A preferred
membership units at any time before September&nbsp;14, 2004 at
$1.00&nbsp;per unit, plus accretion thereon at 8%&nbsp;per year
from September&nbsp;14, 1999. Mr.&nbsp;Allen had guaranteed the
redemption obligation of Charter Holdco. These units were put to
Charter Holdco for redemption, and were redeemed on
April&nbsp;18, 2003 for a total price of approximately
$3.9&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen also was a party to a put
agreement with certain sellers of the Rifkin cable systems that
received a portion of their purchase price in the form of shares
of Class&nbsp;A common stock of Charter. Under this put
agreement, such holders have the right to sell to Mr.&nbsp;Allen
any or all of such shares of Charter&#146;s Class&nbsp;A common
stock at $19&nbsp;per share (subject to adjustments for stock
splits, reorganizations and similar events), plus interest at a
rate of 4.5%&nbsp;per year, compounded annually from
November&nbsp;12, 1999. Approximately 4.6&nbsp;million shares
were put to Mr.&nbsp;Allen under these agreements prior to their
expiration on November&nbsp;12, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Falcon.</FONT></I><FONT size="2">
Mr.&nbsp;Allen also was a party to a put agreement with certain
sellers of the Falcon cable systems (including
Mr.&nbsp;Nathanson, one of our directors) that received a
portion of their purchase price in the form of shares of
Class&nbsp;A common stock of Charter. Under the Falcon put
agreement, such holders had the right to sell to Mr.&nbsp;Allen
any or all shares of Class&nbsp;A common stock received in the
Falcon acquisition at $25.8548&nbsp;per share (subject to
adjustments for stock splits, reorganizations and similar
events), plus interest at a rate of 4.5%&nbsp;per year,
compounded annually from November&nbsp;12, 1999. Approximately
19.4&nbsp;million shares were put to Mr.&nbsp;Allen under these
agreements prior to their expiration on November&nbsp;12, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Helicon.</FONT></I><FONT size="2"> In 1999 we
purchased the Helicon cable systems. As part of that purchase
Mr.&nbsp;Allen entered into a put agreement with a certain
seller of the Helicon cable systems that received a portion of
the purchase price in the form of a preferred membership
interest in Charter Helicon LLC with a redemption price of
$25&nbsp;million plus accrued interest. Under the Helicon put
agreement, such holder has the right to sell to Mr.&nbsp;Allen
any or all of the interest to Mr.&nbsp;Allen prior to its
mandatory redemption in cash on July&nbsp;30, 2009. The
preferred membership interest is not convertible. On
August&nbsp;31, 2005, 40% of the preferred membership interest
was put to Mr.&nbsp;Allen. The remaining 60% of the preferred
interest in Charter Helicon LLC remains subject to the put to
Mr.&nbsp;Allen. The Charter Helicon LLC operating agreement
provides for a quarterly distribution on the preferred interest
of 10% annually.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Previous Funding Commitment of Vulcan
    Inc.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Effective April&nbsp;14, 2003, our subsidiary,
Charter Communications VII, LLC entered into a commitment letter
with Vulcan Inc., which is an affiliate of Paul Allen, under
which Vulcan Inc. agreed to lend, under certain circumstances,
or cause an affiliate to lend initially to Charter
Communications VII, LLC, or another subsidiary of Charter
Holdings, up to $300&nbsp;million, which amount included a
subfacility of up to $100&nbsp;million for the issuance of
letters of credit. No amounts were ever drawn under the
commitment letter. In November 2003, the commitment was
terminated. We incurred expenses to Vulcan Inc. totaling
$5&nbsp;million in connection with the commitment (including an
extension fee) prior to termination. Ms.&nbsp;Jo Allen Patton is
a director and the President and Chief Executive Officer of
Vulcan Inc., and Mr.&nbsp;Lance Conn is Executive Vice President
of Vulcan Inc.
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Mirror Securities</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter is a holding company and its principal
assets are its equity interest in Charter Holdco and certain
mirror notes payable by Charter Holdco to Charter, and mirror
preferred units held by Charter, which have the same principal
amount and terms as those of Charter&#146;s convertible senior
notes and Charter&#146;s outstanding preferred stock. In 2002,
2003 and 2004, Charter Holdco paid to Charter $73&nbsp;million,
$68&nbsp;million and $49&nbsp;million, respectively, related to
interest on the mirror notes, and Charter Holdco paid an
additional $4&nbsp;million related to dividends on the mirror
preferred membership units.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with our 2003 repurchase of
approximately $477&nbsp;million of our outstanding 4.75% senior
convertible notes due 2006 and approximately $132&nbsp;million
of our outstanding 5.75%&nbsp;senior convertible notes due 2005,
$520&nbsp;million of CCH&nbsp;II 10.25%&nbsp;senior notes were
transferred (through a series of distributions) by CCH&nbsp;II
to Charter Holdco, which in turn assigned those CCH&nbsp;II
senior notes to us in exchange for the cancellation of mirror
notes of each series having a principal amount equal to the
amount of convertible notes of that series repurchased by us. As
part of the closing of that transaction, Charter Holdco also
paid to Charter cash in the amount of $10&nbsp;million, which
represented the sum of (a)&nbsp;all accrued and unpaid interest
on the portions of the mirror notes transferred by Charter to
Charter Holdco, to, but not including, the date of the closing,
on the basis set forth in the mirror notes, (b)&nbsp;an amount
equal to the total amount of cash payable by Charter in lieu of
fractional interests in the 10.25% CCH&nbsp;II senior notes
which would have otherwise been due to the holders as a
consequence of the exchange and (c)&nbsp;the costs and expenses
relating to such transactions. Further, during 2004 Charter
Holdco issued 7,252,818&nbsp;common membership units to Charter
in cancellation of $30&nbsp;million principal amount of mirror
notes so as to mirror the issuance by Charter of Class&nbsp;A
common stock in exchange for a like principal amount of its
outstanding convertible notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, in connection with our November 2004
sale of $862.5&nbsp;million principal amount of 5.875%
convertible senior notes due 2009, Charter Holdco issued to us
mirror notes in identical principal amount in exchange for the
proceeds from our offering. Charter Holdco then purchased and
pledged certain U.S. government securities to us as security for
the mirror notes (which were in turn repledged by us to the
trustee for the benefit of holders of our 5.875% convertible
senior notes and which we expect to use to fund the first six
interest payments on the notes), and agreed to lend common units
to us, the terms of which will, to the extent practicable,
mirror the terms of the shares offered hereby. Charter Holdco
also redeemed the remaining $588&nbsp;million principal amount
of the mirror notes in respect of our 5.75% convertible senior
notes due 2005 concurrently with our December&nbsp;23, 2004
redemption of our 5.75% convertible senior notes. In addition,
in November&nbsp;2004, Charter Holdco entered into a unit
lending agreement with Charter in which it agreed to lend common
units to Charter that would mirror the anticipated loan of
Class&nbsp;A common shares by Charter to Citigroup Global
Markets pursuant to a share lending agreement. The members of
Charter Holdco (including the entities controlled by
Mr.&nbsp;Allen) also at that time entered into a letter
agreement providing, among other things, that for purposes of
the allocation provisions of the Limited Liability Company
Agreement of Charter Holdco, the mirror units be treated as
disregarded and not outstanding until such time (and except to
the extent) that, under Charter&#146;s share lending agreement,
Charter treats the loaned shares in a manner that assumes they
will neither be returned to Charter by the borrower nor
otherwise be acquired by Charter in lieu of such a return.
In&nbsp;March, April and May&nbsp;2005, Charter Holdco
repurchased a total of $131&nbsp;million in principal amount of
mirror convertible notes due 2006 concurrently with our
repurchases of equal principal amounts of our 4.75% convertible
senior notes due 2006, for purchase prices equal to the prices
we paid in our repurchases.
</FONT>

<DIV>&nbsp;</DIV>

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<TR>
    <TD width="3%"></TD>
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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Allocation of Business Opportunities with
    Mr.&nbsp;Allen</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As described under &#147;&#151;&nbsp;Third Party
Business Relationships in which Mr.&nbsp;Allen has or had an
Interest&#148; in this section, Mr.&nbsp;Allen and a number of
his affiliates have interests in various entities that provide
services or programming to our subsidiaries. Given the diverse
nature of Mr.&nbsp;Allen&#146;s investment activities and
interests, and to avoid the possibility of future disputes as to
potential business, Charter and Charter Holdco, under the terms
of their respective organizational documents, may not, and may
not allow
</FONT>

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<DIV align="left">
<FONT size="2">their subsidiaries, to engage in any business
transaction outside the cable transmission business except for
the Digeo, Inc. joint venture; a joint venture to develop a
digital video recorder set-top terminal; an existing investment
in Cable Sports Southeast, LLC, a provider of regional sports
programming; as an owner of the business of Interactive
Broadcaster Services Corporation or, Chat TV, an investment in
@Security Broadband Corp., a company developing broadband
security applications; and incidental businesses engaged in as
of the closing of Charter&#146;s initial public offering in
November 1999. This restriction will remain in effect until all
of the shares of Charter&#146;s high-vote&nbsp;Class&nbsp;B
common stock have been converted into shares of Charter
Class&nbsp;A common stock due to Mr.&nbsp;Allen&#146;s equity
ownership falling below specified thresholds.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Should Charter or Charter Holdco or any of their
subsidiaries wish to pursue, or allow their subsidiaries to
pursue, a business transaction outside of this scope, it must
first offer Mr.&nbsp;Allen the opportunity to pursue the
particular business transaction. If he decides not to pursue the
business transaction and consents to Charter or its subsidiaries
engaging in the business transaction, they will be able to do
so. In any such case, the restated certificate of incorporation
of Charter and the limited liability company agreement of
Charter Holdco would need to be amended accordingly to modify
the current restrictions on the ability of such entities to
engage in any business other than the cable transmission
business. The cable transmission business means the business of
transmitting video, audio, including telephone, and data over
cable systems owned, operated or managed by Charter, Charter
Holdco or any of their subsidiaries from time to time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Delaware corporate law, each director of
Charter, including Mr.&nbsp;Allen, is generally required to
present to Charter, any opportunity he or she may have to
acquire any cable transmission business or any company whose
principal business is the ownership, operation or management of
cable transmission businesses, so that we may determine whether
we wish to pursue such opportunities. However, Mr.&nbsp;Allen
and the other directors generally will not have an obligation to
present other types of business opportunities to Charter and
they may exploit such opportunities for their own account.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Also, conflicts could arise with respect to the
allocation of corporate opportunities between us and
Mr.&nbsp;Allen and his affiliates in connection with his
investments in businesses in which we are permitted to engage
under Charter&#146;s restated certificate of incorporation.
Certain of the indentures of Charter and its subsidiaries
require the applicable issuer of notes to obtain, under certain
circumstances, approval of the board of directors of Charter
and, where a transaction or series of related transactions is
valued at or in excess of $50&nbsp;million, a fairness opinion
with respect to transactions in which Mr.&nbsp;Allen has an
interest. Related party transactions are approved by our Audit
Committee in compliance with the listing requirements applicable
to NASDAQ National Market listed companies. We have not
instituted any other formal plan or arrangement to address
potential conflicts of interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restrictive provisions of the organizational
documents described above may limit our ability to take
advantage of attractive business opportunities. Consequently,
our ability to offer new products and services outside of the
cable transmission business and enter into new businesses could
be adversely affected, resulting in an adverse effect on our
growth, financial condition and results of operations.
</FONT>

<P align="left">
<B><FONT size="2">Third Party Business Relationships in Which
Mr.&nbsp;Allen has or had an Interest</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As previously noted, Mr.&nbsp;Allen has and has
had extensive investments in the areas of media and technology.
We have a number of commercial relationships with third parties
in which Mr.&nbsp;Allen has an interest. Mr.&nbsp;Allen or his
affiliates own equity interests or warrants to purchase equity
interests in various entities with which we do business or which
provide us with products, services or programming.
Mr.&nbsp;Allen owns 100% of the equity of Vulcan Ventures
Incorporated and Vulcan Inc. and is the president of Vulcan
Ventures. Ms.&nbsp;Jo Allen Patton is a director and the
President and Chief Executive Officer of Vulcan Inc. and is a
director and Vice President of Vulcan Ventures. Mr.&nbsp;Lance
Conn is Executive Vice President of Vulcan Inc. and Vulcan
Ventures. The various cable, media, Internet and telephone
companies in which Mr.&nbsp;Allen has invested may mutually
benefit one another. We can give no assurance, nor should you
expect, that any of these business relationships will be
successful, that we will realize any benefits from
</FONT>

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<DIV align="left">
<FONT size="2">these relationships or that we will enter into
any business relationships in the future with
Mr.&nbsp;Allen&#146;s affiliated companies.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen and his affiliates have made, and
in the future likely will make, numerous investments outside of
us and our business. We cannot assure you that, in the event
that we or any of our subsidiaries enter into transactions in
the future with any affiliate of Mr.&nbsp;Allen, such
transactions will be on terms as favorable to us as terms we
might have obtained from an unrelated third party.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">High Speed Access</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">High Speed Access Corp. (&#147;High Speed
Access&#148;) was a provider of high-speed Internet access
services over cable modems. During the period from 1997 to 2000,
certain Charter entities entered into Internet-access related
service agreements, and both Vulcan Ventures, an entity owned by
Mr.&nbsp;Allen, and Charter Holdco made equity investments in
High Speed Access.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;28, 2002, our subsidiary, CC
Systems, purchased from High Speed Access the contracts and
associated assets, and assumed related liabilities, that served
our customers, including a customer contact center, network
operations center and provisioning software. At the closing,
certain of our subsidiaries paid $78&nbsp;million to High Speed
Access and delivered 37,000&nbsp;shares of High Speed
Access&#146;s Series&nbsp;D convertible preferred stock and all
of the warrants to buy High Speed Access common stock owned by
Charter Holdco (which had been acquired pursuant to two network
services agreements which were cancelled in connection with this
transaction, as described below), and High Speed Access
purchased 38,000&nbsp;shares of its Series&nbsp;D Preferred
Stock from Vulcan Ventures for $8&nbsp;million. Additional
purchase price adjustments were made as provided in the asset
purchase agreement. Charter Holdco obtained a fairness opinion
from a qualified investment-banking firm regarding the valuation
of the assets purchased. Concurrently with the closing of the
transaction, High Speed Access also purchased all of its common
stock held by Vulcan Ventures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In conjunction with the High Speed Access asset
purchase, on February&nbsp;28, 2002, Charter Holdco granted High
Speed Access the right to use certain intellectual property sold
by High Speed Access to Charter Holdco. High Speed Access does
not pay any fees under the agreement. The domestic portion of
the license terminated on June&nbsp;30, 2002, and the
international portion of the license expired on February&nbsp;2,
2005. Prior to closing the asset purchase, Charter performed
certain management services formerly performed by High Speed
Access, for which it received approximately $4&nbsp;million in
January and February 2002. Concurrently with the asset purchase,
all of the other agreements between Charter Holdco and High
Speed Access Corp. (other than the license agreement described
above), namely the programming content agreement, the services
agreement, the systems access agreement, the 1998&nbsp;network
services agreement and the May 2000&nbsp;network services
agreement, were terminated. The revenues we earned from High
Speed Access for the year ended December&nbsp;31, 2002 were
approximately $17&nbsp;million. In addition, for the year ended
December&nbsp;31, 2002, we paid High Speed Access approximately
$2&nbsp;million under the 1998&nbsp;network services agreement
and the 2000&nbsp;network services agreement, representing a per
customer fee to High Speed Access according to agreed pricing
terms and compensation for services exceeding certain minimum
thresholds.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Immediately prior to the asset purchase, Vulcan
Ventures beneficially owned approximately 37%, and Charter
Holdco and its subsidiaries beneficially owned approximately
13%, of the common stock of High Speed Access (including the
shares of common stock which could be acquired upon conversion
of the Series&nbsp;D preferred stock, and upon exercise of the
warrants owned by Charter Holdco). Following the consummation of
the asset purchase, neither Charter Holdco nor Vulcan Ventures
beneficially owned any securities of, or were otherwise
affiliated with, High Speed Access.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;12, 2000, Charter entered into a
five-year network services agreement with High Speed Access,
which was assigned by Charter Communications, Inc. to Charter
Holdco on August&nbsp;1, 2000. With respect to each system
launched or intended to be launched, we paid a per customer fee
to High Speed Access according to agreed pricing terms. In
addition, we compensated High Speed Access for services
exceeding certain minimum thresholds.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, Charter Holdco was a party to a systems
access and investment agreement with Vulcan Ventures and High
Speed Access and a related network services agreement with High
Speed Access. These agreements provided High Speed Access with
exclusive access to certain of our homes passed. The term of the
network services agreement was, as to a particular cable system,
five years from the date revenue billing commenced for that
cable system. The programming content agreement provided each of
Vulcan Ventures and High Speed Access with a license to use
certain content and materials of the other on a non-exclusive,
royalty-free basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the above described transactions, we also
earned certain warrants to purchase High Speed Access stock.
These warrants were cancelled in February 2002 in connection
with the asset purchase described above. As a result of the
transaction with High Speed Access described above, we neither
paid to, nor received, any amounts from High Speed Access in
2003.
</FONT>

<DIV>&nbsp;</DIV>

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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">TechTV, Inc.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">TechTV, Inc. (&#147;TechTV&#148;) operated a
cable television network that offered programming mostly related
to technology. Pursuant to an affiliation agreement that
originated in 1998 and that terminates in 2008, TechTV has
provided us with programming for distribution via our cable
systems. The affiliation agreement provides, among other things,
that TechTV must offer Charter Holdco certain terms and
conditions that are no less favorable in the affiliation
agreement than are given to any other distributor that serves
the same number of or fewer TechTV viewing customers.
Additionally, pursuant to the affiliation agreement, we were
entitled to incentive payments for channel launches through
December&nbsp;31, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2004, Charter Holdco entered into
agreements with Vulcan Programming and TechTV, which provide for
(i)&nbsp;Charter Holdco and TechTV to amend the affiliation
agreement which, among other things, revises the description of
the TechTV network content, provides for Charter Holdco to waive
certain claims against TechTV relating to alleged breaches of
the affiliation agreement and provides for TechTV to make
payment of outstanding launch receivables due to Charter Holdco
under the affiliation agreement, (ii)&nbsp;Vulcan Programming to
pay approximately $10&nbsp;million and purchase over a 24-month
period, at fair market rates, $2&nbsp;million of advertising
time across various cable networks on Charter cable systems in
consideration of the agreements, obligations, releases and
waivers under the agreements and in settlement of the
aforementioned claims and (iii)&nbsp;TechTV to be a provider of
content relating to technology and video gaming for
Charter&#146;s interactive television platforms through
December&nbsp;31, 2006 (exclusive for the first year). For the
years ended December&nbsp;31, 2002, 2003 and 2004 and for the
six months ended June&nbsp;30, 2005 we recognized approximately
$4&nbsp;million, $1&nbsp;million, $5&nbsp;million and
$0.6&nbsp;million, respectively, of the Vulcan Programming
payment as an offset to programming expense and paid
approximately $0.2&nbsp;million, $80,600, $2&nbsp;million and
$1&nbsp;million, respectively, to TechTV under the affiliation
agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that Vulcan Programming, which is 100%
owned by Mr.&nbsp;Allen, owned an approximate 98% equity
interest in TechTV at the time Vulcan Programming sold TechTV to
an unrelated third party in May 2004. Until September 2003,
Mr.&nbsp;Savoy, a former Charter director, was the president and
director of Vulcan Programming and was a director of TechTV.
Mr.&nbsp;Wangberg, one of Charter&#146;s directors, was the
Chairman, Chief Executive Officer and a director of TechTV.
Mr.&nbsp;Wangberg resigned as the Chief Executive Officer of
TechTV in July 2002. He remained a director of TechTV along with
Mr.&nbsp;Allen until Vulcan Programming sold TechTV.
</FONT>

<DIV>&nbsp;</DIV>

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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Oxygen Media Corporation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Oxygen Media LLC (&#147;Oxygen&#148;) provides
programming content aimed at the female audience for
distribution over cable systems and satellite. On July&nbsp;22,
2002, Charter Holdco entered into a carriage agreement with
Oxygen, whereby we agreed to carry programming content from
Oxygen. Under the carriage agreement, we currently make Oxygen
programming available to approximately 5&nbsp;million of our
video customers. The term of the carriage agreement was
retroactive to February&nbsp;1, 2000, the date of launch of
Oxygen programming by us, and was to run for a period of five
years from that date. For the
</FONT>

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<FONT size="2">years ended December&nbsp;31, 2002, 2003 and 2004
and for the six months ended June&nbsp;30, 2005, we paid Oxygen
approximately $6&nbsp;million, $9&nbsp;million, $13&nbsp;million
and $5&nbsp;million, respectively, for programming content. In
addition, Oxygen pays us marketing support fees for customers
launched after the first year of the term of the carriage
agreement up to a total of $4&nbsp;million. We recorded
approximately $2&nbsp;million, $1&nbsp;million, $1&nbsp;million
and $0.1&nbsp;million related to these launch incentives as a
reduction of programming expense for each of the years ended
December&nbsp;31, 2002, 2003 and 2004 and for the six months
ended June&nbsp;30, 2005, respectively.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Concurrently with the execution of the carriage
agreement, Charter Holdco entered into an equity issuance
agreement pursuant to which Oxygen&#146;s parent company, Oxygen
Media Corporation (&#147;Oxygen Media&#148;), granted a
subsidiary of Charter Holdco a warrant to
purchase&nbsp;2.4&nbsp;million shares of Oxygen Media common
stock for an exercise price of $22.00&nbsp;per share. In
February 2005, this warrant expired unexercised. Charter Holdco
was also to receive unregistered shares of Oxygen Media common
stock with a guaranteed fair market value on the date of
issuance of $34&nbsp;million, on or prior to February&nbsp;2,
2005, with the exact date to be determined by Oxygen Media, but
this commitment was later revised as discussed below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recognize the guaranteed value of the
investment over the life of the carriage agreement as a
reduction of programming expense. For the years ended
December&nbsp;31, 2002, 2003 and 2004 and for the six months
ended June&nbsp;30, 2005, we recorded approximately
$6&nbsp;million, $9&nbsp;million, $13&nbsp;million and
$2&nbsp;million, respectively, as a reduction of programming
expense. The carrying value of our investment in Oxygen was
approximately $10&nbsp;million, $19&nbsp;million,
$32&nbsp;million and $33&nbsp;million as of December&nbsp;31,
2002, 2003 and 2004 and June&nbsp;30, 2005, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2004, Charter Holdco and Oxygen entered
into agreements that amended and renewed the carriage agreement.
The amendment to the carriage agreement (a)&nbsp;revises the
number of our customers to which Oxygen programming must be
carried and for which we must pay, (b)&nbsp;releases Charter
Holdco from any claims related to the failure to achieve
distribution benchmarks under the carriage agreement,
(c)&nbsp;requires Oxygen to make payment on outstanding
receivables for marketing support fees due to us under the
carriage agreement; and (d)&nbsp;requires that Oxygen provide
its programming content to us on economic terms no less
favorable than Oxygen provides to any other cable or satellite
operator having fewer subscribers than us. The renewal of the
carriage agreement (a)&nbsp;extends the period that we will
carry Oxygen programming to our customers through
January&nbsp;31, 2008, and (b)&nbsp;requires license fees to be
paid based on customers receiving Oxygen programming, rather
than for specific customer benchmarks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2004, Charter Holdco and Oxygen also
amended the equity issuance agreement to provide for the
issuance of 1&nbsp;million shares of Oxygen Preferred Stock with
a liquidation preference of $33.10&nbsp;per share plus accrued
dividends to Charter Holdco in place of the $34&nbsp;million of
unregistered shares of Oxygen Media common stock. Oxygen Media
delivered these shares in March&nbsp;2005. The preferred stock
is convertible into common stock after December&nbsp;31, 2007 at
a conversion ratio, the numerator of which is the liquidation
preference and the denominator which is the fair market value
per share of Oxygen Media common stock on the conversion date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, through Vulcan
Programming, Mr.&nbsp;Allen owned an approximate 31% interest in
Oxygen assuming no exercises of outstanding warrants or
conversion or exchange of convertible or exchangeable
securities. Ms.&nbsp;Jo Allen Patton is a director and the
President of Vulcan Programming. Mr.&nbsp;Lance Conn is a Vice
President of Vulcan Programming.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Marc Nathanson has an indirect beneficial
interest of less than 1% in Oxygen.
</FONT>

<DIV>&nbsp;</DIV>

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<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Portland Trail Blazers and Action Sports
    Cable Network</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;7, 1996, the former owner of our
Falcon cable systems entered into a letter agreement and a cable
television agreement with Trail Blazers Inc. for the cable
broadcast in the metropolitan area surrounding Portland, Oregon
of pre-season, regular season and playoff basketball games of
the Portland Trail Blazers, a National Basketball Association
basketball team. Mr.&nbsp;Allen is the 100% owner of the
</FONT>

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<FONT size="2">Portland Trail Blazers and Trail Blazers Inc.
After the acquisition of the Falcon cable systems in November
1999, we continued to operate under the terms of these
agreements until their termination on September&nbsp;30, 2001.
Under the letter agreement, Trail Blazers Inc. was paid a fixed
fee for each customer in areas directly served by the Falcon
cable systems. Under the cable television agreement, we shared
subscription revenues with Trail Blazers Inc. For the years
ended December&nbsp;31, 2002, 2003 and 2004 and for the six
months ended June&nbsp;30, 2005, we paid approximately
$1&nbsp;million, $135,200, $96,100 and $116,500, respectively,
in connection with the cable broadcast of Portland Trail Blazers
basketball games under the October 1996 cable television
agreement and subsequent local cable distribution agreements.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;1, 2001, Charter Holdco and Action
Sports Cable Network (&#147;Action Sports&#148;), which was 100%
owned by Mr.&nbsp;Allen, entered into a new carriage agreement
for a five-year term, which became effective on October&nbsp;1,
2001 with the expiration of the previous agreement. Under the
July 2001 carriage agreement, Charter Holdco pays Action Sports
a fixed fee for each customer receiving the Action Sports
programming, which covered sporting events in the Pacific
Northwest, including the Portland Trail Blazers, the Seattle
Seahawks, a National Football League football team, and the
Portland Fire, a Women&#146;s National Basketball Association
basketball team. On November&nbsp;5, 2002, Action Sports, which
was 100% owned by Mr.&nbsp;Allen, announced that it was
discontinuing its business following its failure to obtain an
acceptable carriage agreement with AT&#38;T Cable, the cable
television provider in Portland, Oregon. Action Sports service
was terminated on November&nbsp;5, 2002 and Charter Holdco
ceased carriage of the service. For the year ended
December&nbsp;31, 2002, we paid Action Sports approximately
$1&nbsp;million for rights to carry its programming.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Click2learn</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdco executed a Software License
Agreement effective September&nbsp;30, 2002, with Click2learn,
Inc. (&#147;Click2learn&#148;), a company which provided
enterprise software for organizations seeking to capture, manage
and disseminate knowledge throughout their extended enterprise.
As of December&nbsp;31, 2003, Mr.&nbsp;Allen owned an
approximate 21% interest in Click2learn through
616,120&nbsp;shares held of record by Vulcan Ventures and
387,096&nbsp;shares issuable upon exercise of a warrant issued
to Vulcan Ventures. In March 2004, Click2learn was merged with
an unrelated company, resulting in a new company, SumTotal
Systems,&nbsp;Inc., which is publicly traded. We have been
informed by Vulcan that, as of December&nbsp;31, 2004,
Mr.&nbsp;Allen owned an approximate 10% interest in SumTotal
Systems,&nbsp;Inc. through his ownership in Vulcan Ventures.
Mr.&nbsp;Allen owns 100% of Vulcan Ventures. Ms.&nbsp;Jo Allen
Patton is a director and Vice President of Vulcan Ventures.
Mr.&nbsp;Lance Conn is Executive Vice President of Vulcan
Ventures. For the years ended December&nbsp;31, 2002, 2003 and
2004, we paid approximately $250,000, $57,100 and $0,
respectively, to Click2learn. For the year ended
December&nbsp;31, 2004 and for the six months ended
June&nbsp;30, 2005, we paid approximately $0 and $0,
respectively to SumTotal Systems,&nbsp;Inc.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Digeo, Inc.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2001, a subsidiary of Charter, Charter
Communications Ventures, LLC (&#147;Charter Ventures&#148;) and
Vulcan Ventures Incorporated formed DBroadband Holdings, LLC for
the sole purpose of purchasing equity interests in Digeo, Inc.
(&#147;Digeo&#148;), an entity controlled by Paul Allen. In
connection with the execution of the broadband carriage
agreement, DBroadband Holdings, LLC purchased an equity interest
in Digeo funded by contributions from Vulcan Ventures
Incorporated. The equity interest is subject to a priority
return of capital to Vulcan Ventures up to the amount
contributed by Vulcan Ventures on Charter Ventures&#146; behalf.
After Vulcan Ventures recovers its amount contributed and any
cumulative loss allocations, Charter Ventures has a 100% profit
interest in DBroadband Holdings, LLC. Charter Ventures is not
required to make any capital contributions, including capital
calls, to Digeo. DBroadband Holdings, LLC is therefore not
included in our consolidated financial statements. Pursuant to
an amended version of this arrangement, in 2003, Vulcan Ventures
contributed a total of $29&nbsp;million to Digeo,
$7&nbsp;million of which was contributed on Charter
Ventures&#146; behalf, subject to Vulcan Ventures&#146;
aforementioned priority return. Since the formation of
DBroadband Holdings, LLC, Vulcan Ventures has contributed
approximately $56&nbsp;million on Charter Ventures&#146; behalf.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;2, 2001, Charter Ventures entered
into a broadband carriage agreement with Digeo Interactive, LLC
(&#147;Digeo Interactive&#148;), a wholly owned subsidiary of
Digeo. The carriage agreement provided that Digeo Interactive
would provide to Charter a &#147;portal&#148; product, which
would function as the television-based Internet portal (the
initial point of entry to the Internet) for Charter&#146;s
customers who received Internet access from Charter. The
agreement term was for 25&nbsp;years and Charter agreed to use
the Digeo portal exclusively for six years. Before the portal
product was delivered to Charter, Digeo terminated development
of the portal product.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;27, 2001, Charter and Digeo
Interactive amended the broadband carriage agreement. According
to the amendment, Digeo Interactive would provide to Charter the
content for enhanced &#147;Wink&#148; interactive television
services, known as Charter Interactive Channels
(&#147;i-channels&#148;). In order to provide the i-channels,
Digeo Interactive sublicensed certain Wink technologies to
Charter. Charter is entitled to share in the revenues generated
by the i-channels. Currently, our digital video customers who
receive i-channels receive the service at no additional charge.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;28, 2002, Charter entered into
a second amendment to its broadband carriage agreement with
Digeo Interactive. This amendment superseded the amendment of
September&nbsp;27, 2001. It provided for the development by
Digeo Interactive of future features to be included in the Basic
i-TV service to be provided by Digeo and for Digeo&#146;s
development of an interactive &#147;toolkit&#148; to enable
Charter to develop interactive local content. Furthermore,
Charter could request that Digeo Interactive manage local
content for a fee. The amendment provided for Charter to pay for
development of the Basic i-TV service as well as license fees
for customers who would receive the service, and for Charter and
Digeo to split certain revenues earned from the service. In
2002, 2003 and 2004 and for the six months ended June&nbsp;30,
2005, we paid Digeo Interactive approximately $3&nbsp;million,
$4&nbsp;million, $3&nbsp;million and $1&nbsp;million,
respectively, for customized development of the i-channels and
the local content tool kit. We received no revenues under the
broadband carriage agreement in 2003. This amendment expired
pursuant to its terms on December&nbsp;31, 2003. Digeo
Interactive is continuing to provide the Basic i-TV service on a
month-to-month basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;30, 2003, Charter Holdco entered
into an agreement with Motorola, Inc. for the purchase of
100,000 digital video recorder (&#147;DVR&#148;) units. The
software for these DVR units is being supplied by Digeo
Interactive under a license agreement entered into in April
2004. Under the license agreement Digeo Interactive granted to
Charter Holdco the right to use Digeo&#146;s proprietary
software for the number of DVR units that Charter deployed from
a maximum of 10 headends through year-end 2004. This maximum
number of headends restriction was expanded and eventually
eliminated through successive agreement amendments and the date
for entering into license agreements for units deployed was
extended. The license granted for each unit deployed under the
agreement is valid for five years. In addition, Charter will pay
certain other fees including a per-headend license fee and
maintenance fees. Maximum license and maintenance fees during
the term of the agreement are expected to be approximately
$7&nbsp;million. The agreement includes an &#147;MFN
clause&#148; pursuant to which Charter is entitled to receive
contract terms, considered on the whole, and license fees,
considered apart from other contract terms, no less favorable
than those accorded to any other Digeo customer. An audit of
Digeo&#146;s third party contracts was conducted by
Ernst&nbsp;&#38; Young, LLP in August 2005 and it was determined
that Charter was not due any refund under the MFN clause.
Charter paid approximately $0.5&nbsp;million and
$0.2&nbsp;million in license and maintenance fees for the year
ended December&nbsp;31, 2004 and for the six months ended
June&nbsp;30, 2005, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2004, we launched DVR service (using
units containing the Digeo software) in our Rochester, Minnesota
market using a broadband media center that is an integrated
set-top terminal with a cable converter, DVR hard drive and
connectivity to other consumer electronics devices (such as
stereos, MP3 players, and digital cameras).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 2004, Charter Holdco entered into a
binding term sheet with Digeo Interactive for the development,
testing and purchase of 70,000 Digeo PowerKey DVR units. The
term sheet provided that the parties would proceed in good faith
to negotiate, prior to year-end 2004, definitive agreements for
the development, testing and purchase of the DVR units and that
the parties would enter into a license agreement for
Digeo&#146;s proprietary software on terms substantially similar
to the terms of the license
</FONT>

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<DIV align="left">
<FONT size="2">agreement described above. In November 2004,
Charter Holdco and Digeo Interactive executed the license
agreement and in December 2004, the parties executed the
purchase agreement, each on terms substantially similar to the
binding term sheet. Total purchase price and license and
maintenance fees during the term of the definitive agreements
are expected to be approximately $41&nbsp;million. The
definitive agreements are terminable at no penalty to Charter in
certain circumstances. Charter paid approximately $0 and
$2&nbsp;million in capital purchases under this agreement for
the year ended December&nbsp;31, 2004 and for the six months
ended June&nbsp;30, 2005, respectively.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In late 2003, Microsoft filed suit against Digeo
for $9&nbsp;million in a breach of contract action, involving an
agreement that Digeo and Microsoft had entered into in 2001.
Digeo informed Charter that it believed it had an
indemnification claim against Charter for half that amount.
Digeo settled with Microsoft agreeing to make a cash payment and
to purchase certain amounts of Microsoft software products and
consulting services through 2008. In consideration of Digeo
agreeing to release Charter from its potential claim against
Charter, after consultation with outside counsel Charter agreed,
in June 2005, to purchase a total of $2.3&nbsp;million in
Microsoft consulting services through 2008, a portion of which
amounts Digeo has informed Charter will count against
Digeo&#146;s purchase obligations with Microsoft.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that Vulcan Ventures, an entity
controlled by Mr.&nbsp;Allen, owns an approximate 60% equity
interest in Digeo, Inc., on a fully-converted non-diluted basis.
Messrs. Allen and Conn and Ms.&nbsp;Patton are directors of
Digeo, and Mr. Vogel was a director of Digeo in 2004. During
2004 and 2005, Mr.&nbsp;Vogel held options to
purchase&nbsp;10,000&nbsp;shares of Digeo common stock.
</FONT>

<P align="left">
<B><FONT size="2">Other Miscellaneous Relationships</FONT></B>

<DIV>&nbsp;</DIV>

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    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Viacom Networks</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to certain affiliation agreements with
networks of Viacom,&nbsp;Inc. (&#147;Viacom&#148;), including
MTV, MTV2, Nickelodeon, VH1, TVLand, CMT, Spike&nbsp;TV, Comedy
Central, Viacom Digital Suite, CBS-owned and operated broadcast
stations, Showtime, The Movie Channel, and Flix, Viacom provides
Charter with programming for distribution via our cable systems.
The affiliation agreements provide for, among other things,
rates and terms of carriage, advertising on the Viacom networks,
which Charter can sell to local advertisers and marketing
support. For the years ended December&nbsp;31, 2002, 2003 and
2004 and for the six months ended June&nbsp;30, 2005, Charter
paid Viacom approximately $177&nbsp;million, $188&nbsp;million,
$194&nbsp;million and $99&nbsp;million, respectively, for
programming. Charter recorded approximately $5&nbsp;million,
$5&nbsp;million, $8&nbsp;million and $15&nbsp;million as
receivables from Viacom networks related to launch incentives
for certain channels and marketing support, respectively, for
the years ended December&nbsp;31, 2002, 2003 and 2004 and for
the six months ended June&nbsp;30, 2005. From April&nbsp;1994 to
July&nbsp;2004, Mr.&nbsp;Dolgen served as Chairman and Chief
Executive Officer of the Viacom Entertainment Group.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">ADC Telecommunications Inc.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter and Charter Holdco purchase certain
equipment for use in our business from ADC Telecommunications,
which provides broadband access and network equipment.
Mr.&nbsp;Wangberg serves as a director for ADC
Telecommunications. For the years ended December&nbsp;31, 2002,
2003 and 2004 and for the six months ended June&nbsp;30, 2005,
we paid $759,600, $60,100, $344,800 and $241,100, respectively,
to ADC Telecommunications under this arrangement.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">HDNet and HDNet Movies
    Network</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;10, 2003 we signed an agreement
to carry two around-the-clock, high-definition networks, HDNet
and HDNet Movies. HDNet Movies delivers a commercial-free
schedule of full-length feature films converted from 35mm to
high-definition, including titles from an extensive library of
Warner Bros. films. HDNet Movies will feature a mix of
theatrical releases, made-for-TV movies, independent films and
shorts. The HDNet channel features a variety of HDTV
programming, including live sports, sitcoms, dramas, action
series, documentaries, travel programs, music concerts and
shows, special events, and news features including the popular
HDNet World Report. HDNet also offers a selection of classic and
recent television series. We
</FONT>

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<DIV align="left">
<FONT size="2">paid HDNet and HDNet Movies approximately
$21,900, $609,100 and $1&nbsp;million in 2003 and 2004 and for
the six months ended June&nbsp;30, 2005, respectively. We
believe that entities controlled by Mr.&nbsp;Cuban owned
approximately 81% of HDNet as of December&nbsp;31, 2003 and 2004
and for the six months ended June&nbsp;30, 2005. On May&nbsp;21,
2003, Mark Cuban filed a Schedule&nbsp;13G with the SEC stating
that he owned approximately 19,000,000&nbsp;shares, or 6.5% of
the total common equity in Charter. However, a
Schedule&nbsp;13G/A filed on April&nbsp;25, 2005, reported that
Mr.&nbsp;Cuban owned no shares of Charter.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

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    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Affiliate Leases and
    Agreements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Companies controlled by Mr.&nbsp;Nathanson, a
director of Charter, leased certain warehouse space in
Riverside, California, to our subsidiaries. For the years ended
December&nbsp;31, 2002 and 2003, total rent paid for the
Riverside warehouse space was approximately $76,000 and $16,600,
respectively, under a lease agreement which expired
March&nbsp;15, 2003.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Carriage Fees</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have carried The Outdoor Channel on a
month-to-month basis since the expiration of an affiliation
agreement in July&nbsp;2002. We paid approximately
$1&nbsp;million, $1&nbsp;million, $1&nbsp;million and $594,900
to The Outdoor Channel during 2002, 2003 and 2004 and for the
six months ended June&nbsp;30, 2005, respectively. In
December&nbsp;2003, Mr.&nbsp;Merritt became director of Outdoor
Channel Holdings, Inc., an affiliate of The Outdoor Channel, Inc.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Payments for Relatives&#146;
    Services</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since June 2003, Charter Holdco has employed the
brother-in-law of Carl&nbsp;E. Vogel, Charter&#146;s former
President, Chief Executive Officer and a director.
Mr.&nbsp;Vogel&#146;s brother-in-law receives a salary
commensurate with his position in the engineering department.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
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</TR>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Radio Advertising</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that, through a third party
advertising agency, we have paid approximately $112,700,
$67,300, $49,300 and $20,200, in 2002, 2003 and 2004, and for
the six months ended June&nbsp;30, 2005, respectively, to
Mapleton Communications, an affiliate of Mapleton Investments,
LLC that owns radio stations in Oregon and California. Mr.
Nathanson is the Chairman and owner of Mapleton Investments, LLC.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Purchase of Certain Enstar Limited
    Partnership Systems; Management Fees</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2002, Interlink Communications Partners,
LLC, Rifkin Acquisition Partners, LLC and Charter Communications
Entertainment&nbsp;I, LLC, each an indirect, wholly owned
subsidiary of Charter Holdings, completed the cash purchase of
certain assets of Enstar Income Program&nbsp;II-2, L.P., Enstar
Income/ Growth Program Six-A, L.P., Enstar Income Program IV-1,
L.P., Enstar Income Program IV-2, L.P., and Enstar Income
Program IV-3, L.P., serving approximately 21,600 customers, for
a total cash sale price of approximately $48&nbsp;million. In
September 2002, Charter Communications Entertainment&nbsp;I, LLC
purchased all of Enstar Income Program&nbsp;II-1, L.P.&#146;s
Illinois cable television systems, serving approximately 6,400
customers, for a cash sale price of $15&nbsp;million. Enstar
Communications Corporation, a direct subsidiary of Charter
Holdco is a general partner of the Enstar limited partnerships
but does not exercise control over them. The purchase prices
were allocated to assets acquired based on fair values,
including approximately $41&nbsp;million assigned to franchises
and $4&nbsp;million assigned to other intangible assets
amortized over a useful life of three years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, Enstar Cable Corporation, the
manager of the Enstar limited partnerships through a management
agreement, engaged Charter Holdco to manage the Enstar limited
partnerships. Pursuant to the management agreement, Charter
Holdco provides management services to the Enstar limited
partnerships in exchange for management fees. The Enstar limited
partnerships also purchase basic and premium programming for
their systems at cost from Charter Holdco. For the years ended
December&nbsp;31, 2002, 2003 and 2004 and for the six months
ended June&nbsp;30, 2005, Charter Holdco earned approximately
</FONT>

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<DIV align="left">
<FONT size="2">$1&nbsp;million, $469,300, $0 and $0,
respectively, by providing management services to the Enstar
limited partnerships. In September 2003 the Enstar limited
partnerships completed sales of all their remaining assets, and
as a result no further management fees were paid in 2004. In
November 2004, the Enstar limited partnerships were dissolved.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of the executive officers of Charter (with
the exception of Mr.&nbsp;Allen), Charter Holdco and Charter
Holdings act as officers of Enstar Communications Corporation.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">Indemnification Advances</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to Charter&#146;s bylaws (and the
employment agreements of certain of our current and former
officers), Charter is obligated (subject to certain limitations)
to indemnify and hold harmless, to the fullest extent permitted
by law, any officer, director or employee against all expense,
liability and loss (including, among other things,
attorneys&#146; fees) reasonably incurred or suffered by such
officer, director or employee as a result of the fact that he or
she is a party or is threatened to be made a party or is
otherwise involved in any action, suit or proceeding by reason
of the fact that he or she is or was a director, officer or
employee of Charter. In addition, Charter is obligated to pay,
as an advancement of its indemnification obligation, the
expenses (including attorneys&#146; fees) incurred by any
officer, director or employee in defending any such action, suit
or proceeding in advance of its final disposition, subject to an
obligation to repay those amounts under certain circumstances.
Pursuant to these indemnification arrangements and as an
advancement of costs, Charter has reimbursed certain of its
current and former directors and executive officers a total of
approximately $3&nbsp;million, $8&nbsp;million, $3&nbsp;million
and $13,400&nbsp;in respect of invoices received in 2002, 2003
and 2004 and for the six months ended June&nbsp;30, 2005,
respectively, in connection with their defense of certain legal
actions described herein. See &#147;Business&nbsp;&#151; Legal
Proceedings.&#148; Those current and former directors and
officers include: Paul G. Allen, David C. Andersen, David G.
Barford, Mary Pat Blake, J. Christian Fenger, Kent D. Kalkwarf,
Ralph G. Kelly, Jerald L. Kent, Paul E. Martin, David L. McCall,
Ronald L. Nelson, Nancy B. Peretsman, John C. Pietri, William D.
Savoy, Steven A. Schumm, Curtis S. Shaw, William J. Shreffler,
Stephen E. Silva, James Trey Smith and Carl E. Vogel. These
amounts were submitted to Charter&#146;s director and officer
insurance carrier and have been reimbursed consistent with the
terms of the Securities Class Action and Derivative Action
Settlements described in &#147;Business&nbsp;&#151; Legal
Proceedings.&#148; On or about February 22, 2005, Charter filed
lawsuits against the four former officers who were indicted and
pled guilty as part of the government investigation conducted by
the United States Attorney&#146;s Office. These suits seek to
recover fees and related expenses that Charter advanced these
former officers under the indemnification provisions described
above. One of these former officers, has counterclaimed against
Charter alleging, among other things, that Charter owes him
additional indemnification for legal fees that Charter did not
pay and another of these former officers, has counterclaimed
against Charter for accrued sick leave.
</FONT>

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<DIV align="left">
<A name='117'></A>
</DIV>

<!-- link1 "DESCRIPTION OF CERTAIN INDEBTEDNESS" -->

<P align="center">
<B><FONT size="2">DESCRIPTION OF CERTAIN INDEBTEDNESS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, our actual total debt
was approximately $19.2&nbsp;billion and on the pro forma basis
described in &#147;Unaudited Pro Forma Consolidated Financial
Statements,&#148; our total debt would have been approximately
$19.0&nbsp;billion as summarized below (in millions):
</FONT>

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    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Pro forma</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Start date for</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">cash interest</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Interest</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">payment on</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Face</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accreted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Face</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accreted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">payment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">discount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Maturity</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">value(a)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">value(a)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">dates</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">notes</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">date(b)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">Charter Communications, Inc.:</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">4.750%&nbsp;convertible senior notes due 2006(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">25</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">25</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">25</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">25</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">12/1 &#38; 6/1</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6/1/06</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">5.875%&nbsp;convertible senior notes due 2009(c)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">863</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">838</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">863</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">838</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/16 &#38; 11/16</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11/16/09</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">Charter Holdings:</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">8.250%&nbsp;senior notes due 2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">105</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">105</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">105</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">105</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1 &#38; 10/1</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1/07</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">8.625%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,244</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,243</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">293</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">293</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1 &#38; 10/1</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1/09</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">9.920%&nbsp;senior discount notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,108</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,108</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">198</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">198</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1 &#38; 10/1</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10/1/04</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1/11</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">10.000%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">640</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">640</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">154</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">154</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1 &#38; 10/1</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1/09</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">10.250%&nbsp;senior notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">318</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">318</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">49</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">49</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15 &#38; 7/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15/10</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">11.750%&nbsp;senior discount notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">450</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">450</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">43</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">43</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15 &#38; 7/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7/15/05</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15/10</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">10.750%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">874</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">874</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">131</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">131</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1 &#38; 10/1</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10/1/09</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">11.125%&nbsp;senior notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">500</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">500</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">217</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">217</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15 &#38; 7/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15/11</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">13.500%&nbsp;senior discount notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">675</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">629</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">94</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">88</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15 &#38; 7/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7/15/06</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15/11</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">9.625%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">640</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">638</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">107</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">107</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/15 &#38; 11/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11/15/09</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">10.000%&nbsp;senior notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">710</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">708</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">136</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">136</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/15 &#38; 11/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/15/11</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">11.750%&nbsp;senior discount notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">939</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">851</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">125</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">113</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/15 &#38; 11/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11/15/06</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/15/11</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">12.125%&nbsp;senior discount notes due 2012
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">330</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">275</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">113</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">94</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15 &#38; 7/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7/15/07</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15/12</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">CIH(d):</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">11.125% senior notes due 2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">151</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">151</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15 &#38; 7/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15/14</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">9.920% senior discount notes due 2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">471</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">471</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1 &#38; 10/1</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1/14</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">10.000% senior notes due 2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">299</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">299</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/15 &#38; 11/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/15/14</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">11.750% senior discount notes due 2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">815</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">737</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/15&nbsp;&#38;&nbsp; 11/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11/15/06</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/15/14</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">13.500% senior discount notes due 2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">581</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">541</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15 &#38; 7/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7/15/06</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15/14</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">12.125% senior discount notes due 2015
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">217</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">181</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15 &#38; 7/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7/15/07</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1/15/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">CCH&nbsp;I(d):</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">11.00% senior notes due 2015
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,525</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,686</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/1 &#38; 10/1</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10/1/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">CCH&nbsp;II:</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">10.250%&nbsp;senior notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,601</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,601</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,601</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,601</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3/15 &#38; 9/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">9/15/10</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">CCO Holdings:</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">8 3/4%&nbsp;senior notes due 2013
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">500</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">500</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">800</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">794</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5/15 &#38; 11/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11/15/13</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Senior floating rate notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3/15, 6/15,</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">12/15/10</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">9/15 &#38; 12/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">Charter Operating:</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">8%&nbsp;senior second lien notes due 2012
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,100</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,100</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,100</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,100</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/30 &#38; 10/30</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/30/12</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">8 3/8%&nbsp;senior second lien notes due 2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">733</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">733</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">733</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">733</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/30 &#38; 10/30</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/30/14</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">Renaissance:</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">10.000%&nbsp;senior discount notes due 2008
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">114</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">116</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">114</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">116</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/15 &#38; 10/15</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10/15/03</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4/15/08</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="1">Credit Facilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="1">Charter Operating
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,445</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,445</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,445</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,445</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,464</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,247</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,055</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">18,996</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The accreted value presented above represents the
    face value of the notes less the original issue discount at the
    time of sale plus the accretion to the balance sheet date.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(b)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">In general, the obligors have the right to redeem
    all of the notes set forth in the above table (except with
    respect to the 5.875% convertible senior notes due 2009 and the
    Charter Holdings notes with terms of eight years) in whole or
    part at their option, beginning at various times prior to their
    stated maturity dates, subject to certain conditions, upon the
    payment of the outstanding principal amount (plus a specified
    redemption premium) and all accrued and unpaid interest. The
    5.875% convertible senior notes are redeemable if the closing
    price of our Class&nbsp;A common stock exceeds the conversion
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">144
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">price by certain percentages as described below.
    For additional information, see Note&nbsp;9 to our consolidated
    financial statements included elsewhere in this prospectus.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(c)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The 4.75% convertible senior notes and the 5.875%
    convertible senior notes are convertible at the option of the
    holders into shares of Class&nbsp;A common stock at a conversion
    rate, subject to certain adjustments, of 38.0952 and 413.2231
    shares, respectively, per $1,000 principal amount of notes,
    which is equivalent to a price of $26.25 and $2.42 per share,
    respectively. Certain anti-dilutive provisions cause adjustments
    to occur automatically upon the occurrence of specified events.
    Additionally, the conversion ratio may be adjusted by us when
    deemed appropriate.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(d)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The pro forma balance sheet amounts of CIH and
    CCH&nbsp;I&nbsp;notes issued in exchange for Charter Holdings
    notes are presented in accordance with GAAP. GAAP requires that
    the CIH notes issued in exchange for Charter Holdings notes and
    the CCH&nbsp;I&nbsp;notes issued in exchange for the
    8.625%&nbsp;Charter Holdings senior notes due&nbsp;2009 be
    recorded at the current accreted values of the old Charter
    Holdings notes as opposed to the current accreted values of the
    new CIH or CCH&nbsp;I&nbsp;notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005 and December&nbsp;31,
2004, our long-term debt totaled approximately
$19.2&nbsp;billion and $19.5&nbsp;billion, respectively. This
debt was comprised of approximately $5.4&nbsp;billion and
$5.5&nbsp;billion of credit facility debt, $12.9&nbsp;billion
and $13.0&nbsp;billion accreted value of high-yield notes and
$863&nbsp;million and $990&nbsp;million accreted value of
convertible senior notes at June&nbsp;30, 2005 and
December&nbsp;31, 2004, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005 and December&nbsp;31,
2004, the weighted average interest rate on the credit facility
debt was approximately 7.2% and 6.8%, respectively, the weighted
average interest rate on our high-yield notes was approximately
9.9% and 9.9%, and the weighted average interest rate on the
convertible senior notes was approximately 5.8% and 5.7%,
respectively, resulting in a blended weighted average interest
rate of 9.0% and 8.8%, respectively. The interest rate on
approximately 81% and 83% of the total principal amount of our
debt was effectively fixed, including the effects of our
interest rate hedge agreements as of June&nbsp;30, 2005 and
December&nbsp;31, 2004, respectively. The fair value of our
high-yield notes was $10.9&nbsp;billion and $12.2&nbsp;billion
at June&nbsp;30, 2005 and December&nbsp;31, 2004, respectively.
The fair value of our convertible senior notes was
$562&nbsp;million and $1.1&nbsp;billion at June&nbsp;30, 2005
and December&nbsp;31, 2004, respectively. The fair value of our
credit facilities was approximately $5.4&nbsp;billion and
$5.5&nbsp;billion at June&nbsp;31, 2005 and December&nbsp;31,
2004, respectively. The fair value of high-yield and convertible
notes is based on quoted market prices, and the fair value of
the credit facilities is based on dealer quotations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following description is a summary of certain
material provisions of the amended and restated Charter
Operating credit facilities and the public notes of our
subsidiaries (collectively, the &#147;Debt Agreements&#148;).
The summary does not restate the terms of the Debt Agreements in
their entirety, nor does it describe all terms of the Debt
Agreements. The agreements and instruments governing each of the
Debt Agreements are complicated and you should consult such
agreements and instruments for more detailed information
regarding the Debt Agreements.
</FONT>

<P align="left">
<B><I><FONT size="2">Charter Operating Credit
Facilities&nbsp;&#151; General</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating credit facilities were
amended and restated concurrently with the sale of
$1.5&nbsp;billion senior second-lien notes in April 2004, among
other things, to defer maturities and increase availability
under these facilities and to enable Charter Operating to
acquire the interests of the lenders under the CC VI Operating,
CC VIII Operating and Falcon credit facilities, thereby
consolidating all credit facilities under one amended and
restated Charter Operating credit agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating credit facilities:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">provide borrowing availability of up to
    $6.5&nbsp;billion;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">provide for two term facilities:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;a Term A facility with a total principal
    amount of $2.0&nbsp;billion, of which 12.5% matures in 2007, 30%
    matures in 2008, 37.5% matures in 2009 and 20% matures in 2010;
    and
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">145
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;a Term B facility with a total
    principal amount of $3.0&nbsp;billion, which shall be repayable
    in 27 equal quarterly installments aggregating in each loan year
    to 1% of the original amount of the Term B facility, with the
    remaining balance due at final maturity in 2011;&nbsp;and
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">provide for a revolving credit facility, in a
    total amount of $1.5&nbsp;billion, with a maturity date in 2010.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Amounts outstanding under the Charter Operating
credit facilities bear interest, at Charter Operating&#146;s
election, at a base rate or the Eurodollar rate, as defined,
plus a margin for Eurodollar loans of up to 3.00% for the Term A
facility and revolving credit facility, and up to 3.25% for the
Term B facility, and for base rate loans of up to 2.00% for the
Term A facility and revolving credit facility, and up to 2.25%
for the Term B facility. A quarterly commitment fee of up to
..75% is payable on the average daily unborrowed balance of the
revolving credit facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The obligations of our subsidiaries under the
Charter Operating credit facilities (the
&#147;Obligations&#148;) are guaranteed by Charter
Operating&#146;s immediate parent company, CCO Holdings, and the
subsidiaries of Charter Operating, except for immaterial
subsidiaries and subsidiaries precluded from guaranteeing by
reason of the provisions of other indebtedness to which they are
subject (the &#147;non-guarantor subsidiaries,&#148; primarily
Renaissance and its subsidiaries). The Obligations are also
secured by (i)&nbsp;a lien on all of the assets of Charter
Operating and its subsidiaries (other than assets of the
non-guarantor subsidiaries), to the extent such lien can be
perfected under the Uniform Commercial Code by the filing of a
financing statement, and (ii)&nbsp;by a pledge by CCO Holdings
of the equity interests owned by it in Charter Operating or any
of Charter Operating&#146;s subsidiaries, as well as
intercompany obligations owing to it by any of such entities.
Upon the Charter Holdings Leverage Ratio (as defined in the
indenture governing the Charter Holdings senior notes and senior
discount notes) being under 8.75 to 1.0, the Charter Operating
credit facilities require that the 11.875%&nbsp;notes due 2008
issued by CC V Holdings, LLC be redeemed. Because such Leverage
Ratio was determined to be under 8.75 to 1.0, CC V Holdings, LLC
redeemed such notes in March 2005, and CC V Holdings, LLC and
its subsidiaries (other than non-guarantor subsidiaries) became
guarantors of the Obligations and have granted a lien on all of
their assets as to which a lien can be perfected under the
Uniform Commercial Code by the filing of a financing statement.
</FONT>

<P align="left">
<B><I><FONT size="2">Charter Operating Credit
Facilities&nbsp;&#151; Restrictive Covenants</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating credit facilities contain
representations and warranties, and affirmative and negative
covenants customary for financings of this type. The financial
covenants measure performance against standards set for
leverage, debt service coverage, and interest coverage, tested
as of the end of each quarter. The maximum allowable leverage
ratio is 4.25 to 1.0 until maturity, tested as of the end of
each quarter beginning September&nbsp;30, 2004. Additionally,
the Charter Operating credit facilities contain provisions
requiring mandatory loan prepayments under specific
circumstances, including when significant amounts of assets are
sold and the proceeds are not reinvested in assets useful in the
business of the borrower within a specified period, and upon the
incurrence of certain indebtedness when the ratio of senior
first lien debt to operating cash flow is greater than 2.0 to
1.0.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating credit facilities permit
Charter Operating and its subsidiaries to make distributions to
pay interest on the Charter Operating senior second-lien notes,
the CCH&nbsp;II senior notes, the CCO Holdings senior notes, the
Charter convertible senior notes and the Charter Holdings senior
notes, provided that, among other things, no default has
occurred and is continuing under the Charter Operating credit
facilities. Conditions to future borrowings include absence of a
default or an event of default under the Charter Operating
credit facilities and the continued accuracy in all material
respects of the representations and warranties, including the
absence since December&nbsp;31, 2003 of any event, development
or circumstance that has had or could reasonably be expected to
have a material adverse effect on our business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The events of default under the Charter Operating
credit facilities include, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;the failure to make payments when due or
    within the applicable grace period,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;the failure to comply with specified
    covenants, including but not limited to a covenant to deliver
    audited financial statements with an unqualified opinion from
    our independent auditors,
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">146
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;the failure to pay or the occurrence
    of events that cause or permit the acceleration of other
    indebtedness owing by CCO Holdings, Charter Operating or Charter
    Operating&#146;s subsidiaries in amounts in excess of
    $50&nbsp;million in aggregate principal amount,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iv)&nbsp;the failure to pay or the occurrence of
    events that result in the acceleration of other indebtedness
    owing by certain of CCO Holdings&#146; direct and indirect
    parent companies in amounts in excess of $200&nbsp;million in
    aggregate principal amount,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(v)&nbsp;Paul Allen and/or certain of his family
    members and/or their exclusively owned entities (collectively,
    the &#147;Paul Allen Group&#148;) ceasing to have the power,
    directly or indirectly, to vote at least 35% of the ordinary
    voting power of Charter Operating,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(vi)&nbsp;the consummation of any transaction
    resulting in any person or group (other than the Paul Allen
    Group) having power, directly or indirectly, to vote more than
    35% of the ordinary voting power of Charter Operating, unless
    the Paul Allen Group holds a greater share of ordinary voting
    power of Charter Operating,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(vii)&nbsp;certain of Charter Operating&#146;s
    indirect or direct parent companies having indebtedness in
    excess of $500&nbsp;million aggregate principal amount which
    remains undefeased three months prior to the final maturity of
    such indebtedness,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(viii)&nbsp;Charter Operating ceasing to be a
    wholly-owned direct subsidiary of CCO Holdings, except in
    certain very limited circumstances.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Outstanding Notes</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Charter Communications, Inc.
    Notes</FONT></I></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Charter 4.75% Convertible Senior Notes due
    2006</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 2001, Charter issued
4.75%&nbsp;convertible senior notes with a total principal
amount at maturity of $633&nbsp;million. As of June&nbsp;30,
2005, there was $25&nbsp;million in total principal amount of
these notes outstanding. The 4.75% convertible notes rank
equally with any of our future unsubordinated and unsecured
indebtedness, but are structurally subordinated to all existing
and future indebtedness and other liabilities of our
subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 4.75% convertible notes are convertible at
the option of the holder into shares of Class&nbsp;A common
stock at a conversion rate of 38.0952&nbsp;shares per $1,000
principal amount of notes, which is equivalent to a price of
$26.25&nbsp;per share, subject to certain adjustments.
Specifically, the adjustments include anti-dilutive provisions,
which automatically occur based on the occurrence of specified
events to provide protection rights to holders of the notes.
Additionally, Charter may adjust the conversion ratio under
certain circumstances when deemed appropriate. These notes are
redeemable at our option at amounts decreasing from 101.9% to
100% of the principal amount, plus accrued and unpaid interest
beginning on June&nbsp;4, 2004, to the date of redemption.
Interest is payable semiannually on December&nbsp;1 and
June&nbsp;1, beginning December&nbsp;1, 2001, until maturity on
June&nbsp;1, 2006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon a change of control, subject to certain
conditions and restrictions, Charter may be required to
repurchase the notes, in whole or in part, at 100% of their
principal amount plus accrued interest at the repurchase date.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Charter 5.875% Convertible Senior Notes due
    2009</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 2004, Charter issued 5.875%
convertible senior notes due 2009 with a total original
principal amount of $862.5&nbsp;million. The 5.875% convertible
senior notes are unsecured (except with respect to the
collateral as described below) and rank equally with our
existing and future unsubordinated and unsecured indebtedness
(except with respect to the collateral described below), but are
structurally subordinated to all existing and future
indebtedness and other liabilities of our subsidiaries. Interest
is payable semi-annually in arrears.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 5.875% convertible senior notes are
convertible at any time at the option of the holder into shares
of Class&nbsp;A common stock at an initial conversion rate of
413.2231 shares per $1,000 principal amount of notes, which is
equivalent to a conversion price of approximately $2.42 per
share, subject to certain
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">adjustments. Specifically, the adjustments
include anti-dilutive provisions, which cause adjustments to
occur automatically based on the occurrence of specified events
to provide protection rights to holders of the notes. The
conversion rate may also be increased (but not to exceed 462
shares per $1,000 principal amount of notes) upon a specified
change of control transaction. Additionally, Charter may elect
to increase the conversion rate under certain circumstances when
deemed appropriate and subject to applicable limitations of the
NASDAQ stock market. Holders who convert their notes prior to
November&nbsp;16, 2007 will receive an early conversion make
whole amount in respect of their notes based on a proportional
share of the portfolio of pledged securities described below,
with specified adjustments.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No holder of notes will be entitled to receive
shares of our Class&nbsp;A common stock on conversion to the
extent that receipt of the shares would cause the converting
holder to become, directly or indirectly, a &#147;beneficial
holder&#148; (within the meaning of Section&nbsp;13(d) of the
Exchange Act and the rules and regulations promulgated
thereunder) of more than 4.9% of the outstanding shares of our
Class&nbsp;A common stock if such conversion would take place
prior to November&nbsp;16, 2008, or more than 9.9% thereafter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a holder tenders a note for conversion, we may
direct that holder (unless we have called those notes for
redemption) to a financial institution designated by us to
conduct a transaction with that institution, on substantially
the same terms that the holder would have received on
conversion. But if any such financial institution does not
accept such notes or does not deliver the required conversion
consideration, we remain obligated to convert the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdco used a portion of the proceeds
from the sale of the notes to purchase a portfolio of
U.S.&nbsp;government securities in an amount which we believe
will be sufficient to make the first six interest payments on
the notes. These government securities were pledged to us as
security for a mirror note issued by Charter Holdco to Charter
and pledged to the trustee under the indenture governing the
notes as security for our obligations thereunder. We expect to
use such securities to fund the first six interest payments
under the notes. The pledged securities were valued at
$122&nbsp;million at June&nbsp;30, 2005. Any holder that
converts its notes prior to the third anniversary of the issue
date will be entitled to receive, in addition to the requisite
number of shares upon conversion, an interest make whole payment
equal to the cash proceeds from the sale by the trustee of that
portion of the remaining pledged U.S. government securities
which secure interest payments on the notes so converted,
subject to certain limitations with respect to notes that have
not been sold pursuant to an effective registration statement
under the Securities Act of 1933.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon a change of control and certain other
fundamental changes, subject to certain conditions and
restrictions, Charter may be required to repurchase the notes,
in whole or in part, at 100% of their principal amount plus
accrued interest at the repurchase date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We were required to have effective a registration
statement by April&nbsp;1, 2005. Such registration was not
declared effective by that date, and we incurred liquidated
damages from April&nbsp;2, 2005 through July&nbsp;17, 2005, the
day before the effective date of the registration statement.
These liquidated damages accrued at a rate of 0.25% per month of
the accreted principal amount of the convertible notes for the
first 60&nbsp;days after April&nbsp;1, 2005 and 0.50% per month
of the accreted principal amount of the convertible notes
thereafter. In April, May, June, July and August 2005, the
liquidated damage payments were made in cash.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We were required to use our reasonable best
efforts to cause a shelf registration statement for resale of
its 5.875% convertible senior notes and shares issued on
conversion of the notes by the holders of the notes to be
declared effective on or before April&nbsp;21, 2005. Such
registration statement was not declared effective by that date
and we incurred liquidated damages at a rate from 0.25% per
annum of the accreted principal amount of the notes through
July&nbsp;14, 2005, the day before to the effective date of the
registration statement. The liquidated damages were or will be
paid by Charter in cash.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following the earlier of the sale of the notes
pursuant to an effective registration statement or the date two
years following the issue date, we may redeem the notes in whole
or in part for cash at any time at a redemption price equal to
100% of the aggregate principal amount plus accrued and unpaid
interest, deferred interest and liquidated damages, if any, but
only if for any 20 trading days in any 30 consecutive trading
day period the closing price has exceeded 180% of the conversion
price, if such 30 trading day
</FONT>

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<DIV align="left">
<FONT size="2">period begins prior to November&nbsp;16, 2007 or
150% of the conversion price, if such 30 trading period begins
thereafter. Holders who convert notes that we have called for
redemption shall receive, in addition to the early conversion
make whole amount, if applicable, the present value of the
interest on the notes converted that would have been payable for
the period from the later of November&nbsp;17, 2007 and the
redemption date through the scheduled maturity date for the
notes, plus any accrued deferred interest.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Charter Communications Holdings, LLC
    Notes</FONT></I></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">March 1999 Charter Holdings Notes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The March 1999 Charter Holdings notes were issued
under three separate indentures, each dated as of March&nbsp;17,
1999, among Charter Holdings and Charter Capital, as the
issuers, and BNY Midwest Trust Company, as trustee. Charter
Holdings and Charter Capital exchanged these notes for new notes
with substantially similar terms, except that the new notes are
registered under the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The March 1999 Charter Holdings notes are general
unsecured obligations of Charter Holdings and Charter Capital.
Cash interest on the March 1999 9.920% Charter Holdings notes
began to accrue on April&nbsp;1, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The March 1999 Charter Holdings notes are senior
debt obligations of Charter Holdings and Charter Capital. They
rank equally with all other current and future unsubordinated
obligations of Charter Holdings and Charter Capital. They are
structurally subordinated to the obligations of Charter
Holdings&#146; subsidiaries, including the CCH&nbsp;II notes,
the CCO Holdings notes, the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and Charter Capital will not
have the right to redeem the March 1999 8.250% Charter Holdings
notes prior to their maturity on April&nbsp;1, 2007. Charter
Holdings and Charter Capital may redeem some or all of the March
1999 8.625% Charter Holdings notes and the March 1999 9.920%
Charter Holdings notes at any time, in each case, at a premium.
The optional redemption price declines to 100% of the principal
amount of March 1999 Charter Holdings notes redeemed, plus
accrued and unpaid interest, if any, for redemption on or after
April&nbsp;1, 2007.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding March 1999 Charter Holdings
notes at 101% of their principal amount or accreted value, as
applicable, plus accrued and unpaid interest, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the March 1999 Charter
Holdings notes contain restrictive covenants that limit certain
transactions or activities by Charter Holdings and its
restricted subsidiaries. See &#147;&#151;&nbsp;Summary of
Restrictive Covenants Under the Charter Holdings High-Yield
Notes.&#148; Substantially all of Charter Holdings&#146; direct
and indirect subsidiaries are currently restricted subsidiaries.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">January 2000 Charter Holdings Notes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2000 Charter Holdings notes were
issued under three separate indentures, each dated as of
January&nbsp;12, 2000, among Charter Holdings and Charter
Capital, as the issuers, and BNY Midwest Trust Company, as
trustee. In June 2000, Charter Holdings and Charter Capital
exchanged these notes for new notes with substantially similar
terms, except that the new notes are registered under the
Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2000 Charter Holdings notes are
general unsecured obligations of Charter Holdings and Charter
Capital. Cash interest on the January 2000 11.75% Charter
Holdings notes began to accrue on January&nbsp;15, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2000 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with all other current and future
unsubordinated obligations of Charter Holdings and Charter
Capital. They are structurally subordinated to the obligations
of Charter Holdings&#146; subsidiaries, including the
CCH&nbsp;II notes, the CCO Holdings notes, the Renaissance
notes, the Charter Operating credit facilities and the Charter
Operating notes.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and Charter Capital will not
have the right to redeem the January 2000 10.00% Charter
Holdings notes prior to their maturity on April&nbsp;1, 2009.
Charter Holdings and Charter Capital may redeem some or all of
the January 2000 10.25% Charter Holdings notes and the January
2000 11.75% Charter Holdings notes at any time, in each case, at
a premium. The optional redemption price declines to 100% of the
principal amount of the January 2000 Charter Holdings notes
redeemed, plus accrued and unpaid interest, if any, for
redemption on or after January&nbsp;15, 2008.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2000 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the January 2000 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 Charter
Holdings notes. See &#147;&#151;&nbsp;Summary of Restrictive
Covenants Under the Charter Holdings High-Yield Notes.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">January 2001 Charter Holdings Notes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2001 Charter Holdings notes were
issued under three separate indentures, each dated as of
January&nbsp;10, 2001, each among Charter Holdings and Charter
Capital, as the issuers, and BNY Midwest Trust Company, as
trustee. In March 2001, Charter Holdings and Charter Capital
exchanged these notes for new notes, with substantially similar
terms, except that the new notes are registered under the
Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2001 Charter Holdings notes are
general unsecured obligations of Charter Holdings and Charter
Capital. Cash interest on the January 2001 13.500% Charter
Holdings notes will not accrue prior to January&nbsp;15, 2006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2001 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with all other current and future
unsubordinated obligations of Charter Holdings and Charter
Capital. They are structurally subordinated to the obligations
of Charter Holdings&#146; subsidiaries, including the
CCH&nbsp;II notes, the CCO Holdings notes, the Renaissance
notes, the Charter Operating credit facilities and the Charter
Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and Charter Capital will not
have the right to redeem the January 2001 10.750% Charter
Holdings notes prior to their maturity on October&nbsp;1, 2009.
On or after January&nbsp;15, 2006, Charter Holdings and Charter
Capital may redeem some or all of the January 2001 11.125%
Charter Holdings notes and the January 2001 13.500% Charter
Holdings notes at any time, in each case, at a premium. The
optional redemption price declines to 100% of the principal
amount of the January 2001 Charter Holdings notes redeemed, plus
accrued and unpaid interest, if any, for redemption on or after
January&nbsp;15, 2009.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2001 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the January 2001 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 Charter
Holdings notes. See &#147;&#151;&nbsp;Summary of Restrictive
Covenants Under the Charter Holdings High-Yield Notes.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">May 2001 Charter Holdings Notes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The May 2001 Charter Holdings notes were issued
under three separate indentures, each among Charter Holdings and
Charter Capital, as the issuers, and BNY Midwest Trust Company,
as trustee. In September 2001, Charter Holdings and Charter
Capital exchanged substantially all of these notes for new notes
with substantially similar terms, except that the new notes are
registered under the Securities Act.
</FONT>

<P align="center"><FONT size="2">150
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The May 2001 Charter Holdings notes are general
unsecured obligations of Charter Holdings and Charter Capital.
Cash interest on the May 2001 11.750% Charter Holdings notes
will not accrue prior to May&nbsp;15, 2006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The May 2001 Charter Holdings notes are senior
debt obligations of Charter Holdings and Charter Capital. They
rank equally with all other current and future unsubordinated
obligations of Charter Holdings and Charter Capital. They are
structurally subordinated to the obligations of Charter
Holdings&#146; subsidiaries, including the CCH&nbsp;II notes,
the CCO Holdings notes, the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and Charter Capital will not
have the right to redeem the May 2001 9.625% Charter Holdings
notes prior to their maturity on November&nbsp;15, 2009. On or
after May&nbsp;15, 2006, Charter Holdings and Charter Capital
may redeem some or all of the May 2001 10.000% Charter Holdings
notes and the May 2001 11.750% Charter Holdings notes at any
time, in each case, at a premium. The optional redemption price
declines to 100% of the principal amount of the May 2001 Charter
Holdings notes redeemed, plus accrued and unpaid interest, if
any, for redemption on or after May&nbsp;15, 2009.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding May 2001 Charter Holdings notes
at 101% of their total principal amount or accreted value, as
applicable, plus accrued and unpaid interest, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the May 2001 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 Charter
Holdings notes. See &#147;&#151;&nbsp;Summary of Restrictive
Covenants Under the Charter Holdings High-Yield Notes.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">January 2002 Charter Holdings Notes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2002 Charter Holdings notes were
issued under three separate indentures, each among Charter
Holdings and Charter Capital, as the issuers, and BNY Midwest
Trust Company, as trustee, two of which were supplements to the
indentures for the May 2001 Charter Holdings notes. In July
2002, Charter Holdings and Charter Capital exchanged
substantially all of these notes for new notes, with
substantially similar terms, except that the new notes are
registered under the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2002 Charter Holdings notes are
general unsecured obligations of Charter Holdings and Charter
Capital. Cash interest on the January 2002 12.125% Charter
Holdings notes will not accrue prior to January&nbsp;15, 2007.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2002 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with the current and future unsecured and
unsubordinated debt of Charter Holdings and Charter Capital.
They are structurally subordinated to the obligations of Charter
Holdings&#146; subsidiaries, including the CCH&nbsp;II notes,
the CCO Holdings notes, the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Holdings 12.125%&nbsp;senior discount
notes are redeemable at the option of the issuers at amounts
decreasing from 106.063% to 100% of accreted value beginning
January&nbsp;15, 2007.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2002 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the January 2002 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 Charter
Holdings notes. See &#147;&#151;&nbsp;Summary of Restrictive
Covenants Under the Charter Holdings High-Yield Notes.&#148;
</FONT>

<P align="center"><FONT size="2">151
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Summary of Restrictive Covenants Under the
    Charter Holdings High-Yield Notes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The limitations on incurrence of debt and
issuance of preferred stock contained in Charter Holdings&#146;
indentures permit Charter Holdings and its subsidiaries to incur
additional debt or issue preferred stock, so long as there is no
default under the Charter Holdings indentures. These limitations
restrict the incurrence of debt unless, after giving pro forma
effect to the incurrence, the Charter Holdings Leverage Ratio
would be below 8.75 to 1.0. In addition, regardless of whether
the leverage ratio could be met, so long as no default exists or
would result from the incurrence or issuance, Charter Holdings
and its restricted subsidiaries are permitted to issue:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $3.5&nbsp;billion of debt under credit
    facilities,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $75&nbsp;million of debt incurred to
    finance the purchase or capital lease of new assets,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $300&nbsp;million of additional debt for
    any purpose,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">additional debt in an amount equal to 200% of new
    cash equity proceeds received by Charter Holdings and its
    restricted subsidiaries since March 1999, the date of our first
    indenture, and not allocated for restricted payments or
    permitted investments,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other items of indebtedness for specific purposes
    such as intercompany debt, refinancing of existing debt, and
    interest rate swaps to provide protection against fluctuation in
    interest rates.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Indebtedness under a single facility or agreement
may be incurred in part under one of the categories listed above
and in part under another. Accordingly, indebtedness under our
credit facilities is incurred under a combination of the
categories of permitted indebtedness listed above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restricted subsidiaries of Charter Holdings
are generally not permitted to issue debt securities
contractually subordinated in right of payment to other debt of
the issuing subsidiary or preferred stock, in either case in any
public or Rule&nbsp;144A offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Holdings indentures permit Charter
Holdings and its restricted subsidiaries to incur debt under one
category, and later reclassify that debt into another category.
The Charter Operating credit facilities generally impose more
restrictive limitations on incurring new debt than Charter
Holdings&#146; indentures, so our subsidiaries that are subject
to the Charter Operating credit facilities may not be permitted
to utilize the full debt incurrence that would otherwise be
available under the Charter Holdings indenture covenants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Generally, under Charter Holdings&#146;
high-yield indentures:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Charter Holdings and its restricted subsidiaries
    are generally permitted to pay dividends on equity interests,
    repurchase interests, or make other specified restricted
    payments only if, after giving pro&nbsp;forma effect to the
    transaction, the Charter Holdings Leverage Ratio would be below
    8.75 to 1.0 and if no default exists or would exist as a
    consequence of such incurrence. If those conditions are met,
    restricted payments in a total amount of up to 100% of Charter
    Holdings&#146; consolidated EBITDA, as defined, minus 1.2 times
    its consolidated interest expense, plus 100% of new cash and
    non-cash equity proceeds received by Charter Holdings and not
    allocated to the debt incurrence covenant or to permitted
    investments, all cumulatively from March 1999, the date of the
    first Charter Holdings indenture, plus $100&nbsp;million.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, Charter Holdings may make
distributions or restricted payments, so long as no default
exists or would be caused by transactions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to repurchase management equity interests in
    amounts not to exceed $10&nbsp;million per fiscal year,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">regardless of the existence of any default, to
    pay pass-through tax liabilities in respect of ownership of
    equity interests in Charter Holdings or its restricted
    subsidiaries,&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to make other specified restricted payments
    including merger fees up to 1.25% of the transaction value,
    repurchases using concurrent new issuances, and certain
    dividends on existing subsidiary preferred equity interests.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">152
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and its restricted subsidiaries
may not make investments except permitted investments if there
is a default under the indentures or if, after giving effect to
the transaction, the Charter Holdings Leverage Ratio would be
above 8.75 to 1.0.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Permitted investments include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments by Charter Holdings in restricted
    subsidiaries or by restricted subsidiaries in Charter Holdings,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments in productive assets (including
    through equity investments) aggregating up to $150&nbsp;million
    since March 1999,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments aggregating up to 100% of new cash
    equity proceeds received by Charter Holdings since March 1999
    and not allocated to the debt incurrence or restricted payments
    covenant,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other investments aggregating up to
    $50&nbsp;million since March 1999.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings is not permitted to grant liens
on its assets other than specified permitted liens. Permitted
liens include liens securing debt and other obligations incurred
under our subsidiaries&#146; credit facilities, liens securing
the purchase price of new assets, liens securing indebtedness of
up to $50&nbsp;million and other specified liens incurred in the
ordinary course of business. The lien covenant does not restrict
liens on assets of subsidiaries of Charter Holdings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and Charter Capital, its
co-issuer, are generally not permitted to sell all or
substantially all of their assets or merge with or into other
companies unless their leverage ratio after any such transaction
would be no greater than their leverage ratio immediately prior
to the transaction, or unless after giving effect to the
transaction, the Charter Holdings Leverage Ratio would be below
8.75 to 1.0, no default exists, and the surviving entity is a
U.S.&nbsp;entity that assumes the Charter Holdings notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and its restricted subsidiaries
may generally not otherwise sell assets or, in the case of
restricted subsidiaries, issue equity interests, unless they
receive consideration at least equal to the fair market value of
the assets or equity interests, consisting of at least 75% in
cash, assumption of liabilities, securities converted into cash
within 60&nbsp;days or productive assets. Charter Holdings and
its restricted subsidiaries are then required within
365&nbsp;days after any asset sale either to commit to use the
net cash proceeds over a specified threshold to acquire assets,
including current assets, used or useful in their businesses or
use the net cash proceeds to repay debt, or to offer to
repurchase the Charter Holdings notes with any remaining
proceeds.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and its restricted subsidiaries
may generally not engage in sale and leaseback transactions
unless, at the time of the transaction, Charter Holdings could
have incurred secured indebtedness in an amount equal to the
present value of the net rental payments to be made under the
lease, and the sale of the assets and application of proceeds is
permitted by the covenant restricting asset sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings&#146; restricted subsidiaries
may generally not enter into restrictions on their ability to
make dividends or distributions or transfer assets to Charter
Holdings on terms that are materially more restrictive than
those governing their debt, lien, asset sale, lease and similar
agreements existing when they entered into the indentures,
unless those restrictions are on customary terms that will not
materially impair Charter Holdings&#146; ability to repay the
high-yield notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restricted subsidiaries of Charter Holdings
are generally not permitted to guarantee or pledge assets to
secure debt of Charter Holdings, unless the guaranteeing
subsidiary issues a guarantee of the notes of comparable
priority and tenor, and waives any rights of reimbursement,
indemnity or subrogation arising from the guarantee transaction
for at least one year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures also restrict the ability of
Charter Holdings and its restricted subsidiaries to enter into
certain transactions with affiliates involving consideration in
excess of $15&nbsp;million without a determination by the board
of directors of Charter Holdings that the transaction is on
terms no less favorable than arms length, or transactions with
affiliates involving over $50&nbsp;million without receiving an
independent opinion as to the fairness of the transaction
addressed to the holders of the Charter Holdings notes.
</FONT>

<P align="center"><FONT size="2">153
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">CCH&nbsp;I Holdings, LLC
    Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 2005, CIH and CCH&nbsp;I Holdings
Capital Corp. jointly issued $2.5&nbsp;billion total principal
amount of 9.92% to 13.50% senior accreting notes due 2014 and
2015 in exchange for an aggregate amount of $2.4&nbsp;billion of
Charter Holdings notes due 2011 and 2012, spread over six series
of notes and with varying interest rates as set forth in the
table under &#147;Description of Certain Indebtedness.&#148; The
notes are guaranteed by Charter Holdings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The CIH&nbsp;notes are senior debt obligations of
CIH and CCH&nbsp;I Holdings Capital Corp. They rank equally with
all other current and future unsecured, unsubordinated
obligations of CIH and CCH&nbsp;I Holdings Capital Corp. The
CIH&nbsp;notes are structurally subordinated to all obligations
of subsidiaries of CIH, including
the&nbsp;CCH&nbsp;I&nbsp;notes, the&nbsp;CCH&nbsp;II&nbsp;notes,
the&nbsp;CCO Holdings notes, the Renaissance notes and the
Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The CIH&nbsp;notes may not be redeemed at the
option of the issuers until September&nbsp;30, 2007. On or after
such date, the CIH notes may be redeemed in accordance with the
following table.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="18%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="18%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" nowrap><B><FONT size="1">Note Series</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Redemption Dates</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage of Principal</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.125%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">September&nbsp;30, 2007&nbsp;-&nbsp;January&nbsp;14, 2008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">103.708</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">January&nbsp;15, 2008&nbsp;-&nbsp;January&nbsp;14, 2009</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">101.854</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">Thereafter</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">9.92%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">September&nbsp;30, 2007&nbsp;-&nbsp;Thereafter</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">September&nbsp;30, 2007&nbsp;-&nbsp;May&nbsp;14, 2008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">103.333</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">May&nbsp;15, 2008&nbsp;-&nbsp;May&nbsp;14, 2009</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">101.667</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">Thereafter</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.75%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">September&nbsp;30, 2007&nbsp;-&nbsp;May&nbsp;14, 2008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">103.917</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">May&nbsp;15, 2008&nbsp;-&nbsp;May&nbsp;14, 2009</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">101.958</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">Thereafter</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">13.5%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">September&nbsp;30, 2007&nbsp;-&nbsp;January&nbsp;14, 2008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">104.5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">January&nbsp;15, 2008&nbsp;-&nbsp;January&nbsp;14, 2009</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">102.25%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">Thereafter</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">12.125%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">September&nbsp;30, 2007&nbsp;-&nbsp;January&nbsp;14, 2008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">106.063</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">January&nbsp;15, 2008&nbsp;-&nbsp;January&nbsp;14, 2009</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">104.042</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">January&nbsp;15, 2009&nbsp;-&nbsp;January&nbsp;14, 2010</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">102.021</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">Thereafter</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event happens, CIH and CCH&nbsp;I Holdings Capital Corp. must
offer to repurchase any outstanding notes at a price equal to
the sum of the accreted value of the notes plus accrued and
unpaid interest plus a premium that varies over time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the CIH&nbsp;notes
contains restrictive covenants similar to those contained in the
indenture governing the Charter Holdings&nbsp;notes with the
following exceptions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The debt incurrence covenant permits up to
    9.75&nbsp;billion (rather than 3.5&nbsp;billion) of debt under
    credit facilities (less the amount of net proceeds of asset
    sales applied to repay such debt as required by the asset sale
    covenant).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">CIH and its restricted subsidiaries are generally
    permitted to pay dividends on equity interests, repurchase
    interests, or make other specified restricted payments only if,
    after giving pro&nbsp;forma effect to the transaction, the CIH
    Leverage Ratio would be below 8.75 to 1.0 and if no default
    exists or would exist as a consequence of such transaction. If
    those conditions are met, restricted payments in a total amount
    of up to the sum of (1)&nbsp;the greater of
    (a)&nbsp;$500&nbsp;million or (b)&nbsp;100% of CIH&#146;s
    consolidated EBITDA, as defined, minus 1.2 times its
    consolidated interest expense each for the period from
    September&nbsp;28, 2005 to the end of CIH&#146;s most recently
    ended full fiscal quarter for which internal financial
    statements are available, plus (2)&nbsp;100% of new cash and
    non-cash equity proceeds received by CIH and not allocated to
    the debt incurrence covenant or to permitted investments, all
    cumulatively from March 1999, the date of the first Charter
    Holdings indenture.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">154
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Instead of the $150&nbsp;million and
    $50&nbsp;million permitted investment baskets described above,
    there is a $750&nbsp;million permitted investment basket.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">CCH&nbsp;I, LLC Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 2005, CCH&nbsp;I and CCH&nbsp;I
Capital Corp. jointly issued $3.5&nbsp;billion total principal
amount of 11% senior secured notes due October 2015 in exchange
for an aggregate amount of $4.2&nbsp;billion of certain Charter
Holdings notes. The notes are guaranteed by Charter Holdings and
are secured by a pledge of 100% of the equity interest of
CCH&nbsp;I&#146;s wholly owned direct subsidiary, CCH&nbsp;II.
Such pledge is subject to significant limitations as described
in the related pledge agreement. Interest on the
CCH&nbsp;I&nbsp;notes accrues at 11%&nbsp;per annum and is
payable semi-annually in arrears on each April&nbsp;1 and
October&nbsp;1, commencing on April&nbsp;1, 2006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The CCH&nbsp;I notes are senior debt obligations
of CCH&nbsp;I and CCH&nbsp;I Capital Corp. To the extent of the
value of the collateral, they rank senior to all of
CCH&nbsp;I&#146;s future unsecured senior indebtedness. The
CCH&nbsp;I&nbsp;notes are structurally subordinated to all
obligations of subsidiaries of CCH&nbsp;I, including
the&nbsp;CCH&nbsp;II&nbsp;notes, CCO Holdings notes, the
Renaissance notes and the Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCH&nbsp;I and CCH&nbsp;I Capital Corp. may,
prior to October&nbsp;1, 2008 in the event of a qualified equity
offering providing sufficient proceeds, redeem up to 35% of the
aggregate principal amount of the CCH&nbsp;I notes at a
redemption price of 111% of the principal amount plus accrued
and unpaid interest. Aside from this provision, CCH&nbsp;I and
CCH&nbsp;I Capital Corp. may not redeem at their option any of
the notes prior to October&nbsp;1, 2010. On or after
October&nbsp;1, 2010, CCH&nbsp;I and CCH&nbsp;I Capital Corp.
may redeem, in whole or in part, CCH&nbsp;I&nbsp;notes at the
applicable prices (expressed as percentages of principal amount)
listed below, plus accrued and unpaid interest if redeemed
during the twelve month period beginning on October&nbsp;1 of
the years listed below.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="82%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105.5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102.75%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">2012
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101.375%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">2013 and thereafter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a change of control occurs, each holder of
the&nbsp;CCH&nbsp;I&nbsp;notes will have the right to require
the repurchase of all or any part of that holder&#146;s
CCH&nbsp;I notes at 101% of the principal amount plus accrued
and unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the CCH&nbsp;I notes
contains restrictive covenants that limit certain transactions
or activities by CCH&nbsp;I and its restricted subsidiaries,
including the covenants summarized below. Substantially all of
CCH&nbsp;I&#146;s direct and indirect subsidiaries are currently
restricted subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The covenant in the indenture governing the
CCH&nbsp;I notes that restricts incurrence of debt and issuance
of preferred stock permits CCH&nbsp;I and its subsidiaries to
incur or issue specified amounts of debt or preferred stock, if,
after giving pro forma effect to the incurrence or issuance,
CCH&nbsp;I could meet a leverage ratio (ratio of consolidated
debt to four times EBITDA, as defined, from the most recent
fiscal quarter for which internal financial reports are
available) of 7.5 to 1.0.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, regardless of whether the leverage
ratio could be met, so long as no default exists or would result
from the incurrence or issuance, CCH&nbsp;I and its restricted
subsidiaries are permitted to incur or issue:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $9.75&nbsp;billion of debt under credit
    facilities (less the amount of net proceeds of asset sales
    applied to repay such debt as required by the asset sale
    covenant);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $75&nbsp;million of debt incurred to
    finance the purchase or capital lease of new assets;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">155
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $300&nbsp;million of additional debt for
    any purpose;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other items of indebtedness for specific purposes
    such as intercompany debt, refinancing of existing debt, and
    interest rate swaps to provide protection against fluctuation in
    interest rates.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restricted subsidiaries of CCH&nbsp;I are
generally not permitted to issue debt securities contractually
subordinated to other debt of the issuing subsidiary or
preferred stock, in either case in any public offering or
private placement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The CCH&nbsp;I indenture generally permits
CCH&nbsp;I and its restricted subsidiaries to incur debt under
one category, and later reclassify that debt into another
category. The Charter Operating credit facilities generally
impose more restrictive limitations on incurring new debt than
those in the CCH&nbsp;I indenture, so our subsidiaries that are
subject to credit facilities are not permitted to utilize the
full debt incurrence that would otherwise be available under the
CCH&nbsp;I indenture covenants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Generally, under the CCH&nbsp;I indenture:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">CCH&nbsp;I and its restricted subsidiaries are
    permitted to pay dividends on equity interests, repurchase
    interests, or make other specified restricted payments only if
    CCH&nbsp;I can incur $1.00 of new debt under the leverage ratio
    test, which requires that CCH&nbsp;I meet a 7.5 to 1.0 leverage
    ratio after giving effect to the transaction, and if no default
    exists or would exist as a consequence of such incurrence. If
    those conditions are met, restricted payments are permitted in a
    total amount of up to 100% of CCH&nbsp;I&#146;s consolidated
    EBITDA, as defined, for the period from September&nbsp;28, 2005
    to the end of CCH&nbsp;I&#146;s most recently ended full fiscal
    quarter for which financial statements are available minus 1.3
    times its consolidated interest expense for such period, plus
    100% of new cash and appraised non-cash equity proceeds received
    by CCH&nbsp;I and not allocated to certain investments, from and
    after September&nbsp;28, 2005, plus $100&nbsp;million.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, CCH&nbsp;I and its restricted
subsidiaries may make distributions or restricted payments, so
long as no default exists or would be caused by the transaction:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to repurchase management equity interests in
    amounts not to exceed $10&nbsp;million per fiscal year;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to pay, regardless of the existence of any
    default, pass-through tax liabilities in respect of ownership of
    equity interests in CCH&nbsp;I or its restricted subsidiaries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to enable certain of its parents to pay interest
    on certain of their indebtedness;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to enable certain of its parents to purchase,
    redeem or refinance certain indebtedness, so long as CCH&nbsp;I
    could incur $1.00 of indebtedness under the 7.5 to 1.0 leverage
    ratio test referred to above;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to make other specified restricted payments
    including merger fees up to 1.25% of the transaction value,
    repurchases using concurrent new issuances, and certain
    dividends on existing subsidiary preferred equity interests.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the CCH&nbsp;I notes
restricts CCH&nbsp;I and its restricted subsidiaries from making
investments, except specified permitted investments, or creating
new unrestricted subsidiaries, if there is a default under the
indenture or if CCH&nbsp;I could not incur $1.00 of new debt
under the 7.5 to 1.0 leverage ratio test described above after
giving effect to the transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Permitted investments include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments by CCH&nbsp;I and its restricted
    subsidiaries in CCH&nbsp;I and in other restricted subsidiaries,
    or entities that become restricted subsidiaries as a result of
    the investment,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments aggregating up to 100% of new cash
    equity proceeds received by CCH&nbsp;I since September&nbsp;28,
    2005 to the extent the proceeds have not been allocated to the
    restricted payments covenant described above,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other investments up to $750&nbsp;million
    outstanding at any time,&nbsp;and
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">156
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain specified additional investments, such as
    investments in customers and suppliers in the ordinary course of
    business and investments received in connection with permitted
    asset sales.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCH&nbsp;I is not permitted to grant liens on its
assets other than specified permitted liens. Permitted liens
include liens securing the purchase price of new assets, liens
securing obligations up to $50&nbsp;million and other specified
liens. The lien covenant does not restrict liens on assets of
subsidiaries of CCH&nbsp;I.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCH&nbsp;I and CCH&nbsp;I Capital Corp., its
co-issuer, are generally not permitted to sell all or
substantially all of their assets or merge with or into other
companies unless their leverage ratio after any such transaction
would be no greater than their leverage ratio immediately prior
to the transaction, or unless CCH&nbsp;I and its subsidiaries
could incur $1.00 of new debt under the 7.50 to 1.0 leverage
ratio test described above after giving effect to the
transaction, no default exists, and the surviving entity is a
U.S.&nbsp;entity that assumes the CCH&nbsp;I&nbsp;notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCH&nbsp;I and its restricted subsidiaries may
generally not otherwise sell assets or, in the case of
restricted subsidiaries, issue equity interests, unless they
receive consideration at least equal to the fair market value of
the assets or equity interests, consisting of at least 75% in
cash, assumption of liabilities, securities converted into cash
within 60&nbsp;days or productive assets. CCH&nbsp;I and its
restricted subsidiaries are then required within 365&nbsp;days
after any asset sale either to commit to use the net cash
proceeds over a specified threshold to acquire assets, including
current assets, used or useful in their businesses or use the
net cash proceeds to repay certain debt, or to offer to
repurchase the CCH&nbsp;I notes with any remaining proceeds.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCH&nbsp;I and its restricted subsidiaries may
generally not engage in sale and leaseback transactions unless,
at the time of the transaction, CCH&nbsp;I could have incurred
secured indebtedness in an amount equal to the present value of
the net rental payments to be made under the lease, and the sale
of the assets and application of proceeds is permitted by the
covenant restricting asset sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With certain exceptions, CCH&nbsp;I&#146;s
restricted subsidiaries may generally not enter into
restrictions on their ability to make dividends or distributions
or transfer assets to CCH&nbsp;I.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restricted subsidiaries of CCH&nbsp;I are
generally not permitted to guarantee or pledge assets to secure
other debt of CCH&nbsp;I, except in respect of credit facilities
unless the guarantying subsidiary issues a guarantee of the
CCH&nbsp;I notes and waives any rights of reimbursement,
indemnity or subrogation arising from the guarantee transaction
for at least one year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture also restricts the ability of
CCH&nbsp;I and its restricted subsidiaries to enter into certain
transactions with affiliates involving consideration in excess
of $15&nbsp;million without a determination by the board of
directors that the transaction is on terms no less favorable
than arms-length, or transactions with affiliates involving over
$50&nbsp;million without receiving an independent opinion as to
the fairness of the transaction to the holders of the
CCH&nbsp;I&nbsp;notes.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">CCH&nbsp;II, LLC Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 2003, CCH&nbsp;II and CCH&nbsp;II
Capital Corp. jointly issued approximately $1.6&nbsp;billion
total principal amount of 10.25%&nbsp;senior notes due 2010. The
CCH&nbsp;II notes are general unsecured obligations of
CCH&nbsp;II and CCH&nbsp;II Capital Corp. They rank equally with
all other current or future unsubordinated obligations of
CCH&nbsp;II and CCH&nbsp;II Capital Corp. The CCH&nbsp;II notes
are structurally subordinated to all obligations of subsidiaries
of CCH&nbsp;II, including the CCO Holdings notes, the
Renaissance notes, the Charter Operating credit facilities and
the Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest on the CCH&nbsp;II notes accrues at
10.25%&nbsp;per annum and is payable semi-annually in arrears on
each March&nbsp;15 and September&nbsp;15, commencing on
March&nbsp;15, 2004.
</FONT>

<P align="center"><FONT size="2">157
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At any time prior to September&nbsp;15, 2006, the
issuers of the CCH&nbsp;II notes may redeem up to 35% of the
total principal amount of the CCH&nbsp;II notes on a pro rata
basis at a redemption price equal to 110.25% of the principal
amount of CCH&nbsp;II notes redeemed, plus any accrued and
unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On or after September&nbsp;15, 2008, the issuers
of the CCH&nbsp;II notes may redeem all or a part of the notes
at a redemption price that declines ratably from the initial
redemption price of 105.125% to a redemption price on or after
September&nbsp;15, 2009 of 100.0% of the principal amount of the
CCH&nbsp;II notes redeemed, plus, in each case, any accrued and
unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of specified change of control
events, CCH&nbsp;II must offer to purchase the outstanding
CCH&nbsp;II notes from the holders at a purchase price equal to
101% of the total principal amount of the notes, plus any
accrued and unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the CCH&nbsp;II notes
contains restrictive covenants that limit certain transactions
or activities by CCH&nbsp;II and its restricted subsidiaries,
including the covenants summarized below. Substantially all of
CCH&nbsp;II&#146;s direct and indirect subsidiaries are
currently restricted subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The covenant in the indenture governing the
CCH&nbsp;II notes that restricts incurrence of debt and issuance
of preferred stock permits CCH&nbsp;II and its subsidiaries to
incur or issue specified amounts of debt or preferred stock, if,
after giving effect to the incurrence, CCH&nbsp;II could meet a
leverage ratio (ratio of consolidated debt to four times EBITDA
from the most recent fiscal quarter for which internal financial
reports are available) of 5.5&nbsp;to&nbsp;1.0.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, regardless of whether the leverage
ratio could be met, so long as no default exists or would result
from the incurrence or issuance, CCH&nbsp;II and its restricted
subsidiaries are permitted to incur or issue:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $9.75&nbsp;billion of debt under credit
    facilities, including debt under credit facilities outstanding
    on the issue date of the CCH&nbsp;II notes,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $75&nbsp;million of debt incurred to
    finance the purchase or capital lease of new assets,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $300&nbsp;million of additional debt for
    any purpose,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other items of indebtedness for specific purposes
    such as intercompany debt, refinancing of existing debt, and
    interest rate swaps to provide protection against fluctuation in
    interest rates.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restricted subsidiaries of CCH&nbsp;II are
generally not permitted to issue debt securities contractually
subordinated to other debt of the issuing subsidiary or
preferred stock, in either case in any public or Rule&nbsp;144A
offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The CCH&nbsp;II indenture permits CCH&nbsp;II and
its restricted subsidiaries to incur debt under one category,
and later reclassify that debt into another category. Our and
our subsidiaries&#146; credit agreements generally impose more
restrictive limitations on incurring new debt than the
CCH&nbsp;II indenture, so we and our subsidiaries that are
subject to credit agreements are not permitted to utilize the
full debt incurrence that would otherwise be available under the
CCH&nbsp;II indenture covenants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Generally, under the CCH&nbsp;II indenture,
CCH&nbsp;II and its restricted subsidiaries are permitted to pay
dividends on equity interests, repurchase interests, or make
other specified restricted payments only if CCH&nbsp;II can
incur $1.00 of new debt under the leverage ratio test, which
requires that CCH&nbsp;II meet a 5.5 to 1.0 leverage ratio after
giving effect to the transaction, and if no default exists or
would exist as a consequence of such incurrence. If those
conditions are met, restricted payments in a total amount of up
to 100% of CCH II&#146;s consolidated EBITDA, as defined, minus
1.3 times its consolidated interest expense, plus 100% of new
cash and non-cash equity proceeds received by CCH&nbsp;II and
not allocated to the debt incurrence covenant, all cumulatively
from the fiscal quarter commenced July&nbsp;1, 2003, plus
$100&nbsp;million.
</FONT>

<P align="center"><FONT size="2">158
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, CCH&nbsp;II may make distributions
or restricted payments, so long as no default exists or would be
caused by transactions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to repurchase management equity interests in
    amounts not to exceed $10&nbsp;million per fiscal year;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">regardless of the existence of any default, to
    pay pass-through tax liabilities in respect of ownership of
    equity interests in CCH&nbsp;II or its restricted subsidiaries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">regardless of the existence of any default, to
    pay interest when due on Charter Holdings notes, to pay, so long
    as there is no default, interest on the convertible senior notes
    (including the notes) of Charter, to purchase, redeem or
    refinance, so long as CCH&nbsp;II could incur $1.00 of
    indebtedness under the 5.5 to 1.0 leverage ratio test referred
    to above and there is no default, Charter Holdings notes,
    Charter notes, and other direct or indirect parent company notes
    (including the CCH&nbsp;II notes);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to make distributions in connection with the
    private exchanges pursuant to which the CCH&nbsp;II notes were
    issued;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other specified restricted payments including
    merger fees up to 1.25% of the transaction value, repurchases
    using concurrent new issuances, and certain dividends on
    existing subsidiary preferred equity interests.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the CCH&nbsp;II notes
restricts CCH&nbsp;II and its restricted subsidiaries from
making investments, except specified permitted investments, or
creating new unrestricted subsidiaries, if there is a default
under the indenture or if CCH&nbsp;II could not incur $1.00 of
new debt under the 5.5&nbsp;to&nbsp;1.0 leverage ratio test
described above after giving effect to the transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Permitted investments include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments by CCH&nbsp;II and its restricted
    subsidiaries in CCH&nbsp;II and in other restricted
    subsidiaries, or entities that become restricted subsidiaries as
    a result of the investment;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments aggregating up to 100% of new cash
    equity proceeds received by CCH&nbsp;II since September&nbsp;23,
    2003 to the extent the proceeds have not been allocated to the
    restricted payments covenant described above;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments resulting from the private exchanges
    pursuant to which the CCH&nbsp;II notes were issued;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other investments up to $750&nbsp;million
    outstanding at any time;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain specified additional investments, such as
    investments in customers and suppliers in the ordinary course of
    business and investments received in connection with permitted
    asset sales.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCH&nbsp;II is not permitted to grant liens on
its assets other than specified permitted liens. Permitted liens
include liens securing debt and other obligations incurred under
our subsidiaries&#146; credit facilities, liens securing the
purchase price of new assets, liens securing indebtedness up to
$50&nbsp;million and other specified liens incurred in the
ordinary course of business. The lien covenant does not restrict
liens on assets of subsidiaries of CCH&nbsp;II.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">CCO Holdings, LLC Notes</FONT></I></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">8<SUP style="font-size: 70%">3</SUP>/<FONT style="font-size: 60%">4</FONT>%
    Senior Notes due 2013</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November&nbsp;2003, CCO Holdings and CCO
Holdings Capital Corp. jointly issued $500&nbsp;million total
principal amount of
8<SUP style="font-size: 70%">3</SUP>/<FONT style="font-size: 60%">4</FONT>%
senior notes due 2013. The CCO Holdings notes are general
unsecured obligations of CCO Holdings and CCO Holdings Capital
Corp. They rank equally with all other current or future
unsubordinated obligations of CCO Holdings and CCO Holdings
Capital Corp. The CCO Holdings notes are structurally
subordinated to all obligations of CCO Holdings&#146;
subsidiaries, including the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes.
</FONT>

<P align="center"><FONT size="2">159
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest on the CCO Holdings senior notes accrues
at
8<SUP style="font-size: 70%">3</SUP>/<FONT style="font-size: 60%">4</FONT>%
per year and is payable semi-annually in arrears on each
May&nbsp;15 and November&nbsp;15.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At any time prior to November&nbsp;15, 2006, the
issuers of the CCO Holdings senior notes may redeem up to 35% of
the total principal amount of the CCO Holdings senior notes to
the extent of public equity proceeds they have received on a pro
rata basis at a redemption price equal to 108.75% of the
principal amount of CCO Holdings senior notes redeemed, plus any
accrued and unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On or after November&nbsp;15, 2008, the issuers
of the CCO Holdings senior notes may redeem all or a part of the
notes at a redemption price that declines ratably from the
initial redemption price of 104.375% to a redemption price on or
after November&nbsp;15, 2011 of 100.0% of the principal amount
of the CCO Holdings senior notes redeemed, plus, in each case,
any accrued and unpaid interest.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Senior Floating Rate Notes Due 2010</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December&nbsp;2004, CCO Holdings and CCO
Holdings Capital Corp. jointly issued $550 million total
principal amount of senior floating rate notes due 2010. These
notes are general unsecured obligations of CCO Holdings and CCO
Holdings Capital Corp. They rank equally with all other current
or future unsubordinated obligations of CCO Holdings and CCO
Holdings Capital Corp. The CCO Holdings notes are structurally
subordinated to all obligations of CCO Holdings&#146;
subsidiaries, including the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes. In
August 2005, CCO Holdings and CCO Holdings Capital Corp.
exchanged these notes for new notes with substantially similar
terms, except the new senior floating rate notes are registered
under the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The CCO Holdings senior floating rate notes have
an annual interest rate of LIBOR plus 4.125%, reset and payable
quarterly.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At any time prior to December&nbsp;15, 2006, the
issuers of the senior floating rate notes may redeem up to 35%
of the notes in an amount not to exceed the amount of proceeds
of one or more public equity offerings at a redemption price
equal to 100% of the principal amount, plus a premium equal to
the interest rate per annum applicable to the notes on the date
notice of redemption is given, plus accrued and unpaid interest,
if any, to the redemption date, provided that at least 65% of
the original aggregate principal amount of the notes issued
remains outstanding after the redemption.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The issuers of the senior floating rate notes may
redeem the notes in whole or in part at the issuers&#146; option
from December&nbsp;15, 2006 until December&nbsp;14, 2007 for
102% of the principal amount, from December&nbsp;15, 2007 until
December&nbsp;14, 2008 for 101% of the principal amount and from
and after December&nbsp;15, 2008, at par, in each case, plus
accrued and unpaid interest.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">8 3/4%&nbsp;Senior Notes due 2013</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2005, CCO Holdings and CCO Holdings
Capital Corp. jointly issued $300&nbsp;million total principal
amount of 8 3/4%&nbsp;senior notes due 2013. The CCO Holdings
notes are general unsecured obligations of CCO Holdings and CCO
Holdings Capital Corp. They rank equally with all other current
or future unsubordinated obligations of CCO Holdings and CCO
Holdings Capital Corp. The CCO Holdings notes are structurally
subordinated to all obligations of CCO Holdings&#146;
subsidiaries, including the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest on the CCO Holdings senior notes accrues
at 8 3/4%&nbsp;per year and is payable semi-annually in arrears
on each May&nbsp;15 and November&nbsp;15.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At any time prior to November&nbsp;15, 2006, the
issuers of the CCO Holdings senior notes may redeem up to 35% of
the total principal amount of the CCO Holdings senior notes to
the extent of public equity proceeds they have received on a pro
rata basis at a redemption price equal to 108.75% of the
principal amount of CCO Holdings senior notes redeemed, plus any
accrued and unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On or after November&nbsp;15, 2008, the issuers
of the CCO Holdings senior notes may redeem all or a part of the
notes at a redemption price that declines ratably from the
initial redemption price of 104.375%
</FONT>

<P align="center"><FONT size="2">160
</FONT>

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<DIV align="left">
<FONT size="2">to a redemption price on or after
November&nbsp;15, 2011 of 100.0% of the principal amount of the
CCO Holdings senior notes redeemed, plus, in each case, any
accrued and unpaid interest.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Additional terms of the CCO Holdings Senior
    Notes and Senior Floating Rate Notes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The CCO Holdings notes described above are
general unsecured obligations of CCO Holdings and CCO Holdings
Capital Corp. They rank equally with all other current or future
unsubordinated obligations of CCO Holdings and CCO Holdings
Capital Corp. The CCO Holdings notes are structurally
subordinated to all obligations of subsidiaries of CCO Holdings,
including the Renaissance notes, the Charter Operating notes and
the Charter Operating credit facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of specified change of control
events, CCO Holdings must offer to purchase the outstanding CCO
Holdings senior notes from the holders at a purchase price equal
to 101% of the total principal amount of the notes, plus any
accrued and unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the CCO Holdings senior
notes contains restrictive covenants that limit certain
transactions or activities by CCO Holdings and its restricted
subsidiaries, including the covenants summarized below.
Substantially all of CCO Holdings&#146; direct and indirect
subsidiaries are currently restricted subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The covenant in the indenture governing the CCO
Holdings senior notes that restricts incurrence of debt and
issuance of preferred stock permits CCO Holdings and its
subsidiaries to incur or issue specified amounts of debt or
preferred stock, if, after giving pro forma effect to the
incurrence or issuance, CCO Holdings could meet a leverage ratio
(ratio of consolidated debt to four times EBITDA, as defined,
from the most recent fiscal quarter for which internal financial
reports are available) of 4.5 to 1.0.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, regardless of whether the leverage
ratio could be met, so long as no default exists or would result
from the incurrence or issuance, CCO Holdings and its restricted
subsidiaries are permitted to incur or issue:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $9.75&nbsp;billion of debt under credit
    facilities, including debt under credit facilities outstanding
    on the issue date of the CCO Holdings senior notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $75&nbsp;million of debt incurred to
    finance the purchase or capital lease of new assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $300&nbsp;million of additional debt for
    any purpose;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other items of indebtedness for specific purposes
    such as intercompany debt, refinancing of existing debt, and
    interest rate swaps to provide protection against fluctuation in
    interest rates.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restricted subsidiaries of CCO Holdings are
generally not permitted to issue debt securities contractually
subordinated to other debt of the issuing subsidiary or
preferred stock, in either case in any public or Rule&nbsp;144A
offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The CCO Holdings indenture permits CCO Holdings
and its restricted subsidiaries to incur debt under one
category, and later reclassify that debt into another category.
The Charter Operating credit facilities generally impose more
restrictive limitations on incurring new debt than CCO
Holdings&#146; indenture, so our subsidiaries that are subject
to credit facilities are not permitted to utilize the full debt
incurrence that would otherwise be available under the CCO
Holdings indenture covenants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Generally, under CCO Holdings&#146; indenture:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">CCO Holdings and its restricted subsidiaries are
    permitted to pay dividends on equity interests, repurchase
    interests, or make other specified restricted payments only if
    CCO Holdings can incur $1.00 of new debt under the leverage
    ratio test, which requires that CCO Holdings meet a 4.5 to 1.0
    leverage ratio after giving effect to the transaction, and if no
    default exists or would exist as a consequence of such
    incurrence. If those conditions are met, restricted payments are
    permitted in a total amount of up to 100% of CCO Holdings&#146;
    consolidated EBITDA, as defined, minus 1.3 times its
    consolidated interest expense, plus 100% of new cash and
    appraised non-cash equity proceeds
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">161
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">received by CCO Holdings and not allocated to the
    debt incurrence covenant, all cumulatively from the fiscal
    quarter commenced on October&nbsp;1, 2003, plus
    $100&nbsp;million.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, CCO Holdings may make distributions
or restricted payments, so long as no default exists or would be
caused by the transaction:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to repurchase management equity interests in
    amounts not to exceed $10&nbsp;million per fiscal year;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to pay, regardless of the existence of any
    default, pass-through tax liabilities in respect of ownership of
    equity interests in Charter Holdings or its restricted
    subsidiaries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to pay, regardless of the existence of any
    default, interest when due on Charter Holdings notes and our
    notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to pay, so long as there is no default, interest
    on the Charter convertible notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to purchase, redeem or refinance Charter Holdings
    notes, CCH&nbsp;II notes, Charter notes, and other direct or
    indirect parent company notes, so long as CCO Holdings could
    incur $1.00 of indebtedness under the 4.5 to 1.0 leverage ratio
    test referred to above and there is no default;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to make other specified restricted payments
    including merger fees up to 1.25% of the transaction value,
    repurchases using concurrent new issuances, and certain
    dividends on existing subsidiary preferred equity interests.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the CCO Holdings senior
notes restricts CCO Holdings and its restricted subsidiaries
from making investments, except specified permitted investments,
or creating new unrestricted subsidiaries, if there is a default
under the indenture or if CCO Holdings could not incur $1.00 of
new debt under the 4.5 to 1.0 leverage ratio test described
above after giving effect to the transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Permitted investments include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments by CCO Holdings and its restricted
    subsidiaries in CCO Holdings and in other restricted
    subsidiaries, or entities that become restricted subsidiaries as
    a result of the investment,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments aggregating up to 100% of new cash
    equity proceeds received by CCO Holdings since November&nbsp;10,
    2003 to the extent the proceeds have not been allocated to the
    restricted payments covenant described above,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other investments up to $750&nbsp;million
    outstanding at any time,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain specified additional investments, such as
    investments in customers and suppliers in the ordinary course of
    business and investments received in connection with permitted
    asset sales.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCO Holdings is not permitted to grant liens on
its assets other than specified permitted liens. Permitted liens
include liens securing debt and other obligations incurred under
our subsidiaries&#146; credit facilities, liens securing the
purchase price of new assets, liens securing indebtedness up to
$50&nbsp;million and other specified liens incurred in the
ordinary course of business. The lien covenant does not restrict
liens on assets of subsidiaries of CCO Holdings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCO Holdings and CCO Holdings Capital, its
co-issuer, are generally not permitted to sell all or
substantially all of their assets or merge with or into other
companies unless their leverage ratio after any such transaction
would be no greater than their leverage ratio immediately prior
to the transaction, or unless CCO Holdings and its subsidiaries
could incur $1.00 of new debt under the 4.50 to 1.0 leverage
ratio test described above after giving effect to the
transaction, no default exists, and the surviving entity is a
U.S.&nbsp;entity that assumes the CCO Holdings senior notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCO Holdings and its restricted subsidiaries may
generally not otherwise sell assets or, in the case of
restricted subsidiaries, issue equity interests, unless they
receive consideration at least equal to the fair market value of
the assets or equity interests, consisting of at least 75% in
cash, assumption of liabilities, securities converted into cash
within 60&nbsp;days or productive assets. CCO Holdings and its
restricted subsidiaries are then required within 365&nbsp;days
after any asset sale either to commit to use the net cash
</FONT>

<P align="center"><FONT size="2">162
</FONT>

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<DIV align="left">
<FONT size="2">proceeds over a specified threshold to acquire
assets, including current assets, used or useful in their
businesses or use the net cash proceeds to repay debt, or to
offer to repurchase the CCO Holdings senior notes with any
remaining proceeds.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCO Holdings and its restricted subsidiaries may
generally not engage in sale and leaseback transactions unless,
at the time of the transaction, CCO Holdings could have incurred
secured indebtedness in an amount equal to the present value of
the net rental payments to be made under the lease, and the sale
of the assets and application of proceeds is permitted by the
covenant restricting asset sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CCO Holdings&#146; restricted subsidiaries may
generally not enter into restrictions on their ability to make
dividends or distributions or transfer assets to CCO Holdings on
terms that are materially more restrictive than those governing
their debt, lien, asset sale, lease and similar agreements
existing when they entered into the indenture, unless those
restrictions are on customary terms that will not materially
impair CCO Holdings&#146; ability to repay its notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restricted subsidiaries of CCO Holdings are
generally not permitted to guarantee or pledge assets to secure
debt of CCO Holdings, unless the guarantying subsidiary issues a
guarantee of the notes of comparable priority and tenor, and
waives any rights of reimbursement, indemnity or subrogation
arising from the guarantee transaction for at least one year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture also restricts the ability of CCO
Holdings and its restricted subsidiaries to enter into certain
transactions with affiliates involving consideration in excess
of $15&nbsp;million without a determination by the board of
directors that the transaction is on terms no less favorable
than arms-length, or transactions with affiliates involving over
$50&nbsp;million without receiving an independent opinion as to
the fairness of the transaction to the holders of the CCO
Holdings notes.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Charter Communications Operating, LLC
    Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;27, 2004, Charter Operating and
Charter Communications Operating Capital Corp. jointly issued
$1.1&nbsp;billion of 8%&nbsp;senior second lien notes due 2012
and $400&nbsp;million of
8<SUP style="font-size: 70%">3</SUP>/<FONT style="font-size: 60%">8</FONT>%&nbsp;senior
second lien notes due 2014, for total gross proceeds of
$1.5&nbsp;billion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating notes were sold in a
private transaction that was not subject to the registration
requirements of the Securities Act of 1933. The Charter
Operating notes are not expected to have the benefit of any
exchange or other registration rights, except in specified
limited circumstances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the first quarter of 2005, as a result of the
occurrence of the guarantee and pledge date (generally, upon the
Charter Holdings leverage ratio being below 8.75 to 1.0), CCO
Holdings and those subsidiaries of Charter Operating that are
currently guarantors of, or otherwise obligors with respect to,
indebtedness under the Charter Operating credit facilities and
related obligations provided guarantees of the Charter Operating
notes. The note guarantee of each such existing guarantor is,
and the note guarantee of any additional future subsidiary
guarantor will be:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a senior obligation of such guarantor;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">structurally senior to the outstanding senior
    notes of CCO Holdings and CCO Holdings Capital Corp. (except in
    the case of CCO Holdings&#146; note guarantee, which is
    structurally <I>pari passu </I>with such senior notes), the
    outstanding senior notes of CCH&nbsp;II and CCH&nbsp;II Capital
    Corp., the outstanding senior notes and senior discount notes of
    Charter Holdings, the outstanding convertible senior notes of
    Charter and any future indebtedness of parent companies of CCO
    Holdings (but subject to provisions in the Charter Operating
    indenture that permit interest and, subject to meeting the 4.25
    to 1.0 leverage ratio test, principal payments to be made
    thereon);&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">senior in right of payment to any future
    subordinated indebtedness of such guarantor.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All the subsidiaries of Charter Operating (except
CCO NR Sub, LLC, and certain other subsidiaries that are not
deemed material and are designated as nonrecourse subsidiaries
under the Charter Operating credit
</FONT>

<P align="center"><FONT size="2">163
</FONT>

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<DIV align="left">
<FONT size="2">facilities) are restricted subsidiaries of
Charter Operating under the Charter Operating notes.
Unrestricted subsidiaries generally will not be subject to the
restrictive covenants in the Charter Operating indenture.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of specified change of control
events, Charter Operating must offer to purchase the Charter
Operating notes at a purchase price equal to 101% of the total
principal amount of the Charter Operating notes repurchased plus
any accrued and unpaid interest thereon.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The limitations on incurrence of debt contained
in the indenture governing the Charter Operating notes permit
Charter Operating and its restricted subsidiaries that are
guarantors of the Charter Operating notes to incur additional
debt or issue shares of preferred stock if, after giving pro
forma effect to the incurrence, Charter Operating could meet a
leverage ratio test (ratio of consolidated debt to four times
EBITDA, as defined, from the most recent fiscal quarter for
which internal financial reports are available) of
4.25&nbsp;to&nbsp;1.0.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, regardless of whether the leverage
ratio test could be met, so long as no default exists or would
result from the incurrence or issuance, Charter Operating and
its restricted subsidiaries are permitted to incur or issue:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $6.5&nbsp;billion of debt under credit
    facilities (but such incurrence is permitted only by Charter
    Operating and its restricted subsidiaries that are guarantors of
    the Charter Operating notes, so long as there are such
    guarantors), including debt under credit facilities outstanding
    on the issue date of the Charter Operating notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $75&nbsp;million of debt incurred to
    finance the purchase or capital lease of assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to $300&nbsp;million of additional debt for
    any purpose,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other items of indebtedness for specific purposes
    such as refinancing of existing debt and interest rate swaps to
    provide protection against fluctuation in interest rates and,
    subject to meeting the leverage ratio test, debt existing at the
    time of acquisition of a restricted subsidiary.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the Charter Operating
notes permits Charter Operating to incur debt under one of the
categories above, and later reclassify the debt into a different
category. The Charter Operating credit facilities generally
impose more restrictive limitations on incurring new debt than
the Charter Operating indenture, so our subsidiaries that are
subject to the Charter Operating credit facilities are not
permitted to utilize the full debt incurrence that would
otherwise be available under the Charter Operating indenture
covenants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Generally, under Charter Operating&#146;s
indenture, Charter Operating and its restricted subsidiaries are
permitted to pay dividends on equity interests, repurchase
interests, or make other specified restricted payments only if
Charter Operating could incur $1.00 of new debt under the
leverage ratio test, which requires that Charter Operating meet
a 4.25 to 1.0 leverage ratio after giving effect to the
transaction, and if no default exists or would exist as a
consequence of such incurrence. If those conditions are met,
restricted payments are permitted in a total amount of up to
100% of Charter Operating&#146;s consolidated EBITDA, as
defined, minus 1.3 times its consolidated interest expense, plus
100% of new cash and appraised non-cash equity proceeds received
by Charter Operating and not allocated to the debt incurrence
covenant, all cumulatively from the fiscal quarter commenced
April&nbsp;1, 2004, plus $100&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, Charter Operating may make
distributions or restricted payments, so long as no default
exists or would be caused by the transaction:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to repurchase management equity interests in
    amounts not to exceed $10&nbsp;million per fiscal year;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">regardless of the existence of any default, to
    pay pass-through tax liabilities in respect of ownership of
    equity interests in Charter Operating or its restricted
    subsidiaries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to pay, regardless of the existence of any
    default, interest when due on the Charter Holdings notes, the
    CCH&nbsp;II notes, CCO Holdings notes, and our notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to pay, so long as there is no default, interest
    on the Charter convertible notes;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">164
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to purchase, redeem or refinance the Charter
    Holdings notes, CCH&nbsp;II notes, the CCO Holdings notes, the
    Charter notes, and other direct or indirect parent company
    notes, so long as Charter Operating could incur $1.00 of
    indebtedness under the 4.25 to 1.0 leverage ratio test referred
    to above and there is no default,&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to make other specified restricted payments
    including merger fees up to 1.25% of the transaction value,
    repurchases using concurrent new issuances, and certain
    dividends on existing subsidiary preferred equity interests.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the Charter Operating
notes restricts Charter Operating and its restricted
subsidiaries from making investments, except specified permitted
investments, or creating new unrestricted subsidiaries, if there
is a default under the indenture or if Charter Operating could
not incur $1.00 of new debt under the 4.25 to 1.0 leverage ratio
test described above after giving effect to the transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Permitted investments include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments by Charter Operating and its
    restricted subsidiaries in Charter Operating and in other
    restricted subsidiaries, or entities that become restricted
    subsidiaries as a result of the investment,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">investments aggregating up to 100% of new cash
    equity proceeds received by Charter Operating since
    April&nbsp;27, 2004 to the extent the proceeds have not been
    allocated to the restricted payments covenant described above,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other investments up to $750&nbsp;million
    outstanding at any time,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain specified additional investments, such as
    investments in customers and suppliers in the ordinary course of
    business and investments received in connection with permitted
    asset sales.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Operating and its restricted subsidiaries
are not permitted to grant liens senior to the liens securing
the Charter Operating notes, other than permitted liens, on
their assets to secure indebtedness or other obligations, if,
after giving effect to such incurrence, the senior secured
leverage ratio (generally, the ratio of obligations secured by
first priority liens to four times EBITDA, as defined, from the
most recent fiscal quarter for which internal financial reports
are available) would exceed 3.75 to 1.0. Permitted liens include
liens securing indebtedness and other obligations under
permitted credit facilities, liens securing the purchase price
of new assets, liens securing indebtedness of up to
$50&nbsp;million and other specified liens incurred in the
ordinary course of business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Operating and Charter Communications
Operating Capital Corp., its co-issuer, are generally not
permitted to sell all or substantially all of their assets or
merge with or into other companies unless their leverage ratio
after any such transaction would be no greater than their
leverage ratio immediately prior to the transaction, or unless
Charter Operating and its subsidiaries could incur $1.00 of new
debt under the 4.25 to 1.0 leverage ratio test described above
after giving effect to the transaction, no default exists, and
the surviving entity is a U.S.&nbsp;entity that assumes the
Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Operating and its restricted subsidiaries
generally may not otherwise sell assets or, in the case of
restricted subsidiaries, issue equity interests, unless they
receive consideration at least equal to the fair market value of
the assets or equity interests, consisting of at least 75% in
cash, assumption of liabilities, securities converted into cash
within 60&nbsp;days or productive assets. Charter Operating and
its restricted subsidiaries are then required within
365&nbsp;days after any asset sale either to commit to use the
net cash proceeds over a specified threshold to acquire assets,
including current assets, used or useful in their businesses or
use the net cash proceeds to repay debt, or to offer to
repurchase the Charter Operating notes with any remaining
proceeds.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Operating and its restricted subsidiaries
may generally not engage in sale and leaseback transactions
unless, at the time of the transaction, Charter Operating could
have incurred secured indebtedness in an amount equal to the
present value of the net rental payments to be made under the
lease, and the sale of the assets and application of proceeds is
permitted by the covenant restricting asset sales.
</FONT>

<P align="center"><FONT size="2">165
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Operating&#146;s restricted subsidiaries
may generally not enter into restrictions on their ability to
make dividends or distributions or transfer assets to Charter
Operating on terms that are materially more restrictive than
those governing their debt, lien, asset sale, lease and similar
agreements existing when Charter Operating entered into the
indenture governing the Charter Operating senior second lien
notes unless those restrictions are on customary terms that will
not materially impair Charter Operating&#146;s ability to repay
the Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restricted subsidiaries of Charter Operating
are generally not permitted to guarantee or pledge assets to
secure debt of Charter Operating, unless the guarantying
subsidiary issues a guarantee of the notes of comparable
priority and tenor, and waives any rights of reimbursement,
indemnity or subrogation arising from the guarantee transaction
for at least one year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture also restricts the ability of
Charter Operating and its restricted subsidiaries to enter into
certain transactions with affiliates involving consideration in
excess of $15&nbsp;million without a determination by the board
of directors that the transaction is on terms no less favorable
than arms-length, or transactions with affiliates involving over
$50&nbsp;million without receiving an independent opinion as to
the fairness of the transaction to the holders of the Charter
Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Operating and its restricted subsidiaries
are generally not permitted to transfer equity interests in
restricted subsidiaries unless the transfer is of all of the
equity interests in the restricted subsidiary or the restricted
subsidiary remains a restricted subsidiary and net proceeds of
the equity sale are applied in accordance with the asset sales
covenant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since the occurrence of the guarantee and pledge
date, the collateral for the Charter Operating notes consists of
all of Charter Operating&#146;s and its subsidiaries&#146;
assets that secure the obligations of Charter Operating or any
subsidiary of Charter Operating with respect to the Charter
Operating credit facilities and the related obligations. The
collateral currently consists of the capital stock of Charter
Operating held by CCO&nbsp;Holdings, all of the intercompany
obligations owing to CCO Holdings by Charter Operating or any
subsidiary of Charter Operating, and substantially all of
Charter Operating&#146;s and the guarantors&#146; assets (other
than the assets of CCO&nbsp;Holdings) in which security
interests may be perfected under the Uniform Commercial Code by
filing a financing statement (including capital stock and
intercompany obligations), including, but not limited to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">with certain exceptions, all capital stock
    (limited in the case of capital stock of foreign subsidiaries,
    if any, to 66% of the capital stock of first tier foreign
    Subsidiaries) held by Charter Operating or any
    guarantor;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">with certain exceptions, all intercompany
    obligations owing to Charter Operating or any guarantor.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2005, CC&nbsp;V Holdings, LLC redeemed
in full the notes outstanding under the CC&nbsp;V indenture.
Following that redemption CC&nbsp;V&nbsp;Holdings, LLC and its
subsidiaries guaranteed the Charter Operating credit facilities
and the related obligations and secured those guarantees with
first-priority liens, and guaranteed the notes and secured the
Charter Operating senior second lien notes with second-priority
liens, on substantially all of their assets in which security
interests may be perfected under the Uniform Commercial Code by
filing a financing statement (including capital stock and
intercompany obligations).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, if Charter Operating or its
subsidiaries exercise any option to redeem in full the notes
outstanding under the Renaissance indenture, then, provided that
the Leverage Condition remains satisfied, the Renaissance
entities will be required to provide corresponding guarantees of
the Charter Operating credit facilities and related obligations
and note guarantees and to secure the Charter Operating notes
and the Charter Operating credit facilities and related
obligations with corresponding liens.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that additional liens are granted by
Charter Operating or its subsidiaries to secure obligations
under the Charter Operating credit facilities or the related
obligations, second priority liens on the same assets will be
granted to secure the Charter Operating notes, which liens will
be subject to the provisions of an intercreditor agreement (to
which none of Charter Operating or its affiliates are parties).
Notwithstanding the foregoing sentence, no such second priority
liens need be provided if the time such
</FONT>

<P align="center"><FONT size="2">166
</FONT>

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<DIV align="left">
<FONT size="2">lien would otherwise be granted is not during a
guarantee and pledge availability period (when the Leverage
Condition is satisfied), but such second priority liens will be
required to be provided in accordance with the foregoing
sentence on or prior to the fifth business day of the
commencement of the next succeeding guarantee and pledge
availability period.
</FONT>
</DIV>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;CC V Holdings, LLC
Notes</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These notes were redeemed on March 14, 2005 and
are therefore no longer outstanding.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Renaissance Media Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 10%&nbsp;senior discount notes due 2008 were
issued by Renaissance Media (Louisiana) LLC, Renaissance Media
(Tennessee) LLC and Renaissance Media Holdings Capital
Corporation, with Renaissance Media Group LLC as guarantor and
the United States Trust Company of New York as trustee.
Renaissance Media Group LLC, which is the direct or indirect
parent company of these issuers, is now a subsidiary of Charter
Operating. The Renaissance 10%&nbsp;notes and the Renaissance
guarantee are unsecured, unsubordinated debt of the issuers and
the guarantor, respectively. In October 1998, the issuers of the
Renaissance notes exchanged $163&nbsp;million of the original
issued and outstanding Renaissance notes for an equivalent value
of new Renaissance notes. The form and terms of the new
Renaissance notes are the same in all material respects as the
form and terms of the original Renaissance notes except that the
issuance of the new Renaissance notes was registered under the
Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There was no payment of any interest in respect
of the Renaissance notes prior to October&nbsp;15, 2003. Since
October&nbsp;15, 2003, interest on the Renaissance notes is
payable semi-annually in arrears in cash at a rate of
10%&nbsp;per year. On April&nbsp;15, 2003, the Renaissance notes
became redeemable at the option of the issuers thereof, in whole
or in part, initially at 105% of their principal amount at
maturity, plus accrued interest, declining to 100% of the
principal amount at maturity, plus accrued interest, on or after
April&nbsp;15, 2006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our acquisition of Renaissance triggered change
of control provisions of the Renaissance notes that required us
to offer to purchase the Renaissance notes at a purchase price
equal to 101% of their accreted value on the date of the
purchase, plus accrued interest, if any. In May 1999, we made an
offer to repurchase the Renaissance notes, and holders of
Renaissance notes representing 30% of the total principal amount
outstanding at maturity tendered their Renaissance notes for
repurchase.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The limitations on incurrence of debt contained
in the indenture governing the Renaissance notes permit
Renaissance Media Group and its restricted subsidiaries to incur
additional debt, so long as they are not in default under the
indenture:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if, after giving effect to the incurrence,
    Renaissance Media Group could meet a leverage ratio (ratio of
    consolidated debt to four times consolidated EBITDA, as defined,
    from the most recent quarter) of 6.75 to 1.0, and, regardless of
    whether the leverage ratio could be met,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to the greater of $200&nbsp;million or 4.5
    times Renaissance Media Group&#146;s consolidated annualized
    EBITDA, as defined,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to an amount equal to 5% of Renaissance Media
    Group&#146;s consolidated total assets to finance the purchase
    of new assets,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">up to two times the sum of (a)&nbsp;the net cash
    proceeds of new equity issuances and capital contributions, and
    (b)&nbsp;80% of the fair market value of property received by
    Renaissance Media Group or an issuer as a capital contribution,
    in each case received after the issue date of the Renaissance
    notes and not allocated to make restricted payments,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other items of indebtedness for specific purposes
    such as intercompany debt, refinancing of existing debt and
    interest rate swaps to provide protection against fluctuation in
    interest rates.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the Renaissance notes
permits us to incur debt under one of the categories above, and
reclassify the debt into a different category.
</FONT>

<P align="center"><FONT size="2">167
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the indenture governing the Renaissance
notes, Renaissance Media Group and its restricted subsidiaries
are permitted to pay dividends on equity interests, repurchase
interests, make restricted investments, or make other specified
restricted payments only if Renaissance Media Group could incur
$1.00 of additional debt under the debt incurrence test, which
requires that Renaissance Media Group meet the 6.75 to 1.0
leverage ratio after giving effect to the transaction of the
indebtedness covenant and that no default exists or would occur
as a consequence thereof. If those conditions are met,
Renaissance Media Group and its restricted subsidiaries are
permitted to make restricted payments in a total amount not to
exceed the result of 100% of Renaissance Media Group&#146;s
consolidated EBITDA, as defined, minus 130% of its consolidated
interest expense, plus 100% of new cash equity proceeds received
by Renaissance Media Group and not allocated to the indebtedness
covenant, plus returns on certain investments, all cumulatively
from June 1998. Renaissance Media Group and its restricted
subsidiaries may make permitted investments up to
$2&nbsp;million in related businesses and other specified
permitted investments, restricted payments up to
$10&nbsp;million, dividends up to 6% each year of the net cash
proceeds of public equity offerings, and other specified
restricted payments without meeting the foregoing test.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Renaissance Media Group and its restricted
subsidiaries are not permitted to grant liens on their assets
other than specified permitted liens, unless corresponding liens
are granted to secure the Renaissance notes. Permitted liens
include liens securing debt permitted to be incurred under
credit facilities, liens securing debt incurred under the
incurrence of indebtedness test, in amounts up to the greater of
$200&nbsp;million or 4.5 times Renaissance Media Group&#146;s
consolidated EBITDA, as defined, liens as deposits for
acquisitions up to 10% of the estimated purchase price, liens
securing permitted financings of new assets, liens securing debt
permitted to be incurred by restricted subsidiaries, and
specified liens incurred in the ordinary course of business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Renaissance Media Group and the issuers of the
Renaissance notes are generally not permitted to sell or
otherwise dispose of all or substantially all of their assets or
merge with or into other companies unless their consolidated net
worth after any such transaction would be equal to or greater
than their consolidated net worth immediately prior to the
transaction, or unless Renaissance Media Group could incur $1.00
of additional debt under the debt incurrence test, which would
require them to meet a leverage ratio of 6.75 to 1.00 after
giving effect to the transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Renaissance Media Group and its subsidiaries may
generally not otherwise sell assets or, in the case of
subsidiaries, equity interests, unless they receive
consideration at least equal to the fair market value of the
assets, consisting of at least 75% cash, temporary cash
investments or assumption of debt. Charter Holdings and its
restricted subsidiaries are then required within 12&nbsp;months
after any asset sale either to commit to use the net cash
proceeds over a specified threshold either to acquire assets
used in their own or related businesses or use the net cash
proceeds to repay debt, or to offer to repurchase the
Renaissance notes with any remaining proceeds.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Renaissance Media Group and its restricted
subsidiaries may generally not engage in sale and leaseback
transactions unless the lease term does not exceed three years
or the proceeds are applied in accordance with the covenant
limiting asset sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Renaissance Media Group&#146;s restricted
subsidiaries may generally not enter into restrictions on their
abilities to make dividends or distributions or transfer assets
to Renaissance Media Group except those not more restrictive
than is customary in comparable financings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restricted subsidiaries of Renaissance Media
Group are not permitted to guarantee or pledge assets to secure
debt of the Renaissance Media Group or its restricted
subsidiaries, unless the guarantying subsidiary issues a
guarantee of the Renaissance notes of comparable priority and
tenor, and waives any rights of reimbursement, indemnity or
subrogation arising from the guarantee transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Renaissance Media Group and its restricted
subsidiaries are generally not permitted to issue or sell equity
interests in restricted subsidiaries, except sales of common
stock of restricted subsidiaries so long as the proceeds of the
sale are applied in accordance with the asset sale covenant, and
issuances as a result of
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">which the restricted subsidiary is no longer a
restricted subsidiary and any remaining investment in that
subsidiary is permitted by the covenant limiting restricted
payments.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the Renaissance notes
also restricts the ability of Renaissance Media Group and its
restricted subsidiaries to enter into certain transactions with
affiliates involving consideration in excess of $2&nbsp;million
without a determination by the disinterested members of the
board of directors that the transaction is on terms no less
favorable than arms length, or transactions with affiliates
involving over $4&nbsp;million with affiliates without receiving
an independent opinion as to the fairness of the transaction to
Renaissance Media Group.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of these covenants are subject to additional
specified exceptions. In general, the covenants of the Charter
Operating credit facilities are more restrictive than those of
our indentures.
</FONT>

<P align="left">
<B><FONT size="2">Cross-Defaults</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our indentures and those of certain of our
subsidiaries include various events of default, including
cross-default provisions. Under these provisions, a failure by
any of the issuers or any of their restricted subsidiaries to
pay at the final maturity thereof the principal amount of other
indebtedness having a principal amount of $100&nbsp;million or
more (or any other default under any such indebtedness resulting
in its acceleration) would result in an event of default under
the indenture governing the applicable notes. The Renaissance
indenture contains a similar cross-default provision with a
$10&nbsp;million threshold that applies to the issuers of the
Renaissance notes and their restricted subsidiaries. As a
result, an event of default related to the failure to repay
principal at maturity or the acceleration of the indebtedness
under the Charter Holdings notes, CCH&nbsp;II notes, CCO
Holdings notes, Charter Operating notes, the Charter Operating
credit facilities or the Renaissance notes could cause
cross-defaults under our subsidiaries&#146; indentures.
</FONT>

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<DIV align="left">
<A name='118'></A>
</DIV>

<!-- link1 "DESCRIPTION OF CAPITAL STOCK AND MEMBERSHIP UNITS" -->

<P align="center">
<B><FONT size="2">DESCRIPTION OF CAPITAL STOCK AND MEMBERSHIP
UNITS</FONT></B>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our capital stock and the provisions of our
restated certificate of incorporation and bylaws are as
described below. These summaries are qualified by reference to
the restated certificate of incorporation and the bylaws, copies
of which have been filed with the Securities and Exchange
Commission.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our authorized capital stock consists of
1.750&nbsp;billion shares of Class&nbsp;A common stock, par
value $.001&nbsp;per share, 750&nbsp;million shares of
Class&nbsp;B common stock, par value $.001&nbsp;per share, and
250&nbsp;million shares of preferred stock, par value
$.001&nbsp;per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restated certificate of incorporation and
Charter Communications Holding Company, LLC&#146;s amended and
restated limited liability company agreement contain provisions
that are designed to cause the number of shares of our common
stock that are outstanding to equal the number of common
membership units of Charter Communications Holding Company, LLC
owned by Charter and to cause the value of a share of common
stock to be equal to the value of a common membership unit.
These provisions are meant to allow a holder of our common stock
to easily understand the economic interest that such
holder&#146;s common shares represent of Charter Communications
Holding Company, LLC&#146;s business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In particular, provisions in our restated
certificate of incorporation provide that:
</FONT>
<P>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;at all times the number of shares of our
    common stock outstanding will be equal to the number of Charter
    Communications Holding Company, LLC common membership units
    owned by Charter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;Charter will not hold any assets other
    than, among other allowable assets:
    </FONT></TD>
</TR>

</TABLE>
<P>

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<TR>
    <TD width="10%"></TD>
    <TD width="1%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">working capital and cash held for the payment of
    current obligations and receivables from Charter Communications
    Holding Company, LLC;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">common membership units of Charter Communications
    Holding Company, LLC;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">obligations and equity interests of Charter
    Communications Holding Company, LLC that correspond to
    obligations and equity interests issued by Charter;
    </FONT></TD>
</TR>

</TABLE>
<P>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;Charter will not borrow any money or
    enter into any capital lease unless Charter Communications
    Holding Company, LLC enters into the same arrangements with
    Charter so that Charter&#146;s liability flows through to
    Charter Communications Holding Company, LLC.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Provisions in Charter Communications Holding
Company, LLC&#146;s amended and restated limited liability
company agreement provide that, upon the contribution by Charter
of assets acquired through the issuance of common stock by
Charter, Charter Communications Holding Company, LLC will issue
to Charter that number of common membership units as equals the
number of shares of common stock issued by Charter. In the event
of the contribution by Charter of assets acquired through the
issuance of indebtedness or preferred interests of Charter,
Charter Communications Holding Company, LLC will issue to
Charter a corresponding obligation or interest, respectively to
allow Charter to pass through to Charter Communications Holding
Company, LLC these liabilities or preferred interests. Such
liabilities or preferred interest of Charter Communication
Holding Company, LLC will be assets of Charter, in addition to
the Class&nbsp;B common units of Charter Communications Holding
Company, LLC that are held by Charter.
</FONT>

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</FONT>

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<P align="left">
<B><FONT size="2">Common Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, there were
304,941,082&nbsp;shares of Class&nbsp;A common stock issued and
outstanding and 50,000&nbsp;shares of Class&nbsp;B common stock
issued and outstanding. In July 2005, 13,400,000&nbsp;shares
were issued in connection with a litigation settlement and
27,170,000&nbsp;shares were issued pursuant to the share lending
agreement. If, as described below, all shares of Class&nbsp;B
common stock convert to shares of Class&nbsp;A common stock as a
result of dispositions by Mr.&nbsp;Allen and his affiliates, the
holders of Class&nbsp;A common stock will be entitled to elect
all members of the board of directors, other than any members
elected separately by the holders of any preferred shares with
the right to vote, of which there are currently none outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Voting
Rights.</FONT></I></B><FONT size="2"> The holders of
Class&nbsp;A common stock and Class&nbsp;B common stock
generally have identical rights, except:
</FONT>
<P>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each Class&nbsp;A common shareholder is entitled
    to one vote per share; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each Class&nbsp;B common shareholder is entitled
    to a number of votes based on the number of outstanding
    Class&nbsp;B common stock and Charter Communications Holding
    Company, LLC membership units exchangeable for Class&nbsp;B
    common stock. For example, Mr.&nbsp;Allen is entitled to ten
    votes for each share of Class&nbsp;B common stock held by him or
    his affiliates and ten votes for each membership unit held by
    him or his affiliates;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the Class&nbsp;B common shareholders have the
    sole power to vote to amend or repeal the provisions of our
    restated certificate of incorporation relating to:
    </FONT></TD>
</TR>

</TABLE>
<P>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the activities in which Charter may
    engage;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the required ratio of outstanding shares
    of common stock to outstanding membership units owned by
    Charter;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;the restrictions on the assets and
    liabilities that Charter may hold.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The effect of the provisions described in the
final bullet point is that holders of Class&nbsp;A common stock
have no right to vote on these matters. These provisions allow
Mr.&nbsp;Allen, for example, to amend the restated certificate
of incorporation to permit Charter to engage in currently
prohibited business activities without having to seek the
approval of holders of Class&nbsp;A common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The voting rights relating to the election of
Charter&#146;s board of directors are as follows:
</FONT>
<P>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The Class&nbsp;B common shareholders, voting
    separately as a class, are entitled to elect all but one member
    of our board of directors.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Class&nbsp;A and Class&nbsp;B common
    shareholders, voting together as one class, are entitled to
    elect the remaining member of our board of directors who is not
    elected by the Class&nbsp;B common shareholders.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Class&nbsp;A common shareholders and Class&nbsp;B
    common shareholders are not entitled to cumulate their votes in
    the election of directors.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In addition, Charter may issue one or more series
    of preferred stock that entitle the holders of such preferred
    stock to elect directors.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other than the election of directors and any
matters where Delaware law or Charter&#146;s restated
certificate of incorporation or bylaws requires otherwise, all
matters to be voted on by shareholders must be approved by a
majority of the votes cast by the holders of shares of
Class&nbsp;A common stock and Class&nbsp;B common stock present
in person or represented by proxy, voting together as a single
class, subject to any voting rights granted to holders of any
preferred stock.
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Amendments to Charter&#146;s restated certificate
of incorporation that would adversely alter or change the
powers, preferences or special rights of the Class&nbsp;A common
stock or the Class&nbsp;B common stock must be approved by a
majority of the votes entitled to be cast by the holders of the
outstanding shares of the affected class, voting as a separate
class. In addition, the following actions by Charter must be
approved by the affirmative vote of the holders of at least a
majority of the voting power of the outstanding Class&nbsp;B
common stock, voting as a separate class:
</FONT>
<P>

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    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the issuance of any Class&nbsp;B common stock
    other than to Mr.&nbsp;Allen and his affiliates and other than
    pursuant to specified stock splits and dividends;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the issuance of any stock other than Class&nbsp;A
    common stock (and other than Class&nbsp;B common stock as
    described above);&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the amendment, modification or repeal of any
    provision of its restated certificate of incorporation relating
    to capital stock or the removal of directors.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter will lose its rights to manage the
business of Charter Communications Holding Company, LLC and
Charter Investment, Inc. will become the sole manager of Charter
Communications Holding Company, LLC if at any time a court holds
that the holders of the Class&nbsp;B common stock no longer:
</FONT>
<P>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">have the number of votes per share of
    Class&nbsp;B common stock described above;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">have the right to elect, voting separately as a
    class, all but one member of Charter&#146;s board of directors,
    except for any directors elected separately by the holders of
    preferred stock;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">have the right to vote as a separate class on
    matters that adversely affect the Class&nbsp;B common stock with
    respect to:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the issuance of equity securities of
    Charter other than the Class&nbsp;A common stock;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the voting power of the Class&nbsp;B
    common stock.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These provisions are contained in the amended and
restated limited liability company agreement of Charter
Communications Holding Company, LLC. The Class&nbsp;B common
stock could lose these rights if a holder of Class&nbsp;A common
stock successfully challenges in a court proceeding the voting
rights of the Class&nbsp;B common stock. In any of these
circumstances, Charter would also lose its 100% voting control
of Charter Communications Holding Company, LLC as provided in
Charter Communications Holding Company, LLC&#146;s amended and
restated limited liability company agreement. These provisions
exist to assure Mr.&nbsp;Allen that he will be able to control
Charter Communications Holding Company, LLC in the event he was
no longer able to control Charter through his ownership of
Class&nbsp;B common stock. These events could have a material
adverse impact on our business and the market price of the
Class&nbsp;A common stock and the notes. See &#147;Risk
Factors&nbsp;&#151; Risks Related to Our Business.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Dividends.</FONT></I></B><FONT size="2">
Holders of Class&nbsp;A common stock and Class&nbsp;B common
stock will share ratably (based on the number of shares of
common stock held) in any dividend declared by our board of
directors, subject to any preferential rights of any outstanding
preferred stock. Dividends consisting of shares of Class&nbsp;A
common stock and Class&nbsp;B common stock may be paid only as
follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">shares of Class&nbsp;A common stock may be paid
    only to holders of Class&nbsp;A common stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">shares of Class&nbsp;B common stock may be paid
    only to holders of Class&nbsp;B common stock;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the number of shares of each class of common
    stock payable per share of such class of common stock shall be
    equal in number.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restated certificate of incorporation
provides that we may not pay a stock dividend unless the number
of outstanding Charter Communications Holding Company, LLC
common membership units are
</FONT>

<P align="center"><FONT size="2">172
</FONT>

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<DIV align="left">
<FONT size="2">adjusted accordingly. This provision is designed
to maintain the equal value between shares of common stock and
membership units and the one-to-one exchange ratio.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Conversion of Class&nbsp;B Common
Stock.</FONT></I></B><FONT size="2"> Each share of outstanding
Class&nbsp;B common stock will automatically convert into one
share of Class&nbsp;A common stock if, at any time,
Mr.&nbsp;Allen or any of his affiliates sells any shares of
common stock of Charter or membership units of Charter
Communications Holding Company, LLC and as a result of such
sale, Mr.&nbsp;Allen and his affiliates no longer own directly
and indirectly common stock and other equity interests in
Charter and membership units in Charter Communications Holding
Company, LLC that in total represent at least:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">20% of the sum of the values, calculated as of
    November&nbsp;12, 1999, of the shares of Class&nbsp;B common
    stock directly or indirectly owned by Mr.&nbsp;Allen and his
    affiliates and the shares of Class&nbsp;B common stock for which
    outstanding Charter Communications Holding Company, LLC
    membership units directly or indirectly owned by Mr.&nbsp;Allen
    and his affiliates were exchangeable on that date,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">5% of the sum of the values, calculated as of the
    measuring date, of shares of outstanding common stock and other
    equity interests in Charter and the shares of Charter common
    stock for which outstanding Charter Communications Holding
    Company, LLC membership units are exchangeable on such date.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These provisions exist to assure that
Mr.&nbsp;Allen will no longer be able to control Charter if
after sales of his equity interests he owns an insignificant
economic interest in our business. The conversion of all
Class&nbsp;B common stock in accordance with these provisions
would not trigger Charter Communications Holding Company,
LLC&#146;s limited liability company agreement provisions
described above whereby Charter would lose its management rights
and special voting rights relating to Charter Communications
Holding Company, LLC in the event of an adverse determination of
a court affecting the rights of the Class&nbsp;B common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each holder of a share of Class&nbsp;B common
stock has the right to convert such share into one share of
Class&nbsp;A common stock at any time on a one-for-one basis. If
a Class&nbsp;B common shareholder transfers any shares of
Class&nbsp;B common stock to a person other than an authorized
Class&nbsp;B common shareholder, these shares of Class&nbsp;B
common stock will automatically convert into shares of
Class&nbsp;A common stock. Authorized Class&nbsp;B common
shareholders are Paul G. Allen entities controlled by
Mr.&nbsp;Allen, Mr.&nbsp;Allen&#146;s estate, any organization
qualified under Section&nbsp;501(c)(3) of the Internal Revenue
Code that is Mr.&nbsp;Allen&#146;s beneficiary upon his death
and certain trusts established by or for the benefit of
Mr.&nbsp;Allen. In this context &#147;controlled&#148; means the
ownership of more than 50% of the voting power and economic
interest of an entity and &#147;transfer&#148; means the
transfer of record or beneficial ownership of any such share of
Class&nbsp;B common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Other Rights.</FONT></I></B><FONT size="2">
Shares of Class&nbsp;A common stock will be treated equally in
the event of any merger or consolidation of Charter so that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each class of common shareholders will receive
    per share the same kind and amount of capital stock, securities,
    cash and/or other property received by any other class of common
    shareholders, provided that any shares of capital stock so
    received may differ in a manner similar to the manner in which
    the shares of Class&nbsp;A common stock and Class&nbsp;B common
    stock differ;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each class of common shareholders, to the extent
    they receive a different kind (other than as described above) or
    different amount of capital stock, securities, cash and/or other
    property than that received by any other class of common
    shareholders, will receive for each share of common stock they
    hold, stock, securities, cash and/or either property having a
    value substantially equivalent to that received by such other
    class of common shareholders.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">173
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon Charter&#146;s liquidation, dissolution or
winding up, after payment in full of the amounts required to be
paid to preferred shareholders, if any, all common shareholders,
regardless of class, are entitled to share ratably in any assets
and funds available for distribution to common shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No shares of any class of common stock are
subject to redemption or have preemptive right to purchase
additional shares of common stock.
</FONT>

<P align="left">
<B><FONT size="2">Preferred Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter&#146;s board of directors is authorized,
subject to the approval of the holders of the Class&nbsp;B
common stock, to issue from time to time up to a total of
250&nbsp;million shares of preferred stock in one or more series
and to fix the numbers, powers, designations, preferences, and
any special rights of the shares of each such series thereof,
including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">dividend rights and rates;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">conversion rights;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">voting rights;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">terms of redemption (including any sinking fund
    provisions) and redemption price or prices;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">liquidation preferences;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the number of shares constituting and the
    designation of such series.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to their authority the board of
directors has designated 1&nbsp;million of the above-described
250&nbsp;million shares as Series&nbsp;A Convertible Redeemable
Preferred Stock (&#147;Series&nbsp;A Preferred Stock&#148;).
Holders of the Series&nbsp;A Preferred Stock have no voting
rights but are entitled to receive cumulative cash dividends at
an annual rate of 5.75%, payable quarterly. If for any reason
Charter fails to pay the dividends on the Series&nbsp;A
Preferred Stock on a timely basis, the dividend rate on each
share increases to an annual rate of 7.75% until the payment is
made. The Series&nbsp;A Preferred Stock is redeemable by Charter
at its option on or after August&nbsp;31, 2004 and must be
redeemed by Charter at any time upon a change of control, or if
not previously redeemed or converted, on August&nbsp;31, 2008.
The Series&nbsp;A Preferred Stock is convertible, in whole or in
part, at the option of the holders on or before August&nbsp;31,
2008, into shares of common stock at an initial conversion rate
equal to a conversion price of $24.71&nbsp;per share of common
stock, subject to certain customary adjustments. The redemption
price per share of Series&nbsp;A Preferred Stock is the
liquidation preference of $100, subject to certain customary
adjustments. At June&nbsp;30, 2005, there were
545,259&nbsp;shares of Series&nbsp;A Preferred Stock
outstanding, with an aggregate liquidation preference of
approximately $55&nbsp;million. These shares are convertible
into approximately 2.2&nbsp;million shares of Class&nbsp;A
common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter has no present plans to issue any other
shares of preferred stock.
</FONT>

<P align="left">
<B><FONT size="2">Options</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, options to purchase a
total of 1,275,168 membership units in Charter Communications
Holding Company, LLC were outstanding pursuant to the 1999
Charter Communications Option Plan, and options to purchase a
total of 25,507,144&nbsp;shares of Class&nbsp;A common stock
were outstanding pursuant to Charter&#146;s 2001 Stock Incentive
Plan. Of these options, 8,684,691 have vested. The membership
units received upon exercise of any of the options under the
1999 Charter Communications Option Plan are automatically
exchanged for shares of our Class&nbsp;A common stock on a
one-for-one basis. In addition, a portion of the unvested
options will vest each month. There are also additional options
outstanding to purchase an aggregate of 475,653&nbsp;shares of
Class&nbsp;A common stock, which were issued to a consultant
outside of the plan. We have agreed to exchange 186,385 of these
options for 18,638&nbsp;shares of Class&nbsp;A common stock, and
we anticipate that exchange to be consummated in 2005.
</FONT>

<P align="center"><FONT size="2">174
</FONT>

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<P align="left">
<B><FONT size="2">Convertible Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At June&nbsp;30, 2005, we had outstanding
$862.5&nbsp;million principal amount of our 5.875% convertible
senior notes due 2009, which are convertible (at approximately
$2.42 per share) into a total of approximately 356&nbsp;million
shares of our Class&nbsp;A common stock. At June&nbsp;30, 2005,
we also had outstanding approximately $25&nbsp;million principal
amount of our 4.75% senior convertible notes due 2006, which are
convertible into Class A common stock at approximately
$26.25&nbsp;per share.
</FONT>

<P align="left">
<B><FONT size="2">Anti-takeover Effects of Provisions of
Charter&#146;s Restated Certificate of Incorporation and
Bylaws</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Provisions of Charter&#146;s restated certificate
of incorporation and bylaws may be deemed to have an
anti-takeover effect and may delay, defer or prevent a tender
offer or takeover attempt that a shareholder might consider in
its best interest, including those attempts that might result in
a premium over the market price for the shares held by
shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Special Meeting of
Shareholders.</FONT></I></B><FONT size="2"> Our bylaws provide
that, subject to the rights of holders of any series of
preferred stock, special meetings of our shareholders may be
called only by the chairman of our board of directors, our chief
executive officer or a majority of our board of directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Advance Notice Requirements For Shareholder
Proposals And Director
Nominations.</FONT></I></B><FONT size="2"> Our bylaws provide
that shareholders seeking to bring business before an annual
meeting of shareholders, or to nominate candidates for election
as directors at an annual meeting of shareholders, must provide
timely prior written notice of their proposals. To be timely, a
shareholder&#146;s notice must be received at our principal
executive offices not less than 45&nbsp;days nor more than
70&nbsp;days prior to the first anniversary of the date on which
we first mailed our proxy statement for the prior year&#146;s
annual meeting. If, however, the date of the annual meeting is
more than 30&nbsp;days before or after the anniversary date of
the prior year&#146;s annual meeting, notice by the shareholder
must be received not less than 90&nbsp;days prior to the annual
meeting or by the 10th day following the public announcement of
the date of the meeting, whichever occurs later, and not more
than 120&nbsp;days prior to the annual meeting. Our bylaws
specify requirements as to the form and content of a
shareholder&#146;s notice. These provisions may limit
shareholders in bringing matters before an annual meeting of
shareholders or in making nominations for directors at an annual
meeting of shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Authorized But Unissued
Shares.</FONT></I></B><FONT size="2"> The authorized but
unissued shares of Class&nbsp;A common stock are available for
future issuance without shareholder approval and, subject to
approval by the holders of the Class&nbsp;B common stock, the
authorized but unissued shares of Class&nbsp;B common stock and
preferred stock are available for future issuance. These
additional shares may be utilized for a variety of corporate
purposes, including future public offerings to raise additional
capital, corporate acquisitions and employee benefit plans. The
existence of authorized but unissued shares of common stock and
preferred stock could render more difficult or discourage an
attempt to obtain control of us by means of a proxy contest,
tender offer, merger or otherwise.
</FONT>

<P align="left">
<B><FONT size="2">Membership Units of Charter Communications
Holding Company</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Communications Holding Company, LLC
limited liability company agreement provides for three separate
classes of common membership units designed Class&nbsp;A,
Class&nbsp;B and Class&nbsp;C and one class of preferred
membership units designated Class&nbsp;A. As of June&nbsp;30,
2005, there were 644,123,113 Charter Communications Holding
Company, LLC common membership units issued and outstanding,
304,991,082 of which were held by Charter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Class&nbsp;A Common Membership
Units.</FONT></I></B><FONT size="2"> As of June&nbsp;30, 2005,
there were a total of 324,300,479 issued and outstanding
Class&nbsp;A common membership units, consisting of
217,585,246&nbsp;units owned by Charter Investment, Inc. and
106,715,233&nbsp;units owned by Vulcan Cable&nbsp;III Inc.
</FONT>

<P align="center"><FONT size="2">175
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Class&nbsp;B Common Membership
Units.</FONT></I></B><FONT size="2"> As of June&nbsp;30, 2005,
there were a total of 304,991,082 issued and outstanding
Class&nbsp;B common membership units, all of which are owned by
Charter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Class&nbsp;C Common Membership
Units.</FONT></I></B><FONT size="2"> As of June&nbsp;30, 2005,
there were a total of 14,831,552 issued and outstanding
Class&nbsp;C common membership units, consisting of 5,233,612
units owned by Charter Investment, Inc. and 9,597,940 units
owned by Vulcan Cable&nbsp;III Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, Charter Investment, Inc., an
affiliate of Mr.&nbsp;Allen owns 24,273,943&nbsp;units of
CC&nbsp;VIII, LLC membership units. An issue has arisen
regarding the ultimate ownership of such CC&nbsp;VIII, LLC
membership interests following Mr.&nbsp;Allen&#146;s acquisition
of those interests on June&nbsp;6, 2003. See &#147;Certain
Relationships and Related Transactions&nbsp;&#151; Transactions
Arising out of Our Organizational Structure and
Mr.&nbsp;Allen&#146;s Investment in Charter Communications, Inc.
and Its Subsidiaries&nbsp;&#151; Equity Put Rights&nbsp;&#151;
CC&nbsp;VIII.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Convertible Preferred Membership
Units.</FONT></I></B><FONT size="2"> As of June&nbsp;30, 2005,
there were a total of 545,259 issued and outstanding convertible
preferred membership units. These units are owned by Charter and
mirror the terms of Charter&#146;s Series&nbsp;A Preferred Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any matter requiring a vote of the members of
Charter Communications Holding Company, LLC requires the
affirmative vote of a majority of the Class&nbsp;B common
membership units. Charter owns all Class&nbsp;B common
membership units and therefore controls Charter Communications
Holding Company, LLC. Because Mr.&nbsp;Allen owns high
vote&nbsp;Class&nbsp;B common stock of Charter that entitles him
to approximately 93% of the voting power of the outstanding
common stock of Charter prior to completion of this offering,
Mr.&nbsp;Allen controls us and through us has voting control of
Charter Communications Holding Company, LLC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The net cash proceeds that Charter receives from
any issuance of shares of common stock will be immediately
transferred to Charter Communications Holding Company, LLC in
exchange for membership units equal in number to the number of
shares of common stock issued by Charter.
</FONT>

<P align="left">
<B><FONT size="2">Exchange Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter is a party to an agreement permitting
Vulcan Cable&nbsp;III Inc., Charter Investment, Inc. and any
other affiliate of Mr.&nbsp;Allen to exchange at any time on a
one-for-one basis any or all of their Charter Holdco common
membership units for shares of Class&nbsp;B common stock. This
exchange may occur directly or, at the election of the
exchanging holder, indirectly through a tax-free reorganization
such as a share exchange or a statutory merger of any
Allen-controlled entity with and into Charter or a wholly owned
subsidiary of Charter. In the case of an exchange in connection
with a tax-free share exchange or a statutory merger, shares of
Class&nbsp;A common stock held by Mr.&nbsp;Allen or the
Allen-controlled entity will also be exchanged for Class&nbsp;B
common stock. Mr.&nbsp;Allen currently owns shares of
Class&nbsp;A common stock as a result of the exercise of put
rights granted to sellers in the Falcon acquisition and the
Rifkin acquisition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdco common membership units held by
Mr.&nbsp;Allen and his affiliates are exchangeable at any time
for shares of our Class&nbsp;B common stock, which is then
convertible into shares of Class&nbsp;A common stock. The
exchange agreement and the 1999 Charter Communications Option
Plan state that common membership units are exchangeable for
shares of common stock at a value equal to the fair market value
of the common membership units. The exchange ratio of common
membership units to shares of Class&nbsp;A common stock will be
one to one because Charter and Charter Holdco have been
structured so that the fair market value of a share of the
Class&nbsp;A common stock equals the fair market value of a
common membership unit owned by Charter.
</FONT>

<P align="center"><FONT size="2">176
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our organizational documents achieve this result
by:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">limiting the assets and liabilities that Charter
    may hold;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">requiring the number of shares of our common
    stock outstanding at any time to equal the number of common
    membership units owned by Charter.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we fail to comply with these provisions or
they are changed, the exchange ratio may vary from one to one
and will then be based on a pre-determined formula contained in
the exchange agreements and the 1999 Charter Communications
Option Plan. This formula will be based on the then current
relative fair market values of common membership units and
common stock.
</FONT>

<P align="left">
<B><FONT size="2">Special Tax Allocation Provisions.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Communications Holding Company,
LLC&#146;s limited liability company agreement contains a number
of provisions affecting allocation of net tax losses and net tax
profits to its members. In some situations, these provisions
could result in Charter having to pay income taxes in an amount
that is more or less than it would have had to pay if these
provisions did not exist. For additional information see
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&nbsp;&#151; Critical
Accounting Policies and Estimates&nbsp;&#151; Income Taxes.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Other Material Terms of the Amended and
Restated Limited Company Agreement of Charter Communications
Holding Company, LLC</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">General.</FONT></I></B><FONT size="2">
Charter Communications Holding Company, LLC&#146;s amended and
restated limited liability company agreement contains provisions
that permit each member (and its officers, directors, agents,
shareholders, members, partners or affiliates) to engage in
businesses that may compete with the businesses of Charter
Communications Holding Company, LLC or any subsidiary. However,
the directors of Charter, including Mr.&nbsp;Allen, are subject
to fiduciary duties under Delaware corporate law that generally
require them to present business opportunities in the cable
transmission business to Charter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amended and restated limited liability
company agreement restricts the business activities that Charter
Communications Holding Company, LLC may engage in.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Transfer
Restrictions.</FONT></I></B><FONT size="2"> The amended and
restated limited liability company agreement restricts the
ability of each member to transfer its membership interest
unless specified conditions have been met. These conditions
include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the transfer will not result in the loss of any
    license or regulatory approval or exemption that has been
    obtained by Charter Communications Holding Company, LLC and is
    materially useful in its business as then conducted or proposed
    to be conducted;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the transfer will not result in a material and
    adverse limitation or restriction on the operations of Charter
    Communications Holding Company, LLC and its subsidiaries taken
    as a whole;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the proposed transferee agrees in writing to be
    bound by the limited liability company agreement;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">except for a limited number of permitted
    transfers under the limited liability company agreement, the
    transfer has been approved by the manager in its sole discretion.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Amendments to the Limited Liability Company
Agreement.</FONT></I></B><FONT size="2"> Any amendment to the
limited liability company agreement generally may be adopted
only upon the approval of a majority of the Class&nbsp;B common
membership units. The agreement may not be amended in a manner
that adversely affects the rights of any class of common
membership units without the consent of holders holding a
majority of the membership units of that class.
</FONT>

<P align="center"><FONT size="2">177
</FONT>

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<P align="left">
<B><FONT size="2">Registration Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Holders of Class&nbsp;B Common
Stock.</FONT></I></B><FONT size="2"> Charter, Mr.&nbsp;Allen,
Charter Investment, Inc. and Vulcan Cable&nbsp;III Inc., are
parties to a registration rights agreement. The agreement gives
Mr.&nbsp;Allen and his affiliates the right to cause us to
register the shares of Class&nbsp;A common stock issued to them
upon conversion of any shares of Class&nbsp;B common stock that
they may hold.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This registration rights agreement provides that
each eligible holder is entitled to unlimited
&#147;piggyback&#148; registration rights permitting them to
include their shares of Class&nbsp;A common stock in
registration statements filed by us. These holders may also
exercise their demand rights causing us, subject to specified
limitations, to register their Class&nbsp;A shares, provided
that the amount of shares subject to each demand has a market
value at least equal to $50&nbsp;million or, if the market value
is less than $50&nbsp;million, all of the Class&nbsp;A shares of
the holders participating in the offering are included in such
registration. We are obligated to pay the costs associated with
all such registrations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders may elect to have their shares registered
pursuant to a shelf registration statement if at the time of the
election, Charter is eligible to file a registration statement
on Form&nbsp;S-3 and the amount of shares to be registered has a
market value equal to at least $100&nbsp;million on the date of
the election.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All shares of Class&nbsp;A common stock issuable
to the registration rights holders in exchange for Charter
Communications Holding Company, LLC membership units and upon
conversion of outstanding Class&nbsp;B common stock and
conversion of Class&nbsp;B common stock issuable to the
registration rights holders upon exchange of Charter
Communications Holding Company, LLC membership units are subject
to the registration rights described above.
</FONT>

<P align="left">
<B><FONT size="2">Transfer Agent and Registrar</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The transfer agent and registrar for our
Class&nbsp;A common stock is Mellon Investor Services, LLC.
</FONT>

<P align="center"><FONT size="2">178
</FONT>

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<DIV align="left">
<A name='119'></A>
</DIV>

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<P align="center">
<B><FONT size="2">SHARES ELIGIBLE FOR FUTURE SALE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the 122.8&nbsp;million shares of
Class&nbsp;A common stock offered hereby and the
27.2&nbsp;million shares issued in July 2005, as of
June&nbsp;30, 2005, we had 304.9&nbsp;million shares of
Class&nbsp;A common stock issued and outstanding, all of which
are eligible for immediate resale (subject to limitations of
Rule&nbsp;144 in the case of shares held by affiliates).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, the following
additional shares of Class&nbsp;A common stock are or will be
issuable after giving effect to this offering:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">339,132,031&nbsp;shares of Class&nbsp;A common
    stock will be issuable upon conversion of Class&nbsp;B common
    stock issuable upon exchange of Charter Communications Holding
    Company, LLC membership units held by Vulcan Cable&nbsp;III Inc.
    and Charter Investment, Inc. These membership units are
    exchangeable for shares of Class&nbsp;B common stock on a
    one-for-one basis. Shares of Class&nbsp;B common stock are
    convertible into shares of Class&nbsp;A common stock on a
    one-for-one basis.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">24,273,943&nbsp;shares of Class&nbsp;A common
    stock may be issuable upon the exchange of Charter
    Communications Holding Company, LLC membership units potentially
    issuable in exchange for CC VIII, LLC membership units held by
    an affiliate of Mr.&nbsp;Allen. An issue has arisen regarding
    the ultimate ownership of such CC VIII, LLC membership interests
    following Mr.&nbsp;Allen&#146;s acquisition of those interests
    on June&nbsp;6, 2003. See&#147;Certain Relationships and Related
    Transactions&nbsp;&#151; Transactions Arising Out of Our
    Organizational Structure and Mr.&nbsp;Allen&#146;s Investment in
    Charter Communications, Inc. and Its Subsidiaries&nbsp;&#151;
    Equity Put Rights&nbsp;&#151; CC&nbsp;VIII.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">50,000&nbsp;shares of Class&nbsp;A common stock
    will be issuable upon conversion of outstanding Class&nbsp;B
    common stock on a one-for-one basis.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Up to 90,000,000&nbsp;shares of Class&nbsp;A
    common stock (or units exchangeable for Class&nbsp;A common
    stock) are authorized for issuance pursuant to Charter&#146;s
    2001 Stock Incentive Plan and 1999 Charter Communications Option
    Plan. At June&nbsp;30, 2005, 1,310,020&nbsp;shares had been
    issued under the plans upon exercise of options,
    685,476&nbsp;shares had been issued upon vesting of restricted
    stock grants, and 1,307,612&nbsp;shares are subject to future
    vesting under restricted stock agreements. Of the remaining
    86,696,892&nbsp;shares covered by the plans, as of June&nbsp;30,
    2005, 26,782,312 were subject to outstanding options (32% of
    which were vested), and there were 11,506,410 performance units
    granted under Charter&#146;s long-term incentive program, which
    will vest on the third anniversary of the date of grant
    conditional upon Charter&#146;s performance against financial
    targets approved by the board of directors at the time of the
    awards. As of June&nbsp;30, 2005, 48,408,170&nbsp;shares
    remained available for future grant under the plans.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">356,404,924&nbsp;shares of Class&nbsp;A common
    stock are issuable upon conversion of our 5.875% convertible
    senior notes due 2009.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">An aggregate of 3,156,081&nbsp;shares of
    Class&nbsp;A common stock would be issuable upon conversion of
    our 4.75% convertible senior notes due 2006 and our
    Series&nbsp;A convertible redeemable preferred stock.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">As more fully described in
    &#147;Business&nbsp;&#151; Legal Proceedings&#148;, 13,400,000
    shares of Class&nbsp;A common stock issued on July&nbsp;8, 2005
    in settlement of certain legal proceedings.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of the shares of Class&nbsp;A common stock
issuable upon exchange of Charter Communications Holding
Company, LLC membership units and upon conversion of shares of
our Class&nbsp;B common stock are subject to demand and
piggyback registration rights.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of the shares of Class&nbsp;A common stock
issuable upon conversion of outstanding convertible senior notes
due 2006 and convertible preferred stock would be eligible for
immediate resale. Shares issuable upon conversion of the 5.875%
convertible senior notes due 2009 are expected to be eligible
for resale pursuant to a resale shelf registration statement
which was declared effective on July&nbsp;15, 2005. All of the
shares issuable to claimants pursuant to the settlements will be
eligible for immediate resale. The
</FONT>

<P align="center"><FONT size="2">179
</FONT>

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<DIV align="left">
<FONT size="2">additional shares that may be issued under the
share lending agreement are expected, if and when issued, to be
available for immediate resale pursuant to a registration
statement to be filed prior to the issuance of those shares.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A registration statement on Form&nbsp;S-8
covering the Class&nbsp;A common stock issuable pursuant to the
exercise of options under the 1999 Charter Communications Option
Plan was filed with the Securities and Exchange Commission in
May 2000 and registration statements on Form&nbsp;S-8 covering
shares issuable under the 2001 Stock Incentive Plan were filed
in May 2001 and November 2003. The shares of Class&nbsp;A common
stock covered by the Form&nbsp;S-8 registration statements
generally may be resold in the public market without restriction
or limitation, except in the case of our affiliates who
generally may only resell such shares in accordance with the
provisions of Rule&nbsp;144 of the Securities Act of 1933.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The sale of a substantial number of shares of
Class&nbsp;A common stock, or the perception that such sales
could occur, could adversely affect prevailing market prices for
the Class&nbsp;A common stock. In addition, any such sale or
perception could make it more difficult for us to sell equity
securities or equity related securities in the future at a time
and price that we deem appropriate.
</FONT>

<P align="center"><FONT size="2">180
</FONT>
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<DIV align="left">
<A name='120'></A>
</DIV>

<!-- link1 "CERTAIN UNITED STATES TAX CONSIDERATIONS FOR NON-UNITED STATES HOLDERS" -->

<P align="center">
<B><FONT size="2">CERTAIN UNITED STATES TAX CONSIDERATIONS FOR
NON-UNITED STATES HOLDERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a general discussion of certain
U.S. federal income and estate tax consequences of the ownership
and disposition of our Class&nbsp;A common stock by a person
that is not a &#147;United States person&#148; for U.S. federal
income tax purposes (a &#147;non-U.S. holder&#148;). For this
purpose, a &#147;United States person&#148; is a citizen or
resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the
United States or any political subdivision thereof, an estate,
the income of which is subject to U.S. federal income taxation
regardless of its source, or a trust the administration of which
is subject to the primary supervision of a U.S. court and which
has one or more United States persons who have the authority to
control all substantial decisions of the trust or that was in
existence on, August&nbsp;20, 1996, was treated as a United
States person under the Internal Revenue Code of 1986, as
amended (the &#147;Code&#148;), on that date and has made a
valid election to be treated as a United States person under the
Code. The discussion does not consider specific facts and
circumstances that may be relevant to a particular non-U.S.
holder&#146;s tax position. Special rules may apply to certain
non-U.S. holders, such as dealers in securities, banks,
insurance companies, tax-exempt organizations, persons holding
their shares as part of a &#147;straddle,&#148;
&#147;hedge,&#148; or &#147;conversion transaction,&#148;
persons who acquire shares as compensation, &#147;controlled
foreign corporations,&#148; &#147;passive foreign investment
companies,&#148; &#147;foreign personal holding companies,&#148;
and corporations that accumulate earnings to avoid U.S. federal
income tax, that are subject to special treatment under the
Code. This discussion is limited to beneficial owners of the
Class&nbsp;A common stock who hold the Class&nbsp;A common stock
as capital assets. It does not address any aspect of state,
local, or foreign law, persons who hold Class&nbsp;A common
stock through a partnership or other pass-through entity, or
persons who are former citizens or long-term residents of the
United States.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Accordingly, each non-U.S. holder is urged to
consult its own tax advisor with respect to the United States
tax consequences of the ownership and disposition of
Class&nbsp;A common stock, as well as any tax consequences that
may arise under the laws of any state, municipality, foreign
country or other taxing jurisdiction.</FONT></B>

<P align="left">
<B><FONT size="2">Dividends</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In general, distributions paid to a Non-U.S.
Holder of Class&nbsp;A common stock will constitute a dividend
for U.S. federal income tax purposes to the extent of our
current or accumulated earnings and profits determined under
U.S. federal income tax principles. We do not anticipate paying
cash dividends on our capital stock in the foreseeable future.
See &#147;Dividend Policy.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Dividends paid to a non-U.S. holder of our
Class&nbsp;A common stock ordinarily will be subject to
withholding of U.S. federal income tax at a 30&nbsp;percent
rate, or at a lower rate under an applicable income tax treaty
that provides for a reduced rate of withholding. To claim the
benefit of a lower treaty rate, a non-U.S. holder must properly
file with the payor an IRS Form&nbsp;W-8BEN, or successor form,
or, in the case of payments made outside the United States with
respect to an offshore account, comply with certain documentary
evidence procedures, directly, or under certain circumstances,
through an intermediary. If, however, the dividends are
effectively connected with the conduct by the non-U.S. holder of
a trade or business within the United States and, where a tax
treaty applies, are attributable to a United States permanent
establishment of the non-U.S. holder, then the dividends will be
exempt from the withholding tax described above, provided that
an IRS Form&nbsp;W-8ECI, or successor form, is furnished to the
payor. Such dividends will instead be taxed on a net basis at
applicable graduated individual or corporate rates. If, however,
the dividends are effectively connected with the conduct by the
non-U.S. holder of a trade or business within the United States,
but are not attributable to a United States permanent
establishment of the non-U.S. holder, a recipient will be
required to file a U.S. tax return and should file an IRS
Form&nbsp;8833 claiming benefits of the tax treaty with respect
to dividends not attributable to a United States permanent
establishment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Effectively connected dividends received by a
foreign corporation may, under certain circumstances, be subject
as well to a &#147;branch profits&#148; tax at a rate of 30% or
a lower applicable treaty rate. A non-United States Holder who
furnished the payor with an IRS Form&nbsp;W-8ECI or successor
form must also provide a United States tax identification number.
</FONT>

<P align="center"><FONT size="2">181
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A non-U.S. holder of our Class&nbsp;A common
stock that is eligible for a reduced rate of U.S. withholding
tax pursuant to an income tax treaty may obtain a refund of any
amounts withheld in excess of the tax treaty rate by filing an
appropriate claim for a refund with the Internal Revenue
Services (the &#147;IRS&#148;).
</FONT>

<P align="left">
<B><FONT size="2">Gain on Disposition of Class&nbsp;A Common
Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A non-U.S. holder generally will not be subject
to United States federal income tax in respect of a gain
realized on a disposition of our Class&nbsp;A common stock,
provided that (a)&nbsp;the gain is not effectively connected
with a trade or business conducted by the non-U.S. holder in the
United States, (b)&nbsp;in the case of a non-U.S. holder who is
an individual, such holder is present in the United States for
less than 183&nbsp;days in the taxable year of the sale and
other conditions are met, and (c)&nbsp;we are not nor have been
a &#147;United States real property holding corporation&#148;
for United States federal income tax purposes (a
&#147;USRPHC&#148;). We believe that we were not, are not
currently, and are not likely to become a USRPHC. If we were to
become a USRPHC, gain recognized on the sale or other
disposition of Class&nbsp;A common stock by a non-United States
holder generally would be subject to United States federal
income tax (and withholding) unless (i)&nbsp;our Class&nbsp;A
common stock continues to be &#147;regularly traded on an
established securities market&#148; at any time during the
calendar year of disposition within the meaning of the Code and
(ii)&nbsp;such non-United States holder does not actually or
constructively own more than 5% of the Class A common stock at
any time during the shorter of the five-year period preceding
the disposition or such non-United States holder&#146;s holding
period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a non-U.S. holder is engaged in the conduct of
a trade or business in the United States, gain on the
disposition of our Class&nbsp;A common stock that is effectively
connected with the conduct of such trade or business and, where
an income tax treaty applies, is attributable to a United States
permanent establishment, will be taxed on a net basis at
applicable graduated individual or corporate rates. Effectively
connected gain of a foreign corporation may, under certain
circumstances, be subject as well to a &#147;branch
profits&#148; tax at a rate of 30&nbsp;percent or a lower
applicable treaty rate.
</FONT>

<P align="left">
<B><FONT size="2">U.S. Information Reporting Requirements and
Backup Withholding Tax</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">U.S. information reporting on IRS Form&nbsp;1099
and backup withholding tax will not apply to dividends paid on
our Class&nbsp;A common stock to a non-U.S. holder, provided
that non-U.S. holder provides an IRS Form&nbsp;W-8BEN (or
satisfies certain certification documentary evidence
requirements for establishing that it is a non-United States
person under U.S. Treasury regulations) or otherwise establishes
an exemption. Distributions on our Class&nbsp;A common stock
will, however, be reported to the IRS and to the non-U.S. holder
on IRS Form&nbsp;1042-S.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information reporting and backup withholding also
generally will not apply to a payment of the proceeds of a sale
of our Class&nbsp;A common stock affected outside the United
States by a foreign office of a foreign broker. However,
information reporting requirements (but not backup withholding)
will apply to a payment of the proceeds of a sale of our
Class&nbsp;A common stock effected outside the United States by
a foreign office of a broker if the broker (i)&nbsp;is a United
States person, (ii)&nbsp;derives 50&nbsp;percent or more of its
gross income for certain periods from the conduct of a trade or
business in the United States, (iii)&nbsp;is a &#147;controlled
foreign corporation&#148; as to the United States, or
(iv)&nbsp;is a foreign partnership that, at any time during its
taxable year, is 50&nbsp;percent or more (by income or capital
interest) owned by United States persons or is engaged in the
conduct of a U.S. trade or business, unless in any such case the
broker has documentary evidence in its records that the holder
is a non-U.S. holder and certain conditions are met, or the
holder otherwise establishes an exemption. Payment by a United
States office of a broker of the proceeds of a sale of our
Class&nbsp;A common stock will be subject to both backup
withholding and information reporting unless the holder
certifies its non-U.S. status under penalties of perjury or
otherwise establishes an exemption.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any amounts withheld under the backup withholding
rules may be allowed as a refund or a credit against that
holder&#146;s U.S. federal income tax liability provided the
required information is furnished to the IRS.
</FONT>

<P align="center"><FONT size="2">182
</FONT>

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<DIV align="left">
<A name='121'></A>
</DIV>

<!-- link1 "SHARE LENDING AGREEMENT" -->

<P align="center">
<B><FONT size="2">SHARE LENDING AGREEMENT</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to this offering of our Class&nbsp;A common
stock, we sold $862.5&nbsp;million in aggregate principal amount
of 5.875%&nbsp;convertible senior notes due 2009 in a private
placement pursuant to Rule 144A under the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We understand that, when we sold the 5.875%
convertible notes, and for some time thereafter, it was
difficult for investors in the notes to borrow shares of our
Class&nbsp;A common stock for the purpose of shorting such stock
to hedge their investment in the notes. We also understand that
many investors in convertible securities seek to hedge their
exposure to the issuer&#146;s common stock by selling the stock
short to establish an initial hedge position that partially
offsets the long position represented by the convertible
securities. Such investors then dynamically adjust their hedge
position over time as the market price of the underlying stock
and the time to maturity of the convertible securities changes.
As the stock price increases, investors will generally increase
their hedge position by borrowing and shorting more shares, and
as the stock price decreases, investors will generally decrease
their hedge position by buying shares in the market and closing
out their stock loans.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because we believed there were not sufficient
shares of our Class&nbsp;A common stock available for investors
to borrow when we offered our 5.875% convertible notes, and
because we understood that the shares that were available were
relatively expensive to borrow, we were concerned that, in order
to sell the notes, we would be forced to offer terms that would
have been unfavorable to us. To address this concern, and to
make it possible or less expensive for prospective investors in
our 5.875% convertible notes to hedge their investment, we
entered into a share lending agreement, dated November&nbsp;22,
2004, with Citigroup Global Markets Inc.
(&#147;Citigroup&#148;), as agent for Citigroup Global Markets
Limited (&#147;CGML&#148;), as borrower. Under this agreement,
we agreed to loan to CGML up to 150,000,000&nbsp;shares of our
Class&nbsp;A common stock on one or more occasions prior to
November&nbsp;16, 2006 or, if earlier, the date as of which all
of the 5.875% convertible notes cease to be outstanding as the
result of conversion, repurchase, redemption or otherwise. We
will receive a loan fee of $.001&nbsp;per share for each share
that we loan to CGML, payable at the time such share is
borrowed. Citigroup Global Markets Holdings Inc. guaranteed the
obligations of CGML under the share lending agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the difficulties that we believe
holders faced in establishing hedge positions at time we
initially sold the 5.875% convertible senior notes and for some
time thereafter, we now understand that many investors in the
notes have since been able to borrow shares of our Class&nbsp;A
common stock for the purpose of shorting such stock to hedge
their investment in the notes in addition to the borrow provided
by the prior share borrow transaction. However, we are
nonetheless required under the registration rights agreement
described below to register the shares offered hereby. As noted
below, we have been advised by CGML that it or its affiliates
intend to use the short sales of our Class&nbsp;A common stock
pursuant to this prospectus to facilitate, through the
transactions discussed below, the establishment by the holders
of our 5.875% convertible senior notes of hedged positions with
respect to the 5.875% convertible senior notes. These holders
may include holders who have not yet established hedge positions
and may also include other holders who have already established
hedge positions but wish to establish new hedge positions
through CGML because these new hedge positions will be less
expensive to maintain than their pre-existing hedge positions.
We understand that such holders who are already hedged will
likely seek to close out their existing hedge positions by
obtaining shares in the open market.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the agreement, CGML agreed that it will not
transfer or dispose of the borrowed shares except for the
purpose of directly or indirectly facilitating the hedging of
the 5.875% convertible notes by holders. Any shares of our
Class&nbsp;A common stock that Citigroup returns to us to reduce
its stock loan after such shares have been sold into the public
market pursuant to a registration statement cannot be reborrowed.
</FONT>

<P align="center"><FONT size="2">183
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Share loans under the agreement will terminate
and the borrowed shares must be returned to us:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if and when CGML in its discretion terminates all
    or any portion of a loan at any time;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if and when we terminate any or all of the
    outstanding loans upon a default by CGML under the share lending
    agreement, including a breach by CGML of any of its
    representations and warranties, covenants or agreements under
    such agreement or the bankruptcy of CGML;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">on November&nbsp;16, 2009, the termination date
    for the share lending agreement or, sooner, if and when all of
    the 5.875% convertible senior notes have been converted, repaid,
    redeemed or are otherwise no longer outstanding.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We will not otherwise have the right to terminate
any loan of borrowed shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any shares that we loan to CGML will be issued
and outstanding for corporate law purposes, and accordingly, the
purchasers of the borrowed shares and their transferees will
have all of the rights of a holder of our outstanding shares of
Class&nbsp;A common stock, including the right to vote the
shares on all matters submitted to a vote of our stockholders
and the right to receive any dividends or other distributions
that we may pay or make on our outstanding shares of
Class&nbsp;A common stock. However, under the share lending
agreement, CGML has agreed:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to pay to us an amount equal to any cash
    dividends that we pay on the borrowed shares,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to pay or deliver to us any other distribution,
    in liquidation or otherwise, that we make on the borrowed shares.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">CGML has also agreed under the share lending
agreement that it will not vote any borrowed shares of which it
is the record owner, and it will not transfer or dispose of any
borrowed shares except pursuant to a registration statement that
is effective under the Securities Act of 1933, as amended.
However, investors that purchase the shares from CGML (and any
subsequent transferees of such purchasers) will be entitled to
the same voting rights with respect to those shares as any other
holder of our Class A common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the credit ratings of Citigroup Global Markets
Holdings Inc., the guarantor of CGML&#146;s obligations under
the share lending agreement, decline below a specified level,
CGML has agreed under the share lending agreement to post and
maintain with Citigroup, as collateral agent on our behalf,
collateral in the form of cash, government securities,
certificates of deposit, high grade commercial paper of
U.S.&nbsp;issuers or money market shares with a market value at
least equal to 100% of the market value of the borrowed shares
as security for the obligation of CGML to return the borrowed
shares to us when required.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In view of the contractual undertakings of CGML
in the share lending agreement, which have the effect of
substantially eliminating the economic dilution that would
otherwise result from the issuance of the borrowed shares, we
believe that under U.S.&nbsp;generally accepted accounting
principles currently in effect, the borrowed shares will not be
considered outstanding for the purpose of computing and
reporting our earnings per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CGML, through Citigroup as principal or agent, is
offering for sale pursuant to this prospectus all 122,830,000 of
the remaining shares it is entitled to borrow under the share
lending agreement. Due to the fact that many investors in the
notes have been able to borrow shares of our Class&nbsp;A common
stock for the purpose of shorting such stock to hedge their
investment in the notes, and in light of prohibitions on the
purchase of shares in this offering by such persons,
substantially less than all of the 122,830,000&nbsp;shares
remaining under the share lending agreement are expected to be
sold in this offering. Subject to certain conditions, the share
lending agreement will entitle Citigroup to borrow the remaining
shares in the future. Accordingly, pursuant to a registration
rights agreement, Charter will be obligated to file, at
Citigroup&#146;s request, up to three additional registration
statements with respect to these unsold shares until
November&nbsp;16, 2006.
</FONT>

<P align="center"><FONT size="2">184
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have been advised by CGML that it or its
affiliates intend to use the short sales of our Class&nbsp;A
common stock pursuant to this prospectus to facilitate the
establishment by investors in our 5.875%&nbsp;convertible senior
notes of short positions with respect to those convertible
senior notes. Concurrently with the offering of shares of
Class&nbsp;A common stock offered hereby, CGML or its affiliates
will offer investors in our 5.875%&nbsp;convertible senior notes
the opportunity to establish short positions in one of two ways:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">First, CGML or its affiliates may enter into a
    swap transaction with an investor under which the investor is
    economically short to CGML or such affiliate. As described under
    &#147;Underwriting&#148; below, the initial reference price of
    these swap transactions (and effectively the price at which the
    investor has established its short position) will be the
    offering price at which Citigroup sells shares to investors in
    our Class&nbsp;A common stock pursuant to this prospectus. We
    refer to this first alternative as &#147;Alternative One.&#148;
    In this case, CGML would ultimately use the proceeds from the
    sale of shares in this offering to acquire shares in the market
    when it must return shares to Charter under the Share Lending
    Agreement (and, if applicable, to fund its obligations to the
    swap counter-parties if the price of the Class&nbsp;A common
    stock when the swap is terminated is below the price in this
    offering).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Second, CGML or its affiliates may borrow shares
    of our Class&nbsp;A common stock from persons who did not
    purchase shares in the offering (an &#147;unrelated share
    lender&#148;), in turn lend those same shares to an investor in
    our convertible senior notes, then use the proceeds it receives
    in this offering to repurchase those shares from the convertible
    senior notes investor. As described under
    &#147;Underwriting&#148; below, the purchase price that CGML or
    its affiliate will pay to a convertible senior notes investor
    that has borrowed shares from CGML or its affiliate and sold
    them back to CGML or its affiliate will be the offering price at
    which Citigroup sells shares to investors in our Class&nbsp;A
    common stock pursuant to this prospectus. Once CGML or its
    affiliate purchases those borrowed shares from such convertible
    senior notes investor, it will either lend those shares to
    another investor who wishes to establish a short position
    through this second alternative or return them to the unrelated
    share lender. We refer to this second alternative as
    &#147;Alternative Two.&#148;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Citigroup expects to enter into the transactions
described under &#147;Alternative One&#148; or &#147;Alternative
Two&#148; concurrently with the sale of the shares of our
Class&nbsp;A common stock offered hereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As described under &#147;Underwriting&#148;
below, the number of shares sold in this offering, and the price
at which those shares will be sold, has been determined by
(i)&nbsp;the level of demand by investors willing to purchase
shares of our Class&nbsp;A common stock pursuant to this
offering and (ii)&nbsp;the level of demand by investors in our
convertible senior notes willing to establish short positions
under Alternative One or Alternative Two. Because, as described
above, the price at which convertible senior notes investors
establish their short positions through CGML or its affiliates
(whether by means of Alternative One or Alternative Two) will be
the offering price of the shares of our Class&nbsp;A common
stock offered hereby, Citigroup will establish a &#147;clearing
price&#148; for a number of shares at which both purchasers of
our Class&nbsp;A common stock are willing to purchase shares
offered hereby and investors in our convertible senior notes are
willing to establish short positions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The offering of shares of our Class&nbsp;A common
stock pursuant to this prospectus, as well as the facilitation
of short positions as described above, may have a significant
impact on the market price of our common stock:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">As described above, this offering of shares of
    our Class&nbsp;A common stock will increase the number of shares
    issued and outstanding, and such shares will be eligible for
    trading in the Nasdaq National Market. Accordingly, the increase
    in supply of shares may have an adverse impact on the trading
    price of our Class&nbsp;A common stock. As described under
    &#147;Underwriting&#148; below, the offering price of the shares
    offered hereby may be at a significant discount to the market
    price of our Class&nbsp;A common stock.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">185
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">As described above, holders of our convertible
    senior notes that have established their hedge positions prior
    to this offering, but wish to establish new hedge positions
    through CGML or its affiliates under Alternative One or
    Alternative Two, will likely seek to close out their existing
    hedge positions. In order to close out those existing hedge
    positions, it is likely those holders will purchase shares in
    the open market prior to, or after, the determination of the
    offering price for the Class&nbsp;A common stock offered hereby.
    While the effect of those transactions cannot be ascertained at
    this time, the purchase activity by such holders may temporarily
    increase the market price of our common stock, which may
    significantly increase the volatility of our stock price.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">A Holder of convertible senior notes that has
    established a short position through Citigroup under either
    Alternative One or Alternative Two may from time to time wish to
    decrease its short position for a variety of reasons, including
    any conversion of their notes or a decline in the price of our
    Class&nbsp;A common stock. If a holder wishes to decrease its
    hedged position, it may either terminate all or part of its swap
    transaction with CGML&#146;s affiliate (in the case of
    Alternative One) or return all or part of the borrowed shares
    (in the case of Alternative Two). CGML&#146;s affiliate may
    concurrently enter into a similar hedge facilitation transaction
    with other holders of the convertible notes to replace the
    terminated swap transaction or the repaid stock loan. If the
    affiliate does not enter into a replacement transaction, it will
    either purchase shares in the market to unwind its swap
    transaction and use those shares to repay a portion of
    CGML&#146;s stock loan (in the case of Alternative One) or it
    will use the shares returned to it upon repayment of the stock
    loan it made to the investor to repay a portion of CGML&#146;s
    stock loan (in the case of Alternative Two). The effect of any
    of these transactions on the market price of our Class&nbsp;A
    common stock cannot be ascertained at this time, but they may
    significantly increase the volatility of our stock price.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our issuance of loaned shares of our Class&nbsp;A
common stock offered pursuant to the share lending agreement
will be essentially analogous to a sale of shares coupled with a
forward contract for the reacquisition of the shares at a future
date. An instrument that requires physical settlement by
repurchase of a fixed number of shares in exchange for cash is
considered a forward purchase instrument. While the share
lending agreement does not require a cash payment upon return of
the shares, physical settlement is required (i.e., the loaned
shares must be returned at the end of the arrangement). The fair
value of the common stock to be lent in this transaction and
that was lent in the prior share borrow transaction is
approximately $225&nbsp;million. However, the net effect on
shareholders&#146; deficit of the share lending agreement
(exclusive of the adjustment for the fair value of the stock
borrow facility discussed below) which includes our requirement
to lend the shares and the counterparties&#146; requirement to
return the shares, is to increase equity by $150,000, which
represents the cash received upon lending of the shares and is
equal to the par value of the common stock to be issued.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares to be issued are required to be
returned, in accordance with the contractual arrangement, and
will be treated in basic and diluted earnings per share as if
they were already returned and retired. Consequently, there will
be no impact of the 150&nbsp;million shares of common stock
subject to the share lending agreement (including the shares
offered hereby) in the earnings per share calculation. However,
the shares will nonetheless be issued and outstanding and will
be eligible for trading in the Nasdaq National Market.
Accordingly, the increase in supply of shares may have an
adverse impact on the trading price of our Class&nbsp;A common
stock. See &#147;Risk Factors&nbsp;&#151; Additional Risks
Related to This Offering&nbsp;&#151; The effect of the issuance
of our shares of Class&nbsp;A common stock pursuant to the share
lending agreement and upon conversion of our 5.875% convertible
notes, including sales of our Class&nbsp;A common stock in short
sale transactions by the holders of the 5.875% convertible
notes, may have a negative effect on the market price of our
Class&nbsp;A common stock.&#148; Accordingly, the existence of
the share lending agreement and the short positions established
in connection with facilitating the hedging of the 5.875%
convertible senior notes could have the effect of causing the
market price of our Class&nbsp;A common stock to be lower over
the term of the share lending agreement than it would have been
had we not entered into the agreement, but we believe that
entering into the share lending agreement was in our best
interests and the
</FONT>

<P align="center"><FONT size="2">186
</FONT>
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<DIV align="left">
<FONT size="2">best interests of our shareholders as it
facilitated the sale of the convertible notes on terms more
favorable to us than we could have otherwise obtained.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The share lending agreement was entered into to
facilitate the ability of the purchasers of the
5.875%&nbsp;convertible senior notes to improve or enhance their
yield on the notes and as such was a cost of the
5.875%&nbsp;notes issuance transaction. We determined that the
fair value of the stock borrow facility was approximately
$13&nbsp;million on the date of issuance of these notes.
Therefore, we recorded such value at issuance as an increase to
deferred financing fees and additional paid in capital in our
consolidated financial statements. We are amortizing the value
of the stock borrow facility to interest expense over the 5-year
term of these notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We agreed to use our reasonable best efforts to
cause a registration statement covering the
150&nbsp;million&nbsp;shares of Class&nbsp;A common stock to be
lent pursuant to the share lending agreement to become effective
on or before April&nbsp;1, 2005. Such registration statement was
not declared effective by that date, and we therefore have
incurred liquidated damages as defined in the related indenture
from April&nbsp;2, 2005 and incurred such damages through
July&nbsp;17, 2005, the day prior to the effective date of the
registration statement. These liquidated damages were or will be
paid in cash at a rate of 0.25% per month of the accreted
principal amount of the convertible notes for the first
60&nbsp;days of the default, and 0.50% per month of the accreted
principal amount of the convertible notes thereafter.
</FONT>

<P align="center"><FONT size="2">187
</FONT>

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<DIV align="left">
<A name='122'></A>
</DIV>

<!-- link1 "UNDERWRITING" -->

<P align="center">
<B><FONT size="2">UNDERWRITING</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares of our Class&nbsp;A common stock
offered by this prospectus are shares that we have agreed to
loan to CGML, an affiliate of Citigroup, pursuant to a share
lending agreement described in &#147;Share Lending
Agreement.&#148; Citigroup also acted as an initial purchaser
for the private placement pursuant to Rule&nbsp;144A under the
Securities Act of $862.5&nbsp;million in principal amount of our
5.875%&nbsp;convertible senior notes due 2009 issued on
November&nbsp;22, 2004. See &#147;Share Lending Agreement.&#148;
CGML, through Citigroup as principal or agent, is offering for
sale pursuant to this prospectus all of the remaining
122,830,000&nbsp;shares CGML is entitled to borrow under the
share lending agreement. We have been advised by CGML that it or
its affiliates intends to use the short sales of our
Class&nbsp;A common stock pursuant to this prospectus to
facilitate transactions by which investors in our 5.875%
convertible senior notes will hedge their investments in such
convertible notes. See &#147;Share Lending Agreement.&#148; In
connection with facilitating those transactions, CGML or its
affiliates expect to receive customary, negotiated fees, not to
exceed approximately 3.0% per share (based on the offering
price), from investors in our 5.875% convertible senior notes.
The National Association of Securities Dealers views these fees
as underwriting compensation in connection with the offering of
shares of our Class&nbsp;A common stock. We will not receive any
proceeds from the sale of shares of our Class&nbsp;A common
stock pursuant to this prospectus, but will receive a loan fee
of $0.001 per share for each share loaned under the share
lending agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares of our Class&nbsp;A common stock are
being offered on a &#147;best efforts&#148; basis. &#147;Best
efforts&#148; means that CGML is not under any obligation under
the share lending agreement or otherwise to borrow and sell any
of the shares offered hereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Citigroup will determine the offering price of
the shares of Class&nbsp;A common stock by initially soliciting
indications of interest from potential purchasers of our common
stock and conducting customary negotiations with those potential
purchasers during the offering period. As described under
&#147;Share Lending Agreement&#148; above, the price at which
investors in our 5.875%&nbsp;convertible senior notes establish
their short positions through CGML or its affiliates (whether by
means of Alternative One or Alternative Two described above)
will be the offering price of the shares of our Class&nbsp;A
common stock offered hereby. As a result, during the offering
period, while Citigroup is negotiating a purchase price with
potential purchasers of our Class&nbsp;A common stock, Citigroup
will also be soliciting indications of interest, based on the
purchase price being negotiated with those potential purchasers,
from such convertible senior notes investors seeking to
establish a short position. Citigroup will establish a
&#147;clearing price&#148; for a number of shares at which both
purchasers of our Class&nbsp;A common stock are willing to
purchase shares offered hereby and investors in our convertible
senior notes are willing to establish short positions. This
clearing price is the offering price hereunder, and may be at a
discount to the market price of our Class&nbsp;A common stock at
the time the offering is commenced.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The offering will be at a fixed price and will
not be conducted on a delayed or continuous basis. The offering
will terminate on or
before &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Class&nbsp;A common stock is quoted on the
Nasdaq National Market under the symbol &#147;CHTR.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes the compensation
that we are to pay to the underwriter in connection with this
offering.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Underwriting Discounts and Commissions paid by us
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Expenses payable by us
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We estimate that our portion of the total
expenses of this offering will
be &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriter has performed investment banking
and advisory services for us from time to time for which it has
received customary fees and expenses. The underwriter may, from
time to time, engage in transactions with and perform services
for us in the ordinary course of its business. The underwriter
also was an initial purchaser of the convertible notes.
</FONT>

<P align="center"><FONT size="2">188
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed to indemnify the underwriter
against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the
underwriter may be required to make because of any of those
liabilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares offered hereby are not being offered
to, and may not be purchased by, any person who has an open
short position in Charter&#146;s Class&nbsp;A common stock at
the time of the sale, any person who is purchasing the shares on
behalf of or for the account of such a person or any person who
has an arrangement or understanding to resell, lend or otherwise
transfer (directly or indirectly) the shares to such a person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each purchaser of Charter&#146;s Class&nbsp;A
common stock in this offering must&nbsp;execute and deliver the
Investor Acknowledgement set forth on Annex&nbsp;A hereto to
Citigroup by facsimile to (646)&nbsp;843-3922.
</FONT>

<DIV align="left">
<A name='123'></A>
</DIV>

<!-- link1 "LEGAL MATTERS" -->

<P align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The validity of the securities offered by this
prospectus has been passed upon for Charter Communications, Inc.
by Gibson, Dunn&nbsp;&#38;&nbsp;Crutcher LLP. Weil,
Gotshal&nbsp;&#38; Manges LLP represented the underwriter in
this offering.
</FONT>

<DIV align="left">
<A name='124'></A>
</DIV>

<!-- link1 "EXPERTS" -->

<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements of Charter
Communications, Inc. and subsidiaries as of December&nbsp;31,
2004 and 2003 and for the three year periods ended
December&nbsp;31, 2004, which are included in this prospectus,
have been audited by KPMG&nbsp;LLP, an independent registered
public accounting firm, as stated in their report included in
this prospectus, which includes explanatory paragraphs regarding
the adoption, effective January&nbsp;1, 2002, of Statement of
Financial Accounting Standards No.&nbsp;142, &#147;Goodwill and
Other Intangible Assets,&#148; effective September&nbsp;30, 2004
of EITF Topic&nbsp;D-108, &#147;Use of the Residual Method to
Value Acquired Assets Other than Goodwill,&#148; and, effective
January&nbsp;1, 2003, of Statement of Financial Accounting
Standards No.&nbsp;123, &#147;Accounting for Stock-Based
Compensation,&#148; as amended by Statement of Financial
Accounting Standards No.&nbsp;148, &#147;Accounting for
Stock-Based Compensation&nbsp;&#151; Transition and
Disclosure&nbsp;&#151; an amendment to FASB Statement
No.&nbsp;123.&#148; The consolidated financial statements
referred to above have been included in this prospectus in
reliance upon the authority of KPMG LLP as experts in giving
said report.
</FONT>

<P align="center"><FONT size="2">189
</FONT>

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<DIV align="left">
<A name='125'></A>
</DIV>

<!-- link1 "INDEX TO FINANCIAL STATEMENTS" -->

<P align="center">
<B><FONT size="2">INDEX TO FINANCIAL STATEMENTS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Condensed Consolidated Balance Sheets as of
    June&nbsp;30, 2005 and December&nbsp;31, 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Condensed Consolidated Statements of Operations
    for the Three and Six Months Ended June&nbsp;30, 2005 and 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Condensed Consolidated Statements of Cash Flows
    for the Six Months Ended June&nbsp;30, 2005 and 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Notes to Condensed Consolidated Financial
    Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Report of Independent Registered Public
    Accounting Firm
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Consolidated Balance Sheets as of
    December&nbsp;31, 2004 and 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Consolidated Statements of Operations for the
    Years Ended December&nbsp;31, 2004, 2003 and 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Consolidated Statements of Changes in
    Shareholders&#146; Equity (Deficit) for the Years Ended
    December&nbsp;31, 2004, 2003 and 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Consolidated Statements of Cash Flows for the
    Years Ended December&nbsp;31, 2004, 2003 and 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Notes to Consolidated Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED BALANCE
SHEETS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except share
data)</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="11" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CURRENT ASSETS:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts receivable, less allowance for doubtful
    accounts of $14 and $15, respectively
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Prepaid expenses and other current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">305</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">INVESTMENT IN CABLE PROPERTIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Property, plant and equipment, net of accumulated
    depreciation of $6,061 and $5,311, respectively
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,075</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Franchises
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,839</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total investment in cable properties, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,914</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,167</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">OTHER NONCURRENT ASSETS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">560</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">584</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,673</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="11"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="11" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146;
    DEFICIT</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CURRENT LIABILITIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts payable and accrued expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">LONG-TERM DEBT
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">DEFERRED MANAGEMENT FEES&nbsp;&#151; RELATED PARTY
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">OTHER LONG-TERM LIABILITIES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">681</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">MINORITY INTEREST
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">648</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">PREFERRED STOCK&nbsp;&#151; REDEEMABLE;
    $.001&nbsp;par value; 1&nbsp;million shares authorized;
    545,259&nbsp;shares issued and outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">SHAREHOLDERS&#146; DEFICIT:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Class&nbsp;A Common stock; $.001&nbsp;par value;
    1.75&nbsp;billion shares authorized; 304,941,082 and
    305,203,770&nbsp;shares issued and outstanding, respectively
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Class&nbsp;B Common stock; $.001&nbsp;par value;
    750&nbsp;million shares authorized; 50,000&nbsp;shares issued
    and outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Preferred stock; $.001&nbsp;par value;
    250&nbsp;million shares authorized; no non-redeemable shares
    issued and outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Additional paid-in capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,802</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,794</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accumulated deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,905</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,196</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accumulated other comprehensive loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,102</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,406</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total liabilities and shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,673</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these condensed consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except share and per
share data)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Unaudited</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">REVENUES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,323</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">COSTS AND EXPENSES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Operating (excluding depreciation and
    amortization)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">569</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Selling, general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">378</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Asset impairment charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(Gain) loss on sale of assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(104</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,263</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">OTHER INCOME AND EXPENSES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(451</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(410</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(871</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(803</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain (loss) on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on debt to equity conversions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain (loss) on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(431</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(381</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(816</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(791</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest and income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(321</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(366</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(655</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(601</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">MINORITY INTEREST
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(324</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(372</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(661</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(611</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">INCOME TAX EXPENSE
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(31</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(43</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(97</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(355</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(415</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(707</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(708</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Dividends on preferred stock&nbsp;&#151;
    redeemable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(416</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(709</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(710</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">LOSS PER COMMON SHARE, basic and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.18</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.34</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted average common shares outstanding, basic
    and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">303,620,347</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,522,815</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">303,465,474</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">297,814,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these condensed consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Dollars in millions)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Unaudited</FONT></B>
</DIV>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH FLOWS FROM OPERATING ACTIVITIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(707</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(708</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Adjustments to reconcile net loss to net cash
    flows from operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Asset impairment charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Noncash interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(26</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(56</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(Gain) loss on sale of assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(104</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on debt to equity conversions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(Gain) loss on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Deferred income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Changes in operating assets and liabilities, net
    of effects from dispositions:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Prepaid expenses and other assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts payable, accrued expenses and other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(118</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net cash flows from operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">181</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">168</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH FLOWS FROM INVESTING ACTIVITIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Purchases of property, plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(542</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(390</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Change in accrued expenses related to capital
    expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(52</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Proceeds from sale of assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">729</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Purchases of investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Proceeds from investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net cash flows from investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(477</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH FLOWS FROM FINANCING ACTIVITIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Borrowings of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">635</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,813</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Repayments of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(946</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,160</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Payments for debt issuance costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(97</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net cash flows from financing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(314</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(444</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">NET DECREASE IN CASH AND CASH EQUIVALENTS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(610</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, beginning of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH PAID FOR INTEREST
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">744</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">NONCASH TRANSACTIONS:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Issuance of debt by Charter Communications
    Operating, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">333</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Retirement of Charter Communications Holdings,
    LLC debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(346</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Debt exchanged for Charter Class&nbsp;A common
    stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these condensed consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">1.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Organization and Basis of
    Presentation</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Communications, Inc.
(&#147;Charter&#148;) is a holding company whose principal
assets at June&nbsp;30, 2005 are the 47% controlling common
equity interest in Charter Communications Holding Company, LLC
(&#147;Charter Holdco&#148;) and &#147;mirror&#148; notes which
are payable by Charter Holdco to Charter and have the same
principal amount and terms as those of Charter&#146;s
convertible senior notes. Charter Holdco is the sole owner of
Charter Communications Holdings, LLC (&#147;Charter
Holdings&#148;). The condensed consolidated financial statements
include the accounts of Charter, Charter Holdco, Charter
Holdings and all of their subsidiaries where the underlying
operations reside, collectively referred to herein as the
&#147;Company.&#148; Charter consolidates Charter Holdco on the
basis of voting control. Charter Holdco&#146;s limited liability
company agreement provides that so long as Charter&#146;s
Class&nbsp;B common stock retains its special voting rights,
Charter will maintain a 100% voting interest in Charter Holdco.
Voting control gives Charter full authority and control over the
operations of Charter Holdco. All significant intercompany
accounts and transactions among consolidated entities have been
eliminated. The Company is a broadband communications company
operating in the United States. The Company offers its customers
traditional cable video programming (analog and digital video)
as well as high-speed Internet services and, in some areas,
advanced broadband services such as high definition television,
video on demand and telephone. The Company sells its cable video
programming, high-speed Internet and advanced broadband services
on a subscription basis. The Company also sells local
advertising on satellite-delivered networks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accompanying condensed consolidated financial
statements of the Company have been prepared in accordance with
accounting principles generally accepted in the United States
for interim financial information and the rules and regulations
of the Securities and Exchange Commission (&#147;SEC&#148;).
Accordingly, certain information and footnote disclosures
typically included in Charter&#146;s Annual Report on
Form&nbsp;10-K have been condensed or omitted for this quarterly
report. The accompanying condensed consolidated financial
statements are unaudited and are subject to review by regulatory
authorities. However, in the opinion of management, such
financial statements include all adjustments, which consist of
only normal recurring adjustments, necessary for a fair
presentation of the results for the periods presented. Interim
results are not necessarily indicative of results for a full
year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Areas
involving significant judgments and estimates include
capitalization of labor and overhead costs; depreciation and
amortization costs; impairments of property, plant and
equipment, franchises and goodwill; income taxes; and
contingencies. Actual results could differ from those estimates.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Reclassifications</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain 2004 amounts have been reclassified to
conform with the 2005 presentation.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">2.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Liquidity and Capital Resources</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company incurred net loss applicable to
common stock of $356&nbsp;million and $416&nbsp;million for the
three months ended June&nbsp;30, 2005 and 2004, respectively,
and $709&nbsp;million and $710&nbsp;million for the six months
ended June&nbsp;30, 2005 and 2004, respectively. The
Company&#146;s net cash flows from operating activities were
$181&nbsp;million and $168&nbsp;million for the six months ended
June&nbsp;30, 2005 and 2004, respectively.
</FONT>

<P align="center"><FONT size="2">F-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has a significant level of debt. The
Company&#146;s long-term financing as of June&nbsp;30, 2005
consists of $5.4&nbsp;billion of credit facility debt,
$12.9&nbsp;billion accreted value of high-yield notes and
$863&nbsp;million accreted value of convertible senior notes.
For the remainder of 2005, $15&nbsp;million of the
Company&#146;s debt matures, and in 2006, an additional
$55&nbsp;million of the Company&#146;s debt matures. In 2007 and
beyond, significant additional amounts will become due under the
Company&#146;s remaining long-term debt obligations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has historically required significant
cash to fund debt service costs, capital expenditures and
ongoing operations. Historically, the Company has funded these
requirements through cash flows from operating activities,
borrowings under its credit facilities, sales of assets,
issuances of debt and equity securities and from cash on hand.
However, the mix of funding sources changes from period to
period. For the six months ended June&nbsp;30, 2005, the Company
generated $181&nbsp;million of net cash flows from operating
activities, after paying cash interest of $744&nbsp;million. In
addition, the Company used approximately $542&nbsp;million for
purchases of property, plant and equipment. Finally, the Company
had net cash flows used in financing activities of
$314&nbsp;million, which included, among other things,
approximately $705&nbsp;million in repayment of borrowings under
the Company&#146;s revolving credit facility. This repayment was
the primary reason cash on hand decreased by $610&nbsp;million
to $40&nbsp;million at June&nbsp;30, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company expects that cash on hand, cash flows
from operating activities and the amounts available under its
credit facilities will be adequate to meet its cash needs for
the remainder of 2005. Cash flows from operating activities and
amounts available under the Company&#146;s credit facilities may
not be sufficient to fund the Company&#146;s operations and
satisfy its principal repayment obligations that come due in
2006 and, the Company believes, will not be sufficient to fund
its operations and satisfy such repayment obligations thereafter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is likely that the Company will require
additional funding to repay debt maturing after 2006. The
Company is working with its financial advisors to address such
funding requirements. However, there can be no assurance that
such funding will be available to the Company. Although
Mr.&nbsp;Allen and his affiliates have purchased equity from the
Company in the past, Mr.&nbsp;Allen and his affiliates are not
obligated to purchase equity from, contribute to or loan funds
to the Company in the future.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Credit Facilities and
    Covenants</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s ability to operate depends
upon, among other things, its continued access to capital,
including credit under the Charter Communications Operating, LLC
(&#147;Charter Operating&#148;) credit facilities. These credit
facilities, along with the Company&#146;s indentures, contain
certain restrictive covenants, some of which require the Company
to maintain specified financial ratios and meet financial tests
and to provide audited financial statements with an unqualified
opinion from the Company&#146;s independent auditors. As of
June&nbsp;30, 2005, the Company was in compliance with the
covenants under its indentures and credit facilities and the
Company expects to remain in compliance with those covenants for
the next twelve months. As of June&nbsp;30, 2005, the Company
had borrowing availability under the credit facilities of
$870&nbsp;million, none of which was restricted due to
covenants. Continued access to the Company&#146;s credit
facilities is subject to the Company remaining in compliance
with the covenants of these credit facilities, including
covenants tied to the Company&#146;s operating performance. If
the Company&#146;s operating performance results in
non-compliance with these covenants, or if any of certain other
events of non-compliance under these credit facilities or
indentures governing the Company&#146;s debt occurs, funding
under the credit facilities may not be available and defaults on
some or potentially all of the Company&#146;s debt obligations
could occur. An event of default under the covenants governing
any of the Company&#146;s debt instruments could result in the
acceleration of its payment obligations under that debt and,
under certain circumstances, in cross-defaults under its other
debt obligations, which could have a material adverse effect on
the Company&#146;s consolidated financial condition or results
of operations.
</FONT>

<P align="center"><FONT size="2">F-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating credit facilities required
the Company to redeem the CC&nbsp;V&nbsp;Holdings, LLC notes as
a result of the Charter Holdings leverage ratio becoming less
than 8.75 to 1.0. In satisfaction of this requirement, in March
2005, CC&nbsp;V&nbsp;Holdings, LLC redeemed all of its
outstanding notes, at 103.958% of principal amount, plus accrued
and unpaid interest to the date of redemption. The total cost of
the redemption including accrued and unpaid interest was
approximately $122&nbsp;million. The Company funded the
redemption with borrowings under the Charter Operating credit
facilities.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Specific Limitations</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter&#146;s ability to make interest payments
on its convertible senior notes, and, in 2006 and 2009, to repay
the outstanding principal of its convertible senior notes of
$25&nbsp;million and $863&nbsp;million, respectively, will
depend on its ability to raise additional capital and/or on
receipt of payments or distributions from Charter Holdco or its
subsidiaries, including CCH&nbsp;II, LLC
(&#147;CCH&nbsp;II&#148;), CCO Holdings, LLC (&#147;CCO
Holdings&#148;) and Charter Operating. Distributions by
Charter&#146;s subsidiaries to a parent company (including
Charter and Charter Holdco) for payment of principal on
Charter&#146;s convertible senior notes, however, are restricted
by the indentures governing the CCH&nbsp;II notes, CCO Holdings
notes, and Charter Operating notes, unless under their
respective indentures there is no default and a specified
leverage ratio test is met at the time of such event. During the
six months ended June&nbsp;30, 2005, Charter Holdings
distributed $60&nbsp;million to Charter Holdco. As of
June&nbsp;30, 2005, Charter Holdco was owed $62&nbsp;million in
intercompany loans from its subsidiaries, which amount was
available to pay interest and principal on Charter&#146;s
convertible senior notes. In addition, Charter has
$122&nbsp;million of governmental securities pledged as security
for the next five semi-annual interest payments on
Charter&#146;s 5.875%&nbsp;convertible senior notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the Charter Holdings
notes permit Charter Holdings to make distributions to Charter
Holdco for payment of interest or principal on the convertible
senior notes, only if, after giving effect to the distribution,
Charter Holdings can incur additional debt under the leverage
ratio of 8.75 to 1.0, there is no default under Charter
Holdings&#146; indentures and other specified tests are met. For
the quarter ended June&nbsp;30, 2005, there was no default under
Charter Holdings&#146; indentures and other specified tests were
met. However, Charter Holdings did not meet the leverage ratio
of 8.75 to 1.0 based on June&nbsp;30, 2005 financial results. As
a result, distributions from Charter Holdings to Charter or
Charter Holdco are currently restricted and will continue to be
restricted until that test is met. During this restriction
period, the indentures governing the Charter Holdings notes
permit Charter Holdings and its subsidiaries to make specified
investments in Charter Holdco or Charter, up to an amount
determined by a formula, as long as there is no default under
the indentures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with the registration rights
agreement entered into with their initial sale, the Company was
required to register for resale by April&nbsp;21, 2005 its
5.875%&nbsp;convertible senior notes due 2009, issued in
November 2004. Since these convertible notes were not registered
by that date, the Company paid or will pay liquidated damages
totaling $0.5&nbsp;million through July&nbsp;14, 2005, the day
prior to the effective date of the registration statement. In
addition, in accordance with the share lending agreement entered
into in connection with the initial sale of its 5.875%
convertible senior notes due 2009, Charter was required to
register by April&nbsp;1, 2005 150&nbsp;million shares of its
Class&nbsp;A common stock that Charter was obligated to lend to
Citigroup Global Markets Limited (&#147;CGML&#148;) at
CGML&#146;s request. Because this registration statement was not
declared effective by such date, the Company paid or will pay
liquidated damages totaling $11&nbsp;million from April&nbsp;2,
2005 through July&nbsp;17, 2005, the day before the effective
date of the registration statement. The liquidated damages were
recorded as interest expense in the accompanying condensed
consolidated statements of operations.
</FONT>

<P align="center"><FONT size="2">F-7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">3.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Sale of Assets</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, the Company has
concluded it is probable that three pending cable asset sales,
representing approximately 33,000 customers, will close within
the next twelve months thus meeting the criteria for assets held
for sale under Statement of Financial Accounting Standards
(&#147;SFAS&#148;) No.&nbsp;144, <I>Accounting for the
Impairment or Disposal of Long-Lived Assets</I>. As such the
assets were written down to fair value less estimated costs to
sell resulting in asset impairment charges during the three and
six months ended June&nbsp;30, 2005 of approximately
$8&nbsp;million and $39&nbsp;million, respectively. At
June&nbsp;30, 2005 assets held for sale, included in investment
in cable properties, are approximately $40&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2004, the Company closed the sale of
certain cable systems in Florida, Pennsylvania, Maryland,
Delaware and West Virginia to Atlantic Broadband Finance, LLC.
The Company closed the sale of an additional cable system in New
York to Atlantic Broadband Finance, LLC in April 2004. These
transactions resulted in a $106&nbsp;million pretax gain
recorded as a gain on sale of assets in the Company&#146;s
consolidated statements of operations. The total net proceeds
from the sale of all of these systems were approximately
$735&nbsp;million. The proceeds were used to repay a portion of
amounts outstanding under the Company&#146;s revolving credit
facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gain on investments for the three and six months
ended June&nbsp;30, 2005 primarily represents a gain realized on
an exchange of the Company&#146;s interest in an equity investee
for an investment in a larger enterprise.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">4.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Franchises and Goodwill</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Franchise rights represent the value attributed
to agreements with local authorities that allow access to homes
in cable service areas acquired through the purchase of cable
systems. Management estimates the fair value of franchise rights
at the date of acquisition and determines if the franchise has a
finite life or an indefinite-life as defined by
SFAS&nbsp;No.&nbsp;142, <I>Goodwill and Other Intangible
Assets</I>. Franchises that qualify for indefinite-life
treatment under SFAS&nbsp;No.&nbsp;142 are tested for impairment
annually based on valuations, or more frequently as warranted by
events or changes in circumstances. Such test resulted in a
total franchise impairment of approximately $3.3&nbsp;billion
during the third quarter of 2004. Franchises are aggregated into
essentially inseparable asset groups to conduct the valuations.
The asset groups generally represent geographic clustering of
the Company&#146;s cable systems into groups by which such
systems are managed. Management believes such grouping
represents the highest and best use of those assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s valuations, which are based on
the present value of projected after tax cash flows, result in a
value of property, plant and equipment, franchises, customer
relationships and its total entity value. The value of goodwill
is the difference between the total entity value and amounts
assigned to the other assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Franchises, for valuation purposes, are defined
as the future economic benefits of the right to solicit and
service potential customers (customer marketing rights), and the
right to deploy and market new services such as interactivity
and telephone to the potential customers (service marketing
rights). Fair value is determined based on estimated discounted
future cash flows using assumptions consistent with internal
forecasts. The franchise after-tax cash flow is calculated as
the after-tax cash flow generated by the potential customers
obtained and the new services added to those customers in future
periods. The sum of the present value of the franchises&#146;
after-tax cash flow in years 1 through 10 and the continuing
value of the after-tax cash flow beyond year 10 yields the fair
value of the franchise.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company follows the guidance of EITF
Issue&nbsp;02-17, <I>Recognition of Customer Relationship
Intangible Assets Acquired in a Business Combination</I>, in
valuing customer relationships. Customer
</FONT>

<P align="center"><FONT size="2">F-8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">relationships, for valuation purposes, represent
the value of the business relationship with existing customers
and are calculated by projecting future after-tax cash flows
from these customers including the right to deploy and market
additional services such as interactivity and telephone to these
customers. The present value of these after-tax cash flows
yields the fair value of the customer relationships.
Substantially all acquisitions occurred prior to January&nbsp;1,
2002. The Company did not record any value associated with the
customer relationship intangibles related to those acquisitions.
For acquisitions subsequent to January&nbsp;1, 2002 the Company
did assign a value to the customer relationship intangible,
which is amortized over its estimated useful life.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005 and December&nbsp;31,
2004, indefinite-lived and finite-lived intangible assets are
presented in the following table:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Gross</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Net</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Gross</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Net</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amortization</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amortization</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Indefinite-lived intangible assets:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Franchises with indefinite lives
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,845</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,845</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Goodwill
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Finite-lived intangible assets:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Franchises with finite lives
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Franchises with indefinite lives decreased
$39&nbsp;million as a result of the asset impairment charges
recorded related to three pending cable asset sales (see
Note&nbsp;3). Franchise amortization expense for the three and
six months ended June&nbsp;30, 2005 and 2004 was $1&nbsp;million
and $2&nbsp;million, respectively, which represents the
amortization relating to franchises that did not qualify for
indefinite-life treatment under SFAS&nbsp;No.&nbsp;142,
including costs associated with franchise renewals. The Company
expects that amortization expense on franchise assets will be
approximately $3&nbsp;million annually for each of the next five
years. Actual amortization expense in future periods could
differ from these estimates as a result of new intangible asset
acquisitions or divestitures, changes in useful lives and other
relevant factors.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">5.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Accounts Payable and Accrued
    Expenses</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounts payable and accrued expenses consist of
the following as of June&nbsp;30, 2005 and December&nbsp;31,
2004:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts payable&nbsp;&#151; trade
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accrued capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accrued expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">342</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">324</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Programming costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">285</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Franchise-related fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Compensation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">269</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">6.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Long-Term Debt</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Long-term debt consists of the following as of
June&nbsp;30, 2005 and December&nbsp;31, 2004:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Face</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accreted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Face</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accreted</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Long-Term Debt</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Communications, Inc.:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">4.75%&nbsp;convertible senior notes due 2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">5.875%&nbsp;convertible senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">863</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">863</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">834</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Holdings:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8.250%&nbsp;senior notes due 2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8.625%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">9.920%&nbsp;senior discount notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.000%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.250%&nbsp;senior notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.750%&nbsp;senior discount notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.750%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.125%&nbsp;senior notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">13.500%&nbsp;senior discount notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">589</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">9.625%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.000%&nbsp;senior notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">708</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">708</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.750%&nbsp;senior discount notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">939</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">851</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">939</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">803</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">12.125%&nbsp;senior discount notes due 2012
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">275</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">259</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CCH&nbsp;II, LLC:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.250%&nbsp;senior notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CCO Holdings, LLC:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8 3/4%&nbsp;senior notes due 2013
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Senior floating rate notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Operating:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8%&nbsp;senior second lien notes due 2012
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8 3/8%&nbsp;senior second lien notes due 2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">733</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">733</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Renaissance Media Group LLC:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.000%&nbsp;senior discount notes due 2008
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CC V Holdings:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.875%&nbsp;senior discount notes due 2008
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Credit Facilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Operating
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,445</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,445</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accreted values presented above represent the
face value of the notes less the original issue discount at the
time of sale plus the accretion to the balance sheet date.
</FONT>

<P align="center"><FONT size="2">F-10
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Gain (loss) on extinguishment of
    debt</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March and June 2005, Charter Operating
consummated exchange transactions with a small number of
institutional holders of Charter Holdings 8.25% senior notes due
2007 pursuant to which Charter Operating issued, in private
placements, approximately $333&nbsp;million principal amount of
new notes with terms identical to Charter Operating&#146;s
8.375% senior second lien notes due 2014 in exchange for
approximately $346&nbsp;million of the Charter Holdings 8.25%
senior notes due 2007. The exchanges resulted in a loss on
extinguishment of debt of approximately $1&nbsp;million for the
three months ended June&nbsp;30, 2005 and a gain on
extinguishment of debt of approximately $10&nbsp;million for the
six months ended June&nbsp;30, 2005. The Charter Holdings notes
received in the exchange were thereafter distributed to Charter
Holdings and cancelled.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the three and six months ended
June&nbsp;30, 2005, the Company repurchased, in private
transactions, from a small number of institutional holders, a
total of $97&nbsp;million and $131&nbsp;million, respectively,
principal amount of its 4.75% convertible senior notes due 2006.
These transactions resulted in a net gain on extinguishment of
debt of approximately $3&nbsp;million and $4&nbsp;million for
the three and six months ended June&nbsp;30, 2005, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2005, Charter&#146;s subsidiary, CC V
Holdings, LLC, redeemed all of its 11.875% notes due 2008, at
103.958% of principal amount, plus accrued and unpaid interest
to the date of redemption. The total cost of redemption was
approximately $122&nbsp;million and was funded through
borrowings under the Charter Operating credit facilities. The
redemption resulted in a loss on extinguishment of debt for the
six months ended June&nbsp;30, 2005 of approximately
$5&nbsp;million. Following such redemption, CC V Holdings, LLC
and its subsidiaries (other than non-guarantor subsidiaries)
guaranteed the Charter Operating credit facilities and granted a
lien on all of their assets as to which a lien can be perfected
under the Uniform Commercial Code by the filing of a financing
statement.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">7.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Minority Interest and Equity Interest of
    Charter Holdco</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter is a holding company whose primary asset
is a controlling equity interest in Charter Holdco, the indirect
owner of the Company&#146;s cable systems, and $863&nbsp;million
and $990&nbsp;million at June&nbsp;30, 2005 and
December&nbsp;31, 2004, respectively, of mirror notes which are
payable by Charter Holdco to Charter and have the same principal
amount and terms as those of Charter&#146;s convertible senior
notes. Minority interest on the Company&#146;s consolidated
balance sheets represents the ownership percentage of Charter
Holdco not owned by Charter, or approximately 53% of total
members&#146; equity of Charter Holdco, plus $662&nbsp;million
and $656&nbsp;million of preferred membership interests in
CC&nbsp;VIII, LLC (&#147;CC&nbsp;VIII&#148;), an indirect
subsidiary of Charter Holdco, as of June&nbsp;30, 2005 and
December&nbsp;31, 2004, respectively. As more fully described in
Note&nbsp;17, this preferred interest arises from the
approximately $630&nbsp;million of preferred membership units
issued by CC&nbsp;VIII in connection with an acquisition in
February 2000 and continues to be the subject of a dispute
between Charter and Mr.&nbsp;Paul G. Allen, Charter&#146;s
Chairman and controlling shareholder. Generally, operating
earnings or losses are allocated to the minority owners based on
their ownership percentage, thereby increasing or decreasing the
Company&#146;s net loss, respectively. To the extent they relate
to CC&nbsp;VIII, the allocations of earnings or losses are
subject to adjustment based on the ultimate resolution of this
disputed ownership. Due to the uncertainties related to the
ultimate resolution, effective January&nbsp;1, 2005, the Company
ceased recognizing minority interest in earnings or losses of
CC&nbsp;VIII for financial reporting purposes until such time as
the resolution of the matter is determinable or other events
occur. For the three and six months ended June&nbsp;30, 2005,
the Company&#146;s results include income of $8&nbsp;million and
$17&nbsp;million, respectively, attributable to CC&nbsp;VIII.
</FONT>

<P align="center"><FONT size="2">F-11
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Members&#146; deficit of Charter Holdco was
$5.1&nbsp;billion and $4.4&nbsp;billion as of June&nbsp;30, 2005
and December&nbsp;31, 2004, respectively. Gains and losses
arising from the issuance by Charter Holdco of its membership
units are recorded as capital transactions, thereby increasing
or decreasing shareholders&#146; equity and decreasing or
increasing minority interest on the accompanying condensed
consolidated balance sheets. Minority interest was approximately
53% as of June&nbsp;30, 2005 and December&nbsp;31, 2004.
Minority interest includes the proportionate share of changes in
fair value of interest rate derivative agreements. Such amounts
are temporary as they are contractually scheduled to reverse
over the life of the underlying instrument. Additionally,
reported losses allocated to minority interest on the
consolidated statement of operations are limited to the extent
of any remaining minority interest on the balance sheet related
to Charter Holdco. Because minority interest in Charter Holdco
is substantially eliminated, Charter absorbs substantially all
losses before income taxes that otherwise would be allocated to
minority interest. Subject to any changes in Charter
Holdco&#146;s capital structure, future losses will continue to
be substantially absorbed by Charter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Changes to minority interest consist of the
following:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="82%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Minority</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Interest</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance, December&nbsp;31, 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">648</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CC VIII 2% Priority Return (see Note&nbsp;17)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Changes in fair value of interest rate agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance, June&nbsp;30, 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">8.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Comprehensive Loss</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain marketable equity securities are
classified as available-for-sale and reported at market value
with unrealized gains and losses recorded as accumulated other
comprehensive loss on the accompanying condensed consolidated
balance sheets. Additionally, the Company reports changes in the
fair value of interest rate agreements designated as hedging the
variability of cash flows associated with floating-rate debt
obligations, that meet the effectiveness criteria of
SFAS&nbsp;No.&nbsp;133, <I>Accounting for Derivative Instruments
and Hedging Activities</I>, in accumulated other comprehensive
loss, after giving effect to the minority interest share of such
gains and losses. Comprehensive loss for the three months ended
June&nbsp;30, 2005 and 2004 was $355&nbsp;million and
$404&nbsp;million, respectively, and $704&nbsp;million and
$697&nbsp;million for the six months ended June&nbsp;30, 2005
and 2004, respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">9.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Accounting for Derivative Instruments and
    Hedging Activities</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company uses interest rate risk management
derivative instruments, such as interest rate swap agreements
and interest rate collar agreements (collectively referred to
herein as interest rate agreements) to manage its interest
costs. The Company&#146;s policy is to manage interest costs
using a mix of fixed and variable rate debt. Using interest rate
swap agreements, the Company has agreed to exchange, at
specified intervals through 2007, the difference between fixed
and variable interest amounts calculated by reference to an
agreed-upon notional principal amount. Interest rate collar
agreements are used to limit the Company&#146;s exposure to and
benefits from interest rate fluctuations on variable rate debt
to within a certain range of rates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company does not hold or issue derivative
instruments for trading purposes. The Company does, however,
have certain interest rate derivative instruments that have been
designated as cash flow hedging instruments. Such instruments
effectively convert variable interest payments on certain debt
instruments
</FONT>

<P align="center"><FONT size="2">F-12
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">into fixed payments. For qualifying hedges,
SFAS&nbsp;No.&nbsp;133 allows derivative gains and losses to
offset related results on hedged items in the consolidated
statement of operations. The Company has formally documented,
designated and assessed the effectiveness of transactions that
receive hedge accounting. For the three months ended
June&nbsp;30, 2005 and 2004, net gain (loss) on derivative
instruments and hedging activities includes gains of $0 and
$3&nbsp;million, respectively, and for the six months ended
June&nbsp;30, 2005 and 2004, net gain (loss) on derivative
instruments and hedging activities includes gains of
$1&nbsp;million and $2&nbsp;million, respectively, which
represent cash flow hedge ineffectiveness on interest rate hedge
agreements arising from differences between the critical terms
of the agreements and the related hedged obligations. Changes in
the fair value of interest rate agreements designated as hedging
instruments of the variability of cash flows associated with
floating-rate debt obligations that meet the effectiveness
criteria of SFAS&nbsp;No.&nbsp;133 are reported in accumulated
other comprehensive loss. For the three months ended
June&nbsp;30, 2005 and 2004, a gain of $0 and $27&nbsp;million,
respectively, and for the six months ended June&nbsp;30, 2005
and 2004, a gain of $9&nbsp;million and $29&nbsp;million,
respectively, related to derivative instruments designated as
cash flow hedges, was recorded in accumulated other
comprehensive loss and minority interest. The amounts are
subsequently reclassified into interest expense as a yield
adjustment in the same period in which the related interest on
the floating-rate debt obligations affects earnings (losses).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain interest rate derivative instruments are
not designated as hedges as they do not meet the effectiveness
criteria specified by SFAS&nbsp;No.&nbsp;133. However,
management believes such instruments are closely correlated with
the respective debt, thus managing associated risk. Interest
rate derivative instruments not designated as hedges are marked
to fair value, with the impact recorded as gain (loss) on
derivative instruments and hedging activities in the
Company&#146;s condensed consolidated statements of operations.
For the three months ended June&nbsp;30, 2005 and 2004, net gain
(loss) on derivative instruments and hedging activities includes
losses of $1&nbsp;million and gains of $60&nbsp;million,
respectively, and for the six months ended June&nbsp;30, 2005
and 2004, net gain (loss) on derivative instruments and hedging
activities includes gains of $25&nbsp;million and
$54&nbsp;million, respectively, for interest rate derivative
instruments not designated as hedges.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005 and December&nbsp;31,
2004, the Company had outstanding $2.2&nbsp;billion and
$2.7&nbsp;billion and $20&nbsp;million and $20&nbsp;million,
respectively, in notional amounts of interest rate swaps and
collars, respectively. The notional amounts of interest rate
instruments do not represent amounts exchanged by the parties
and, thus, are not a measure of exposure to credit loss. The
amounts exchanged are determined by reference to the notional
amount and the other terms of the contracts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain provisions of the Company&#146;s
5.875%&nbsp;convertible senior notes issued in November 2004
were considered embedded derivatives for accounting purposes and
were required to be accounted for separately from the
convertible senior notes. In accordance with
SFAS&nbsp;No.&nbsp;133, these derivatives are marked to market
with gains or losses recorded in interest expense on the
Company&#146;s condensed consolidated statement of operations.
For the three and six months ended June&nbsp;30, 2005, the
Company recognized $8&nbsp;million and $27&nbsp;million,
respectively, as a reduction in interest expense related to
these derivatives. At June&nbsp;30, 2005 and December&nbsp;31,
2004, $1&nbsp;million and $10&nbsp;million, respectively, is
recorded in accounts payable and accrued expenses relating to
the short-term portion of these derivatives and $3&nbsp;million
and $21&nbsp;million, respectively, is recorded in other
long-term liabilities related to the long-term portion.
</FONT>

<P align="center"><FONT size="2">F-13
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">10.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Revenues</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues consist of the following for the three
and six months ended June&nbsp;30, 2005 and 2004:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Video
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,703</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,695</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High-speed Internet
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">226</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">181</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">140</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,323</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">11.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Operating Expenses</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Operating expenses consist of the following for
the three and six months ended June&nbsp;30, 2005 and 2004:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="64%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Programming
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">709</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Service
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">369</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">316</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">569</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">12.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Selling, General and Administrative
    Expenses</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Selling, general and administrative expenses
consist of the following for the three and six months ended
June&nbsp;30, 2005 and 2004:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="64%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">General and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">208</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">427</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">416</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Marketing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Components of selling expense are included in
general and administrative and marketing expense.
</FONT>

<P align="center"><FONT size="2">F-14
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">13.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Special Charges</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has recorded special charges as a
result of reducing its workforce, consolidating administrative
offices and management realignment in 2004 and 2005. The
activity associated with this initiative is summarized in the
table below.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="62%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Beginning Balance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special Charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Payments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance at June&nbsp;30,
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the three and six months ended June&nbsp;30,
2005, special charges were offset by approximately
$2&nbsp;million related to an agreed upon discount in respect of
the portion of the settlement consideration payable under the
Stipulations of Settlement of the consolidated Federal Class
Action and the Federal Derivative Action allocable to
plaintiff&#146;s attorney fees and Charter&#146;s insurance
carrier as a result of the election to pay such fees in cash
(see Note&nbsp;15).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the three and six months ended June&nbsp;30,
2004, special charges also includes approximately
$85&nbsp;million, which represents the aggregate value of the
Charter Class&nbsp;A common stock and warrants to purchase
Charter Class&nbsp;A common stock contemplated to be issued as
part of the terms set forth in memoranda of understanding
regarding settlement of the consolidated Federal Class Action
and Federal Derivative Action. For the six months ended
June&nbsp;30, 2004, special charges includes approximately
$9&nbsp;million of litigation costs related to the tentative
settlement of the South Carolina national class action suit,
subject to final documentation and court approval (see
Note&nbsp;15).
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">14.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Income Taxes</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All operations are held through Charter Holdco
and its direct and indirect subsidiaries. Charter Holdco and the
majority of its subsidiaries are not subject to income tax.
However, certain of these subsidiaries are corporations and are
subject to income tax. All of the taxable income, gains, losses,
deductions and credits of Charter Holdco are passed through to
its members: Charter, Charter Investment, Inc. (&#147;Charter
Investment&#148;) and Vulcan Cable&nbsp;III Inc. (&#147;Vulcan
Cable&#148;). Charter is responsible for its share of taxable
income or loss of Charter Holdco allocated to Charter in
accordance with the Charter Holdco limited liability company
agreement (&#147;LLC Agreement&#148;) and partnership tax rules
and regulations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005 and December&nbsp;31,
2004, the Company had net deferred income tax liabilities of
approximately $259&nbsp;million and $216&nbsp;million,
respectively. Approximately $214&nbsp;million and
$208&nbsp;million of the deferred tax liabilities recorded in
the condensed consolidated financial statements at June&nbsp;30,
2005 and December&nbsp;31, 2004, respectively, relate to certain
indirect subsidiaries of Charter Holdco, which file separate
income tax returns.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the three and six months ended
June&nbsp;30, 2005, the Company recorded $31&nbsp;million and
$46&nbsp;million of income tax expense, respectively, and during
the three and six months ended June&nbsp;30, 2004, the Company
recorded $43&nbsp;million and $97&nbsp;million of income tax
expense, respectively. The sale of systems to Atlantic
Broadband, LLC in March and April 2004 resulted in income tax
expense of $1&nbsp;million and $15&nbsp;million for the three
and six months ended June&nbsp;30, 2004, respectively.
</FONT>

<P align="center"><FONT size="2">F-15
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Income tax expense is recognized through
increases in the deferred tax liabilities related to
Charter&#146;s investment in Charter Holdco, as well as current
federal and state income tax expense and increases to the
deferred tax liabilities of certain of Charter&#146;s indirect
corporate subsidiaries. The Company recorded an additional
deferred tax asset of approximately $130&nbsp;million and
$265&nbsp;million during the three and six months ended
June&nbsp;30, 2005, respectively, relating to net operating loss
carryforwards, but recorded a valuation allowance with respect
to these amounts because of the uncertainty of the ability to
realize a benefit from these carryforwards in the future.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has deferred tax assets of
approximately $3.8&nbsp;billion and $3.5&nbsp;billion as of
June&nbsp;30, 2005 and December&nbsp;31, 2004, respectively,
which primarily relate to financial and tax losses allocated to
Charter from Charter Holdco. The deferred tax assets include
approximately $2.3&nbsp;billion and $2.1&nbsp;billion of tax net
operating loss carryforwards as of June&nbsp;30, 2005 and
December&nbsp;31, 2004, respectively (generally expiring in
years 2005 through 2025), of Charter and its indirect corporate
subsidiaries. Valuation allowances of $3.4&nbsp;billion and
$3.2&nbsp;billion as of June&nbsp;30, 2005 and December&nbsp;31,
2004 exist with respect to these deferred tax assets,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Realization of any benefit from the
Company&#146;s tax net operating losses is dependent on:
(1)&nbsp;Charter and its indirect corporate subsidiaries&#146;
ability to generate future taxable income and (2)&nbsp;the
absence of certain future &#147;ownership changes&#148; of
Charter&#146;s common stock. An &#147;ownership change&#148; as
defined in the applicable federal income tax rules, would place
significant limitations, on an annual basis, on the use of such
net operating losses to offset any future taxable income the
Company may generate. Such limitations, in conjunction with the
net operating loss expiration provisions, could effectively
eliminate the Company&#146;s ability to use a substantial
portion of its net operating losses to offset any future taxable
income. Future transactions and the timing of such transactions
could cause an ownership change. Such transactions include
additional issuances of common stock by the Company (including
but not limited to the issuance of up to a total of
150&nbsp;million shares of common stock (of which
27.2&nbsp;million were issued in July 2005) under the share
lending agreement, the issuance of shares of common stock upon
future conversion of Charter&#146;s convertible senior notes and
the issuance of common stock in the class action settlement
discussed in Note&nbsp;15, reacquisition of the borrowed shares
by Charter, or acquisitions or sales of shares by certain
holders of Charter&#146;s shares, including persons who have
held, currently hold, or accumulate in the future five percent
or more of Charter&#146;s outstanding stock (including upon an
exchange by Paul Allen or his affiliates, directly or
indirectly, of membership units of Charter Holdco into CCI
common stock)). Many of the foregoing transactions are beyond
management&#146;s control.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In assessing the realizability of deferred tax
assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will be
realized. Because of the uncertainties in projecting future
taxable income of Charter Holdco, valuation allowances have been
established except for deferred benefits available to offset
certain deferred tax liabilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdco is currently under examination by
the Internal Revenue Service for the tax years ending
December&nbsp;31, 2000, 2002 and 2003. The results of the
Company (excluding Charter and the indirect corporate
subsidiaries) for these years are subject to this examination.
Management does not expect the results of this examination to
have a material adverse effect on the Company&#146;s financial
condition or results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">15.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Contingencies</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
Class Actions and Derivative Suits</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Fourteen putative federal class action lawsuits
(the &#147;Federal Class Actions&#148;) were filed against
Charter and certain of its former and present officers and
directors in various jurisdictions allegedly on
</FONT>

<P align="center"><FONT size="2">F-16
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">behalf of all purchasers of Charter&#146;s
securities during the period from either November&nbsp;8 or
November&nbsp;9, 1999 through July&nbsp;17 or July&nbsp;18,
2002. Unspecified damages were sought by the plaintiffs. In
general, the lawsuits alleged that Charter utilized misleading
accounting practices and failed to disclose these accounting
practices and/or issued false and misleading financial
statements and press releases concerning Charter&#146;s
operations and prospects. The Federal Class Actions were
specifically and individually identified in public filings made
by Charter prior to the date of this quarterly report. On
March&nbsp;12, 2003, the Panel transferred the six Federal Class
Actions not filed in the Eastern District of Missouri to that
district for coordinated or consolidated pretrial proceedings
with the eight Federal Class Actions already pending there. The
Court subsequently consolidated the Federal Class Actions into a
single action (the &#147;Consolidated Federal Class
Action&#148;) for pretrial purposes. On August&nbsp;5, 2004, the
plaintiff&#146;s representatives, Charter and the individual
defendants who were the subject of the suit entered into a
Memorandum of Understanding setting forth agreements in
principle to settle the Consolidated Federal Class Action. These
parties subsequently entered into Stipulations of Settlement
dated as of January&nbsp;24, 2005 (described more fully below)
which incorporate the terms of the August&nbsp;5, 2004
Memorandum of Understanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;12, 2002, a shareholders
derivative suit (the &#147;State Derivative Action&#148;) was
filed in the Circuit Court of the City of St.&nbsp;Louis, State
of Missouri (the &#147;Missouri State Court&#148;), against
Charter and its then current directors, as well as its former
auditors. The plaintiffs alleged that the individual defendants
breached their fiduciary duties by failing to establish and
maintain adequate internal controls and procedures. On
March&nbsp;12, 2004, an action substantively identical to the
State Derivative Action was filed in Missouri State Court
against Charter and certain of its current and former directors,
as well as its former auditors. On July 14, 2004, the Court
consolidated this case with the State Derivative Action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Separately, on February&nbsp;12, 2003, a
shareholders derivative suit (the &#147;Federal Derivative
Action&#148;), was filed against Charter and its then current
directors in the United States District Court for the Eastern
District of Missouri. The plaintiff in that suit alleged that
the individual defendants breached their fiduciary duties and
grossly mismanaged Charter by failing to establish and maintain
adequate internal controls and procedures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As noted above, Charter and the individual
defendants entered into a Memorandum of Understanding on
August&nbsp;5, 2004 setting forth agreements in principle
regarding settlement of the Consolidated Federal Class Action,
the State Derivative Action(s) and the Federal Derivative Action
(the &#147;Actions&#148;). Charter and various other defendants
in those actions subsequently entered into Stipulations of
Settlement dated as of January&nbsp;24, 2005, setting forth a
settlement of the Actions in a manner consistent with the terms
of the Memorandum of Understanding. The Stipulations of
Settlement, along with various supporting documentation, were
filed with the Court on February&nbsp;2, 2005. On May&nbsp;23,
2005 the United States District Court for the Eastern District
of Missouri conducted the final fairness hearing for the
Actions, and on June&nbsp;30, 2005, the Court issued its final
approval of the settlements. Members of the class had
30&nbsp;days from the issuance of the June&nbsp;30 order
approving the settlement to file an appeal challenging the
approval. Two notices of appeal were filed relating to the
settlement, but Charter does not yet know the specific issues
presented by such appeals, nor have briefing schedules been set.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As amended, the Stipulations of Settlement
provide that, in exchange for a release of all claims by
plaintiffs against Charter and its former and present officers
and directors named in the Actions, Charter would pay to the
plaintiffs a combination of cash and equity collectively valued
at $144&nbsp;million, which will include the fees and expenses
of plaintiffs&#146; counsel. Of this amount, $64&nbsp;million
would be paid in cash (by Charter&#146;s insurance carriers) and
the $80&nbsp;million balance was to be paid (subject to
Charter&#146;s right to substitute cash therefor described
below) in shares of Charter Class&nbsp;A common stock having an
aggregate
</FONT>

<P align="center"><FONT size="2">F-17
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">value of $40&nbsp;million and ten-year warrants
to purchase shares of Charter Class&nbsp;A common stock having
an aggregate warrant value of $40&nbsp;million, with such values
in each case being determined pursuant to formulas set forth in
the Stipulations of Settlement. However, Charter had the right,
in its sole discretion, to substitute cash for some or all of
the aforementioned securities on a dollar for dollar basis.
Pursuant to that right, Charter elected to fund the
$80&nbsp;million obligation with 13.4&nbsp;million shares of
Charter Class&nbsp;A common stock (having an aggregate value of
approximately $15&nbsp;million pursuant to the formula set forth
in the Stipulations of Settlement) with the remaining balance
(less an agreed upon $2&nbsp;million discount in respect of that
portion allocable to plaintiffs&#146; attorneys&#146; fees) to
be paid in cash. In addition, Charter had agreed to issue
additional shares of its Class&nbsp;A common stock to its
insurance carrier having an aggregate value of $5&nbsp;million;
however, by agreement with its carrier Charter has paid
$4.5&nbsp;million in cash in lieu of issuing such shares.
Charter delivered the settlement consideration to the claims
administrator on July&nbsp;8, 2005, and it will be held in
escrow pending any appeals of the approval. On July&nbsp;14,
2005, the Circuit Court for the City of St Louis dismissed with
prejudice the State Derivative Actions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of the settlements, Charter has committed
to a variety of corporate governance changes, internal practices
and public disclosures, some of which have already been
undertaken and none of which are inconsistent with measures
Charter is taking in connection with the recent conclusion of
the SEC investigation.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Government Investigations</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2002, Charter became aware of a grand
jury investigation being conducted by the U.S. Attorney&#146;s
Office for the Eastern District of Missouri into certain of its
accounting and reporting practices, focusing on how Charter
reported customer numbers, and its reporting of amounts received
from digital set-top terminal suppliers for advertising. The
U.S. Attorney&#146;s Office publicly stated that Charter was not
a target of the investigation. Charter was also advised by the
U.S. Attorney&#146;s Office that no current officer or member of
its board of directors was a target of the investigation. On
July&nbsp;24, 2003, a federal grand jury charged four former
officers of Charter with conspiracy and mail and wire fraud,
alleging improper accounting and reporting practices focusing on
revenue from digital set-top terminal suppliers and inflated
customer account numbers. Each of the indicted former officers
pled guilty to single conspiracy counts related to the original
mail and wire fraud charges and were sentenced April&nbsp;22,
2005. Charter fully cooperated with the investigation, and
following the sentencings, the U.S. Attorney&#146;s Office for
the Eastern District of Missouri announced that its
investigation was concluded and that no further indictments
would issue.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Indemnification</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter was generally required to indemnify,
under certain conditions, each of the named individual
defendants in connection with the matters described above
pursuant to the terms of its bylaws and (where applicable) such
individual defendants&#146; employment agreements. In accordance
with these documents, in connection with the grand jury
investigation, a now-settled SEC investigation and the
above-described lawsuits, some of Charter&#146;s current and
former directors and current and former officers have been
advanced certain costs and expenses incurred in connection with
their defense. On February&nbsp;22, 2005, Charter filed suit
against four of its former officers who were indicted in the
course of the grand jury investigation. These suits seek to
recover the legal fees and other related expenses advanced to
these individuals. One of these former officers has
counterclaimed against Charter alleging, among other things,
that Charter owes him additional indemnification for legal fees
that Charter did not pay and another of these former officers
has counterclaimed against Charter for accrued sick leave.
</FONT>

<P align="center"><FONT size="2">F-18
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Other Litigation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the matters set forth above,
Charter is also party to other lawsuits and claims that arose in
the ordinary course of conducting its business. In the opinion
of management, after taking into account recorded liabilities,
the outcome of these other lawsuits and claims are not expected
to have a material adverse effect on the Company&#146;s
consolidated financial condition, results of operations or its
liquidity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">16.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Stock Compensation Plans</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to January&nbsp;1, 2003, the Company
accounted for stock-based compensation in accordance with
Accounting Principles Board (&#147;APB&#148;) Opinion
No.&nbsp;25, <I>Accounting for Stock Issued to Employees</I>,
and related interpretations, as permitted by
SFAS&nbsp;No.&nbsp;123, <I>Accounting for Stock-Based
Compensation.</I> On January&nbsp;1, 2003, the Company adopted
the fair value measurement provisions of SFAS&nbsp;No.&nbsp;123
using the prospective method, under which the Company recognizes
compensation expense of a stock-based award to an employee over
the vesting period based on the fair value of the award on the
grant date consistent with the method described in Financial
Accounting Standards Board Interpretation No.&nbsp;28,
<I>Accounting for Stock Appreciation Rights and Other Variable
Stock Option or Award Plans</I>. Adoption of these provisions
resulted in utilizing a preferable accounting method as the
condensed consolidated financial statements will present the
estimated fair value of stock-based compensation in expense
consistently with other forms of compensation and other expense
associated with goods and services received for equity
instruments. In accordance with SFAS&nbsp;No.&nbsp;148,
<I>Accounting for Stock-Based Compensation&nbsp;&#151;
Transition and Disclosure</I>, the fair value method is being
applied only to awards granted or modified after January&nbsp;1,
2003, whereas awards granted prior to such date will continue to
be accounted for under APB No.&nbsp;25, unless they are modified
or settled in cash. The ongoing effect on consolidated results
of operations or financial condition will depend on future
stock-based compensation awards granted by the Company.
</FONT>

<P align="center"><FONT size="2">F-19
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SFAS&nbsp;No.&nbsp;123 requires pro forma
disclosure of the impact on earnings as if the compensation
expense for these plans had been determined using the fair value
method. The following table presents the Company&#146;s net loss
and loss per share as reported and the pro forma amounts that
would have been reported using the fair value method under
SFAS&nbsp;No.&nbsp;123 for the periods presented:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Six Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(416</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(709</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(710</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Add back stock-based compensation expense related
    to stock options included in reported net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less employee stock-based compensation expense
    determined under fair value based method for all employee stock
    option awards
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(31</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Effects of unvested options in stock option
    exchange
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Pro forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(414</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(709</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(667</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss per common shares, basic and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">As reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.18</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.34</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Add back stock-based compensation expense related
    to stock options included in reported net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.09</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less employee stock-based compensation expense
    determined under fair value based method for all employee stock
    option awards
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.01</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.03</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.03</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Effects of unvested options in stock option
    exchange
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Pro forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.18</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.38</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.34</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2.24</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2004, Charter began an option exchange
program in which the Company offered its employees the right to
exchange all stock options (vested and unvested) under the 1999
Charter Communications Option Plan and 2001 Stock Incentive Plan
that had an exercise price over $10&nbsp;per share for shares of
restricted Charter Class&nbsp;A common stock or, in some
instances, cash. Based on a sliding exchange ratio, which varied
depending on the exercise price of an employee&#146;s
outstanding options, if an employee would have received more
than 400&nbsp;shares of restricted stock in exchange for
tendered options, Charter issued to that employee shares of
restricted stock in the exchange. If, based on the exchange
ratios, an employee would have received 400 or fewer shares of
restricted stock in exchange for tendered options, Charter
instead paid the employee cash in an amount equal to the number
of shares the employee would have received multiplied by $5.00.
The offer applied to options (vested and unvested) to purchase a
total of 22,929,573&nbsp;shares of Charter Class&nbsp;A common
stock, or approximately 48% of the Company&#146;s 47,882,365
total options (vested and unvested) issued and outstanding as of
December&nbsp;31, 2003. Participation by employees was
voluntary. Those members of Charter&#146;s board of directors
who were not also employees of the Company were not eligible to
participate in the exchange offer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the closing of the exchange offer on
February&nbsp;20, 2004, the Company accepted for cancellation
eligible options to purchase approximately
18,137,664&nbsp;shares of Charter Class&nbsp;A common stock. In
exchange, the Company granted 1,966,686&nbsp;shares of
restricted stock, including 460,777 performance shares to
eligible employees of the rank of senior vice president and
above, and paid a total cash amount of approximately
$4&nbsp;million (which amount includes applicable withholding
taxes) to those employees who
</FONT>

<P align="center"><FONT size="2">F-20
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">received cash rather than shares of restricted
stock. The restricted stock was granted on February&nbsp;25,
2004. Employees tendered approximately 79% of the options
exchangeable under the program.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cost to the Company of the stock option
exchange program was approximately $10&nbsp;million, with a 2004
cash compensation expense of approximately $4&nbsp;million and a
non-cash compensation expense of approximately $6&nbsp;million
to be expensed ratably over the three-year vesting period of the
restricted stock issued in the exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2004, the Compensation Committee of
the board of directors of Charter approved Charter&#146;s
Long-Term Incentive Program (&#147;LTIP&#148;), which is a
program administered under the 2001 Stock Incentive Plan. Under
the LTIP, employees of Charter and its subsidiaries whose pay
classifications exceed a certain level are eligible to receive
stock options, and more senior level employees are eligible to
receive stock options and performance shares. The stock options
vest 25% on each of the first four anniversaries of the date of
grant. The performance units vest on the third anniversary of
the grant date and shares of Charter Class&nbsp;A common stock
are issued, conditional upon Charter&#146;s performance against
financial performance targets established by Charter&#146;s
management and approved by its board of directors. Charter
granted 6.9&nbsp;million performance shares in January 2004
under this program and recognized expense of $3&nbsp;million and
$6&nbsp;million during the three and six months ended
June&nbsp;30, 2004, respectively. However, in the fourth quarter
of 2004, the Company reversed the $8&nbsp;million of expense
recorded in the first three quarters of 2004 based on the
Company&#146;s assessment of the probability of achieving the
financial performance measures established by Charter and
required to be met for the performance shares to vest. In March
and April&nbsp;2005, Charter granted 2.8&nbsp;million
performance shares under the LTIP. The impact of such grants
were de minimis to the Company&#146;s results of operations for
the three and six months ended June&nbsp;30, 2005.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">17.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Related Party Transactions</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following sets forth certain transactions in
which the Company and the directors, executive officers and
affiliates of the Company are involved. Unless otherwise
disclosed, management believes that each of the transactions
described below was on terms no less favorable to the Company
than could have been obtained from independent third parties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">CC VIII.</FONT></I><FONT size="2"> As part of
the acquisition of the cable systems owned by Bresnan
Communications Company Limited Partnership in February 2000, CC
VIII, Charter&#146;s indirect limited liability company
subsidiary, issued, after adjustments, 24,273,943 Class&nbsp;A
preferred membership units (collectively, the &#147;CC VIII
interest&#148;) with a value and an initial capital account of
approximately $630&nbsp;million to certain sellers affiliated
with AT&#38;T Broadband, subsequently owned by Comcast
Corporation (the &#147;Comcast sellers&#148;). While held by the
Comcast sellers, the CC VIII interest was entitled to a 2%
priority return on its initial capital account and such priority
return was entitled to preferential distributions from available
cash and upon liquidation of CC VIII. While held by the Comcast
sellers, the CC VIII interest generally did not share in the
profits and losses of CC VIII. Mr.&nbsp;Allen granted the
Comcast sellers the right to sell to him the CC VIII interest
for approximately $630&nbsp;million plus 4.5% interest annually
from February 2000 (the &#147;Comcast put right&#148;). In April
2002, the Comcast sellers exercised the Comcast put right in
full, and this transaction was consummated on June&nbsp;6, 2003.
Accordingly, Mr.&nbsp;Allen has become the holder of the CC VIII
interest, indirectly through an affiliate. Consequently, subject
to the matters referenced in the next paragraph, Mr.&nbsp;Allen
generally thereafter will be allocated his pro rata share (based
on number of membership interests outstanding) of profits or
losses of CC VIII. In the event of a liquidation of CC VIII,
Mr.&nbsp;Allen would be entitled to a priority distribution with
respect to the 2% priority return (which will continue to
accrete). Any remaining distributions in liquidation would be
distributed to CC V Holdings, LLC and Mr.&nbsp;Allen in
proportion to CC V Holdings, LLC&#146;s capital
</FONT>

<P align="center"><FONT size="2">F-21
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">account and Mr.&nbsp;Allen&#146;s capital account
(which will equal the initial capital account of the Comcast
sellers of approximately $630&nbsp;million, increased or
decreased by Mr.&nbsp;Allen&#146;s pro rata share of
CC&nbsp;VIII&#146;s profits or losses (as computed for capital
account purposes) after June&nbsp;6, 2003). The limited
liability company agreement of CC VIII does not provide for a
mandatory redemption of the CC&nbsp;VIII interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An issue has arisen as to whether the
documentation for the Bresnan transaction was correct and
complete with regard to the ultimate ownership of the CC VIII
interest following consummation of the Comcast put right.
Specifically, under the terms of the Bresnan transaction
documents that were entered into in June 1999, the Comcast
sellers originally would have received, after adjustments,
24,273,943 Charter Holdco membership units, but due to an FCC
regulatory issue raised by the Comcast sellers shortly before
closing, the Bresnan transaction was modified to provide that
the Comcast sellers instead would receive the preferred equity
interests in CC VIII represented by the CC VIII interest. As
part of the last-minute changes to the Bresnan transaction
documents, a draft amended version of the Charter Holdco limited
liability company agreement was prepared, and contract
provisions were drafted for that agreement that would have
required an automatic exchange of the CC VIII interest for
24,273,943 Charter Holdco membership units if the Comcast
sellers exercised the Comcast put right and sold the
CC&nbsp;VIII interest to Mr.&nbsp;Allen or his affiliates.
However, the provisions that would have required this automatic
exchange did not appear in the final version of the Charter
Holdco limited liability company agreement that was delivered
and executed at the closing of the Bresnan transaction. The law
firm that prepared the documents for the Bresnan transaction
brought this matter to the attention of Charter and
representatives of Mr.&nbsp;Allen in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Thereafter, the board of directors of Charter
formed a Special Committee (currently comprised of
Messrs.&nbsp;Merritt, Tory and Wangberg) to investigate the
matter and take any other appropriate action on behalf of
Charter with respect to this matter. After conducting an
investigation of the relevant facts and circumstances, the
Special Committee determined that a &#147;scrivener&#146;s
error&#148; had occurred in February 2000 in connection with the
preparation of the last-minute revisions to the Bresnan
transaction documents and that, as a result, Charter should seek
the reformation of the Charter Holdco limited liability company
agreement, or alternative relief, in order to restore and ensure
the obligation that the CC VIII interest be automatically
exchanged for Charter Holdco units. The Special Committee
further determined that, as part of such contract reformation or
alternative relief, Mr.&nbsp;Allen should be required to
contribute the CC&nbsp;VIII interest to Charter Holdco in
exchange for 24,273,943 Charter Holdco membership units. The
Special Committee also recommended to the board of directors of
Charter that, to the extent the contract reformation is
achieved, the board of directors should consider whether the CC
VIII interest should ultimately be held by Charter Holdco or
Charter Holdings or another entity owned directly or indirectly
by them.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen disagrees with the Special
Committee&#146;s determinations described above and has so
notified the Special Committee. Mr.&nbsp;Allen contends that the
transaction is accurately reflected in the transaction
documentation and contemporaneous and subsequent company public
disclosures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The parties engaged in a process of non-binding
mediation to seek to resolve this matter, without success. The
Special Committee is evaluating what further actions or
processes it may undertake to resolve this dispute. To
accommodate further deliberation, each party has agreed to
refrain from initiating legal proceedings over this matter until
it has given at least ten days&#146; prior notice to the other.
In addition, the Special Committee and Mr.&nbsp;Allen have
determined to utilize the Delaware Court of Chancery&#146;s
program for mediation of complex business disputes in an effort
to resolve the CC&nbsp;VIII interest dispute. If the Special
Committee and Mr.&nbsp;Allen are unable to reach a resolution
through that mediation process or to agree on an alternative
dispute resolution process, the Special Committee intends to
seek resolution of this dispute through judicial proceedings in
an action that would be commenced, after appropriate notice, in
</FONT>

<P align="center"><FONT size="2">F-22
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">the Delaware Court of Chancery against
Mr.&nbsp;Allen and his affiliates seeking contract reformation,
declaratory relief as to the respective rights of the parties
regarding this dispute and alternative forms of legal and
equitable relief. The ultimate resolution and financial impact
of the dispute are not determinable at this time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">TechTV, Inc.</FONT></I><FONT size="2"> TechTV,
Inc. (&#147;TechTV&#148;) operated a cable television network
that offered programming mostly related to technology. Pursuant
to an affiliation agreement that originated in 1998 and that
terminates in 2008, TechTV has provided the Company with
programming for distribution via Charter&#146;s cable systems.
The affiliation agreement provides, among other things, that
TechTV must offer Charter certain terms and conditions that are
no less favorable in the affiliation agreement than are given to
any other distributor that serves the same number of or fewer
TechTV viewing customers. Additionally, pursuant to the
affiliation agreement, the Company was entitled to incentive
payments for channel launches through December&nbsp;31, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2004, Charter Holdco entered into
agreements with Vulcan Programming and TechTV, which provide for
(i)&nbsp;Charter Holdco and TechTV to amend the affiliation
agreement which, among other things, revises the description of
the TechTV network content, provides for Charter Holdco to waive
certain claims against TechTV relating to alleged breaches of
the affiliation agreement and provides for TechTV to make
payment of outstanding launch receivables due to Charter Holdco
under the affiliation agreement, (ii)&nbsp;Vulcan Programming to
pay approximately $10&nbsp;million and purchase over a 24-month
period, at fair market rates, $2&nbsp;million of advertising
time across various cable networks on Charter cable systems in
consideration of the agreements, obligations, releases and
waivers under the agreements and in settlement of the
aforementioned claims and (iii)&nbsp;TechTV to be a provider of
content relating to technology and video gaming for
Charter&#146;s interactive television platforms through
December&nbsp;31, 2006 (exclusive for the first year). For each
of the three and six months ended June&nbsp;30, 2005 and 2004,
the Company recognized approximately $0.3&nbsp;million and
$0.6&nbsp;million, respectively, of the Vulcan Programming
payment as an offset to programming expense. For the three and
six months ended June&nbsp;30, 2005, the Company paid
approximately $0.5&nbsp;million and $1&nbsp;million,
respectively, and for the three and six months ended
June&nbsp;30, 2004, the Company paid approximately
$0.4&nbsp;million and $0.6&nbsp;million, respectively, under the
affiliation agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company believes that Vulcan Programming,
which is 100% owned by Mr.&nbsp;Allen, owned an approximate 98%
equity interest in TechTV at the time Vulcan Programming sold
TechTV to an unrelated third party in May 2004. Until September
2003, Mr.&nbsp;Savoy, a former Charter director, was the
president and director of Vulcan Programming and was a director
of TechTV. Mr.&nbsp;Wangberg, one of Charter&#146;s directors,
was the chairman, chief executive officer and a director of
TechTV. Mr.&nbsp;Wangberg resigned as the chief executive
officer of TechTV in July 2002. He remained a director of TechTV
along with Mr.&nbsp;Allen until Vulcan Programming sold TechTV.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Digeo, Inc.</FONT></I><FONT size="2"> In March
2001, a subsidiary of Charter, Charter Communications Ventures,
LLC (&#147;Charter Ventures&#148;), and Vulcan Ventures
Incorporated formed DBroadband Holdings, LLC for the sole
purpose of purchasing equity interests in Digeo, Inc.
(&#147;Digeo&#148;), an entity controlled by Paul Allen. In
connection with the execution of the broadband carriage
agreement, DBroadband Holdings, LLC purchased an equity interest
in Digeo funded by contributions from Vulcan Ventures
Incorporated. The equity interest is subject to a priority
return of capital to Vulcan Ventures up to the amount
contributed by Vulcan Ventures on Charter Ventures&#146; behalf.
After Vulcan Ventures recovers its amount contributed and any
cumulative loss allocations, Charter Ventures has a 100% profit
interest in DBroadband Holdings, LLC. Charter Ventures is not
required to make any capital contributions, including capital
calls, to Digeo. DBroadband Holdings, LLC is therefore not
included in the Company&#146;s consolidated financial
statements. Pursuant to an amended version of this arrangement,
in 2003, Vulcan Ventures contributed a total of
</FONT>

<P align="center"><FONT size="2">F-23
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">$29&nbsp;million to Digeo, $7&nbsp;million of
which was contributed on Charter Ventures&#146; behalf, subject
to Vulcan Ventures&#146; aforementioned priority return. Since
the formation of DBroadband Holdings, LLC, Vulcan Ventures has
contributed approximately $56&nbsp;million on Charter
Ventures&#146; behalf.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;2, 2001, Charter Ventures entered
into a broadband carriage agreement with Digeo Interactive, LLC
(&#147;Digeo Interactive&#148;), a wholly owned subsidiary of
Digeo. The carriage agreement provided that Digeo Interactive
would provide to Charter a &#147;portal&#148; product, which
would function as the television-based Internet portal (the
initial point of entry to the Internet) for Charter&#146;s
customers who received Internet access from Charter. The
agreement term was for 25&nbsp;years and Charter agreed to use
the Digeo portal exclusively for six years. Before the portal
product was delivered to Charter, Digeo terminated development
of the portal product.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;27, 2001, Charter and Digeo
Interactive amended the broadband carriage agreement. According
to the amendment, Digeo Interactive would provide to Charter the
content for enhanced &#147;Wink&#148; interactive television
services, known as Charter Interactive Channels
(&#147;i-channels&#148;). In order to provide the i-channels,
Digeo Interactive sublicensed certain Wink technologies to
Charter. Charter is entitled to share in the revenues generated
by the i-channels. Currently, the Company&#146;s digital video
customers who receive i-channels receive the service at no
additional charge.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;28, 2002, Charter entered into
a second amendment to its broadband carriage agreement with
Digeo Interactive. This amendment superseded the amendment of
September&nbsp;27, 2001. It provided for the development by
Digeo Interactive of future features to be included in the Basic
i-TV service to be provided by Digeo and for Digeo&#146;s
development of an interactive &#147;toolkit&#148; to enable
Charter to develop interactive local content. Furthermore,
Charter could request that Digeo Interactive manage local
content for a fee. The amendment provided for Charter to pay for
development of the Basic i-TV service as well as license fees
for customers who would receive the service, and for Charter and
Digeo to split certain revenues earned from the service. The
Company paid Digeo Interactive approximately $1&nbsp;million and
$1&nbsp;million for the three and six months ended June&nbsp;30,
2005, respectively, and $1&nbsp;million and $1&nbsp;million for
the three and six months ended June&nbsp;30, 2004, respectively,
for customized development of the i-channels and the local
content tool kit. This amendment expired pursuant to its terms
on December&nbsp;31, 2003. Digeo Interactive is continuing to
provide the Basic i-TV service on a month-to-month basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;30, 2003, Charter Holdco entered
into an agreement with Motorola, Inc. for the purchase of
100,000 digital video recorder (&#147;DVR&#148;) units. The
software for these DVR units is being supplied by Digeo
Interactive, LLC under a license agreement entered into in April
2004. Under the license agreement Digeo Interactive granted to
Charter Holdco the right to use Digeo&#146;s proprietary
software for the number of DVR units that Charter deployed from
a maximum of 10 headends through year-end 2004. This maximum
number of headends was increased from 10 to 15 pursuant to a
letter agreement executed on June&nbsp;11, 2004 and the date for
entering into license agreements for units deployed was extended
to June&nbsp;30, 2005. The number of headends was increased from
15 to 20 pursuant to a letter agreement dated August&nbsp;4,
2004, from 20 to 30 pursuant to a letter agreement dated
September&nbsp;28, 2004 and from 30 to 50 headends by a letter
agreement in February 2005. The license granted for each unit
deployed under the agreement is valid for five years. In
addition, Charter will pay certain other fees including a
per-headend license fee and maintenance fees. Maximum license
and maintenance fees during the term of the agreement are
expected to be approximately $7&nbsp;million. The agreement
provides that Charter is entitled to receive contract terms,
considered on the whole, and license fees, considered apart from
other contract terms, no less favorable than those accorded to
any other Digeo customer. Charter paid approximately
$0.1&nbsp;million and $0.2&nbsp;million in license and
maintenance fees for the three and six months ended
June&nbsp;30, 2005, respectively.
</FONT>

<P align="center"><FONT size="2">F-24
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2004, the Company launched DVR service
using units containing the Digeo software in Charter&#146;s
Rochester, Minnesota market using a broadband media center that
is an integrated set-top terminal with a cable converter, DVR
hard drive and connectivity to other consumer electronics
devices (such as stereos, MP3 players, and digital cameras).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 2004, Charter Holdco entered into a
binding term sheet with Digeo Interactive for the development,
testing and purchase of 70,000 Digeo PowerKey DVR units. The
term sheet provided that the parties would proceed in good faith
to negotiate, prior to year-end 2004, definitive agreements for
the development, testing and purchase of the DVR units and that
the parties would enter into a license agreement for
Digeo&#146;s proprietary software on terms substantially similar
to the terms of the license agreement described above. In
November 2004, Charter Holdco and Digeo Interactive executed the
license agreement and in December 2004, the parties executed the
purchase agreement, each on terms substantially similar to the
binding term sheet. Product development and testing has been
completed. Total purchase price and license and maintenance fees
during the term of the definitive agreements are expected to be
approximately $41&nbsp;million. The definitive agreements are
terminable at no penalty to Charter in certain circumstances.
Charter paid approximately $1&nbsp;million and $2&nbsp;million
in capital purchases under this agreement for the three and six
months ended June&nbsp;30, 2005, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In late 2003, Microsoft filed suit against Digeo
for $9&nbsp;million in a breach of contract action, involving an
agreement that Digeo and Microsoft had entered into in 2001.
Digeo informed us that it believed it had an indemnification
claim against us for half that amount. Digeo settled with
Microsoft agreeing to make a cash payment and to purchase
certain amounts of Microsoft software products and consulting
services through 2008. In consideration of Digeo agreeing to
release us from its potential claim against us, after
consultation with outside counsel we agreed, in June 2005, to
purchase a total of $2.3&nbsp;million in Microsoft consulting
services through 2008, a portion of which amounts Digeo has
informed us will count against Digeo&#146;s purchase obligations
with Microsoft.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company believes that Vulcan Ventures, an
entity controlled by Mr. Allen, owns an approximate 60% equity
interest in Digeo, Inc., on a fully-converted non-diluted basis.
Mr. Allen, Lance Conn and Jo Allen Patton, directors of Charter,
are directors of Digeo, and Mr. Vogel was a director of Digeo in
2004. During 2004 and 2005, Mr. Vogel held options to purchase
10,000 shares of Digeo common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Oxygen Media LLC.</FONT></I><FONT size="2">
Oxygen Media LLC (&#147;Oxygen&#148;) provides programming
content aimed at the female audience for distribution over cable
systems and satellite. On July&nbsp;22, 2002, Charter Holdco
entered into a carriage agreement with Oxygen, whereby the
Company agreed to carry programming content from Oxygen. Under
the carriage agreement, the Company currently makes Oxygen
programming available to approximately 5&nbsp;million of its
video customers. The term of the carriage agreement was
retroactive to February&nbsp;1, 2000, the date of launch of
Oxygen programming by the Company, and runs for a period of five
years from that date. For the three and six months ended
June&nbsp;30, 2005, the Company paid Oxygen approximately
$2&nbsp;million and $5&nbsp;million, respectively, and for the
three and six months ended June&nbsp;30, 2004, the Company paid
Oxygen approximately $3&nbsp;million and $7&nbsp;million,
respectively, for programming content. In addition, Oxygen pays
the Company marketing support fees for customers launched after
the first year of the term of the carriage agreement up to a
total of $4&nbsp;million. The Company recorded approximately
$0.1&nbsp;million related to these launch incentives as a
reduction of programming expense for the six months ended
June&nbsp;30, 2005, and $0.4&nbsp;million and $0.7&nbsp;million
for the three and six months ended June&nbsp;30, 2004,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Concurrently with the execution of the carriage
agreement, Charter Holdco entered into an equity issuance
agreement pursuant to which Oxygen&#146;s parent company, Oxygen
Media Corporation (&#147;Oxygen Media&#148;), granted a
subsidiary of Charter Holdco a warrant to
purchase&nbsp;2.4&nbsp;million shares of Oxygen
</FONT>

<P align="center"><FONT size="2">F-25
</FONT>

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<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Media common stock for an exercise price of
$22.00&nbsp;per share. In February 2005, this warrant expired
unexercised. Charter Holdco was also to receive unregistered
shares of Oxygen Media common stock with a guaranteed fair
market value on the date of issuance of $34&nbsp;million, on or
prior to February&nbsp;2, 2005, with the exact date to be
determined by Oxygen Media, but this commitment was later
revised as discussed below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recognized the guaranteed value of
the investment over the life of the carriage agreement as a
reduction of programming expense. For the six months ended
June&nbsp;30, 2005, the Company recorded approximately
$2&nbsp;million, as a reduction of programming expense and for
the three and six months ended June&nbsp;30, 2004, the Company
recorded approximately $3&nbsp;million and $7&nbsp;million,
respectively. The carrying value of the Company&#146;s
investment in Oxygen was approximately $33&nbsp;million and
$32&nbsp;million as of June&nbsp;30, 2005 and December&nbsp;31,
2004, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2004, Charter Holdco and Oxygen entered
into agreements that amended and renewed the carriage agreement.
The amendment to the carriage agreement (a)&nbsp;revises the
number of the Company&#146;s customers to which Oxygen
programming must be carried and for which the Company must pay,
(b)&nbsp;releases Charter Holdco from any claims related to the
failure to achieve distribution benchmarks under the carriage
agreement, (c)&nbsp;requires Oxygen to make payment on
outstanding receivables for marketing support fees due to the
Company under the carriage agreement; and (d)&nbsp;requires that
Oxygen provide its programming content to the Company on
economic terms no less favorable than Oxygen provides to any
other cable or satellite operator having fewer subscribers than
the Company. The renewal of the carriage agreement
(a)&nbsp;extends the period that the Company will carry Oxygen
programming to the Company&#146;s customers through
January&nbsp;31, 2008, and (b)&nbsp;requires license fees to be
paid based on customers receiving Oxygen programming, rather
than for specific customer benchmarks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2004, Charter Holdco and Oxygen also
amended the equity issuance agreement to provide for the
issuance of 1&nbsp;million shares of Oxygen Preferred Stock with
a liquidation preference of $33.10&nbsp;per share plus accrued
dividends to Charter Holdco on February&nbsp;1, 2005 in place of
the $34&nbsp;million of unregistered shares of Oxygen Media
common stock. Oxygen Media delivered these shares in March 2005.
The preferred stock is convertible into common stock after
December&nbsp;31, 2007 at a conversion ratio per share of
preferred stock, the numerator of which is the liquidation
preference and the denominator of which is the fair market value
per share of Oxygen Media common stock on the conversion date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2005, through Vulcan
Programming, Mr.&nbsp;Allen owned an approximate 31% interest in
Oxygen assuming no exercises of outstanding warrants or
conversion or exchange of convertible or exchangeable
securities. Ms.&nbsp;Jo Allen Patton is a director and the
President of Vulcan Programming. Mr.&nbsp;Lance Conn is a Vice
President of Vulcan Programming. Marc Nathanson has an indirect
beneficial interest of less than 1% in Oxygen.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">18.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Recently Issued Accounting Standards</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 2004, the Financial Accounting
Standards Board (&#147;FASB&#148;) issued SFAS No.&nbsp;153,
<I>Exchanges of Non-monetary Assets&nbsp;&#151; An Amendment of
APB No.&nbsp;29</I>. This statement eliminates the exception to
fair value for exchanges of similar productive assets and
replaces it with a general exception for exchange transactions
that do not have commercial substance&nbsp;&#151; that is,
transactions that are not expected to result in significant
changes in the cash flows of the reporting entity. The Company
adopted this pronouncement effective April&nbsp;1, 2005. The
exchange transaction discussed in Note&nbsp;3 was accounted for
under this standard.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2004, the Financial Accounting
Standards Board issued the revised SFAS No.&nbsp;123,
<I>Share-Based Payment</I>, which addresses the accounting for
share-based payment transactions in which a
</FONT>

<P align="center"><FONT size="2">F-26
</FONT>

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<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share amounts
and where indicated)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Unaudited)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">company receives employee services in exchange
for (a)&nbsp;equity instruments of that company or
(b)&nbsp;liabilities that are based on the fair value of the
company&#146;s equity instruments or that may be settled by the
issuance of such equity instruments. This statement will be
effective for the Company beginning January&nbsp;1, 2006.
Because the Company adopted the fair value recognition
provisions of SFAS No.&nbsp;123 on January&nbsp;1, 2003, the
Company does not expect this revised standard to have a material
impact on its financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter does not believe that any other recently
issued, but not yet effective accounting pronouncements, if
adopted, would have a material effect on the Company&#146;s
accompanying financial statements.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">19.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Subsequent Events</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;29, 2005, we issued
27.2&nbsp;million shares of Class&nbsp;A common stock in a
public offering, which was effected pursuant to an effective
registration statement that initially covered the issuance and
sale of up to 150&nbsp;million shares of Class&nbsp;A common
stock. The shares were issued pursuant to a share lending
agreement, pursuant to which Charter had previously agreed to
loan up to 150&nbsp;million shares to CGML. Because less than
the full 150&nbsp;million shares covered by the share lending
agreement were sold in the offering, we remain obligated to
issue, at CGML&#146;s request, up to an additional
122.8&nbsp;million additional loaned shares in subsequent
registered public offerings pursuant to the share lending
agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This offering of Charter&#146;s Class&nbsp;A
common stock was conducted to facilitate transactions by which
investors in Charter&#146;s 5.875% convertible senior notes due
2009 issued on November&nbsp;22, 2004 hedged their investments
in the convertible senior notes. Charter did not receive any of
the proceeds from the sale of this Class&nbsp;A common stock.
However, under the share lending agreement, Charter received a
loan fee of $.001 for each share that it lends to CGML.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;28, 2005, Charter Holdings and
its wholly owned subsidiaries, CCH&nbsp;I, LLC
(&#147;CCH&nbsp;I&#148;) and CCH&nbsp;I Holdings, LLC
(&#147;CIH&#148;), completed the exchange of approximately
$6.8&nbsp;billion total principal amount of outstanding debt
securities of Charter Holdings in a private placement for new
debt securities. Holders of Charter Holdings notes due in
2009-2010 tendered $3.4&nbsp;billion principal amount of notes
for $2.9&nbsp;billion principal amount of new
11%&nbsp;CCH&nbsp;I notes due 2015. Holders of Charter Holdings
notes due 2011-2012 tendered $845&nbsp;million principal amount
of notes for $662&nbsp;million principal amount of
11%&nbsp;CCH&nbsp;I notes due 2015. In addition, holders of
Charter Holdings notes due 2011-2012 tendered $2.5&nbsp;billion
principal amount of notes for $2.5&nbsp;billion principal amount
of new CIH notes. Each series of new CIH notes have the same
coupon and provisions for payment of cash interest as the series
of old Charter Holdings notes for which such CIH notes were
exchanged. In addition, the maturities for each series were
extended three years. On August&nbsp;17, 2005, CCO Holdings
issued $300&nbsp;million in debt securities, the proceeds of
which will be used for general corporate purposes, including the
potential payment of dividends or distributions to its parent
companies, including Charter Holdings, to pay interest expense.
</FONT>

<P align="center"><FONT size="2">F-27
</FONT>

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<P align="center">
<B><FONT size="2">REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</FONT></B>

<P align="left">
<FONT size="2">To the Board of Directors <BR>
 Charter Communications, Inc.:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying consolidated
balance sheets of Charter Communications, Inc. and subsidiaries
(the Company) as of December&nbsp;31, 2004 and 2003, and the
related consolidated statements of operations, changes in
shareholders&#146; equity (deficit), and cash flows for each of
the years in the three-year period ended December&nbsp;31, 2004.
These consolidated financial statements are the responsibility
of the Company&#146;s management. Our responsibility is to
express an opinion on these consolidated financial statements
based on our audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the consolidated financial
statements referred to above present fairly, in all material
respects, the financial position of Charter Communications, Inc.
and subsidiaries as of December&nbsp;31, 2004 and 2003, and the
results of their operations and their cash flows for each of the
years in the three-year period ended December&nbsp;31, 2004, in
conformity with U.S.&nbsp;generally accepted accounting
principles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also have audited, in accordance with the
standards of the Public Company Accounting Oversight Board
(United States), the effectiveness of the Company&#146;s
internal control over financial reporting as of
December&nbsp;31, 2004, based on criteria established in
<I>Internal Control&nbsp;&#151; Integrated Framework</I> issued
by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO), and our report dated March&nbsp;1, 2005
expressed an unqualified opinion on management&#146;s assessment
of, and the effective operation of, internal control over
financial reporting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As discussed in note&nbsp;3 to the consolidated
financial statements, effective January&nbsp;1, 2002, the
Company adopted Statement of Financial Accounting Standards
No.&nbsp;142, <I>Goodwill and Other Intangible Assets.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As discussed in note&nbsp;7 to the consolidated
financial statements, effective September&nbsp;30, 2004, the
Company adopted EITF Topic D-108, <I>Use of the Residual Method
to Value Acquired Assets Other than Goodwill.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As discussed in note&nbsp;19 to the consolidated
financial statements, effective January&nbsp;1, 2003, the
Company adopted Statement of Financial Accounting Standards
No.&nbsp;123, <I>Accounting for Stock-Based Compensation,</I> as
amended by Statement of Financial Accounting Standards
No.&nbsp;148, <I>Accounting for Stock-Based
Compensation&nbsp;&#151; Transition and Disclosure&nbsp;&#151;
an amendment of FASB Statement No.&nbsp;123.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">/s/ KPMG LLP
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">St.&nbsp;Louis, Missouri <BR>
 March&nbsp;1, 2005
</FONT>

<P align="center"><FONT size="2">F-28
</FONT>

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<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED BALANCE SHEETS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except share
data)</FONT></B>
</DIV>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="13" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CURRENT ASSETS:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts receivable, less allowance for doubtful
    accounts of $15 and $17, respectively
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">189</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Prepaid expenses and other current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">INVESTMENT IN CABLE PROPERTIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Property, plant and equipment, net of accumulated
    depreciation of $5,311 and $3,950, respectively
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Franchises
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,680</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total investment in cable properties, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,167</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">OTHER NONCURRENT ASSETS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">584</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">320</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,673</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="13"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="13" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146;
    DEFICIT</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CURRENT LIABILITIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts payable and accrued expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">LONG-TERM DEBT
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">DEFERRED MANAGEMENT FEES&nbsp;&#151; RELATED PARTY
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">OTHER LONG-TERM LIABILITIES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">681</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">848</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">MINORITY INTEREST
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">648</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">689</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">PREFERRED STOCK&nbsp;&#151; REDEEMABLE;
    $.001&nbsp;par value; 1&nbsp;million shares authorized;
    545,259&nbsp;shares issued and outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">SHAREHOLDERS&#146; DEFICIT:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Class&nbsp;A Common stock; $.001&nbsp;par value;
    1.75&nbsp;billion shares authorized; 305,203,770 and
    295,038,606&nbsp;shares issued and outstanding, respectively
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Class&nbsp;B Common stock; $.001&nbsp;par value;
    750&nbsp;million shares authorized; 50,000&nbsp;shares issued
    and outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Preferred stock; $.001&nbsp;par value;
    250&nbsp;million shares authorized; no non-redeemable shares
    issued and outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Additional paid-in capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,794</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accumulated deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,196</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,851</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accumulated other comprehensive loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,406</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(175</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total liabilities and shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,673</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-29
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF
OPERATIONS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except per share and
share data)</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">REVENUES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,819</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">COSTS AND EXPENSES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Operating (excluding depreciation and
    amortization)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Selling, general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,495</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,436</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Impairment of franchises
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(Gain) loss on sale of fixed assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(86</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Unfavorable contracts and other settlements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(72</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,023</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,888</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income (loss) from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,046</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,322</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">OTHER INCOME AND EXPENSES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,670</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,557</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,503</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain (loss) on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(115</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on debt to equity conversions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain (loss) on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(31</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">267</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,652</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,241</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,622</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest, income taxes and
    cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,698</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(725</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,944</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">MINORITY INTEREST
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">377</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before income taxes and cumulative effect of
    accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,679</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(348</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,768</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">INCOME TAX BENEFIT
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">460</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,576</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,308</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(765</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(206</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,341</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,514</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Dividends on preferred stock&nbsp;&#151;
    redeemable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,345</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(242</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">LOSS PER COMMON SHARE, basic and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14.47</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.82</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8.55</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted average common shares outstanding, basic
    and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,291,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,597,519</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,440,261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-30
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS&#146; EQUITY (DEFICIT)</FONT></B>

<DIV align="center">
<B><FONT size="2">(Dollars in millions)</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;A</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;B</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Additional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shareholders&#146;</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Paid-In</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Comprehensive</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Equity</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capital</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Deficit</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Income&nbsp;(Loss)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Deficit)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">BALANCE, December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,092</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(17</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,585</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Issuance of common stock related to acquisitions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Changes in fair value of interest rate agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(30</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(30</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on issuance of equity by subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Dividends on preferred stock&nbsp;&#151;
    redeemable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,514</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,514</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">BALANCE, December&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,697</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,609</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(47</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Changes in fair value of interest rate agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Issuance of common stock related to acquisitions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on issuance of equity by subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Dividends on preferred stock&nbsp;&#151;
    redeemable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">BALANCE, December&nbsp;31, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,851</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(175</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Changes in fair value of interest rate agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Issuance of common stock in exchange for
    convertible notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Dividends on preferred stock&nbsp;&#151;
    redeemable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,341</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,341</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">BALANCE, December&nbsp;31, 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,794</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,196</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,406</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-31
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CASH
FLOWS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Dollars in millions)</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH FLOWS FROM OPERATING ACTIVITIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,341</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,514</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Adjustments to reconcile net loss to net cash
    flows from operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(377</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,176</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,495</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,436</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Impairment of franchises
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Option compensation expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special charges, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Noncash interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">324</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">414</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">395</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gain on derivative instruments and hedging
    activities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(69</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(65</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(Gain) loss on sale of assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(86</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss on debt to equity conversions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">(Gain) loss on extinguishment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(267</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Deferred income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(109</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(110</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(460</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cumulative effect of accounting change, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">765</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Unfavorable contracts and other settlements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(72</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Changes in operating assets and liabilities, net
    of effects from acquisitions and dispositions:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Prepaid expenses and other assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts payable, accrued expenses and other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(59</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(69</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Receivables from and payables to related party,
    including deferred management fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net cash flows from operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">472</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">765</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH FLOWS FROM INVESTING ACTIVITIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Purchases of property, plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(924</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(854</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,167</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Change in accrued expenses related to capital
    expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(43</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(33</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(55</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Proceeds from sale of systems
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">744</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Payments for acquisitions, net of cash acquired
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(139</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Purchases of investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(17</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net cash flows from investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(243</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(817</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,363</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH FLOWS FROM FINANCING ACTIVITIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Proceeds from issuance of common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Borrowings of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">738</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Repayments of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,448</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,368</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,134</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Proceeds from issuance of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">529</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Payments for debt issuance costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(145</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(41</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(40</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Purchase of pledge securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(143</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net cash flows from financing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(142</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,934</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">NET INCREASE (DECREASE)&nbsp;IN CASH AND CASH
    EQUIVALENTS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">523</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(194</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, beginning of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">321</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">321</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH PAID FOR INTEREST
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,111</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">NONCASH TRANSACTIONS:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Debt exchanged for Charter Class&nbsp;A common
    stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Issuance of debt by CCH&nbsp;II, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,572</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Retirement of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Issuances of preferred stock&nbsp;&#151;
    redeemable, as payment for acquisitions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Issuance of equity as partial payments for
    acquisitions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-32
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">1.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Organization and Basis of
    Presentation</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Communications, Inc.
(&#147;Charter&#148;) is a holding company whose principal
assets at December&nbsp;31, 2004 are the 47% controlling common
equity interest in Charter Communications Holding Company, LLC
(&#147;Charter Holdco&#148;) and &#147;mirror&#148; notes which
are payable by Charter Holdco to Charter and have the same
principal amount and terms as those of Charter&#146;s
convertible senior notes. Charter Holdco is the sole owner of
Charter Communications Holdings, LLC (&#147;Charter
Holdings&#148;). The consolidated financial statements include
the accounts of Charter, Charter Holdco, Charter Holdings and
all of their wholly owned subsidiaries where the underlying
operations reside, collectively referred to herein as the
&#147;Company.&#148; Charter consolidates Charter Holdco on the
basis of voting control. Charter Holdco&#146;s limited liability
company agreement provides that so long as Charter&#146;s
Class&nbsp;B common stock retains its special voting rights,
Charter will maintain a 100% voting interest in Charter Holdco.
Voting control gives Charter full authority and control over the
operations of Charter Holdco. All significant intercompany
accounts and transactions among consolidated entities have been
eliminated. The Company is a broadband communications company
operating in the United States. The Company offers its customers
traditional cable video programming (analog and digital video)
as well as high-speed data services and, in some areas, advanced
broadband services such as high definition television, video on
demand and telephony. The Company sells its cable video
programming, high-speed data and advanced broadband services on
a subscription basis. The Company also sells local advertising
on satellite-delivered networks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Areas
involving significant judgments and estimates include
capitalization of labor and overhead costs; depreciation and
amortization costs; impairments of property, plant and
equipment, franchises and goodwill; income taxes; and
contingencies. Actual results could differ from those estimates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Reclassifications.</FONT></I><FONT size="2">
Certain prior year amounts have been reclassified to conform
with the 2004 presentation.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">2.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Liquidity and Capital Resources</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company incurred net loss applicable to
common stock of $4.3&nbsp;billion, $242&nbsp;million and
$2.5&nbsp;billion in 2004, 2003 and 2002, respectively. The
Company&#146;s net cash flows from operating activities were
$472&nbsp;million, $765&nbsp;million and $748&nbsp;million for
the years ending December&nbsp;31, 2004, 2003 and 2002,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has a significant level of debt. The
Company&#146;s long-term financing as of December&nbsp;31, 2004
consists of $5.5&nbsp;billion of credit facility debt,
$13.3&nbsp;billion principal amount of high-yield notes and
$1.0&nbsp;billion principal amount of convertible senior notes.
In 2005, $30&nbsp;million of the Company&#146;s debt will mature
and in 2006, an additional $186&nbsp;million of the
Company&#146;s debt will mature. In 2007 and beyond, significant
additional amounts will become due under the Company&#146;s
remaining long-term debt obligations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has historically required significant
cash to fund capital expenditures and debt service costs.
Historically, the Company has funded these requirements through
cash flows from operating activities, borrowings under its
credit facilities, sales of assets, issuances of debt and equity
securities and cash on hand. However, the mix of funding sources
changes from period to period. For the year ended
December&nbsp;31, 2004, the Company, generated $472&nbsp;million
of net cash flows from operating activities, after paying cash
interest of $1.3&nbsp;billion. In addition, the Company
generated approximately $744&nbsp;million from the sale of
assets, substantially all of which was used to fund operations,
including capital expenditures.
</FONT>

<P align="center"><FONT size="2">F-33
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Finally, the Company had net cash flows from
financing activities of $294&nbsp;million, which included, among
other things, the proceeds from the issuance in December of
$550&nbsp;million of CCO Holdings, LLC (&#147;CCO
Holdings&#148;) Notes. This debt issuance was the primary reason
cash on hand increased by $523&nbsp;million to $650&nbsp;million
at December&nbsp;31, 2004. Approximately $622&nbsp;million was
used to repay outstanding borrowings under the Company&#146;s
revolving credit facility, through a series of transactions
executed in February 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company expects that cash on hand, cash flows
from operating activities and the amounts available under its
credit facilities will be adequate to meet its cash needs in
2005. Cash flows from operating activities and amounts available
under the Company&#146;s credit facilities may not be sufficient
to fund the Company&#146;s operations and satisfy its principal
repayment obligations that come due in 2006 and, the Company
believes, will not be sufficient to fund its operations and
satisfy such repayment obligations thereafter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is likely that the Company will require
additional funding to repay debt maturing after 2006. The
Company is working with its financial advisors to address such
funding requirements. However, there can be no assurance that
such funding will be available to the Company. Although
Mr.&nbsp;Allen and his affiliates have purchased equity from the
Company in the past, Mr.&nbsp;Allen and his affiliates are not
obligated to purchase equity from, contribute to or loan funds
to the Company in the future.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Credit Facilities and
    Covenants</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s ability to operate depends
upon, among other things, its continued access to capital,
including credit under the Charter Communications Operating, LLC
(&#147;Charter Operating&#148;) credit facilities. These credit
facilities, along with the Company&#146;s indentures, are
subject to certain restrictive covenants, some of which require
the Company to maintain specified financial ratios and meet
financial tests and to provide audited financial statements with
an unqualified opinion from the Company&#146;s independent
auditors. As of December&nbsp;31, 2004, the Company was in
compliance with the covenants under the Company&#146;s
indentures and under its credit facilities and the Company
expects to remain in compliance with those covenants for the
next twelve months. As of December&nbsp;31, 2004, the Company
had borrowing availability under the credit facilities of
$804&nbsp;million, none of which was restricted due to
covenants. Continued access to the Company&#146;s credit
facilities is subject to the Company remaining in compliance
with the applicable covenants of these credit facilities,
including covenants tied to the Company&#146;s operating
performance. If the Company&#146;s operating performance results
in non-compliance with these covenants, or if any of certain
other events of non-compliance under these credit facilities or
indentures governing the Company&#146;s debt occurs, funding
under the credit facilities may not be available and defaults on
some or potentially all of the Company&#146;s debt obligations
could occur. An event of default under the covenants governing
any of the Company&#146;s debt instruments could result in the
acceleration of its payment obligations under that debt and,
under certain circumstances, in cross-defaults under its other
debt obligations, which could have a material adverse effect on
the Company&#146;s consolidated financial condition or results
of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating credit facilities require
the Company to redeem the CC V Holdings notes within
45&nbsp;days after the first date that the Charter Holdings
leverage ratio is less than 8.75 to 1.0. In satisfaction of this
requirement, CC V Holdings, LLC has called for redemption all of
its outstanding notes, at 103.958% of principal amount, plus
accrued and unpaid interest to the date of redemption, which is
expected to be March&nbsp;14, 2005. The total cost of the
redemption including accrued and unpaid interest is expected to
be $122&nbsp;million. The Company intends to fund the redemption
with borrowings under its credit facilities.
</FONT>

<P align="center"><FONT size="2">F-34
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Specific Limitations</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter&#146;s ability to make interest payments
on its convertible senior notes, and, in 2006 and 2009, to repay
the outstanding principal of its convertible senior notes, will
depend on its ability to raise additional capital and/or on
receipt of payments or distributions from Charter Holdco or its
subsidiaries, including CCH&nbsp;II, LLC
(&#147;CCH&nbsp;II&#148;), CCO Holdings, LLC (&#147;CCO
Holdings&#148;) and Charter Operating. The indentures governing
the CCH&nbsp;II notes, CCO Holdings notes, and Charter Operating
notes, however, restrict these entities and their subsidiaries
from making distributions to their parent companies (including
Charter and Charter Holdco) for payment of principal on
Charter&#146;s convertible senior notes, in each case unless
there is no default under the applicable indenture and a
specified leverage ratio test is met at the time of such event.
CCH&nbsp;II, CCO Holdings and Charter Operating meet the
applicable leverage ratio test under each of their respective
indentures, and as a result are not prohibited from making any
such distributions to their respective direct parent.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the Charter Holdings
notes permit Charter Holdings to make distributions to Charter
Holdco for payment of interest or principal on the convertible
senior notes, only if, after giving effect to the distribution,
Charter Holdings can incur additional debt under the leverage
ratio of 8.75 to 1.0, there is no default under Charter
Holdings&#146; indentures and other specified tests are met. For
the quarter ended December&nbsp;31, 2004, there was no default
under Charter Holdings&#146; indentures and other specified
tests were met. In addition, Charter Holdings met the leverage
ratio of 8.75 to 1.0 based on December&nbsp;31, 2004 financial
results. As a result, distributions from Charter Holdings to
Charter or Charter Holdco are not currently restricted. Such
distributions will again be restricted, however, if Charter
Holdings fails to meet its leverage ratio test. In the past,
Charter Holdings has from time to time failed to meet this
leverage ratio test and there can be no assurance that Charter
Holdings will satisfy this test in the future.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During periods when such distributions are
restricted, the indentures governing the Charter Holdings notes
permit Charter Holdings and its subsidiaries to make specified
investments in Charter Holdco or Charter, up to an amount
determined by a formula, as long as there is no default under
the indentures. As of December&nbsp;31, 2004, Charter Holdco had
$106&nbsp;million in cash on hand and was owed $29&nbsp;million
in intercompany loans from its subsidiaries, which were
available to pay interest on Charter&#146;s
4.75%&nbsp;convertible senior notes, which is expected to be
approximately $7&nbsp;million in 2005. In addition, Charter has
$144&nbsp;million of governmental securities pledged as security
for the six interest payments on Charter&#146;s
5.875%&nbsp;convertible senior notes.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Sale of Assets</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2004, the Company closed the sale of
certain cable systems in Florida, Pennsylvania, Maryland,
Delaware and West Virginia to Atlantic Broadband Finance, LLC.
The Company closed the sale of an additional cable system in New
York to Atlantic Broadband Finance, LLC in April 2004. These
transactions resulted in a $104&nbsp;million pretax gain
recorded as a gain on sale of assets in the Company&#146;s
consolidated statements of operations. Subject to post-closing
contractual adjustments, the total net proceeds from the sale of
all of these systems were approximately $733&nbsp;million. The
proceeds were used to repay a portion of amounts outstanding
under the Company&#146;s credit facilities.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">3.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Summary of Significant Accounting
    Policies</FONT></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Cash Equivalents</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company considers all highly liquid
investments with original maturities of three months or less to
be cash equivalents. These investments are carried at cost,
which approximates market value.
</FONT>

<P align="center"><FONT size="2">F-35
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Property, Plant and Equipment</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property, plant and equipment are recorded at
cost, including all material, labor and certain indirect costs
associated with the construction of cable transmission and
distribution facilities. Costs associated with initial customer
installations and the additions of network equipment necessary
to enable advanced services are capitalized. Costs capitalized
as part of initial customer installations include materials,
labor, and certain indirect costs. Indirect costs are associated
with the activities of the Company&#146;s personnel who assist
in connecting and activating the new service and consist of
compensation and indirect costs associated with these support
functions. Indirect costs primarily include employee benefits
and payroll taxes, direct variable costs associated with
capitalizable activities, consisting primarily of installation
and construction vehicle costs, the cost of dispatch personnel
and indirect costs directly attributable to capitalizable
activities. The costs of disconnecting service at a
customer&#146;s dwelling or reconnecting service to a previously
installed dwelling are charged to operating expense in the
period incurred. Costs for repairs and maintenance are charged
to operating expense as incurred, while plant and equipment
replacement and betterments, including replacement of cable
drops from the pole to the dwelling, are capitalized.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation is recorded using the straight-line
composite method over management&#146;s estimate of the useful
lives of the related assets as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="81%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cable distribution systems
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7-20 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Customer equipment and installations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3-5 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Vehicles and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1-5 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Buildings and leasehold improvements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5-15 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Furniture and fixtures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Franchises</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Franchise rights represent the value attributed
to agreements with local authorities that allow access to homes
in cable service areas acquired through the purchase of cable
systems. Management estimates the fair value of franchise rights
at the date of acquisition and determines if the franchise has a
finite life or an indefinite-life as defined by Statement of
Financial Accounting Standards (&#147;SFAS&#148;) No.&nbsp;142,
<I>Goodwill and Other Intangible Assets</I>. All franchises that
qualify for indefinite-life treatment under
SFAS&nbsp;No.&nbsp;142 are no longer amortized against earnings
but instead are tested for impairment annually as of
October&nbsp;1, or more frequently as warranted by events or
changes in circumstances (see Note&nbsp;7). The Company
concluded that 99% of its franchises qualify for indefinite-life
treatment; however, certain franchises did not qualify for
indefinite-life treatment due to technological or operational
factors that limit their lives. These franchise costs are
amortized on a straight-line basis over 10&nbsp;years. Costs
incurred in renewing cable franchises are deferred and amortized
over 10&nbsp;years.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Other Noncurrent Assets</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other noncurrent assets primarily include
goodwill, deferred financing costs, governmental securities and
investments in equity securities. Costs related to borrowings
are deferred and amortized to interest expense over the terms of
the related borrowings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Investments in equity securities are accounted
for at cost, under the equity method of accounting or in
accordance with SFAS&nbsp;No.&nbsp;115, <I>Accounting for
Certain Investments in Debt and Equity Securities</I>. Charter
recognizes losses for any decline in value considered to be
other than temporary. Certain marketable equity securities are
classified as available-for-sale and reported at market value
with unrealized gains and losses recorded as accumulated other
comprehensive income or loss.
</FONT>

<P align="center"><FONT size="2">F-36
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summarizes investment information
as of and for the years ended December&nbsp;31, 2004 and 2003:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Gain (loss) for the</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Value at</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Equity investments, under the cost method
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Equity investments, under the equity method
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Marketable securities, at market value
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As required by the indentures to the
Company&#146;s 5.875%&nbsp;convertible senior notes issued in
November 2004, the Company purchased U.S.&nbsp;government
securities valued at approximately $144&nbsp;million with
maturities corresponding to the interest payment dates for the
convertible senior notes. These securities were pledged and are
held in escrow to provide payment in full for the first six
interest payments of the convertible senior notes (see
Note&nbsp;9). These securities are accounted for as
held-to-maturity securities. At December&nbsp;31, 2004, the
carrying value and fair value of the securities was
approximately $144&nbsp;million with approximately
$48&nbsp;million recorded in prepaid and other assets and
approximately $96&nbsp;million recorded in other assets in the
Company&#146;s consolidated balance sheet.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Valuation of Property, Plant and
    Equipment</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company evaluates the recoverability of
property, plant and equipment for impairment when events or
changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. Such events or changes in
circumstances could include such factors as impairment of the
Company&#146;s indefinite life franchise under
SFAS&nbsp;No.&nbsp;142, changes in technological advances,
fluctuations in the fair value of such assets, adverse changes
in relationships with local franchise authorities, adverse
changes in market conditions or poor operating results. If a
review indicates that the carrying value of such asset is not
recoverable from estimated undiscounted cash flows, the carrying
value of such asset is reduced to its estimated fair value.
While the Company believes that its estimates of future cash
flows are reasonable, different assumptions regarding such cash
flows could materially affect its evaluations of asset
recoverability. No impairment of property, plant and equipment
occurred in 2004, 2003 and 2002.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Derivative Financial
    Instruments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company accounts for derivative financial
instruments in accordance with SFAS&nbsp;No.&nbsp;133,
<I>Accounting for Derivative Instruments and Hedging
Activities</I>, as amended. For those instruments which qualify
as hedging activities, related gains or losses are recorded in
accumulated other comprehensive income. For all other derivative
instruments, the related gains or losses are recorded in the
income statement. The Company uses interest rate risk management
derivative instruments, such as interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements
(collectively referred to herein as interest rate agreements) as
required under the terms of the credit facilities of the
Company&#146;s subsidiaries. The Company&#146;s policy is to
manage interest costs using a mix of fixed and variable rate
debt. Using interest rate swap agreements, the Company agrees to
exchange, at specified intervals, the difference between fixed
and variable interest amounts calculated by reference to an
agreed-upon notional principal amount. Interest rate cap
agreements are used to lock in a maximum interest rate should
variable rates rise, but enable the Company to otherwise pay
lower market rates. Interest rate collar agreements are used to
limit exposure to
</FONT>

<P align="center"><FONT size="2">F-37
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">and benefits from interest rate fluctuations on
variable rate debt to within a certain range of rates. The
Company does not hold or issue any derivative financial
instruments for trading purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain provisions of the Company&#146;s
5.875%&nbsp;convertible senior notes issued in November 2004
were considered embedded derivatives for accounting purposes and
were required to be separately accounted for from the
convertible senior notes. In accordance with
SFAS&nbsp;No.&nbsp;133, these derivatives are marked to market
with gains or losses recorded in interest expense on the
Company&#146;s consolidated statement of operations. For the
year ended December&nbsp;31, 2004, the Company recognized
$1&nbsp;million in losses related to these derivatives. At
December&nbsp;31, 2004, $10&nbsp;million is recorded in accounts
payable and accrued expenses relating to the short-term portion
of these derivatives and $21&nbsp;million is recorded in other
long-term liabilities related to the long-term portion.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Revenue Recognition</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues from residential and commercial video
and high-speed data services are recognized when the related
services are provided. Advertising sales are recognized at
estimated realizable values in the period that the
advertisements are broadcast. Local governmental authorities
impose franchise fees on the Company ranging up to a federally
mandated maximum of 5% of gross revenues as defined in the
franchise agreement. Such fees are collected on a monthly basis
from the Company&#146;s customers and are periodically remitted
to local franchise authorities. Franchise fees are reported as
revenues on a gross basis with a corresponding operating
expense<I>.</I>
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Programming Costs</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has various contracts to obtain
analog, digital and premium video programming from program
suppliers whose compensation is typically based on a flat fee
per customer. The cost of the right to exhibit network
programming under such arrangements is recorded in operating
expenses in the month the programming is available for
exhibition. Programming costs are paid each month based on
calculations performed by the Company and are subject to
adjustment based on periodic audits performed by the
programmers. Certain programming contracts contain launch
incentives to be paid by the programmers. The Company receives
these payments related to the activation of the
programmer&#146;s cable television channel and recognizes the
launch incentives on a straight-line basis over the life of the
programming agreement as a reduction of programming expense.
This offset to programming expense was $59&nbsp;million,
$62&nbsp;million and $57&nbsp;million for the years ended
December&nbsp;31, 2004, 2003 and 2002, respectively. Programming
costs included in the accompanying statement of operations were
$1.3&nbsp;billion, $1.2&nbsp;billion and $1.2&nbsp;billion for
the years ended December&nbsp;31, 2004, 2003 and 2002,
respectively. As of December&nbsp;31, 2004 and 2003, the
deferred amount of launch incentives, included in other
long-term liabilities, totaled $106&nbsp;million and
$170&nbsp;million, respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Advertising Costs</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising costs associated with marketing the
Company&#146;s products and services are generally expensed as
costs are incurred. Such advertising expense was
$72&nbsp;million, $62&nbsp;million and $60&nbsp;million for the
years ended December&nbsp;31, 2004, 2003 and 2002, respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Stock-Based Compensation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has historically accounted for
stock-based compensation in accordance with Accounting
Principles Board (&#147;APB&#148;) Opinion No.&nbsp;25,
<I>Accounting for Stock Issued to Employees</I>, and related
interpretations, as permitted by SFAS&nbsp;No.&nbsp;123,
<I>Accounting for Stock-Based Compensation</I>. On
January&nbsp;1,
</FONT>

<P align="center"><FONT size="2">F-38
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">2003, the Company adopted the fair value
measurement provisions of SFAS&nbsp;No.&nbsp;123 using the
prospective method under which the Company will recognize
compensation expense of a stock-based award to an employee over
the vesting period based on the fair value of the award on the
grant date consistent with the method described in Financial
Accounting Standards Board Interpretation (&#147;FIN&#148;)
No.&nbsp;28, <I>Accounting for Stock Appreciation Rights and
Other Variable Stock Option or Award Plans</I>. Adoption of
these provisions resulted in utilizing a preferable accounting
method as the consolidated financial statements will present the
estimated fair value of stock-based compensation in expense
consistently with other forms of compensation and other expense
associated with goods and services received for equity
instruments. In accordance with SFAS&nbsp;No.&nbsp;148,
<I>Accounting for Stock-Based Compensation&nbsp;&#151;
Transition and Disclosure</I>, the fair value method was applied
only to awards granted or modified after January&nbsp;1, 2003,
whereas awards granted prior to such date were accounted for
under APB No.&nbsp;25, unless they were modified or settled in
cash.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SFAS&nbsp;No.&nbsp;123 requires pro forma
disclosure of the impact on earnings as if the compensation
expense for these plans had been determined using the fair value
method. The following table presents the Company&#146;s net loss
and loss per share as reported and the pro forma amounts that
would have been reported using the fair value method under
SFAS&nbsp;No.&nbsp;123 for the years presented:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,345</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(242</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Add back stock-based compensation expense related
    to stock options included in reported net loss (net of minority
    interest)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less employee stock-based compensation expense
    determined under fair value based method for all employee stock
    option awards (net of minority interest)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(33</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(56</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Effects of unvested options in stock option
    exchange (see Note&nbsp;19)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Pro forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,299</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(254</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,571</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss per common shares, basic and diluted:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">As reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14.47</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.82</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8.55</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Pro forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14.32</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.86</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8.73</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The fair value of each option granted is
estimated on the date of grant using the Black-Scholes
option-pricing model. The following weighted average assumptions
were used for grants during the years ended December&nbsp;31,
2004, 2003 and 2002, respectively: risk-free interest rates of
3.3%, 3.0%, and 3.6%; expected volatility of 92.4%, 93.6% and
64.2%; and expected lives of 4.6&nbsp;years, 4.5&nbsp;years and
4.3&nbsp;years, respectively. The valuations assume no dividends
are paid.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Unfavorable Contracts and Other
    Settlements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recognized $5&nbsp;million of benefit
for the year ended December&nbsp;31, 2004 related to changes in
estimated legal reserves established as part of previous
business combinations, which, based on an evaluation of current
facts and circumstances, are no longer required.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recognized $72&nbsp;million of
benefit for the year ended December&nbsp;31, 2003 as a result of
the settlement of estimated liabilities recorded in connection
with prior business combinations. The majority of this benefit
(approximately $52&nbsp;million) is due to the renegotiation of
a major programming
</FONT>

<P align="center"><FONT size="2">F-39
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">contract, for which a liability had been recorded
for the above market portion of the agreement in conjunction
with the Falcon acquisition in 1999 and the Bresnan acquisition
in 2000. The remaining benefit relates to the reversal of
previously recorded liabilities, which are no longer required.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Income Taxes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recognizes deferred tax assets and
liabilities for temporary differences between the financial
reporting basis and the tax basis of the Company&#146;s assets
and liabilities and expected benefits of utilizing net operating
loss carryforwards. The impact on deferred taxes of changes in
tax rates and tax law, if any, applied to the years during which
temporary differences are expected to be settled, are reflected
in the consolidated financial statements in the period of
enactment (see Note&nbsp;21).
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Minority Interest</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Minority interest on the consolidated balance
sheets represents the portion of members&#146; equity of Charter
Holdco not owned by Charter, plus preferred membership interests
in an indirect subsidiary of Charter held by Mr.&nbsp;Paul G.
Allen. Minority interest totaled $648&nbsp;million and
$689&nbsp;million as of December&nbsp;31, 2004 and 2003,
respectively, on the accompanying consolidated balance sheets.
Gains or losses arising from issuances by Charter Holdco of its
membership units are recorded as capital transactions thereby
increasing or decreasing shareholders&#146; equity and
decreasing or increasing minority interest on the consolidated
balance sheets. These losses totaled $0, $1&nbsp;million and
$1&nbsp;million for the years ended December&nbsp;31, 2004, 2003
and 2002, respectively, on the accompanying consolidated
statements of changes in shareholders&#146; equity. Operating
losses are allocated to the minority owners based on their
ownership percentage, thereby reducing the Company&#146;s net
loss.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Reported losses allocated to minority interest on
the statement of operations are limited to the extent of any
remaining minority interest on the balance sheet related to
Charter Holdco. Because minority interest in Charter Holdco was
substantially eliminated at December&nbsp;31, 2003, beginning in
2004, Charter began to absorb substantially all future losses
before income taxes that otherwise would have been allocated to
minority interest.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Loss per Common Share</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Basic loss per common share is computed by
dividing the net loss applicable to common stock by
300,291,877&nbsp;shares, 294,597,519&nbsp;shares and
294,440,261&nbsp;shares for the years ended December&nbsp;31,
2004, 2003 and 2002, representing the weighted-average common
shares outstanding during the respective periods. Diluted loss
per common share equals basic loss per common share for the
periods presented, as the effect of stock options is
antidilutive because the Company incurred net losses. All
membership units of Charter Holdco are exchangeable on a
one-for-one basis into common stock of Charter at the option of
the holders. As of December&nbsp;31, 2004, Charter Holdco has
644,385,801 membership units outstanding. Should the holders
exchange units for shares, the effect would not be dilutive
because the Company incurred net losses.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Segments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SFAS&nbsp;No.&nbsp;131, <I>Disclosure about
Segments of an Enterprise and Related Information</I>,
established standards for reporting information about operating
segments in annual financial statements and in interim financial
reports issued to shareholders. Operating segments are defined
as components of an enterprise about which separate financial
information is available that is evaluated on a regular basis by
the chief
</FONT>

<P align="center"><FONT size="2">F-40
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">operating decision maker, or decision making
group, in deciding how to allocate resources to an individual
segment and in assessing performance of the segment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s operations are managed on the
basis of geographic divisional operating segments. The Company
has evaluated the criteria for aggregation of the geographic
operating segments under paragraph&nbsp;17 of
SFAS&nbsp;No.&nbsp;131 and believes it meets each of the
respective criteria set forth. The Company delivers similar
products and services within each of its geographic divisional
operations. Each geographic and divisional service area utilizes
similar means for delivering the programming of the
Company&#146;s services; have similarity in the type or class of
customer receiving the products and services; distributes the
Company&#146;s services over a unified network; and operates
within a consistent regulatory environment. In addition, each of
the geographic divisional operating segments has similar
economic characteristics. In light of the Company&#146;s similar
services, means for delivery, similarity in type of customers,
the use of a unified network and other considerations across its
geographic divisional operating structure, management has
determined that the Company has one reportable segment,
broadband services.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">4.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Acquisitions</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;28, 2002, CC Systems, LLC, a
subsidiary of the Company, and High Speed Access Corp.
(&#147;HSA&#148;) closed the Company&#146;s acquisition from HSA
of the contracts and associated assets, and assumed related
liabilities, that served certain of the Company&#146;s
high-speed data customers. At closing, the Company paid
approximately $78&nbsp;million in cash and delivered
37,000&nbsp;shares of HSA&#146;s Series&nbsp;D convertible
preferred stock and all the warrants to buy HSA common stock
owned by the Company. The purchase price has been allocated to
assets acquired and liabilities assumed based on fair values,
including approximately $8&nbsp;million assigned to intangible
assets and amortized over an average useful life of three years
and approximately $52&nbsp;million assigned to goodwill. During
the period from 1997 to 2000, certain subsidiaries of the
Company entered into Internet-access related service agreements
with HSA, and both Vulcan Ventures and certain of the
Company&#146;s subsidiaries made equity investments in HSA. (see
Note&nbsp;22 for additional information).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2002, Interlink Communications Partners,
LLC, Rifkin Acquisition Partners, LLC and Charter Communications
Entertainment&nbsp;I, LLC, each an indirect, wholly-owned
subsidiary of Charter Holdings, completed the purchase of
certain assets of Enstar Income Program&nbsp;II-2, L.P., Enstar
Income Program&nbsp;IV-3, L.P., Enstar Income/ Growth Program
Six-A, L.P., Enstar Cable of Macoupin County and Enstar&nbsp;IV/
PBD Systems Venture, serving approximately 21,600 (unaudited)
customers, for a total cash purchase price of $48&nbsp;million.
In September 2002, Charter Communications Entertainment&nbsp;I,
LLC purchased all of Enstar Income Program&nbsp;II-1,
L.P.&#146;s Illinois cable systems, serving approximately 6,400
(unaudited)&nbsp;customers, for a cash purchase price of
$15&nbsp;million. Enstar Communications Corporation, a direct
subsidiary of Charter Holdco, is a general partner of the Enstar
limited partnerships but does not exercise control over them.
The purchase prices were allocated to assets acquired based on
fair values, including $41&nbsp;million assigned to franchises
and $4&nbsp;million assigned to other intangible assets
amortized over a useful life of three years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 2002 acquisitions were funded primarily from
borrowings under the credit facilities of the Company&#146;s
subsidiaries.
</FONT>

<P align="center"><FONT size="2">F-41
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">5.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Allowance for Doubtful Accounts</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Activity in the allowance for doubtful accounts
is summarized as follows for the years presented:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance, beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charged to expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Uncollected balances written off, net of
    recoveries
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(94</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(81</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(122</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance, end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">6.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Property, Plant and Equipment</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property, plant and equipment consists of the
following as of December&nbsp;31, 2004 and 2003:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cable distribution systems
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,347</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Customer equipment and installations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Vehicles and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">430</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Buildings and leasehold improvements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">578</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Furniture and fixtures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,964</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less: accumulated depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,311</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,950</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company periodically evaluates the estimated
useful lives used to depreciate its assets and the estimated
amount of assets that will be abandoned or have minimal use in
the future. A significant change in assumptions about the extent
or timing of future asset retirements, or in the Company&#146;s
use of new technology and upgrade programs, could materially
affect future depreciation expense.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation expense for the years ended
December&nbsp;31, 2004, 2003 and 2002 was $1.5&nbsp;billion,
$1.5&nbsp;billion and $1.4&nbsp;billion respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">7.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Franchises and Goodwill</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;1, 2002, the Company adopted
Statement of Financial Accounting Standards (&#147;SFAS&#148;)
No.&nbsp;142, which eliminates the amortization of
indefinite-lived intangible assets. Accordingly, beginning
January&nbsp;1, 2002, all franchises that qualify for
indefinite-life treatment under SFAS&nbsp;No.&nbsp;142 are no
longer amortized against earnings but instead are tested for
impairment annually based on valuations, or more frequently as
warranted by events or changes in circumstances. Based on the
guidance prescribed in Emerging Issues Task Force
(&#147;EITF&#148;) Issue No.&nbsp;02-7, <I>Unit of Accounting
for Testing of Impairment of Indefinite-Lived Intangible
Assets</I>, franchises are aggregated into essentially
inseparable asset groups to conduct the valuations. The asset
groups generally represent geographic clustering of the
Company&#146;s cable systems into groups by which such systems
are managed. Management believes such grouping represents the
highest and best use of those assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s valuations, which are based on
the present value of projected after tax cash flows, result in a
value of property, plant and equipment, franchises, customer
relationships and its total entity
</FONT>

<P align="center"><FONT size="2">F-42
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">value. The value of goodwill is the difference
between the total entity value and amounts assigned to the other
assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Franchises, for valuation purposes, are defined
as the future economic benefits of the right to solicit and
service potential customers (customer marketing rights), and the
right to deploy and market new services such as interactivity
and telephony to the potential customers (service marketing
rights). Fair value is determined based on estimated discounted
future cash flows using assumptions consistent with internal
forecasts. The franchise after-tax cash flow is calculated as
the after-tax cash flow generated by the potential customers
obtained and the new services added to those customers in future
periods. The sum of the present value of the franchises&#146;
after-tax cash flow in years 1 through 10 and the continuing
value of the after-tax cash flow beyond year 10 yields the fair
value of the franchise. Prior to the adoption of EITF Topic
D-108, <I>Use of the Residual Method to Value Acquired Assets
Other than Goodwill,</I> discussed below, the Company followed a
residual method of valuing its franchise assets, which had the
effect of including goodwill with the franchise assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company follows the guidance of EITF
Issue&nbsp;02-17, <I>Recognition of Customer Relationship
Intangible Assets Acquired in a Business Combination, </I>in
valuing customer relationships. Customer relationships, for
valuation purposes, represent the value of the business
relationship with existing customers and are calculated by
projecting future after-tax cash flows from these customers
including the right to deploy and market additional services
such as interactivity and telephony to these customers. The
present value of these after-tax cash flows yield the fair value
of the customer relationships. Substantially all acquisitions
occurred prior to January&nbsp;1, 2002. The Company did not
record any value associated with the customer relationship
intangibles related to those acquisitions. For acquisitions
subsequent to January&nbsp;1, 2002 the Company did assign a
value to the customer relationship intangible, which is
amortized over its estimated useful life.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 2004, the SEC staff issued Topic
D-108 which requires the direct method of separately valuing all
intangible assets and does not permit goodwill to be included in
franchise assets. The Company performed an impairment assessment
as of September&nbsp;30, 2004, and adopted Topic D-108 in that
assessment resulting in a total franchise impairment of
approximately $3.3&nbsp;billion. The Company recorded a
cumulative effect of accounting change of $765&nbsp;million
(approximately $875&nbsp;million before tax effects of
$91&nbsp;million and minority interest effects of
$19&nbsp;million) for the year ended December&nbsp;31, 2004
representing the portion of the Company&#146;s total franchise
impairment attributable to no longer including goodwill with
franchise assets. The effect of the adoption was to increase net
loss and loss per share by $765&nbsp;million and $2.55 for the
year ended December&nbsp;31, 2004. The remaining
$2.4&nbsp;billion of the total franchise impairment was
attributable to the use of lower projected growth rates and the
resulting revised estimates of future cash flows in the
Company&#146;s valuation, and was recorded as impairment of
franchises in the Company&#146;s accompanying consolidated
statements of operations for the year ended December&nbsp;31,
2004. Sustained analog video customer losses by the Company in
the third quarter of 2004 primarily as a result of increased
competition from direct broadcast satellite providers and
decreased growth rates in the Company&#146;s high-speed data
customers in the third quarter of 2004, in part, as a result of
increased competition from digital subscriber line service
providers led to the lower projected growth rates and the
revised estimates of future cash flows from those used at
October&nbsp;1, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The valuation completed at October&nbsp;1, 2003
showed franchise values in excess of book value and thus
resulted in no impairment. The Company&#146;s annual impairment
assessment as of October&nbsp;1, 2002, based on revised
estimates from January&nbsp;1, 2002 of future cash flows and
projected long-term growth rates in the Company&#146;s
valuation, led to the recognition of a $4.6&nbsp;billion
impairment charge in the fourth quarter of 2002.
</FONT>

<P align="center"><FONT size="2">F-43
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2004 and 2003,
indefinite-lived and finite-lived intangible assets are
presented in the following table:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Gross</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Net</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Gross</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Net</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amortization</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amortization</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Indefinite-lived intangible assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Franchises with indefinite lives
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,845</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,845</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Goodwill
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,658</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,658</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Finite-lived intangible assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Franchises with finite lives
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the year ended December&nbsp;31, 2004, the
net carrying amount of indefinite-lived intangible assets was
reduced by $490&nbsp;million as a result of the sale of cable
systems, primarily the sale to Atlantic Broadband Finance, LLC,
discussed in Note&nbsp;2. Additionally, in the first and fourth
quarters of 2004, approximately $29&nbsp;million and
$8&nbsp;million, respectively, of franchises that were
previously classified as finite-lived were reclassified to
indefinite-lived, based on the Company&#146;s renewal of these
franchise assets in 2003 and 2004. Franchise amortization
expense for the years ended December&nbsp;31, 2004, 2003 and
2002 was $4&nbsp;million, $9&nbsp;million and $9&nbsp;million,
respectively, which represents the amortization relating to
franchises that did not qualify for indefinite-life treatment
under SFAS&nbsp;No.&nbsp;142, including costs associated with
franchise renewals. The Company expects that amortization
expense on franchise assets will be approximately
$3&nbsp;million annually for each of the next five years. Actual
amortization expense in future periods could differ from these
estimates as a result of new intangible asset acquisitions or
divestitures, changes in useful lives and other relevant factors.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">8.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Accounts Payable and Accrued
    Expenses</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounts payable and accrued expenses consist of
the following as of December&nbsp;31, 2004 and 2003:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounts payable&nbsp;&#151; trade
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accrued capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accrued expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">324</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Programming costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Franchise related fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">State sales tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">288</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">288</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-44
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">9.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Long-Term Debt</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Long-term debt consists of the following as of
December&nbsp;31, 2004 and 2003:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Face</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accreted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Face</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accreted</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Long-Term Debt</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Communications, Inc.:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">5.75%&nbsp;convertible senior notes due 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">618</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">618</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">4.750%&nbsp;convertible senior notes due 2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">5.875%&nbsp;convertible senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">863</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">834</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Holdings:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8.250%&nbsp;senior notes due 2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8.625%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,242</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">9.920%&nbsp;senior discount notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.000%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.250%&nbsp;senior notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.750%&nbsp;senior discount notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.750%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">873</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.125%&nbsp;senior notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">13.500%&nbsp;senior discount notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">589</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">517</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">9.625%&nbsp;senior notes due 2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.000%&nbsp;senior notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">708</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">708</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.750%&nbsp;senior discount notes due 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">939</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">803</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">939</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">717</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">12.125%&nbsp;senior discount notes due 2012
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">259</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">231</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CCH&nbsp;II, LLC:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.250%&nbsp;senior notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CCO Holdings, LLC:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8 3/4%&nbsp;senior notes due 2013
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Senior floating notes due 2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Operating:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8%&nbsp;senior second-lien notes due 2012
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">8 3/8%&nbsp;senior second-lien notes due 2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Renaissance Media Group LLC:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">10.000%&nbsp;senior discount notes due 2008
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CC V Holdings, LLC:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">11.875%&nbsp;senior discount notes due 2008
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Credit Facilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Operating
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,459</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,459</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CC VI Operating
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">868</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">868</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Falcon Cable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">856</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">856</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CC VIII Operating
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,044</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,044</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,208</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-45
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accreted values presented above represents
the face value of the notes less the original issue discount at
the time of sale plus the accretion to the balance sheet date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;22, 2004, the Company issued
$862.5&nbsp;million original principal amount of
5.875%&nbsp;convertible senior notes due 2009, which are
convertible into shares of Charter&#146;s Class&nbsp;A common
stock, par value $.001&nbsp;per share, at a rate of
413.2231&nbsp;shares per $1,000 principal amount of notes (or
approximately $2.42&nbsp;per share), subject to adjustment in
certain circumstances. On December&nbsp;23, 2004, the Company
used a portion of the proceeds from the sale of the notes to
redeem all of its outstanding 5.75%&nbsp;convertible senior
notes due 2005 (total principal amount of $588&nbsp;million).
The redemption resulted in a loss on extinguishment of debt of
$10&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2004, Charter&#146;s indirect
subsidiaries, Charter Operating and Charter Communications
Operating Capital Corp., sold $1.5&nbsp;billion of senior
second-lien notes in a private transaction. Additionally,
Charter Operating amended and restated its $5.1&nbsp;billion
credit facilities, among other things, to defer maturities and
increase availability under those facilities to approximately
$6.5&nbsp;billion, consisting of a $1.5&nbsp;billion six-year
revolving credit facility, a $2.0&nbsp;billion six-year term
loan facility and a $3.0&nbsp;billion seven-year term loan
facility. Charter Operating used the additional borrowings under
the amended and restated credit facilities, together with
proceeds from the sale of the Charter Operating senior
second-lien notes to refinance the credit facilities of its
subsidiaries, CC VI Operating Company, LLC (&#147;CC VI
Operating&#148;), Falcon Cable Communications, LLC (&#147;Falcon
Cable&#148;), and CC VIII Operating, LLC (&#147;CC VIII
Operating&#148;), all in concurrent transactions. In addition,
Charter Operating was substituted as the lender in place of the
banks under those subsidiaries&#146; credit facilities. These
transactions resulted in losses on extinguishment of debt of
$21&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recognized a loss of approximately
$23&nbsp;million recorded as loss on debt to equity conversion
on the accompanying consolidated statement of operations for the
year ended December&nbsp;31, 2004 from privately negotiated
exchanges of a total of $30&nbsp;million principal amount of
Charter&#146;s 5.75%&nbsp;convertible senior notes for shares of
Charter Class&nbsp;A common stock. The exchanges resulted in the
issuance of more shares in the exchange transaction than would
have been issuable under the original terms of the convertible
senior notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 2003, Charter, Charter Holdings and
their indirect subsidiary, CCH II purchased, in a non-monetary
transaction, a total of approximately $609&nbsp;million
principal amount of Charter&#146;s outstanding convertible
senior notes and approximately $1.3&nbsp;billion principal
amount of the senior notes and senior discount notes issued by
Charter Holdings from institutional investors in a small number
of privately negotiated transactions. As consideration for these
securities, CCH&nbsp;II issued approximately $1.6&nbsp;billion
principal amount of 10.25%&nbsp;notes due 2010, and realized
approximately $294&nbsp;million of debt discount. CCH II also
issued an additional $30&nbsp;million principal amount of
10.25%&nbsp;notes for an equivalent amount of cash and used the
proceeds for transaction costs and for general corporate
purposes. This transaction resulted in a gain on extinguishment
of debt of $267&nbsp;million for the year ended
December&nbsp;31, 2003. See discussion of the CCH&nbsp;II notes
below for more details.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">5.75% Charter Convertible Notes.
</FONT></I><FONT size="2">In October and November 2000, Charter
issued 5.75%&nbsp;convertible senior notes with a total
principal amount at maturity of $750&nbsp;million. The 5.75%
Charter convertible notes were convertible at the option of the
holder into shares of Class&nbsp;A common stock at a conversion
rate of 46.3822&nbsp;shares per $1,000 principal amount of
notes, which was equivalent to a price of $21.56&nbsp;per share,
subject to certain adjustments. The remaining $588&nbsp;million
of these notes was redeemed on December&nbsp;23, 2004 at a price
of 101.15% of the outstanding principal amount plus accrued and
unpaid interest through the redemption date.
</FONT>

<P align="center"><FONT size="2">F-46
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">4.75% Charter Convertible
Notes.</FONT></I><FONT size="2"> In May 2001, Charter issued
4.75%&nbsp;convertible senior notes with a total principal
amount at maturity of $633&nbsp;million. As of December&nbsp;31,
2004, there was $156&nbsp;million in total principal amount of
these notes outstanding. The 4.75% Charter convertible notes
rank equally with any of Charter&#146;s future unsubordinated
and unsecured indebtedness, but are structurally subordinated to
all existing and future indebtedness and other liabilities of
Charter&#146;s subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 4.75% Charter convertible notes are
convertible at the option of the holder into shares of
Class&nbsp;A common stock at a conversion rate of
38.0952&nbsp;shares per $1,000 principal amount of notes, which
is equivalent to a price of $26.25&nbsp;per share, subject to
certain adjustments. Specifically, the adjustments include
anti-dilutive provisions, which automatically occur based on the
occurrence of specified events to provide protection rights to
holders of the notes. Additionally, Charter may adjust the
conversion ratio under certain circumstances when deemed
appropriate. These notes are redeemable at Charter&#146;s option
at amounts decreasing from 101.9% to 100% of the principal
amount, plus accrued and unpaid interest beginning on
June&nbsp;4, 2004, to the date of redemption. Interest is
payable semiannually on December&nbsp;1 and June&nbsp;1,
beginning December&nbsp;1, 2001, until maturity on June&nbsp;1,
2006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon a change of control, subject to certain
conditions and restrictions, Charter may be required to
repurchase the notes, in whole or in part, at 100% of their
principal amount plus accrued interest at the repurchase date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">5.875% Charter Convertible Notes.
</FONT></I><FONT size="2">In November 2004, Charter issued
5.875%&nbsp;convertible senior notes due 2009 with a total
original principal amount of $862.5&nbsp;million. The 5.875%
Charter convertible notes are convertible at any time at the
option of the holder into shares of Class&nbsp;A common stock at
an initial conversion rate of 413.2231&nbsp;shares per $1,000
principal amount of notes, which is equivalent to a conversion
price of approximately $2.42&nbsp;per share, subject to certain
adjustments. Specifically, the adjustments include anti-dilutive
provisions, which cause adjustments to occur automatically based
on the occurrence of specified events to provide protection
rights to holders of the notes. The conversion rate may also be
increased (but not to exceed 462&nbsp;shares per $1,000
principal amount of notes) upon a specified change of control
transaction. Additionally, Charter may elect to increase the
conversion rate under certain circumstances when deemed
appropriate and subject to applicable limitations of the NASDAQ
stock market. Holders who convert their notes prior to
November&nbsp;16, 2007 will receive an early conversion make
whole amount in respect of their notes based on a proportional
share of the portfolio of pledged securities described below,
with specified adjustments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 5.875% Charter convertible notes are
unsecured (except with respect to the collateral as described
below) and rank equally with existing and future unsubordinated
and unsecured indebtedness (except with respect to the
collateral described below), but are structurally subordinated
to all existing and future indebtedness and other liabilities of
Charter&#146;s subsidiaries. Upon a change of control and
certain other fundamental changes, subject to certain conditions
and restrictions, Charter may be required to repurchase the
notes, in whole or in part, at 100% of their principal amount
plus accrued interest at the repurchase date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest is payable semi-annually in arrears.
Charter Holdco used a portion of the proceeds from the sale of
the notes to purchase a portfolio of U.S.&nbsp;government
securities in an amount which the Company believes will be
sufficient to make the first six interest payments on the notes.
These government securities were pledged to the Company as
security for a mirror note issued by Charter Holdco to Charter
(as discussed below) and pledged to the trustee under the
indenture governing the notes as security for the Company&#146;s
obligations thereunder. The Company expects to use such
securities to fund the first six interest payments under the
notes. The pledged securities totaled $144&nbsp;million at
December&nbsp;31, 2004. Any holder that converts its notes prior
to the third anniversary of the issue date will be entitled to
receive, in
</FONT>

<P align="center"><FONT size="2">F-47
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">addition to the requisite number of shares upon
conversion, an interest make whole payment equal to the cash
proceeds from the sale by the trustee of that portion of the
remaining pledged U.S.&nbsp;government securities which secure
interest payments on the notes so converted, subject to certain
limitations with respect to notes that have not been sold prior
to being registered under the Securities Act of 1933.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following the earlier of the sale of the notes
pursuant to an effective registration statement or the date two
years following the issue date, the notes in whole or in part
may be redeemed for cash at any time at a redemption price equal
to 100% of the aggregate principal amount plus accrued and
unpaid interest, deferred interest and liquidated damages, if
any, but only if for any 20 trading days in any 30 consecutive
trading day period the closing price has exceeded 180% of the
conversion price, if such 30 trading day period begins prior to
November&nbsp;16, 2007 or 150% of the conversion price, if such
30 trading period begins thereafter. Holders who convert notes
that the Company has called for redemption shall receive, in
addition to the early conversion make whole amount, if
applicable, the present value of the interest on the notes
converted that would have been payable for the period from the
later of November&nbsp;17, 2007 and the redemption date through
the scheduled maturity date for the notes, plus any accrued
deferred interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is required to register the 5.875%
Charter convertible notes by April&nbsp;21, 2005. If the 5.875%
Charter convertible notes are not registered by such date, the
Company will incur liquidating damages as defined in the related
indenture. In conjunction with issuing the 5.875% Charter
convertible notes, the Company filed a registration statement to
sell up to 150&nbsp;million shares of the Company&#146;s
Class&nbsp;A common stock pursuant to a share lending agreement.
The share lending agreement is required to be registered by
April&nbsp;1, 2005. If the share lending agreement is not
registered by such date, the Company will incur liquidating
damages as defined in the related indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with our November 2004 sale of the
$862.5&nbsp;million principal amount of 5.875%&nbsp;convertible
senior notes due 2009, Charter Holdco issued to Charter mirror
notes in identical principal amount in exchange for the proceeds
from its offering. Charter Holdco then purchased and pledged
certain U.S.&nbsp;government securities to Charter as security
for the mirror notes (which were in turn repledged by Charter to
the trustee for the benefit of holders of Charter&#146;s
5.875%&nbsp;convertible senior notes and which Charter expects
to use to fund the first six interest payments on the notes),
and agreed to lend common units to Charter, the terms of which
will, to the extent practicable, mirror the terms of the shares.
Charter Holdco also redeemed the remaining $588&nbsp;million
principal amount of the mirror notes in respect of our
5.75%&nbsp;convertible senior notes due 2005 concurrently with
its December&nbsp;23, 2004 redemption of its
5.75%&nbsp;convertible senior notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, in December 2004, Charter Holdco
entered into a unit lending agreement with Charter in which it
agreed to lend common units to Charter that would mirror the
anticipated loan of Class&nbsp;A common shares by Charter to
Citigroup Global Markets pursuant to a share lending agreement.
The members of Charter Holdco (including the entities controlled
by Mr.&nbsp;Allen) also at that time entered into a letter
agreement providing, among other things, that for purposes of
the allocation provisions of the Limited Liability Company
Agreement of Charter Holdco, the mirror units be treated as
disregarded and not outstanding until such time (and except to
the extent) that, under Charter&#146;s share lending agreement,
Charter treats the loaned shares in a manner that assumes they
will neither be returned by Charter by the borrower nor
otherwise be acquired by Charter in lieu of such a return.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">March 1999 Charter Holdings
Notes.</FONT></I><FONT size="2"> The March 1999 Charter Holdings
notes are general unsecured obligations of Charter Holdings and
Charter Communications Capital Corporation (&#147;Charter
Capital&#148;). The March 1999 8.250% Charter Holdings notes
mature on April&nbsp;1, 2007, and as of December&nbsp;31, 2004,
there was $451&nbsp;million in total principal amount
outstanding. The March 1999 8.625% Charter Holdings notes mature
on April&nbsp;1, 2009 and as of December&nbsp;31, 2004, there
was $1.2&nbsp;billion in total principal
</FONT>

<P align="center"><FONT size="2">F-48
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">amount outstanding. The March 1999 9.920% Charter
Holdings notes mature on April&nbsp;1, 2011 and as of
December&nbsp;31, 2004, the total principal amount outstanding
and accreted value was $1.1&nbsp;billion. Cash interest on the
March 1999 9.920% Charter Holdings notes began to accrue on
April&nbsp;1, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The March 1999 Charter Holdings notes are senior
debt obligations of Charter Holdings and Charter Capital. They
rank equally with all other current and future unsubordinated
obligations of Charter Holdings and Charter Capital. They are
structurally subordinated to the obligations of Charter
Holdings&#146; subsidiaries, including the CCH&nbsp;II notes,
the CCO Holdings notes, the Renaissance notes, the CC V Holdings
notes, the Charter Operating credit facilities and the Charter
Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and Charter Capital will not
have the right to redeem the March 1999 8.250% Charter Holdings
notes prior to their maturity on April&nbsp;1, 2007. On or after
April&nbsp;1, 2004, Charter Holdings and Charter Capital may
redeem some or all of the March 1999 8.625% Charter Holdings
notes and the March 1999 9.920% Charter Holdings notes at any
time, in each case, at a premium. The optional redemption price
declines to 100% of the principal amount of March 1999 Charter
Holdings notes redeemed, plus accrued and unpaid interest, if
any, for redemption on or after April&nbsp;1, 2007.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding March 1999 Charter Holdings
notes at 101% of their principal amount or accreted value, as
applicable, plus accrued and unpaid interest, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the March 1999 Charter
Holdings notes contain restrictive covenants that limit certain
transactions or activities by Charter Holdings and its
restricted subsidiaries. Substantially all of Charter
Holdings&#146; direct and indirect subsidiaries are currently
restricted subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">January 2000 Charter Holdings
Notes.</FONT></I><FONT size="2"> The January 2000 Charter
Holdings notes are general unsecured obligations of Charter
Holdings and Charter Capital. The January 2000 10.00% Charter
Holdings notes mature on April&nbsp;1, 2009, and as of
December&nbsp;31, 2004, there was $640&nbsp;million in total
principal amount of these notes outstanding. The January 2000
10.25% Charter Holdings notes mature on January&nbsp;15, 2010
and as of December&nbsp;31, 2004, there was $318&nbsp;million in
total principal amount of these notes outstanding. The January
2000 11.75% Charter Holdings notes mature on January&nbsp;15,
2010 and as of December&nbsp;31, 2004, the total principal
amount outstanding was $450&nbsp;million and the total accreted
value of these notes was approximately $448&nbsp;million. Cash
interest on the January 2000 11.75% Charter Holdings notes began
to accrue on January&nbsp;15, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2000 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with all other current and future
unsubordinated obligations of Charter Holdings and Charter
Capital. They are structurally subordinated to the obligations
of Charter Holdings&#146; subsidiaries, including the
CCH&nbsp;II notes, the CCO Holdings notes, the Renaissance
notes, the CC V Holdings notes, the Charter Operating credit
facilities and the Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and Charter Capital will not
have the right to redeem the January 2000 10.00% Charter
Holdings notes prior to their maturity on April&nbsp;1, 2009.
Charter Holdings and Charter Capital may redeem some or all of
the January 2000 10.25% Charter Holdings notes and the January
2000 11.75% Charter Holdings notes at any time, in each case, at
a premium. The optional redemption price declines to 100% of the
principal amount of the January 2000 Charter Holdings notes
redeemed, plus accrued and unpaid interest, if any, for
redemption on or after January&nbsp;15, 2008.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2000 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
</FONT>

<P align="center"><FONT size="2">F-49
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the January 2000 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 Charter
Holdings notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">January 2001 Charter Holdings
Notes.</FONT></I><FONT size="2"> The January 2001 Charter
Holdings notes are general unsecured obligations of Charter
Holdings and Charter Capital. The January 2001 10.750% Charter
Holdings notes mature on October&nbsp;1, 2009, and as of
December&nbsp;31, 2004, there was $874&nbsp;million in total
principal amount of these notes outstanding. The January 2001
11.125% Charter Holdings notes mature on January&nbsp;15, 2011
and as of December&nbsp;31, 2004, there was $500&nbsp;million in
total principal amount outstanding. The January 2001 13.500%
Charter Holdings notes mature on January&nbsp;15, 2011 with a
total principal amount at maturity of $675&nbsp;million. As of
December&nbsp;31, 2004, the total accreted value of these
13.500%&nbsp;notes was approximately $589&nbsp;million. Cash
interest on the January 2001 13.500% Charter Holdings notes will
not accrue prior to January&nbsp;15, 2006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2001 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with all other current and future
unsubordinated obligations of Charter Holdings and Charter
Capital. They are structurally subordinated to the obligations
of Charter Holdings&#146; subsidiaries, including the
CCH&nbsp;II notes, the CCO Holdings notes, the Renaissance
notes, the CC V Holdings notes, the Charter Operating credit
facilities and the Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and Charter Capital will not
have the right to redeem the January 2001 10.750% Charter
Holdings notes prior to their maturity date on October&nbsp;1,
2009. On or after January&nbsp;15, 2006, Charter Holdings and
Charter Capital may redeem some or all of the January 2001
11.125% Charter Holdings notes and the January 2001 13.500%
Charter Holdings notes at any time, in each case, at a premium.
The optional redemption price declines to 100% of the principal
amount of the January 2001 Charter Holdings notes redeemed, plus
accrued and unpaid interest, if any, for redemption on or after
January&nbsp;15, 2009.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2001 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the January 2001 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 and January
2000 Charter Holdings notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">May 2001 Charter Holdings
Notes.</FONT></I><FONT size="2"> The May 2001 Charter Holdings
notes are general unsecured obligations of Charter Holdings and
Charter Capital. The May 2001 9.625% Charter Holdings notes
mature on November&nbsp;15, 2009, and as of December&nbsp;31,
2004, combined with the January 2002 additional bond issue,
there was $640&nbsp;million in total principal amount
outstanding. The May 2001 10.000% Charter Holdings notes mature
on May&nbsp;15, 2011 and as of December&nbsp;31, 2004, combined
with the January 2002 additional bond issue, there was
$710&nbsp;million in total principal amount outstanding. The May
2001 11.750% Charter Holdings notes mature on May&nbsp;15, 2011
and as of December&nbsp;31, 2004, the total principal amount
outstanding was $939&nbsp;million and the total accreted value
of the 11.750%&nbsp;notes was approximately $803&nbsp;million.
Cash interest on the May 2001 11.750% Charter Holdings notes
will not accrue prior to May&nbsp;15, 2006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The May 2001 Charter Holdings notes are senior
debt obligations of Charter Holdings and Charter Capital. They
rank equally with all other current and future unsubordinated
obligations of Charter Holdings and Charter Capital. They are
structurally subordinated to the obligations of Charter
Holdings&#146;
</FONT>

<P align="center"><FONT size="2">F-50
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">subsidiaries, including the CCH&nbsp;II notes,
the CCO Holdings notes, the Renaissance notes, the CC&nbsp;V
Holdings notes, the Charter Operating credit facilities and the
Charter Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Holdings and Charter Capital will not
have the right to redeem the May 2001 9.625% Charter Holdings
notes prior to their maturity on November&nbsp;15, 2009. On or
after May&nbsp;15, 2006, Charter Holdings and Charter Capital
may redeem some or all of the May 2001 10.000% Charter Holdings
notes and the May 2001 11.750% Charter Holdings notes at any
time, in each case, at a premium. The optional redemption price
declines to 100% of the principal amount of the May 2001 Charter
Holdings notes redeemed, plus accrued and unpaid interest, if
any, for redemption on or after May&nbsp;15, 2009.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding May 2001 Charter Holdings notes
at 101% of their total principal amount or accreted value, as
applicable, plus accrued and unpaid interest, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the May 2001 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999, January
2000 and January 2001 Charter Holdings notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">January 2002 Charter Holdings Notes.
</FONT></I><FONT size="2">The January 2002 Charter Holdings
notes are general unsecured obligations of Charter Holdings and
Charter Capital. The January 2002 Charter Holdings notes consist
of $330&nbsp;million in total principal amount at maturity of
12.125%&nbsp;senior discount notes due 2012.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2002 12.125%&nbsp;senior discount
notes mature on January&nbsp;15, 2012, and as of
December&nbsp;31, 2004, the total principal amount outstanding
was $330&nbsp;million and the total accreted value of these
notes was approximately $259&nbsp;million. Cash interest on the
January 2002 12.125% Charter Holdings notes will not accrue
prior to January&nbsp;15, 2007.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The January 2002 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with the current and future unsecured and
unsubordinated debt of Charter Holdings. They are structurally
subordinated to the obligations of Charter Holdings&#146;
subsidiaries, including the CCH&nbsp;II notes, the CCO Holdings
notes, the Renaissance notes, the CC&nbsp;V Holdings notes, the
Charter Operating credit facilities and the Charter Operating
notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Holdings 12.125%&nbsp;senior discount
notes are redeemable at the option of the issuers at amounts
decreasing from 106.063% to 100% of accreted value beginning
January&nbsp;15, 2007.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2002 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the January 2002 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999, January
2000, January 2001 and May 2001 Charter Holdings notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">CCH&nbsp;II Notes.</FONT></I><FONT size="2">
In September 2003, CCH&nbsp;II and CCH&nbsp;II Capital Corp.
jointly issued $1.6&nbsp;billion total principal amount of
10.25%&nbsp;senior notes due 2010. The CCH&nbsp;II notes are
general unsecured obligations of CCH&nbsp;II and CCH&nbsp;II
Capital Corp. They rank equally with all other current or future
unsubordinated obligations of CCH&nbsp;II and CCH&nbsp;II
Capital Corp. The CCH&nbsp;II notes are structurally
subordinated to all obligations of subsidiaries of CCH&nbsp;II,
including the CCO Holdings notes, the Renaissance notes, the
CC&nbsp;V Holdings notes, the Charter Operating credit
facilities and the Charter Operating notes.
</FONT>

<P align="center"><FONT size="2">F-51
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest on the CCH&nbsp;II notes accrues at
10.25%&nbsp;per annum and is payable semi-annually in arrears on
each March 15 and September&nbsp;15, commencing on
March&nbsp;15, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At any time prior to September&nbsp;15, 2006, the
issuers of the CCH&nbsp;II notes may redeem up to 35% of the
total principal amount of the CCH&nbsp;II notes on a pro rata
basis at a redemption price equal to 110.25% of the principal
amount of CCH&nbsp;II notes redeemed, plus any accrued and
unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On or after September&nbsp;15, 2008, the issuers
of the CCH&nbsp;II notes may redeem all or a part of the notes
at a redemption price that declines ratably from the initial
redemption price of 105.125% to a redemption price on or after
September&nbsp;15, 2009 of 100.0% of the principal amount of the
CCH&nbsp;II notes redeemed, plus, in each case, any accrued and
unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of specified change of control
events, CCH&nbsp;II must offer to purchase the outstanding
CCH&nbsp;II notes from the holders at a purchase price equal to
101% of the total principal amount of the notes, plus any
accrued and unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the CCH&nbsp;II notes
contains restrictive covenants that limit certain transactions
or activities by CCH&nbsp;II and its restricted subsidiaries.
Substantially all of CCH&nbsp;II&#146;s direct and indirect
subsidiaries are currently restricted subsidiaries.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">CCO Holdings Notes.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">8 3/4%&nbsp;Senior Notes due 2013</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 2003, CCO Holdings and CCO Holdings
Capital Corp. jointly issued $500&nbsp;million total principal
amount of 8 3/4%&nbsp;senior notes due 2013. The CCO Holdings
notes are general unsecured obligations of CCO Holdings and CCO
Holdings Capital Corp. They rank equally with all other current
or future unsubordinated obligations of CCO Holdings and CCO
Holdings Capital Corp. The CCO Holdings notes are structurally
subordinated to all obligations of CCO Holdings&#146;
subsidiaries, including the Renaissance notes, the CC V Holdings
notes, the Charter Operating credit facilities and the Charter
Operating notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest on the CCO Holdings senior notes accrues
at 8 3/4% per year and is payable semi-annually in arrears on
each May&nbsp;15 and November&nbsp;15.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At any time prior to November&nbsp;15, 2006, the
issuers of the CCO Holdings senior notes may redeem up to 35% of
the total principal amount of the CCO Holdings senior notes to
the extent of public equity proceeds they have received on a pro
rata basis at a redemption price equal to 108.75% of the
principal amount of CCO Holdings senior notes redeemed, plus any
accrued and unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On or after November&nbsp;15, 2008, the issuers
of the CCO Holdings senior notes may redeem all or a part of the
notes at a redemption price that declines ratably from the
initial redemption price of 104.375% to a redemption price on or
after November&nbsp;15, 2011 of 100.0% of the principal amount
of the CCO Holdings senior notes redeemed, plus, in each case,
any accrued and unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of specified change of control
events, CCO Holdings must offer to purchase the outstanding CCO
Holdings senior notes from the holders at a purchase price equal
to 101% of the total principal amount of the notes, plus any
accrued and unpaid interest.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Senior Floating Rate Notes Due 2010</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2004, CCO Holdings and CCO Holdings
Capital Corp. jointly issued $550&nbsp;million total principal
amount of senior floating rate notes due 2010.
</FONT>

<P align="center"><FONT size="2">F-52
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest on the CCO Holdings senior floating rate
notes accrues at the LIBOR rate plus 4.125% annually, from
December&nbsp;15, 2004 or, if interest already has been paid,
from the date it was most recently paid. Interest is reset and
payable quarterly in arrears on each March&nbsp;15,
June&nbsp;15, September 15 and December&nbsp;15, commencing on
March&nbsp;15, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At any time prior to December&nbsp;15, 2006, the
issuers of the senior floating rate notes may redeem up to 35%
of the notes in an amount not to exceed the amount of proceeds
of one or more public equity offerings at a redemption price
equal to 100% of the principal amount, plus a premium equal to
the interest rate per annum applicable to the notes on the date
notice of redemption is given, plus accrued and unpaid interest,
if any, to the redemption date, provided that at least 65% of
the original aggregate principal amount of the notes issued
remains outstanding after the redemption.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The issuers of the senior floating rate notes may
redeem the notes in whole or in part at the issuers&#146; option
from December&nbsp;15, 2006 until December&nbsp;14, 2007 for
102% of the principal amount, from December&nbsp;15, 2007 until
December&nbsp;14, 2008 for 101% of the principal amount and from
and after December&nbsp;15, 2008, at par, in each case, plus
accrued and unpaid interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures governing the CCO Holdings senior
notes contain restrictive covenants that limit certain
transactions or activities by CCO Holdings and its restricted
subsidiaries. Substantially all of CCO Holdings&#146; direct and
indirect subsidiaries are currently restricted subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Charter Operating Notes.
</FONT></I><FONT size="2">On April&nbsp;27, 2004, Charter
Operating and Charter Communications Operating Capital Corp.
jointly issued $1.1&nbsp;billion of 8%&nbsp;senior second-lien
notes due 2012 and $400&nbsp;million of 8 3/8%&nbsp;senior
second-lien notes due 2014, for total gross proceeds of
$1.5&nbsp;billion. Interest on the Charter Operating notes is
payable semi-annually in arrears on each April&nbsp;30 and
October&nbsp;30, commencing on October&nbsp;30, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating notes were sold in a
private transaction that was not subject to the registration
requirements of the Securities Act of 1933. The Charter
Operating notes are not expected to have the benefit of any
exchange or other registration rights, except in specified
limited circumstances. On the issue date of the Charter
Operating notes, because of restrictions contained in the
Charter Holdings indentures, there were no Charter Operating
note guarantees, even though Charter Operating&#146;s immediate
parent, CCO Holdings, and certain of the Company&#146;s
subsidiaries were obligors and/or guarantors under the Charter
Operating credit facilities. Upon the occurrence of the
guarantee and pledge date (generally, the fifth business day
after the Charter Holdings leverage ratio is certified to be
below 8.75 to 1.0), CCO Holdings and those subsidiaries of
Charter Operating that are then guarantors of, or otherwise
obligors with respect to, indebtedness under the Charter
Operating credit facilities and related obligations will be
required to guarantee the Charter Operating notes. The note
guarantee of each such guarantor will be:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a senior obligation of such guarantor;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">structurally senior to the outstanding senior
    notes of CCO Holdings and CCO Holdings Capital Corp. (except in
    the case of CCO Holdings&#146; note guarantee, which ranks
    equally with such senior notes), the outstanding senior notes of
    CCH&nbsp;II and CCH&nbsp;II Capital Corp., the outstanding
    senior notes and senior discount notes of Charter Holdings and
    the outstanding convertible senior notes of Charter (but subject
    to provisions in the Charter Operating indenture that permit
    interest and, subject to meeting the 4.25 to 1.0 leverage ratio
    test, principal payments to be made thereon);&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">senior in right of payment to any future
    subordinated indebtedness of such guarantor.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the above leverage ratio test
being met, CCO Holdings and certain of its subsidiaries provided
the additional guarantees described above during the first
quarter of 2005.
</FONT>

<P align="center"><FONT size="2">F-53
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All the subsidiaries of Charter Operating (except
CCO NR Sub, LLC, and certain other subsidiaries that are not
deemed material and are designated as nonrecourse subsidiaries
under the Charter Operating credit facilities) are restricted
subsidiaries of Charter Operating under the Charter Operating
notes. Unrestricted subsidiaries generally will not be subject
to the restrictive covenants in the Charter Operating indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of specified change of control
events, Charter Operating must offer to purchase the Charter
Operating notes at a purchase price equal to 101% of the total
principal amount of the Charter Operating notes repurchased plus
any accrued and unpaid interest thereon.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the Charter Operating
senior notes contains restrictive covenants that limit certain
transactions or activities by Charter Operating and its
restricted subsidiaries. Substantially all of Charter
Operating&#146;s direct and indirect subsidiaries are currently
restricted subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Renaissance Notes.</FONT></I><FONT size="2">
In connection with the acquisition of Renaissance in April 1999,
the Company assumed $163&nbsp;million principal amount at
maturity of 10.000%&nbsp;senior discount notes due 2008 of which
$49&nbsp;million was repurchased in May 1999. The Renaissance
notes did not require the payment of interest until
April&nbsp;&nbsp;15, 2003. From and after April&nbsp;15, 2003,
the Renaissance notes bear interest, payable semi-annually, on
April&nbsp;15 and October&nbsp;15, commencing on
October&nbsp;15, 2003. The Renaissance notes are due on
April&nbsp;15, 2008.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">CC V Holdings Notes.</FONT></I><FONT size="2">
Charter Holdco acquired CC V Holdings in November 1999 and
assumed CC V Holdings&#146; outstanding 11.875%&nbsp;senior
discount notes due 2008 with an accreted value of
$113&nbsp;million as of December&nbsp;31, 2003. Commencing
December&nbsp;&nbsp;1, 2003, cash interest on the CC V Holdings
11.875%&nbsp;notes will be payable semi-annually on June&nbsp;1
and December&nbsp;1 of each year. In February 2005, these notes
were called with an anticipated redemption date of
March&nbsp;14, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">High-Yield Restrictive Covenants; Limitation
on Indebtedness.</FONT></I><FONT size="2"> The indentures
governing the notes of the Company&#146;s subsidiaries contain
certain covenants that restrict the ability of Charter Holdings,
Charter Capital, CCH&nbsp;II, CCH&nbsp;II Capital Corp., CCO
Holdings, CCO Holdings Capital Corp., Charter Operating, Charter
Communications Operating Capital Corp., the CC V Holdings notes
issuers, Renaissance Media Group, and all of their restricted
subsidiaries to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">incur additional debt;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">pay dividends on equity or repurchase equity;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make investments;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">sell all or substantially all of their assets or
    merge with or into other companies;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">sell assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">enter into sale-leasebacks;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in the case of restricted subsidiaries, create or
    permit to exist dividend or payment restrictions with respect to
    the bond issuers, guarantee their parent companies debt, or
    issue specified equity interests;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">engage in certain transactions with
    affiliates;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">grant liens.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Charter Operating Credit
Facilities.</FONT></I><FONT size="2"> In April 2004, Charter
Operating amended and restated its $5.1&nbsp;billion credit
facilities, among other things, to defer maturities and increase
availability under those
</FONT>

<P align="center"><FONT size="2">F-54
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">facilities to approximately $6.5&nbsp;billion,
consisting of a $1.5&nbsp;billion revolving credit facility with
a maturity date in 2010; a $2.0&nbsp;billion Term A loan
facility of which 12.5% matures in 2007, 30% matures in 2008,
37.5% matures in 2009 and 20% matures in 2010; and a
$3.0&nbsp;billion Term B loan facility which is repayable in 27
equal quarterly installments aggregating in each loan year to 1%
of the original amount of the Term B facility, with the
remaining balance due at final maturity in 2011. Charter
Operating used the additional borrowings under the amended and
restated credit facilities, together with proceeds from the sale
of the Charter Operating senior second-lien notes to refinance
the credit facilities of its subsidiaries, CC&nbsp;VI Operating,
Falcon Cable, and CC&nbsp;VIII Operating,, all in concurrent
transactions. In addition, Charter Operating was substituted as
the lender in place of the banks under those subsidiaries&#146;
credit facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Amounts outstanding under the Charter Operating
credit facilities bear interest, at Charter Operating&#146;s
election, at a base rate or the Eurodollar rate (2.07% to 2.28%
as of December&nbsp;31, 2004), as defined, plus a margin for
Eurodollar loans of up to 3.00% for the Term A facility and
revolving credit facility, and up to 3.25% for the Term B
facility, and for base rate loans of up to 2.00% for the Term A
facility and revolving credit facility, and up to 2.25% for the
Term B facility. A quarterly commitment fee of up to .75% is
payable on the average daily unborrowed balance of the revolving
credit facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The obligations of Charter&#146;s subsidiaries
under the Charter Operating credit facilities (the
&#147;Obligations&#148;) are guaranteed by Charter
Operatings&#146; immediate parent company, CCO Holdings, and the
subsidiaries of Charter Operating, except for immaterial
subsidiaries and subsidiaries precluded from guaranteeing by
reason of the provisions of other indebtedness to which they are
subject (the &#147;non-guarantor subsidiaries&#148;, primarily
Renaissance and CC V Holdings and their subsidiaries). The
Obligations are also secured by (i)&nbsp;a lien on all of the
assets of Charter Operating and its subsidiaries (other than
assets of the non-guarantor subsidiaries), to the extent such
lien can be perfected under the Uniform Commercial Code by the
filing of a financing statement, and (ii)&nbsp;by a pledge by
CCO Holdings of the equity interests owned by it in Charter
Operating or any of Charter Operating&#146;s subsidiaries, as
well as intercompany obligations owing to it by any of such
entities. Upon the Charter Holdings Leverage Ratio (as defined
in the indenture governing the Charter Holdings senior notes and
senior discount notes) being under 8.75 to 1.0, the Charter
Operating credit facilities require that the 11.875%&nbsp;notes
due 2008 issued by CC&nbsp;V Holdings, LLC be redeemed. Because
such Leverage Ratio was determined to be under 8.75 to 1.0 in
February 2005, CC V Holdings has called for redemption of such
notes with an anticipated redemption date of March&nbsp;14,
2005. Following such redemption and provided the Leverage Ratio
of Charter Holdings remains under 8.75 to 1.0, CC&nbsp;V
Holdings and its subsidiaries (other than non-guarantor
subsidiaries) will guarantee the Obligations and grant a lien on
all of their assets as to which a lien can be perfected under
the Uniform Commercial Code by the filing of a financing
statement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Charter Operating credit facilities were
amended and restated previously as of June&nbsp;19, 2003 to
allow for the insertion of intermediate holding companies
between Charter Holdings and Charter Operating. In exchange for
the lenders&#146; consent to the organizational restructuring,
Charter Operating&#146;s pricing increased by 50&nbsp;basis
points across all levels in the pricing grid then in effect
under the Charter Operating credit facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Amounts under the Charter Operating credit
facilities, as amended in 2003, bore interest at the Eurodollar
rate or the base rate, each as defined, plus a margin of up to
3.0% for Eurodollar loans (3.15% to 3.92% as of
December&nbsp;31, 2003) and 2.0% for base rate loans. A
quarterly commitment fee of between 0.25% and 0.375%&nbsp;per
annum was payable on the unborrowed balance of the revolving
credit facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2004, outstanding
borrowings under the Charter Operating credit facilities were
approximately $5.5&nbsp;billion and the unused total potential
availability was $804&nbsp;million.
</FONT>

<P align="center"><FONT size="2">F-55
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">CC VI Operating Credit
Facilities.</FONT></I><FONT size="2"> As discussed above, in
April 2004, Charter Operating was substituted as the lender in
place of the banks for the CC&nbsp;VI Operating Credit
Facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to April 2004, amounts under the CC&nbsp;VI
Operating credit facilities bore interest at the Eurodollar rate
or the base rate, each as defined, plus a margin of up to 2.5%
for Eurodollar loans (2.40% to 3.66% as of December&nbsp;31,
2003) and 1.5% for base rate loans. A quarterly commitment fee
of 0.25%&nbsp;per year was payable on the unborrowed balance of
the Term&nbsp;A facility and the revolving facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Falcon Cable Credit
Facilities.</FONT></I><FONT size="2"> As discussed above, in
April 2004, Charter Operating was substituted as the lender in
place of the banks for the Falcon Cable Credit Facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to April 2004, amounts under the Falcon
Cable credit facilities bore interest at the Eurodollar rate or
the base rate, each as defined, plus a margin of up to 2.25% for
Eurodollar loans (2.40% to 3.42% as of December&nbsp;31, 2003)
and up to 1.25% for base rate loans. A quarterly commitment fee
of between 0.25% and 0.375%&nbsp;per year was payable on the
unborrowed balance of the revolving facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">CC VIII Operating Credit
Facilities.</FONT></I><FONT size="2"> As discussed above, in
April 2004, Charter Operating was substituted as the lender in
place of the banks for the CC&nbsp;VIII Operating Credit
Facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to April 2004, amounts under the
CC&nbsp;VIII Operating credit facilities bear interest at the
Eurodollar rate or the base rate, each as defined, plus a margin
of up to 2.50% for Eurodollar loans (2.15% to 3.66% as of
December&nbsp;31, 2003) and up to 1.50% for base rate loans. A
quarterly commitment fee of 0.25% was payable on the unborrowed
balance of the revolving credit facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Charter Operating Credit Facilities
Restrictive Covenants.</FONT></I><FONT size="2"> The Charter
Operating credit facilities contain representations and
warranties, affirmative and negative covenants similar to those
described above with respect to the indentures governing the
Company&#146;s notes, information requirements, events of
default and financial covenants. The financial covenants, as
defined, measure performance against standards set for leverage,
debt service coverage, and operating cash flow coverage of cash
interest expense on a quarterly basis or as applicable.
Additionally, the credit facilities contain provisions requiring
mandatory loan prepayments under specific circumstances,
including when significant amounts of assets are sold and the
proceeds are not promptly reinvested in assets useful in the
business of the borrower within a specified period. The Charter
Operating credit facilities also provide that in the event that
any indebtedness of CCO Holdings remains outstanding on the
date, which is six months prior to the scheduled final maturity,
the term loans under the Charter Operating credit facilities
will mature and the revolving credit facilities will terminate
on such date. The events of default under the Charter Operating
credit facilities include, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the failure to make payments when due or within
    the applicable grace period,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the failure to comply with specified covenants,
    including but not limited to a covenant to deliver audited
    financial statements with an unqualified opinion from the
    Company&#146;s independent auditors,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the failure to pay or the occurrence of events
    that cause or permit the acceleration of other indebtedness
    owing by CCO Holdings, Charter Operating or Charter
    Operating&#146;s subsidiaries in amounts in excess of
    $50&nbsp;million in aggregate principal amount,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the failure to pay or the occurrence of events
    that result in the acceleration of other indebtedness owing by
    certain of CCO Holdings&#146; direct and indirect parent
    companies in amounts in excess of $200&nbsp;million in aggregate
    principal amount,
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">F-56
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Paul Allen and/or certain of his family members
    and/or their exclusively owned entities (collectively, the
    &#147;Paul Allen Group&#148;) ceasing to have the power,
    directly or indirectly, to vote at least 35% of the ordinary
    voting power of Charter Operating,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the consummation of any transaction resulting in
    any person or group (other than the Paul Allen Group) having
    power, directly or indirectly, to vote more than 35% of the
    ordinary voting power of Charter Operating, unless the Paul
    Allen Group holds a greater share of ordinary voting power of
    Charter Operating,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain of Charter Operating&#146;s indirect or
    direct parent companies having indebtedness in excess of
    $500&nbsp;million aggregate principal amount which remains
    undefeased three months prior to the final maturity of such
    indebtedness,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Charter Operating ceasing to be a wholly-owned
    direct subsidiary of CCO Holdings, except in certain very
    limited circumstances.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of a default under the
Company&#146;s subsidiaries&#146; credit facilities or notes,
the subsidiaries&#146; creditors could elect to declare all
amounts borrowed, together with accrued and unpaid interest and
other fees, to be due and payable. In such event, the
subsidiaries&#146; credit facilities and indentures would not
permit the Company&#146;s subsidiaries to distribute funds to
Charter Holdco or Charter to pay interest or principal on
Charter&#146;s notes. In addition, the lenders under the
Company&#146;s credit facilities could foreclose on their
collateral, which includes equity interests in the
Company&#146;s subsidiaries, and exercise other rights of
secured creditors. In any such case, the Company might not be
able to repay or make any payments on its notes. Additionally,
an acceleration or payment default under Charter
Operating&#146;s credit facilities would cause a cross-default
in the indentures governing the Charter Holdings notes,
CCH&nbsp;II notes, CCO Holdings notes, Charter Operating notes
and Charter&#146;s convertible senior notes and would trigger
the cross-default provision of the Charter Operating Credit
Agreement. Any default under any of the subsidiaries&#146;
credit facilities or notes might adversely affect the holders of
Charter&#146;s notes and the Company&#146;s growth, financial
condition and results of operations and could force the Company
to examine all options, including seeking the protection of the
bankruptcy laws.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based upon outstanding indebtedness as of
December&nbsp;31, 2004, the amortization of term loans,
scheduled reductions in available borrowings of the revolving
credit facilities, and the maturity dates for all senior and
subordinated notes and debentures, total future principal
payments on the total borrowings under all debt agreements as of
December&nbsp;31, 2004, are as follows:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="87%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">186</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">731</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">2008
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,040</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Thereafter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,946</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the amounts of debt scheduled to mature
during 2005, it is management&#146;s intent to fund the
repayments from borrowings on the Company&#146;s revolving
credit facility. The accompanying consolidated balance sheet
reflects this intent by presenting all debt balances as
long-term while the table above reflects actual debt maturities
as of the stated date.
</FONT>

<P align="center"><FONT size="2">F-57
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">10.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Minority Interest and Equity Interest of
    Charter Holdco</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter is a holding company whose primary asset
is a controlling equity interest in Charter Holdco, the indirect
owner of the Company&#146;s cable systems, and $990&nbsp;million
and $774&nbsp;million at December&nbsp;31, 2004 and 2003,
respectively, of mirror notes which are payable by Charter
Holdco to Charter and have the same principal amount and terms
as those of Charter&#146;s convertible senior notes. Minority
interest on the Company&#146;s consolidated balance sheets
represents the ownership percentage of Charter Holdco not owned
by Charter, or 52.8% of total members&#146; equity of Charter
Holdco, plus $656&nbsp;million and $694&nbsp;million of
preferred membership interests in CC VIII, LLC (&#147;CC
VIII&#148;), an indirect subsidiary of Charter Holdco, as of
December&nbsp;31, 2004 and 2003 respectively. As more fully
described in Note&nbsp;22, this preferred interest arises from
the approximately $630&nbsp;million of preferred membership
units issued by CC VIII in connection with an acquisition in
February 2000. As of December&nbsp;31, 2003, minority interest
also includes $25&nbsp;million of preferred interest in Charter
Helicon, LLC, another indirect subsidiary of Charter Holdco,
issued in connection with the 1999 Helicon acquisition. As of
December&nbsp;31, 2004, the preferred interest in Charter
Helicon, LLC was reclassified to other long-term liabilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Members&#146; equity of Charter Holdco was
($4.4)&nbsp;billion, ($57)&nbsp;million and $662&nbsp;million as
of December&nbsp;31, 2004, 2003 and 2002, respectively. Gains
and losses arising from the issuance by Charter Holdco of its
membership units are recorded as capital transactions, thereby
increasing or decreasing shareholders&#146; equity and
decreasing or increasing minority interest on the accompanying
consolidated balance sheets. Minority interest was 52.8% as of
December&nbsp;31, 2004 and 53.5% as of December&nbsp;31, 2003
and 2002. Minority interest includes the proportionate share of
changes in fair value of interest rate risk derivative
agreements. Such amounts are temporary as they are contractually
scheduled to reverse over the life of the underlying instrument.
Additionally, reported losses allocated to minority interest on
the consolidated statement of operations are limited to the
extent of any remaining minority interest on the balance sheet
related to Charter Holdco. Because minority interest in Charter
Holdco was substantially eliminated at December&nbsp;31, 2003,
beginning in 2004, the Company began to absorb substantially all
losses before income taxes that otherwise would have been
allocated to minority interest. This resulted in an additional
$2.4&nbsp;billion of net loss for the year ended
December&nbsp;31, 2004. Subject to any changes in Charter
Holdco&#146;s capital structure, future losses will be
substantially absorbed by Charter. Changes to minority interest
consist of the following for the periods presented:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="82%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Minority</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Interest</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance, December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,434</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest in loss of a subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,176</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest in change in accounting
    principle
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(306</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest in income tax benefit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Changes in fair value of interest rate agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(35</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance, December&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest in loss of a subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(377</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest in income tax benefit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Changes in fair value of interest rate agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-58
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="82%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Minority</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Interest</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance, December&nbsp;31, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">689</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest in loss of a subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Minority interest in cumulative effect of
    accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Reclass of Helicon, LLC interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(25</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Changes in fair value of interest rate agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance, December&nbsp;31, 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">648</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">11.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Preferred Stock&nbsp;&#151;
    Redeemable</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;31, 2001, in connection with its
acquisition of Cable USA, Inc. and certain cable system assets
from affiliates of Cable USA, Inc., the Company issued
505,664&nbsp;shares of Series&nbsp;A Convertible Redeemable
Preferred Stock (the Preferred Stock) valued at and with a
liquidation preference of $51&nbsp;million. Holders of the
Preferred Stock have no voting rights but are entitled to
receive cumulative cash dividends at an annual rate of 5.75%,
payable quarterly. If for any reason Charter fails to pay the
dividends on the Preferred Stock on a timely basis, the dividend
rate on each share increases to an annual rate of 7.75% until
the payment is made. The Preferred Stock is redeemable by
Charter at its option on or after August&nbsp;31, 2004 and must
be redeemed by Charter at any time upon a change of control, or
if not previously redeemed or converted, on August&nbsp;31,
2008. The Preferred Stock is convertible, in whole or in part,
at the option of the holders from April&nbsp;1, 2002 through
August&nbsp;31, 2008, into shares of common stock at an initial
conversion rate equal to a conversion price of $24.71&nbsp;per
share of common stock, subject to certain customary adjustments.
The redemption price per share of Preferred Stock is the
Liquidation Preference of $100, subject to certain customary
adjustments. In the first quarter of 2003, the Company issued
39,595 additional shares of preferred stock valued at and with a
liquidation preference of $4&nbsp;million.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">12.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Common Stock</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s Class&nbsp;A common stock and
Class&nbsp;B common stock are identical except with respect to
certain voting, transfer and conversion rights. Holders of
Class&nbsp;A common stock are entitled to one vote per share and
holder of Class&nbsp;B common stock is entitled to ten votes for
each share of Class&nbsp;B common stock held and for each
Charter Holdco membership unit held. The Class&nbsp;B common
stock is subject to significant transfer restrictions and is
convertible on a share for share basis into Class&nbsp;A common
stock at the option of the holder. Charter Holdco membership
units are exchangeable on a one-for-one basis for shares of
Class&nbsp;A common stock.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">13.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Comprehensive Loss</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain marketable equity securities are
classified as available-for-sale and reported at market value
with unrealized gains and losses recorded as accumulated other
comprehensive loss on the accompanying consolidated balance
sheets. Additionally, the Company reports changes in the fair
value of interest rate agreements designated as hedging the
variability of cash flows associated with floating-rate debt
obligations, that meet the effectiveness criteria of
SFAS&nbsp;No.&nbsp;133, <I>Accounting for Derivative Instruments
and Hedging Activities</I>, in accumulated other comprehensive
loss, after giving effect to the minority interest share of such
gains and losses. Comprehensive loss for the years ended
December&nbsp;31, 2004, 2003 and 2002 was $4.3&nbsp;billion,
$219&nbsp;million and $2.5&nbsp;billion, respectively.
</FONT>

<P align="center"><FONT size="2">F-59
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">14.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Accounting for Derivative Instruments and
    Hedging Activities</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company uses interest rate risk management
derivative instruments, such as interest rate swap agreements
and interest rate collar agreements (collectively referred to
herein as interest rate agreements) to manage its interest
costs. The Company&#146;s policy is to manage interest costs
using a mix of fixed and variable rate debt. Using interest rate
swap agreements, the Company has agreed to exchange, at
specified intervals through 2007, the difference between fixed
and variable interest amounts calculated by reference to an
agreed-upon notional principal amount. Interest rate collar
agreements are used to limit the Company&#146;s exposure to and
benefits from interest rate fluctuations on variable rate debt
to within a certain range of rates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company does not hold or issue derivative
instruments for trading purposes. The Company does, however,
have certain interest rate derivative instruments that have been
designated as cash flow hedging instruments. Such instruments
effectively convert variable interest payments on certain debt
instruments into fixed payments. For qualifying hedges,
SFAS&nbsp;No.&nbsp;133 allows derivative gains and losses to
offset related results on hedged items in the consolidated
statement of operations. The Company has formally documented,
designated and assessed the effectiveness of transactions that
receive hedge accounting. For the years ended December&nbsp;31,
2004, 2003 and 2002, net gain (loss) on derivative instruments
and hedging activities includes gains of $4&nbsp;million and
$8&nbsp;million and losses of $14&nbsp;million, respectively,
which represent cash flow hedge ineffectiveness on interest rate
hedge agreements arising from differences between the critical
terms of the agreements and the related hedged obligations.
Changes in the fair value of interest rate agreements designated
as hedging instruments of the variability of cash flows
associated with floating-rate debt obligations that meet the
effectiveness criteria SFAS&nbsp;No.&nbsp;133 are reported in
accumulated other comprehensive loss. For the years ended
December&nbsp;31, 2004, 2003 and 2002, a gain of
$42&nbsp;million and $48&nbsp;million and losses of
$65&nbsp;million, respectively, related to derivative
instruments designated as cash flow hedges, was recorded in
accumulated other comprehensive loss and minority interest. The
amounts are subsequently reclassified into interest expense as a
yield adjustment in the same period in which the related
interest on the floating-rate debt obligations affects earnings
(losses).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain interest rate derivative instruments are
not designated as hedges as they do not meet the effectiveness
criteria specified by SFAS&nbsp;No.&nbsp;133. However,
management believes such instruments are closely correlated with
the respective debt, thus managing associated risk. Interest
rate derivative instruments not designated as hedges are marked
to fair value, with the impact recorded as gain (loss) on
derivative instruments and hedging activities in the
Company&#146;s consolidated statement of operations. For the
years ended December&nbsp;31, 2004, 2003 and 2002, net gain
(loss) on derivative instruments and hedging activities includes
gains of $65&nbsp;million, $57&nbsp;million and losses of
$101&nbsp;million, respectively, for interest rate derivative
instruments not designated as hedges.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2004, 2003 and 2002, the
Company had outstanding $2.7&nbsp;billion, $3.0&nbsp;billion and
$3.4&nbsp;billion and $20&nbsp;million, $520&nbsp;million and
$520&nbsp;million, respectively, in notional amounts of interest
rate swaps and collars, respectively. The notional amounts of
interest rate instruments do not represent amounts exchanged by
the parties and, thus, are not a measure of exposure to credit
loss. The amounts exchanged are determined by reference to the
notional amount and the other terms of the contracts.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">15.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Fair Value of Financial Instruments</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has estimated the fair value of its
financial instruments as of December&nbsp;31, 2004 and 2003
using available market information or other appropriate
valuation methodologies. Considerable judgment, however, is
required in interpreting market data to develop the estimates of
fair value.
</FONT>

<P align="center"><FONT size="2">F-60
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Accordingly, the estimates presented in the
accompanying consolidated financial statements are not
necessarily indicative of the amounts the Company would realize
in a current market exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The carrying amounts of cash, receivables,
payables and other current assets and liabilities approximate
fair value because of the short maturity of those instruments.
The Company is exposed to market price risk volatility with
respect to investments in publicly traded and privately held
entities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The fair value of interest rate agreements
represents the estimated amount the Company would receive or pay
upon termination of the agreements. Management believes that the
sellers of the interest rate agreements will be able to meet
their obligations under the agreements. In addition, some of the
interest rate agreements are with certain of the participating
banks under the Company&#146;s credit facilities, thereby
reducing the exposure to credit loss. The Company has policies
regarding the financial stability and credit standing of major
counterparties. Nonperformance by the counterparties is not
anticipated nor would it have a material adverse effect on the
Company&#146;s consolidated financial condition or results of
operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The estimated fair value of the Company&#146;s
notes and interest rate agreements at December&nbsp;31, 2004 and
2003 are based on quoted market prices, and the fair value of
the credit facilities is based on dealer quotations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A summary of the carrying value and fair value of
the Company&#146;s debt and related interest rate agreements at
December&nbsp;31, 2004 and 2003 is as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fair</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fair</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Debt</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter convertible notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">732</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Holdings debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,579</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,316</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,431</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CCH&nbsp;II debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,698</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,680</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CCO Holdings debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,064</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Charter Operating debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Credit facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,502</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,227</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,949</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">229</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">229</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Interest Rate Agreements</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Assets (Liabilities)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Swaps
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(69</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(69</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(171</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(171</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Collars
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The weighted average interest pay rate for the
Company&#146;s interest rate swap agreements was 8.07% and 7.25%
at December&nbsp;31, 2004 and 2003, respectively.
</FONT>

<P align="center"><FONT size="2">F-61
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">16.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Revenues</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues consist of the following for the years
presented:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Video
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,461</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,420</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">High-speed data
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">337</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">263</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">302</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">204</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">336</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,819</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">17.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Operating Expenses</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Operating expenses consist of the following for
the years presented:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Programming
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,249</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,166</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Advertising sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">98</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Service
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">615</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">554</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling,
General and Administrative Expenses</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Selling, general and administrative expenses
consist of the following for the years presented:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">General and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">849</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">810</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Marketing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Components of selling expense are included in
general and administrative and marketing expense.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">19.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Stock Compensation Plans</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company grants stock options, restricted
stock and other incentive compensation pursuant to the 2001
Stock Incentive Plan of Charter (the &#147;2001 Plan&#148;).
Prior to 2001, options were granted under the 1999 Option Plan
of Charter Holdco (the &#147;1999 Plan&#148;).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 1999 Plan provided for the grant of options
to purchase membership units in Charter Holdco to current and
prospective employees and consultants of Charter Holdco and its
affiliates and current and prospective non-employee directors of
Charter. Options granted generally vest over five years from the
grant date, with 25% vesting 15&nbsp;months after the
anniversary of the grant date and ratably thereafter. Options
not exercised accumulate and are exercisable, in whole or in
part, in any subsequent period, but
</FONT>

<P align="center"><FONT size="2">F-62
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">not later than 10&nbsp;years from the date of
grant. Membership units received upon exercise of the options
are automatically exchanged into Class&nbsp;A common stock of
Charter on a one-for-one basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 2001 Plan provides for the grant of
non-qualified stock options, stock appreciation rights, dividend
equivalent rights, performance units and performance shares,
share awards, phantom stock and/or shares of restricted stock
(not to exceed 3,000,000), as each term is defined in the
2001&nbsp;Plan. Employees, officers, consultants and directors
of the Company and its subsidiaries and affiliates are eligible
to receive grants under the 2001 Plan. Options granted generally
vest over four years from the grant date, with 25% vesting on
the anniversary of the grant date and ratably thereafter.
Generally, options expire 10&nbsp;years from the grant date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 2001 Plan allows for the issuance of up to a
total of 90,000,000&nbsp;shares of Charter Class&nbsp;A common
stock (or units convertible into Charter Class&nbsp;A common
stock). The total shares available reflect a July 2003 amendment
to the 2001 Plan approved by the board of directors and the
shareholders of Charter to increase available shares by
30,000,000&nbsp;shares. In 2001, any shares covered by options
that terminated under the 1999 Plan were transferred to the 2001
Plan, and no new options can be granted under the 1999 Plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the years ended December&nbsp;31, 2004 and
2003, certain directors were awarded a total of 182,932 and
80,603&nbsp;shares, respectively, of restricted Class&nbsp;A
common stock of which 25,705&nbsp;shares had been cancelled as
of December&nbsp;31, 2004. The shares vest one year from the
date of grant. In December 2003 and January 2004, in connection
with new employment agreements, certain officers were awarded
50,000 and 50,000&nbsp;shares, respectively, of restricted
Class&nbsp;A common stock of which 50,000&nbsp;shares had been
cancelled as of December&nbsp;31, 2004. The shares vest annually
over a four-year period beginning from the date of grant. As of
December&nbsp;31, 2004, deferred compensation remaining to be
recognized in future period totaled $0.4&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A summary of the activity for the Company&#146;s
stock options, excluding granted shares of restricted
Class&nbsp;A common stock, for the years ended December&nbsp;31,
2004, 2003 and 2002, is as follows (amounts in thousands, except
per share data):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Options outstanding, beginning of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,632</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,558</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Granted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,983</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Exercised
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(839</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(165</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cancelled
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(31,613</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(13,568</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,048</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Options outstanding, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,835</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,632</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted average remaining contractual life
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8&nbsp; years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Options exercisable, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,731</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,844</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted average fair value of options granted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-63
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes information about
stock options outstanding and exercisable as of
December&nbsp;31, 2004:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Options Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Options Exercisable</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Remaining</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Remaining</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Range of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Contractual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Contractual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Exercise Prices</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Life</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Life</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">$&nbsp;1.11&nbsp;-&nbsp;$1.60
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,144</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">782</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">$&nbsp;2.85&nbsp;-&nbsp;$4.56
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,408</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">$&nbsp;5.06&nbsp;-&nbsp;$5.17
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,857</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">533</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.06</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">$&nbsp;9.13&nbsp;-&nbsp;$13.68
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,264</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,481</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">$13.96&nbsp;-&nbsp;$23.09
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,162</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,855</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5&nbsp;years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;1, 2003, the Company adopted the
fair value measurement provisions of SFAS&nbsp;No.&nbsp;123,
under which the Company recognizes compensation expense of a
stock-based award to an employee over the vesting period based
on the fair value of the award on the grant date. Adoption of
these provisions resulted in utilizing a preferable accounting
method as the consolidated financial statements present the
estimated fair value of stock-based compensation in expense
consistently with other forms of compensation and other expense
associated with goods and services received for equity
instruments. In accordance with SFAS&nbsp;No.&nbsp;123, the fair
value method will be applied only to awards granted or modified
after January&nbsp;1, 2003, whereas awards granted prior to such
date will continue to be accounted for under APB No.&nbsp;25,
unless they are modified or settled in cash. The ongoing effect
on consolidated results of operations or financial condition
will be dependent upon future stock based compensation awards
granted. The Company recorded $31&nbsp;million of option
compensation expense for the year ended December&nbsp;31, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to the adoption of SFAS&nbsp;No.&nbsp;123,
the Company used the intrinsic value method prescribed by
APB&nbsp;No.&nbsp;25, <I>Accounting for Stock Issued to
Employees</I>, to account for the option plans. Option
compensation expense of $5&nbsp;million for the year ended
December&nbsp;31, 2002, was recorded in the consolidated
statements of operations since the exercise prices of certain
options were less than the estimated fair values of the
underlying membership interests on the date of grant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2004, the Company began an option
exchange program in which the Company offered its employees the
right to exchange all stock options (vested and unvested) under
the 1999 Charter Communications Option Plan and 2001 Stock
Incentive Plan that had an exercise price over $10&nbsp;per
share for shares of restricted Charter Class&nbsp;A common stock
or, in some instances, cash. Based on a sliding exchange ratio,
which varied depending on the exercise price of an employees
outstanding options, if an employee would have received more
than 400&nbsp;shares of restricted stock in exchange for
tendered options, Charter issued that employee shares of
restricted stock in the exchange. If, based on the exchange
ratios, an employee would have received 400 or fewer shares of
restricted stock in exchange for tendered options, Charter
instead paid the employee cash in an amount equal to the number
of shares the employee would have received multiplied by $5.00.
The offer applied to options (vested and unvested) to purchase a
total of 22,929,573&nbsp;shares of Class&nbsp;A common stock, or
approximately 48% of the Company&#146;s 47,882,365 total options
issued and outstanding as of December&nbsp;31, 2003.
Participation by employees was voluntary. Those members of the
Company&#146;s board of directors who were not also employees of
the Company or any of its subsidiaries were not eligible to
participate in the exchange offer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the closing of the exchange offer on
February&nbsp;20, 2004, the Company accepted for cancellation
eligible options to purchase approximately
18,137,664&nbsp;shares of its Class&nbsp;A common stock. In
exchange,
</FONT>

<P align="center"><FONT size="2">F-64
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">the Company granted 1,966,686&nbsp;shares of
restricted stock, including 460,777 performance shares to
eligible employees of the rank of senior vice president and
above, and paid a total cash amount of approximately
$4&nbsp;million (which amount includes applicable withholding
taxes) to those employees who received cash rather than shares
of restricted stock. The restricted stock was granted on
February&nbsp;25, 2004. Employees tendered approximately 79% of
the options eligible to be exchanged under the program.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cost to the Company of the stock option
exchange program was approximately $10&nbsp;million, with a 2004
cash compensation expense of approximately $4&nbsp;million and a
non-cash compensation expense of approximately $6&nbsp;million
to be expensed ratably over the three-year vesting period of the
restricted stock in the exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2004, the Compensation Committee of
the board of directors of Charter approved Charter&#146;s
Long-Term Incentive Program (&#147;LTIP&#148;), which is a
program administered under the 2001 Stock Incentive Plan. Under
the LTIP, employees of Charter and its subsidiaries whose pay
classifications exceed a certain level are eligible to receive
stock options, and more senior level employees are eligible to
receive stock options and performance shares. The stock options
vest 25% on each of the first four anniversaries of the date of
grant. The performance shares vest on the third anniversary of
the grant date and shares of Charter Class&nbsp;A common stock
are issued, conditional upon Charter&#146;s performance against
financial performance measures established by Charter&#146;s
management and approved by its board of directors as of the time
of the award. Charter granted 6.9&nbsp;million shares in January
2004 under this program and recognized expense of
$8&nbsp;million in the first three quarters of 2004. However, in
the fourth quarter of 2004, the Company reversed the entire
$8&nbsp;million of expense based on the Company&#146;s
assessment of the probability of achieving the financial
performance measures established by Charter and required to be
met for the performance shares to vest.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">20.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Special Charges</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the fourth quarter of 2002, the Company began
a workforce reduction program and consolidation of its
operations from three divisions and ten regions into five
operating divisions, eliminating redundant practices and
streamlining its management structure. The Company has recorded
special charges as a result of reducing its workforce and
consolidating administrative offices in 2003 and 2004. The
activity associated with this initiative is summarized in the
table below.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Severance</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Special</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">/Leases</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Litigation</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Charge</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special Charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance at December&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special Charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Payments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(43</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance at December&nbsp;31, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Special Charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Payments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Balance at December&nbsp;31, 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the year ended December&nbsp;31, 2002 special
charges include $4&nbsp;million related to legal and other costs
associated with the Company&#146;s ongoing grand jury
investigation, shareholder lawsuits and SEC investigation and
$1&nbsp;million associated with severance costs related to a
2001 restructuring plan. For the
</FONT>

<P align="center"><FONT size="2">F-65
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">year ended December&nbsp;31, 2003, the severance
and lease costs were offset by a $5&nbsp;million settlement from
the Internet service provider Excite@Home related to the
conversion of high-speed data customers to Charter Pipeline
service in 2001. For the year ended December&nbsp;31, 2004,
special charges include approximately $85&nbsp;million,
representing the aggregate value of the Charter Class&nbsp;A
common stock and warrants to purchase Charter Class&nbsp;A
common stock contemplated to be issued as part of a settlement
of consolidated federal and state class actions and federal
derivative action lawsuits and approximately $10&nbsp;million of
litigation costs related to the tentative settlement of a
national class action suit, all of which are subject to final
documentation and court approval (see Note&nbsp;23). For the
year ended December&nbsp;31, 2004, special charges were offset
by $3&nbsp;million received from a third party in settlement of
a dispute.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">21.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Income Taxes</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All operations are held through Charter Holdco
and its direct and indirect subsidiaries. Charter Holdco and the
majority of its subsidiaries are not subject to income tax.
However, certain of these subsidiaries are corporations and are
subject to income tax. All of the taxable income, gains, losses,
deductions and credits of Charter Holdco are passed through to
its members: Charter, Charter Investment, Inc. (&#147;Charter
Investment&#148;) and Vulcan Cable&nbsp;III Inc. (&#147;Vulcan
Cable&#148;). Charter is responsible for its share of taxable
income or loss of Charter Holdco allocated to Charter in
accordance with the Charter Holdco limited liability company
agreement (&#147;LLC Agreement&#148;) and partnership tax rules
and regulations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The LLC Agreement provides for certain special
allocations of net tax profits and net tax losses (such net tax
profits and net tax losses being determined under the applicable
federal income tax rules for determining capital accounts).
Pursuant to the LLC Agreement, through the end of 2003, net tax
losses of Charter Holdco that would otherwise have been
allocated to Charter based generally on its percentage ownership
of outstanding common units were allocated instead to membership
units held by Vulcan Cable and Charter Investment (the
&#147;Special Loss Allocations&#148;) to the extent of their
respective capital account balances. After 2003, pursuant to the
LLC Agreement, net tax losses of Charter Holdco are to be
allocated to Charter, Vulcan Cable and Charter Investment based
generally on their respective percentage ownership of
outstanding common units to the extent of their respective
capital account balances. The LLC Agreement further provides
that, beginning at the time Charter Holdco generates net tax
profits, the net tax profits that would otherwise have been
allocated to Charter based generally on its percentage ownership
of outstanding common membership units will instead generally be
allocated to Vulcan Cable and Charter Investment (the
&#147;Special Profit Allocations&#148;). The Special Profit
Allocations to Vulcan Cable and Charter Investment will
generally continue until the cumulative amount of the Special
Profit Allocations offsets the cumulative amount of the Special
Loss Allocations. The amount and timing of the Special Profit
Allocations are subject to the potential application of, and
interaction with, the Curative Allocation Provisions described
in the following paragraph. The LLC Agreement generally provides
that any additional net tax profits are to be allocated among
the members of Charter Holdco based generally on their
respective percentage ownership of Charter Holdco common
membership units.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because the respective capital account balance of
each of Vulcan Cable and Charter Investment was reduced to zero
by December&nbsp;31, 2002, certain net tax losses of Charter
Holdco that were to be allocated for 2002, 2003, 2004 and
possibly later years (subject to resolution of the issue
described in Note&nbsp;22) to Vulcan Cable and Charter
Investment instead have been and will be allocated to Charter
(the &#147;Regulatory Allocations&#148;). The LLC Agreement
further provides that, to the extent possible, the effect of the
Regulatory Allocations is to be offset over time pursuant to
certain curative allocation provisions (the &#147;Curative
Allocation Provisions&#148;) so that, after certain offsetting
adjustments are made, each member&#146;s capital account balance
is equal to the capital account balance such member would have
had if the
</FONT>

<P align="center"><FONT size="2">F-66
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Regulatory Allocations had not been part of the
LLC Agreement. The cumulative amount of the actual tax losses
allocated to Charter as a result of the Regulatory Allocations
through the year ended December&nbsp;31, 2004 is approximately
$4.0&nbsp;billion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the Special Loss Allocations and
the Regulatory Allocations referred to above, the cumulative
amount of losses of Charter Holdco allocated to Vulcan Cable and
Charter Investment is in excess of the amount that would have
been allocated to such entities if the losses of Charter Holdco
had been allocated among its members in proportion to their
respective percentage ownership of Charter Holdco common
membership units. The cumulative amount of such excess losses
was approximately $2.1&nbsp;billion through December&nbsp;31,
2003 and $1.0&nbsp;billion through December&nbsp;31, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In certain situations, the Special Loss
Allocations, Special Profit Allocations, Regulatory Allocations
and Curative Allocation Provisions described above could result
in Charter paying taxes in an amount that is more or less than
if Charter Holdco had allocated net tax profits and net tax
losses among its members based generally on the number of common
membership units owned by such members. This could occur due to
differences in (i)&nbsp;the character of the allocated income
(e.g., ordinary versus capital), (ii)&nbsp;the allocated amount
and timing of tax depreciation and tax amortization expense due
to the application of section&nbsp;704(c) under the Internal
Revenue Code, (iii)&nbsp;the potential interaction between the
Special Profit Allocations and the Curative Allocation
Provisions, (iv)&nbsp;the amount and timing of alternative
minimum taxes paid by Charter, if any, (v)&nbsp;the
apportionment of the allocated income or loss among the states
in which Charter Holdco does business, and (vi)&nbsp;future
federal and state tax laws. Further, in the event of new capital
contributions to Charter Holdco, it is possible that the tax
effects of the Special Profit Allocations, Special Loss
Allocations, Regulatory Allocations and Curative Allocation
Provisions will change significantly pursuant to the provisions
of the income tax regulations or the terms of a contribution
agreement with respect to such contribution. Such change could
defer the actual tax benefits to be derived by Charter with
respect to the net tax losses allocated to it or accelerate the
actual taxable income to Charter with respect to the net tax
profits allocated to it. As a result, it is possible under
certain circumstances, that Charter could receive future
allocations of taxable income in excess of its currently
allocated tax deductions and available tax loss carryforwards.
The ability to utilize net operating loss carryforwards is
potentially subject to certain limitations as discussed below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, under their exchange agreement with
Charter, Vulcan Cable and Charter Investment may exchange some
or all of their membership units in Charter Holdco for
Charter&#146;s Class&nbsp;B common stock, be merged with
Charter, or be acquired by Charter in a non-taxable
reorganization. If such an exchange were to take place prior to
the date that the Special Profit Allocation provisions had fully
offset the Special Loss Allocations, Vulcan Cable and Charter
Investment could elect to cause Charter Holdco to make the
remaining Special Profit Allocations to Vulcan Cable and Charter
Investment immediately prior to the consummation of the
exchange. In the event Vulcan Cable and Charter Investment
choose not to make such election or to the extent such
allocations are not possible, Charter would then be allocated
tax profits attributable to the membership units received in
such exchange pursuant to the Special Profit Allocation
provisions. Mr.&nbsp;Allen has generally agreed to reimburse
Charter for any incremental income taxes that Charter would owe
as a result of such an exchange and any resulting future Special
Profit Allocations to Charter. The ability of Charter to utilize
net operating loss carryforwards is potentially subject to
certain limitations as discussed below. If Charter were to
become subject to certain limitations (whether as a result of an
exchange described above or otherwise), and as a result were to
owe taxes resulting from the Special Profit Allocations, then
Mr.&nbsp;Allen may not be obligated to reimburse Charter for
such income taxes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the years ended December&nbsp;31, 2004, 2003
and 2002, the Company recorded deferred income tax benefits as
shown below. The income tax benefits were realized through
reductions in the deferred tax
</FONT>

<P align="center"><FONT size="2">F-67
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">liabilities related to Charter&#146;s investment
in Charter Holdco, as well as the deferred tax liabilities of
certain of Charter&#146;s indirect corporate subsidiaries. In
2003, Charter received tax loss allocations from Charter Holdco.
Previously, the tax losses had been allocated to Vulcan Cable
and Charter Investment in accordance with the Special Loss
Allocations provided under the Charter Holdco amended and
restated limited liability company agreement. The Company does
not expect to recognize a similar benefit related to its
investment in Charter Holdco after 2003 due to limitations on
its ability to offset future tax benefits against the remaining
deferred tax liabilities. However, the actual tax provision
calculation in future periods will be the result of current and
future temporary differences, as well as future operating
results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Current and deferred income tax expense (benefit)
is as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Current expense:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Federal income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">State income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Current income tax expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Deferred benefit:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Federal income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(175</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(98</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(456</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">State income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(25</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(66</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Deferred income tax benefit:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(200</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(112</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(522</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total income benefit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(194</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(110</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(520</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recorded the portion of the income
tax benefit associated with the adoption of EITF Topic D-108 and
SFAS&nbsp;No.&nbsp;142 as a $91&nbsp;million and a
$60&nbsp;million reduction of the cumulative effect of
accounting change on the accompanying statement of operations
for the years ended December&nbsp;31, 2004 and December&nbsp;31,
2002, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s effective tax rate differs
from that derived by applying the applicable federal income tax
rate of 35%, and average state income tax rate of 5% for the
years ended December&nbsp;31, 2004, 2003 and 2002 as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Statutory federal income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,288</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(122</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(969</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">State income taxes, net of federal benefit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(184</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(17</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(138</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Valuation allowance provided
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">587</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(194</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(110</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(520</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less: cumulative effect of accounting change
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income tax benefit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(103</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(110</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(460</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-68
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The tax effects of these temporary differences
that give rise to significant portions of the deferred tax
assets and deferred tax liabilities at December&nbsp;31, 2004
and 2003 which are included in long-term liabilities are
presented below.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Deferred tax assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net operating loss carryforward
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,533</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total gross deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,541</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,729</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Less: valuation allowance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,151</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,291</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">390</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">438</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Deferred tax liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Investment in Charter Holdco
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(365</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(553</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Indirect Corporate Subsidiaries:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Property, plant&nbsp;&#38; equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(40</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(42</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Franchises
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(201</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(260</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Gross deferred tax liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(606</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(855</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net deferred tax liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(216</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(417</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2004, the Company has
deferred tax assets of $3.5&nbsp;billion, which primarily relate
to financial and tax losses allocated to Charter from Charter
Holdco. The deferred tax assets include $2.1&nbsp;billion of tax
net operating loss carryforwards (generally expiring in years
2005 through 2024) of Charter and its indirect corporate
subsidiaries. Valuation allowances of $3.2&nbsp;billion exist
with respect to these deferred tax assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The change of approximately $1.9&nbsp;billion in
valuation allowance between the years ended December&nbsp;31,
2004 and 2003, presented above, includes the provision for
valuation allowance, the impact of the decrease in deferred tax
liabilities and the impact of additional losses resulting from
the cumulative effect of accounting change.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Full realization of the Company&#146;s tax net
operating losses is dependent on: (1)&nbsp;Charter and its
indirect corporate subsidiaries&#146; ability to generate future
taxable income and (2)&nbsp;the absence of certain future
&#147;ownership changes&#148; of Charter&#146;s common stock. An
&#147;ownership change&#148; as defined in the applicable
federal income tax rules, would place significant limitations,
on an annual basis, on the use of such net operating losses to
offset any future taxable income the Company may generate. Such
limitations, in conjunction with the net operating loss
expiration provisions, could effectively eliminate the
Company&#146;s ability to use a substantial portion of its net
operating losses to offset future taxable income. Future
transactions and the timing of such transactions could cause an
ownership change. Such transactions include additional issuances
of common stock by the Company (including but not limited the
anticipated issuances of 150&nbsp;million shares of common stock
under the share lending agreement in conjunction with the
issuance of 5.875% convertible senior notes in November 2004 or
upon future conversion of Charter&#146;s convertible senior
notes), reacquisitions of the borrowed shares by Charter, or
acquisitions or sales of shares by certain holders of
Charter&#146;s shares, including persons who have held,
currently hold, or accumulate in the future five percent or more
of Charter&#146;s outstanding stock (including upon an exchange
</FONT>

<P align="center"><FONT size="2">F-69
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">by Paul Allen or his affiliates, directly or
indirectly, of membership units of Charter Holdco into CCI
common stock). Many of the foregoing transactions are beyond
management&#146;s control.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The total valuation allowance for deferred tax
assets as of December&nbsp;31, 2004 and 2003 was
$3.2&nbsp;billion and $1.3&nbsp;billion, respectively. In
assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion
or all of the deferred tax assets will be realized. Because of
the uncertainties in projecting future taxable income of Charter
Holdco, valuation allowances have been established except for
deferred benefits available to offset certain deferred tax
liabilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is currently under examination by the
Internal Revenue Service for the tax years ending
December&nbsp;31, 1999 and 2000. Management does not expect the
results of this examination to have a material adverse effect on
the Company&#146;s consolidated financial condition or results
of operation.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">22.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Related Party Transactions</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following sets forth certain transactions in
which the Company and the directors, executive officers and
affiliates of the Company are involved. Unless otherwise
disclosed, management believes that each of the transactions
described below was on terms no less favorable to the Company
than could have been obtained from independent third parties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter is a holding company and its principal
assets are its equity interest in Charter Holdco and certain
mirror notes payable by Charter Holdco to Charter and mirror
preferred units held by Charter, which have the same principal
amount and terms as those of Charter&#146;s convertible senior
notes and Charter&#146;s outstanding preferred stock. In 2004,
Charter Holdco paid to Charter $49&nbsp;million related to
interest on the mirror notes, and Charter Holdco paid an
additional $4&nbsp;million related to dividends on the mirror
preferred membership units. Further, during 2004 Charter Holdco
issued 7,252,818 common membership units to Charter in
cancellation of $30&nbsp;million principal amount of mirror
notes so as to mirror the issuance by Charter of Class&nbsp;A
common stock in exchange for a like principal amount of its
outstanding convertible notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter is a party to management arrangements
with Charter Holdco and certain of its subsidiaries. Under these
agreements, Charter provides management services for the cable
systems owned or operated by its subsidiaries. The management
services include such services as centralized customer billing
services, data processing and related support, benefits
administration and coordination of insurance coverage and
self-insurance programs for medical, dental and workers&#146;
compensation claims. Costs associated with providing these
services are billed and charged directly to the Company&#146;s
operating subsidiaries and are included within operating costs
in the accompanying consolidated statements of operations. Such
costs totaled $202&nbsp;million, $210&nbsp;million and
$176&nbsp;million for the years ended December&nbsp;31, 2004,
2003 and 2002, respectively. All other costs incurred on the
behalf of Charter&#146;s operating subsidiaries are considered a
part of the management fee and are recorded as a component of
selling, general and administrative expense, in the accompanying
consolidated financial statements. For the years ended
December&nbsp;31, 2004, 2003 and 2002, the management fee
charged to the Company&#146;s operating subsidiaries
approximated the expenses incurred by Charter Holdco and Charter
on behalf of the Company&#146;s operating subsidiaries. The
credit facilities of the Company&#146;s operating subsidiaries
prohibit payments of management fees in excess of 3.5% of
revenues until repayment of the outstanding indebtedness. In the
event any portion of the management fee due and payable is not
paid, it is deferred by Charter and accrued as a liability of
such subsidiaries. Any deferred amount of the management fee
will bear interest at the rate of 10%&nbsp;per year, compounded
annually, from the date it was due and payable until the date it
is paid.
</FONT>

<P align="center"><FONT size="2">F-70
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen, the controlling shareholder of
Charter, and a number of his affiliates have interests in
various entities that provide services or programming to
Charter&#146;s subsidiaries. Given the diverse nature of
Mr.&nbsp;Allen&#146;s investment activities and interests, and
to avoid the possibility of future disputes as to potential
business, Charter and Charter Holdco, under the terms of their
respective organizational documents, may not, and may not allow
their subsidiaries to engage in any business transaction outside
the cable transmission business except for certain existing
approved investments. Should Charter or Charter Holdco or any of
their subsidiaries wish to pursue, or allow their subsidiaries
to pursue, a business transaction outside of this scope, it must
first offer Mr.&nbsp;Allen the opportunity to pursue the
particular business transaction. If he decides not to pursue the
business transaction and consents to Charter or its subsidiaries
engaging in the business transaction, they will be able to do
so. The cable transmission business means the business of
transmitting video, audio, including telephony, and data over
cable systems owned, operated or managed by Charter, Charter
Holdco or any of their subsidiaries from time to time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen or his affiliates own or have
owned equity interests or warrants to purchase equity interests
in various entities with which the Company does business or
which provides it with products, services or programming. Among
these entities are TechTV L.L.C. (&#147;TechTV&#148;), Oxygen
Media Corporation (&#147;Oxygen Media&#148;), Digeo, Inc.,
Click2learn, Inc., Trail Blazer Inc., Action Sports Cable
Network (&#147;Action Sports&#148;) and Microsoft Corporation.
In addition, Mr.&nbsp;Allen and William Savoy, a former Charter
director, were directors of USA Networks, Inc. (&#147;USA
Networks&#148;), who operates the USA Network, The Sci-Fi
Channel, Trio, World News International and Home Shopping
Network, owning approximately 5% and less than 1%, respectively,
of the common stock of USA Networks. In 2002, Mr.&nbsp;Allen and
Mr.&nbsp;Savoy sold their common stock and are no longer
directors of the USA Network. In May 2004, TechTV was sold to an
unrelated third party. Mr.&nbsp;Allen owns 100% of the equity of
Vulcan Ventures Incorporated (&#147;Vulcan Ventures&#148;) and
Vulcan Inc. and is the president of Vulcan Ventures. Ms.&nbsp;Jo
Allen Patton is a director and the President and Chief Executive
Officer of Vulcan Inc. and is a director and Vice President of
Vulcan Ventures. Mr.&nbsp;Lance Conn is Executive Vice President
of Vulcan Inc. and Vulcan Ventures. Mr.&nbsp;Savoy was a vice
president and a director of Vulcan Ventures until his
resignation in September 2003 and he resigned as a director of
Charter in April 2004. The various cable, media, Internet and
telephony companies in which Mr.&nbsp;Allen has invested may
mutually benefit one another. The Company can give no assurance,
nor should you expect, that any of these business relationships
will be successful, that the Company will realize any benefits
from these relationships or that the Company will enter into any
business relationships in the future with Mr.&nbsp;Allen&#146;s
affiliated companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen and his affiliates have made, and
in the future likely will make, numerous investments outside of
the Company and its business. The Company cannot assure that, in
the event that the Company or any of its subsidiaries enter into
transactions in the future with any affiliate of Mr.&nbsp;Allen,
such transactions will be on terms as favorable to the Company
as terms it might have obtained from an unrelated third party.
Also, conflicts could arise with respect to the allocation of
corporate opportunities between the Company and Mr.&nbsp;Allen
and his affiliates. The Company has not instituted any formal
plan or arrangement to address potential conflicts of interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">High Speed Access
Corp.</FONT></I><FONT size="2"> (&#147;High Speed Access&#148;)
was a provider of high-speed Internet access services over cable
modems. During the period from 1997 to 2000, certain Charter
entities entered into Internet-access related service
agreements, and both Vulcan Ventures, an entity owned by
Mr.&nbsp;Allen, and Charter Holdco made equity investments in
High Speed Access.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;28, 2002, Charter&#146;s
subsidiary, CC Systems, purchased from High Speed Access the
contracts and associated assets, and assumed related
liabilities, that served the Company&#146;s customers, including
a customer contact center, network operations center and
provisioning software. Immediately prior to the asset purchase,
Vulcan Ventures beneficially owned approximately 37%, and the
Company
</FONT>

<P align="center"><FONT size="2">F-71
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">beneficially owned approximately 13%, of the
common stock of High Speed Access (including the shares of
common stock which could be acquired upon conversion of the
Series&nbsp;D preferred stock, and upon exercise of the warrants
owned by Charter Holdco). Following the consummation of the
asset purchase, neither the Company nor Vulcan Ventures
beneficially owned any securities of, or were otherwise
affiliated with, High Speed Access.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company receives or will receive programming
for broadcast via its cable systems from TechTV (now G4), USA
Networks, Oxygen Media, Trail Blazers Inc. and Action Sports.
The Company pays a fee for the programming service generally
based on the number of customers receiving the service. Such
fees for the years ended December&nbsp;31, 2004, 2003 and 2002
were each less than 1% of total operating expenses with the
exception of USA Networks which was 2%, 2% and 2% of total
operating expenses for the years ended December&nbsp;31, 2004,
2003 and 2002, respectively. In addition, the Company receives
commissions from USA Networks for home shopping sales generated
by its customers. Such revenues for the years ended
December&nbsp;31, 2004, 2003 and 2002 were less than 1% of total
revenues. On November&nbsp;5, 2002, Action Sports announced that
it was discontinuing its business. The Company believes that the
failure of Action Sports will not materially affect the
Company&#146;s business or results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Tech TV.</FONT></I><FONT size="2"> The Company
receives from TechTV programming for distribution via its cable
system pursuant to an affiliation agreement. The affiliation
agreement provides, among other things, that TechTV must offer
Charter certain terms and conditions that are no less favorable
in the affiliation agreement than are given to any other
distributor that serves the same number of or fewer TechTV
viewing customers. Additionally, pursuant to the affiliation
agreement, the Company was entitled to incentive payments for
channel launches through December&nbsp;31, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2004, Charter Holdco entered into
agreements with Vulcan Programming and TechTV, which provide for
(i)&nbsp;Charter Holdco and TechTV to amend the affiliation
agreement which, among other things, revises the description of
the TechTV network content, provides for Charter Holdco to waive
certain claims against TechTV relating to alleged breaches of
the affiliation agreement and provides for TechTV to make
payment of outstanding launch receivables due to Charter Holdco
under the affiliation agreement, (ii)&nbsp;Vulcan Programming to
pay approximately $10&nbsp;million and purchase over a 24-month
period, at fair market rates, $2&nbsp;million of advertising
time across various cable networks on Charter cable systems in
consideration of the agreements, obligations, releases and
waivers under the agreements and in settlement of the
aforementioned claims and (iii)&nbsp;TechTV to be a provider of
content relating to technology and video gaming for
Charter&#146;s interactive television platforms through
December&nbsp;31, 2006 (exclusive for the first year). For the
year ended December&nbsp;31, 2004, the Company recognized
approximately $5&nbsp;million of the Vulcan Programming payment
as an offset to programming expense and paid approximately
$2&nbsp;million to Tech TV under the affiliation agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Oxygen.</FONT></I><FONT size="2"> Concurrently
with the execution of a carriage agreement, Charter Holdco
entered into an equity issuance agreement pursuant to which
Oxygen Media LLC&#146;s (&#147;Oxygen&#148;) parent company,
Oxygen Media Corporation (&#147;Oxygen Media&#148;), granted a
subsidiary of Charter Holdco a warrant to
purchase&nbsp;2.4&nbsp;million shares of common stock of Oxygen
Media for an exercise price of $22.00&nbsp;per share. In
February 2005, the warrant expired unexercised. Charter Holdco
was also to receive unregistered shares of Oxygen Media common
stock with a guaranteed fair market value on the date of
issuance of $34&nbsp;million, on or prior to February&nbsp;2,
2005 with the exact date to be determined by Oxygen Media, but
this commitment was later revised as discussed below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recognizes the guaranteed value of
the investment over the life of the carriage agreement as a
reduction of programming expense. For the years ended
December&nbsp;31, 2004, 2003 and 2002, the Company recorded
approximately $13&nbsp;million, $9&nbsp;million, and
$6&nbsp;million, respectively, as a
</FONT>

<P align="center"><FONT size="2">F-72
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">reduction of programming expense. The carrying
value of the Company&#146;s investment in Oxygen was
approximately $32&nbsp;million and $19&nbsp;million as of
December&nbsp;31, 2004 and 2003, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2004, Charter Holdco and Oxygen entered
into agreements that amended and renewed the carriage agreement.
The amendment to the carriage agreement (a)&nbsp;revises the
number of the Company&#146;s customers to which Oxygen
programming must be carried and for which the Company must pay,
(b)&nbsp;releases Charter Holdco from any claims related to the
failure to achieve distribution benchmarks under the carriage
agreement, (c)&nbsp;requires Oxygen to make payment on
outstanding receivables for marketing support fees due to the
Company under the affiliation agreement; and (d)&nbsp;requires
that Oxygen provide its programming content to the Company on
economic terms no less favorable than Oxygen provides to any
other cable or satellite operator having fewer subscribers than
the Company. The renewal of the carriage agreement
(a)&nbsp;extends the period that the Company will carry Oxygen
programming to its customers through January&nbsp;31, 2008, and
(b)&nbsp;requires license fees to be paid based on customers
receiving Oxygen programming, rather than for specific customer
benchmarks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2004, Charter Holdco and Oxygen also
amended the equity issuance agreement to provide for the
issuance of 1&nbsp;million shares of Oxygen Preferred Stock with
a liquidation preference of $33.10&nbsp;per share plus accrued
dividends to Charter Holdco on February&nbsp;1, 2005 in place of
the $34&nbsp;million of unregistered shares of Oxygen Media
common stock. Oxygen Media will deliver these shares in March
2005. The preferred stock is convertible into common stock after
December&nbsp;31, 2007 at a conversion ratio, the numerator of
which is the liquidation preference and the denominator which is
the fair market value per share of Oxygen Media common stock on
the conversion date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Digeo, Inc.</FONT></I><FONT size="2"> In March
2001, Charter Ventures and Vulcan Ventures Incorporated formed
DBroadband Holdings, LLC for the sole purpose of purchasing
equity interests in Digeo. In connection with the execution of
the broadband carriage agreement, DBroadband Holdings, LLC
purchased an equity interest in Digeo funded by contributions
from Vulcan Ventures Incorporated. The equity interest is
subject to a priority return of capital to Vulcan Ventures up to
the amount contributed by Vulcan Ventures on Charter
Ventures&#146; behalf. After Vulcan Ventures recovers its amount
contributed and any cumulative loss allocations, Charter
Ventures has a 100% profit interest in DBroadband Holdings, LLC.
Charter Ventures is not required to make any capital
contributions, including capital calls, and may require Vulcan
Ventures, through January&nbsp;24, 2004, to make certain
additional contributions through DBroadband Holdings, LLC to
acquire additional equity in Digeo as necessary to maintain
Charter Ventures&#146; pro rata interest in Digeo in the event
of certain future Digeo equity financings by the founders of
Digeo. These additional equity interests are also subject to a
priority return of capital to Vulcan Ventures up to amounts
contributed by Vulcan Ventures on Charter Ventures&#146; behalf.
DBroadband Holdings, LLC is therefore not included in the
Company&#146;s consolidated financial statements. Pursuant to an
amended version of this arrangement, in 2003, Vulcan Ventures
contributed a total of $29&nbsp;million to Digeo,
$7&nbsp;million of which was contributed on Charter
Ventures&#146; behalf, subject to Vulcan Ventures&#146;
aforementioned priority return. Since the formation of
DBroadband Holdings, LLC, Vulcan Ventures has contributed
approximately $56&nbsp;million on Charter Ventures&#146; behalf.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;30, 2003, Charter Holdco entered
into an agreement with Motorola, Inc. for the purchase of
100,000 digital video recorder (&#147;DVR&#148;) units. The
software for these DVR units is being supplied by Digeo
Interactive, LLC under a license agreement entered into in April
2004. Under the license agreement Digeo Interactive granted to
Charter Holdco the right to use Digeo&#146;s proprietary
software for the number of DVR units that Charter deploys from a
maximum of 10 headends through year-end 2004. This maximum
number of headends was increased from 10 to 15 pursuant to a
letter agreement executed on June&nbsp;11, 2004 and the date for
entering into license agreements for units deployed was extended
to June&nbsp;30, 2005. The number of headends was increased
again from 15 to 20 pursuant to a letter agreement
</FONT>

<P align="center"><FONT size="2">F-73
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">dated August&nbsp;4, 2004, from 20 to 30 pursuant
to a letter agreement dated September&nbsp;28, 2004 and from 30
to 50 headends by a letter agreement in February 2005. The
license granted for each unit deployed under the agreement is
valid for five years. In addition, Charter will pay certain
other fees including a per-headend license fee and maintenance
fees. Maximum license and maintenance fees during the term of
the agreement are expected to be approximately $7&nbsp;million.
The agreement provides that Charter is entitled to receive
contract terms, considered on the whole, and license fees,
considered apart from other contract terms, no less favorable
than those accorded to any other Digeo customer. Charter paid
$474,400 in license and maintenance fees in 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2004, the Company launched DVR service
(using units containing the Digeo software) in its Rochester,
Minnesota market using a broadband media center that is an
integrated set-top terminal with a cable converter, DVR hard
drive and connectivity to other consumer electronics devices
(such as stereos, MP3 players, and digital cameras).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 2004, Charter Holdco entered into a
binding term sheet with Digeo Interactive for the development,
testing and purchase of 70,000 Digeo PowerKey DVR units. The
term sheet provided that the parties would proceed in good faith
to negotiate, prior to year-end 2004, definitive agreements for
the development, testing and purchase of the DVR units and that
the parties would enter into a license agreement for
Digeo&#146;s proprietary software on terms substantially similar
to the terms of the license agreement described above. In
November 2004, Charter Holdco and Digeo Interactive executed the
license agreement and in December 2004, the parties executed the
purchase agreement, each on terms substantially similar to the
binding term sheet. Product development and testing is
continuing. Total purchase price and license and maintenance
fees during the term of the definitive agreements are expected
to be approximately $41&nbsp;million. The definitive agreements
are terminable at no penalty to Charter in certain circumstances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A wholly owned subsidiary of Digeo, Digeo
Interactive, provides interactive channel (i-channel) service to
Charter on a month-to-month basis. In the years ended
December&nbsp;31, 2004, 2003 and 2002, Charter paid Digeo
Interactive $3&nbsp;million, $4&nbsp;million and
$3&nbsp;million, respectively, for customized development of
i-channels and an interactive &#147;toolkit&#148; to enable
Charter to develop interactive local content.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;10, 2003, the Company signed an
agreement to carry two around-the-clock, high-definition
networks, HDNet and HDNet Movies. HDNet Movies delivers a
commercial-free schedule of full-length feature films converted
from 35mm to high-definition, including titles from an extensive
library of Warner Bros. films. HDNet Movies will feature a mix
of theatrical releases, made-for-TV movies, independent films
and shorts. The HDNet channel features a variety of HDTV
programming, including live sports, sitcoms, dramas, action
series, documentaries, travel programs, music concerts and
shows, special events, and news features including HDNet World
Report. HDNet also offers a selection of classic and recent
television series. The Company paid HDNet and HDNet Movies
approximately $0.6&nbsp;million in 2004. The Company believes
that entities controlled by Mr.&nbsp;Cuban owned approximately
81% of HDNet as of December&nbsp;31, 2004. As of
December&nbsp;31, 2004, the Company believes that Mark Cuban,
co-founder and president of HDNet, owned approximately 6.2% of
the total common equity in Charter based on a Schedule&nbsp;13G
filed with the SEC on May&nbsp;21, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain related parties, including members of the
board of directors and officers, hold interests in the
Company&#146;s senior convertible debt and senior notes and
discount notes of the Company&#146;s subsidiary of approximately
$59.6&nbsp;million of face value at December&nbsp;31, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of the acquisition of the cable systems
owned by Bresnan Communications Company Limited Partnership in
February 2000, CC&nbsp;VIII, LLC, Charter&#146;s indirect
limited liability company subsidiary,
</FONT>

<P align="center"><FONT size="2">F-74
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">issued, after adjustments, 24,273,943
Class&nbsp;A preferred membership units (collectively, the
&#147;CC&nbsp;VIII interest&#148;) with a value and an initial
capital account of approximately $630&nbsp;million to certain
sellers affiliated with AT&#38;T Broadband, subsequently owned
by Comcast Corporation (the &#147;Comcast sellers&#148;). While
held by the Comcast sellers, the CC&nbsp;VIII interest was
entitled to a 2% priority return on its initial capital account
and such priority return was entitled to preferential
distributions from available cash and upon liquidation of
CC&nbsp;VIII. While held by the Comcast sellers, the
CC&nbsp;VIII interest generally did not share in the profits and
losses of CC&nbsp;VIII. Mr.&nbsp;Allen granted the Comcast
sellers the right to sell to him the CC&nbsp;VIII interest for
approximately $630&nbsp;million plus 4.5% interest annually from
February 2000 (the &#147;Comcast put right&#148;). In April
2002, the Comcast sellers exercised the Comcast put right in
full, and this transaction was consummated on June&nbsp;6, 2003.
Accordingly, Mr.&nbsp;Allen has become the holder of the
CC&nbsp;VIII interest, indirectly through an affiliate.
Consequently, subject to the matters referenced in the next
paragraph, Mr.&nbsp;Allen generally thereafter will be allocated
his pro rata share (based on number of membership interests
outstanding) of profits or losses of CC&nbsp;VIII. In the event
of a liquidation of CC&nbsp;VIII, Mr.&nbsp;Allen would be
entitled to a priority distribution with respect to the 2%
priority return (which will continue to accrete). Any remaining
distributions in liquidation would be distributed to CC&nbsp;V
Holdings, LLC and Mr.&nbsp;Allen in proportion to CC&nbsp;V
Holdings, LLC&#146;s capital account and Mr.&nbsp;Allen&#146;s
capital account (which will equal the initial capital account of
the Comcast sellers of approximately $630&nbsp;million,
increased or decreased by Mr.&nbsp;Allen&#146;s pro rata share
of CC&nbsp;VIII&#146;s profits or losses (as computed for
capital account purposes) after June&nbsp;6, 2003). The limited
liability company agreement of CC&nbsp;VIII does not provide for
a mandatory redemption of the CC&nbsp;VIII interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An issue has arisen as to whether the
documentation for the Bresnan transaction was correct and
complete with regard to the ultimate ownership of the
CC&nbsp;VIII interest following consummation of the Comcast put
right. Specifically, under the terms of the Bresnan transaction
documents that were entered into in June 1999, the Comcast
sellers originally would have received, after adjustments,
24,273,943 Charter Holdco membership units, but due to an FCC
regulatory issue raised by the Comcast sellers shortly before
closing, the Bresnan transaction was modified to provide that
the Comcast sellers instead would receive the preferred equity
interests in CC&nbsp;VIII represented by the CC&nbsp;VIII
interest. As part of the last-minute changes to the Bresnan
transaction documents, a draft amended version of the Charter
Holdco limited liability company agreement was prepared, and
contract provisions were drafted for that agreement that would
have required an automatic exchange of the CC&nbsp;VIII interest
for 24,273,943 Charter Holdco membership units if the Comcast
sellers exercised the Comcast put right and sold the
CC&nbsp;VIII interest to Mr.&nbsp;Allen or his affiliates.
However, the provisions that would have required this automatic
exchange did not appear in the final version of the Charter
Holdco limited liability company agreement that was delivered
and executed at the closing of the Bresnan transaction. The law
firm that prepared the documents for the Bresnan transaction
brought this matter to the attention of Charter and
representatives of Mr.&nbsp;Allen in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Thereafter, the board of directors of Charter
formed a Special Committee (currently comprised of
Messrs.&nbsp;Merritt, Tory and Wangberg) to investigate the
matter and take any other appropriate action on behalf of
Charter with respect to this matter. After conducting an
investigation of the relevant facts and circumstances, the
Special Committee determined that a &#147;scrivener&#146;s
error&#148; had occurred in February 2000 in connection with the
preparation of the last-minute revisions to the Bresnan
transaction documents and that, as a result, Charter should seek
the reformation of the Charter Holdco limited liability company
agreement, or alternative relief, in order to restore and ensure
the obligation that the CC&nbsp;VIII interest be automatically
exchanged for Charter Holdco units. The Special Committee
further determined that, as part of such contract reformation or
alternative relief, Mr.&nbsp;Allen should be required to
contribute the CC&nbsp;VIII interest to Charter Holdco in
exchange for 24,273,943 Charter Holdco membership units. The
Special Committee also recommended to the board of directors of
Charter that, to the extent the contract
</FONT>

<P align="center"><FONT size="2">F-75
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">reformation is achieved, the board of directors
should consider whether the CC VIII interest should ultimately
be held by Charter Holdco or Charter Holdings or another entity
owned directly or indirectly by them.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Allen disagrees with the Special
Committee&#146;s determinations described above and has so
notified the Special Committee. Mr.&nbsp;Allen contends that the
transaction is accurately reflected in the transaction
documentation and contemporaneous and subsequent company public
disclosures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The parties engaged in a process of non-binding
mediation to seek to resolve this matter, without success. The
Special Committee is evaluating what further actions or
processes it may undertake to resolve this dispute. To
accommodate further deliberation, each party has agreed to
refrain from initiating legal proceedings over this matter until
it has given at least ten days&#146; prior notice to the other.
In addition, the Special Committee and Mr.&nbsp;Allen have
determined to utilize the Delaware Court of Chancery&#146;s
program for mediation of complex business disputes in an effort
to resolve the CC&nbsp;VIII interest dispute. If the Special
Committee and Mr.&nbsp;Allen are unable to reach a resolution
through that mediation process or to agree on an alternative
dispute resolution process, the Special Committee intends to
seek resolution of this dispute through judicial proceedings in
an action that would be commenced, after appropriate notice, in
the Delaware Court of Chancery against Mr.&nbsp;Allen and his
affiliates seeking contract reformation, declaratory relief as
to the respective rights of the parties regarding this dispute
and alternative forms of legal and equitable relief. The
ultimate resolution and financial impact of the dispute are not
determinable at this time.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">23.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Commitments and Contingencies</FONT></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Commitments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes the Company&#146;s
payment obligations as of December&nbsp;31, 2004 for its
contractual obligations.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2006</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2007</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2008</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2009</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Thereafter</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT size="2">Contractual Obligations</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Operating and Capital Lease Obligations(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Programming Minimum Commitments(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,579</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">344</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">308</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">234</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,939</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">403</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">411</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">435</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">343</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The Company leases certain facilities and
    equipment under noncancellable operating leases. Leases and
    rental costs charged to expense for the years ended
    December&nbsp;31, 2004, 2003 and 2002, were $23&nbsp;million,
    $30&nbsp;million and $31&nbsp;million, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The Company pays programming fees under
    multi-year contracts ranging from three to six years typically
    based on a flat fee per customer, which may be fixed for the
    term or may in some cases, escalate over the term. Programming
    costs included in the accompanying statement of operations were
    $1.3&nbsp;billion, $1.2&nbsp;billion and $1.2&nbsp;billion for
    the years ended December&nbsp;31, 2004, 2003 and 2002,
    respectively. Certain of the Company&#146;s programming
    agreements are based on a flat fee per month or have guaranteed
    minimum payments. The table sets forth the aggregate guaranteed
    minimum commitments under the Company&#146;s programming
    contracts.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">&#147;Other&#148; represents other guaranteed
    minimum commitments, which consist primarily of commitments to
    the Company&#146;s billing services vendors.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">F-76
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following items are not included in the
contractual obligation table due to various factors discussed
below. However, the Company incurs these costs as part of its
operations:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The Company also rents utility poles used in its
    operations. Generally, pole rentals are cancelable on short
    notice, but the Company anticipates that such rentals will
    recur. Rent expense incurred for pole rental attachments for the
    years ended December&nbsp;31, 2004, 2003 and 2002, was
    $43&nbsp;million, $40&nbsp;million and $41&nbsp;million,
    respectively.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The Company pays franchise fees under multi-year
    franchise agreements based on a percentage of revenues earned
    from video service per year. The Company also pays other
    franchise related costs, such as public education grants under
    multi-year agreements. Franchise fees and other
    franchise-related costs included in the accompanying statement
    of operations were $164&nbsp;million, $162&nbsp;million and
    $160&nbsp;million for the years ended December&nbsp;31, 2004,
    2003 and 2002, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The Company also has $166&nbsp;million in letters
    of credit, primarily to its various worker&#146;s compensation,
    property casualty and general liability carriers as collateral
    for reimbursement of claims. These letters of credit reduce the
    amount the Company may borrow under its credit facilities.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Litigation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Fourteen putative federal class action lawsuits
(the &#147;Federal Class&nbsp;Actions&#148;) were filed against
Charter and certain of its former and present officers and
directors in various jurisdictions allegedly on behalf of all
purchasers of Charter&#146;s securities during the period from
either November&nbsp;8 or November&nbsp;9, 1999 through
July&nbsp;17 or July&nbsp;18, 2002. Unspecified damages were
sought by the plaintiffs. In general, the lawsuits alleged that
Charter utilized misleading accounting practices and failed to
disclose these accounting practices and/or issued false and
misleading financial statements and press releases concerning
Charter&#146;s operations and prospects. The Federal
Class&nbsp;Actions were specifically and individually identified
in public filings made by Charter prior to the date of these
financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 2002, Charter filed a motion with the
Judicial Panel on Multidistrict Litigation (the
&#147;Panel&#148;) to transfer the Federal Class&nbsp;Actions to
the Eastern District of Missouri. On March&nbsp;12, 2003, the
Panel transferred the six Federal Class&nbsp;Actions not filed
in the Eastern District of Missouri to that district for
coordinated or consolidated pretrial proceedings with the eight
Federal Class&nbsp;Actions already pending there. The
Panel&#146;s transfer order assigned the Federal
Class&nbsp;Actions to Judge Charles A. Shaw. By virtue of a
prior court order, StoneRidge Investment Partners LLC became
lead plaintiff upon entry of the Panel&#146;s transfer order.
StoneRidge subsequently filed a Consolidated Amended Complaint.
The Court subsequently consolidated the Federal
Class&nbsp;Actions into a single action (the &#147;Consolidated
Federal Class&nbsp;Action&#148;) for pretrial purposes. On
June&nbsp;19, 2003, following a status and scheduling conference
with the parties, the Court issued a Case Management Order
setting forth a schedule for the pretrial phase of the
Consolidated Class&nbsp;Action. Motions to dismiss the
Consolidated Amended Complaint were filed. On
February&nbsp;&nbsp;10, 2004, in response to a joint motion made
by StoneRidge and defendants, Charter, Vogel and Allen, the
court entered an order providing, among other things, that:
(1)&nbsp;the parties who filed such motion engage in a mediation
within ninety (90)&nbsp;days; and (2)&nbsp;all proceedings in
the Consolidated Federal Class&nbsp;Actions were stayed until
May&nbsp;10, 2004. On May&nbsp;11, 2004, the Court extended the
stay in the Consolidated Federal Class&nbsp;Action for an
additional sixty (60)&nbsp;days. On July&nbsp;12, 2004, the
parties submitted a joint motion to again extend the stay, this
time until September&nbsp;10, 2004. The Court granted that
extension on July&nbsp;20, 2004. On August&nbsp;5, 2004,
Stoneridge, Charter and the individual defendants who were the
subject of the suit entered into a Memorandum of Understanding
setting forth agreements in principle to settle the Consolidated
Federal Class&nbsp;Action. These parties subsequently entered
into
</FONT>

<P align="center"><FONT size="2">F-77
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Stipulations of Settlement dated as of
January&nbsp;24, 2005 (described more fully below) which
incorporate the terms of the August&nbsp;5, 2004 Memorandum of
Understanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;12, 2002, a shareholders
derivative suit (the &#147;State Derivative Action&#148;) was
filed in the Circuit Court of the City of St.&nbsp;Louis, State
of Missouri (the &#147;Missouri State Court&#148;) against
Charter and its then current directors, as well as its former
auditors. A substantively identical derivative action was later
filed and consolidated into the State Derivative Action. The
plaintiffs allege that the individual defendants breached their
fiduciary duties by failing to establish and maintain adequate
internal controls and procedures. Unspecified damages, allegedly
on Charter&#146;s behalf, were sought by the plaintiffs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;12, 2004, an action substantively
identical to the State Derivative Action was filed in the
Missouri State Court, against Charter and certain of its current
and former directors, as well as its former auditors. The
plaintiffs in that case alleged that the individual defendants
breached their fiduciary duties by failing to establish and
maintain adequate internal controls and procedures. Unspecified
damages, allegedly on Charter&#146;s behalf, were sought by
plaintiffs. On July&nbsp;14, 2004, the Court consolidated this
case with the State Derivative Action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Separately, on February&nbsp;12, 2003, a
shareholders derivative suit (the &#147;Federal Derivative
Action&#148;) was filed against Charter and its then current
directors in the United States District Court for the Eastern
District of Missouri. The plaintiff in that suit alleged that
the individual defendants breached their fiduciary duties and
grossly mismanaged Charter by failing to establish and maintain
adequate internal controls and procedures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As noted above, Charter entered into Memoranda of
Understanding on August&nbsp;5, 2004 setting forth agreements in
principle regarding settlement of the Consolidated Federal
Class&nbsp;Action, the State Derivative Action(s) and the
Federal Derivative Action (the &#147;Actions&#148;). Charter and
various other defendants in those actions subsequently entered
into Stipulations of Settlement dated as of January&nbsp;24,
2005, setting forth a settlement of the Actions in a manner
consistent with the terms of the Memorandum of Understanding.
The Stipulations of Settlement, along with the various
supporting documentation, were filed with the Court on
February&nbsp;2, 2005. The Settlements provide that, in exchange
for a release of all claims by plaintiffs against Charter and
its former and present officers and directors named in the
Actions, Charter will pay to the plaintiffs a combination of
cash and equity collectively valued at $144&nbsp;million, which
will include the fees and expenses of plaintiffs&#146; counsel.
Of this amount, $64&nbsp;million will be paid in cash (by
Charter&#146;s insurance carriers) and the balance will be paid
in shares of Charter Class&nbsp;A common stock having an
aggregate value of $40&nbsp;million and ten-year warrants to
purchase shares of Charter Class&nbsp;A common stock having an
aggregate warrant value of $40&nbsp;million. The warrants would
have an exercise price equal to 150% of the fair market value
(as defined) of Charter Class&nbsp;A common stock as of the date
of the entry of the order of final judgment approving the
settlement. In addition, Charter expects to issue additional
shares of its Class&nbsp;A common stock to its insurance carrier
having an aggregate value of $5&nbsp;million. As a result, in
the second quarter of 2004, the Company recorded a
$149&nbsp;million litigation liability within other long-term
liabilities and a $64&nbsp;million insurance receivable as part
of other non-current assets on its consolidated balance sheet
and an $85&nbsp;million special charge on its consolidated
statement of operations. Additionally, as part of the
settlements, Charter will also commit to a variety of corporate
governance changes, internal practices and public disclosures,
some of which have already been undertaken and none of which are
inconsistent with measures Charter is taking in connection with
the recent conclusion of the SEC investigation described below.
Documents related to the settlement of the Actions have now been
executed and filed. On February&nbsp;15, 2005, the United States
District Court for the Eastern District of Missouri gave
preliminary approval to the settlement of the Actions. The
settlement of each of the lawsuits remains conditioned upon,
among other things, final judicial approval of the
</FONT>

<P align="center"><FONT size="2">F-78
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">settlements following notice to the class, and
dismissal, with prejudice, of the consolidated derivative
actions now pending in Missouri State Court, which are related
to the Federal Derivative Action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the Federal Class&nbsp;Actions,
the State Derivative Action (s), the new Missouri State Court
derivative action and the Federal Derivative Action, six
putative class action lawsuits have been filed against Charter
and certain of its then current directors and officers in the
Court of Chancery of the State of Delaware (the &#147;Delaware
Class&nbsp;Actions&#148;). The lawsuits were filed after the
filing of a 13D amendment by Mr.&nbsp;Allen indicating that he
was exploring a number of possible alternatives with respect to
restructuring or expanding his ownership interest in Charter.
Charter believes the plaintiffs speculated that Mr.&nbsp;Allen
might have been contemplating an unfair bid for shares of
Charter or some other sort of going private transaction on
unfair terms and generally alleged that the defendants breached
their fiduciary duties by participating in or acquiescing to
such a transaction. The lawsuits, which are substantively
identical, were brought on behalf of Charter&#146;s securities
holders as of July&nbsp;&nbsp;29, 2002, and sought unspecified
damages and possible injunctive relief. However, no such
transaction by Mr.&nbsp;Allen has been presented. On
April&nbsp;30, 2004, orders of dismissal without prejudice were
entered in each of the Delaware Class&nbsp;Actions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2002, Charter became aware of a grand
jury investigation being conducted by the
U.S.&nbsp;Attorney&#146;s Office for the Eastern District of
Missouri into certain of its accounting and reporting practices,
focusing on how Charter reported customer numbers and its
reporting of amounts received from digital set-top terminal
suppliers for advertising. The U.S.&nbsp;Attorney&#146;s Office
has publicly stated that Charter is not a target of the
investigation. Charter was also advised by the
U.S.&nbsp;Attorney&#146;s Office that no current officer or
member of its board of directors is a target of the
investigation. On July&nbsp;24, 2003, a federal grand jury
charged four former officers of Charter with conspiracy and mail
and wire fraud, alleging improper accounting and reporting
practices focusing on revenue from digital set-top terminal
suppliers and inflated customer account numbers. Trial was set
for February&nbsp;7, 2005. Subsequently, each of the indicted
former officers pled guilty to single conspiracy counts related
to the original mail and wire fraud charges and are awaiting
sentencing. The Company is fully cooperating with the
investigation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;4, 2002, Charter received an
informal, non-public inquiry from the staff of the Securities
and Exchange Commission (&#147;SEC&#148;). The SEC issued a
formal order of investigation dated January&nbsp;23, 2003, and
subsequently served document and testimony subpoenas on Charter
and a number of its former employees. The investigation and
subpoenas generally concerned Charter&#146;s prior reports with
respect to its determination of the number of customers, and
various of its accounting policies and practices including its
capitalization of certain expenses and dealings with certain
vendors, including programmers and digital set-top terminal
suppliers. On July&nbsp;27, 2004, the SEC and Charter reached a
final agreement to settle the investigation. In the Settlement
Agreement and Cease and Desist Order, Charter agreed to entry of
an administrative order prohibiting any future violation of
United States securities laws and requiring certain other
remedial internal practices and public disclosures. Charter
neither admitted nor denied any wrongdoing, and the SEC assessed
no fine against Charter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter is generally required to indemnify each
of the named individual defendants in connection with the
matters described above pursuant to the terms of its bylaws and
(where applicable) such individual defendants&#146; employment
agreements. In accordance with these documents, in connection
with the pending grand jury investigation, the now-settled SEC
investigation and the above-described lawsuits, some of
Charter&#146;s current and former directors and current and
former officers have been advanced certain costs and expenses
incurred in connection with their defense. On February&nbsp;22,
2005, Charter filed suit against four of its former officers who
were indicted in the course of the grand jury investigation.
These suits seek to recover the legal fees and other related
expenses advanced to these individuals by Charter for the grand
jury investigation, SEC investigation and class action and
related lawsuits.
</FONT>

<P align="center"><FONT size="2">F-79
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 2001, two customers, Nikki Nicholls
and Geraldine M. Barber, filed a class action suit against
Charter Holdco in South Carolina Court of Common Pleas (the
&#147;South Carolina Class&nbsp;Action&#148;), purportedly on
behalf of a class of Charter Holdco&#146;s customers, alleging
that Charter Holdco improperly charged them a wire maintenance
fee without request or permission. They also claimed that
Charter Holdco improperly required them to rent analog and/or
digital set-top terminals even though their television sets were
&#147;cable ready.&#148; A substantively identical case was
filed in the Superior Court of Athens&nbsp;&#151; Clarke County,
Georgia by Emma S. Tobar on March&nbsp;26, 2002 (the
&#147;Georgia Class&nbsp;Action&#148;), alleging a nationwide
class for these claims. Charter Holdco removed the South
Carolina Class&nbsp;Action to the United States District Court
for the District of South Carolina in November 2001, and moved
to dismiss the suit in December 2001. The federal judge remanded
the case to the South Carolina Court of Common Pleas in August
2002 without ruling on the motion to dismiss. The plaintiffs
subsequently moved for a default judgment, arguing that upon
return to state court, Charter Holdco should have, but did not
file a new motion to dismiss. The state court judge granted the
plaintiff&#146;s motion over Charter Holdco&#146;s objection in
September 2002. Charter Holdco immediately appealed that
decision to the South Carolina Court of Appeals and the South
Carolina Supreme Court, but those courts ruled that until a
final judgment was entered against Charter Holdco, they lacked
jurisdiction to hear the appeal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2003, the Court of Common Pleas
granted the plaintiffs&#146; motion for class certification. In
October and November 2003, Charter Holdco filed motions
(a)&nbsp;asking that court to set aside the default judgment,
and (b)&nbsp;seeking dismissal of plaintiffs&#146; suit for
failure to state a claim. In January 2004, the Court of Common
Pleas granted in part and denied in part Charter Holdco&#146;s
motion to dismiss for failure to state a claim. It also took
under advisement Charter Holdco&#146;s motion to set aside the
default judgment. In April 2004, the parties to both the Georgia
and South Carolina Class&nbsp;Actions participated in a
mediation. The mediator made a proposal to the parties to settle
the lawsuits. In May 2004, the parties accepted the
mediator&#146;s proposal and reached a tentative settlement,
subject to final documentation and court approval. As a result
of the tentative settlement, we recorded a special charge of
$9&nbsp;million in our consolidated statement of operations in
the first quarter of 2004. On July&nbsp;8, 2004, the Superior
Court of Athens&nbsp;&#151; Clarke County, Georgia granted a
motion to amend the Tobar complaint to add Nicholls, Barber and
April Jones as plaintiffs in the Georgia Class&nbsp;Action and
to add any potential class members in South Carolina. The court
also granted preliminary approval of the proposed settlement on
that date. On August&nbsp;2, 2004, the parties submitted a joint
request to the South Carolina Court of Common Pleas to stay the
South Carolina Class&nbsp;Action pending final approval of the
settlement and on August&nbsp;17, 2004, that court granted the
parties&#146; request. On November&nbsp;10, 2004, the court
granted final approval of the settlement, rejecting positions
advanced by two objectors to the settlement. On
December&nbsp;13, 2004 the court entered a written order
formally approving that settlement. On January&nbsp;11, 2005,
certain class members appealed the order entered by the Georgia
court. That appeal was dismissed on or about February&nbsp;3,
2005. Additionally, one of the objectors to this settlement
recently filed a similar, but not identical, lawsuit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Furthermore, Charter is also party to, other
lawsuits and claims that arose in the ordinary course of
conducting its business. In the opinion of management, after
taking into account recorded liabilities, the outcome of these
other lawsuits and claims are not expected to have a material
adverse effect on the Company&#146;s consolidated financial
condition, results of operations or its liquidity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Regulation in the Cable
    Industry</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The operation of a cable system is extensively
regulated by the Federal Communications Commission
(&#147;FCC&#148;), some state governments and most local
governments. The FCC has the authority to enforce its
regulations through the imposition of substantial fines, the
issuance of cease and desist orders and/or the
</FONT>

<P align="center"><FONT size="2">F-80
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">imposition of other administrative sanctions,
such as the revocation of FCC licenses needed to operate certain
transmission facilities used in connection with cable
operations. The 1996 Telecom Act altered the regulatory
structure governing the nation&#146;s communications providers.
It removed barriers to competition in both the cable television
market and the local telephone market. Among other things, it
reduced the scope of cable rate regulation and encouraged
additional competition in the video programming industry by
allowing local telephone companies to provide video programming
in their own telephone service areas.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 1996 Telecom Act required the FCC to
undertake a number of implementing rulemakings. Moreover,
Congress and the FCC have frequently revisited the subject of
cable regulation. Future legislative and regulatory changes
could adversely affect the Company&#146;s operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">24.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Employee Benefit Plan</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s employees may participate in
the Charter Communications, Inc. 401(k) Plan. Employees that
qualify for participation can contribute up to 50% of their
salary, on a pre-tax basis, subject to a maximum contribution
limit as determined by the Internal Revenue Service. The Company
matches 50% of the first 5% of participant contributions. The
Company made contributions to the 401(k) plan totaling
$7&nbsp;million, $7&nbsp;million and $8&nbsp;million for the
years ended December&nbsp;31, 2004, 2003 and 2002, respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">25.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Recently Issued Accounting Standards</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2004, the Financial Accounting
Standards Board issued the revised SFAS&nbsp;No.&nbsp;123,
<I>Share&nbsp;&#151; Based Payment</I>, which addresses the
accounting for share-based payment transactions in which a
company receives employee services in exchange for
(a)&nbsp;equity instruments of that company or
(b)&nbsp;liabilities that are based on the fair value of the
company&#146;s equity instruments or that may be settled by the
issuance of such equity instruments. This statement will be
effective for the Company beginning July&nbsp;1, 2005. Because
Charter adopted the fair value recognition provisions of
SFAS&nbsp;No.&nbsp;123 on January&nbsp;1, 2003, the Company does
not expect this revised standard to have a material impact on
its financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter does not believe that any other recently
issued, but not yet effective accounting pronouncements, if
adopted, would have a material effect on the Company&#146;s
accompanying financial statements.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">26.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Parent Company Only Financial
    Statements</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As the result of limitations on, and prohibitions
of, distributions, substantially all of the net assets of the
consolidated subsidiaries are restricted from distribution to
Charter, the parent company. The following condensed parent-only
financial statements of Charter account for the investment in
Charter Holdco under the equity method of accounting. The
financial statements should be read in conjunction with the
consolidated financial statements of the Company and notes
thereto.
</FONT>

<P align="center"><FONT size="2">F-81
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">Charter Communications, Inc. (Parent Company
Only)</FONT></B>

<DIV align="center">
<B><FONT size="2">Condensed Balance Sheet</FONT></B>
</DIV>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="9" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Receivable from related party
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Investment in Charter Holdco
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Notes receivable from Charter Holdco
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,073</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,093</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="9"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="9" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146;
    DEFICIT</FONT></B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Convertible notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Deferred income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">149</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Losses in excess of investment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Other long term liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Preferred stock&nbsp;&#151; redeemable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,406</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(175</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total liabilities and shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,093</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">Condensed Statement of Operations</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">REVENUES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Management fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">EXPENSES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Equity in losses of Charter Holdco
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,488</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(359</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,922</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">General and administrative expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(49</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(65</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(73</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,551</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(435</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,004</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss before income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,484</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(355</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,919</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">143</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,341</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,514</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Dividend on preferred equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss after preferred dividends
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,345</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(242</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-82
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">Condensed Statements of Cash Flows</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="62%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH FLOWS FROM OPERATING ACTIVITIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss after preferred dividends
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,345</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(242</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Equity in losses of Charter Holdco
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,488</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">359</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Changes in operating assets and liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Deferred income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(143</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(117</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(405</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net cash flows from operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH FLOWS FROM INVESTING ACTIVITIES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Receivables from Charter Holdco
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(863</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Payments from Charter Holdco
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">588</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Investment in Charter Holdco
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net cash flows from investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(277</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH FLOWS FROM FINANCING ACTIVITIES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Issuance of convertible notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">863</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Paydown of convertible notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(588</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net proceeds from issuance of common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net cash flows from financing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">NET INCREASE (DECREASE)&nbsp;IN CASH AND CASH
    EQUIVALENTS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-83
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2004, 2003 and
2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Dollars in millions, except where
indicated)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">27.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Unaudited Quarterly Financial Data</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents quarterly data for
the periods presented on the consolidated statement of
operations:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31, 2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">First Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Second Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Third Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth Quarter</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income (loss) from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,344</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Loss before minority interest and income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(235</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(366</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,776</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(321</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net loss applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(294</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(416</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,295</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(340</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Basic and diluted loss per common share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10.89</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.12</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted-average shares outstanding, basic and
    diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">295,106,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,522,815</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">302,604,978</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">302,934,348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31, 2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">First Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Second Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Third Quarter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth Quarter</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,178</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,207</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">112</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Income (loss) before minority interest and income
    taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(301</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(286</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(161</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Net income (loss) applicable to common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(182</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(38</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(58</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Basic income (loss) per common share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.62</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.13</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Diluted income (loss) per common share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.62</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.13</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted-average shares outstanding, basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,466,137</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,474,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,566,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,875,504</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Weighted-average shares outstanding, diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,466,137</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,474,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">637,822,843</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">294,875,504</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-84
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="right">
<B><FONT size="2">ANNEX A</FONT></B>
</DIV>

<DIV align="left">
<A name='127'></A>
</DIV>

<!-- link1 "Form of Investor Acknowledgment" -->

<P align="center">
<FONT size="2">Form of Investor Acknowledgment
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned acknowledges and agrees that the
shares of Charter&#146;s Class&nbsp;A common stock offered
pursuant to this prospectus are not being offered to, and may
not be purchased by, any person who has an open short position
in Charter&#146;s Class&nbsp;A common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each purchaser of Charter&#146;s Class&nbsp;A
common stock hereby represents and agrees that, at the time it
received an offer to purchase the shares and at the time of its
purchase of the shares:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">it did not have an open short position in
    Charter&#146;s Class&nbsp;A common stock;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">it is not purchasing the shares on behalf of, or
    for the account of, any person described in the first bullet
    above, and has no arrangement or understanding to resell, lend
    or otherwise transfer (directly or indirectly) the shares to any
    such person.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of the foregoing, an &#147;open
short position&#148; means any contractual or other arrangement
whereby a holder is economically &#147;short&#148; Class&nbsp;A
common stock, including any so-called &#147;synthetic short
position.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each purchaser of Charter&#146;s Class&nbsp;A
common stock in this offering must execute and deliver this
Investor Acknowledgement to Citigroup by facsimile to
(646)&nbsp;843-3922.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Purchaser of Class&nbsp;A common stock
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Name:&nbsp;</FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Title:
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-1
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="5">122,830,000&nbsp;Shares</FONT></B>

<P align="center">
<IMG src="y11229y1122906.gif" alt="(CHARTER COMMUNICATIONS LOGO)">

<P align="center">
<B><FONT size="5">Class&nbsp;A Common Stock</FONT></B>

<P align="center">
<HR size="1" width="15%" align="center" noshade>

<DIV align="center">
<B><FONT size="2">PROSPECTUS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005</FONT></B>
</DIV>

<DIV align="center">
<HR size="1" width="15%" align="center" noshade>
</DIV>

<P align="center">
<B><FONT size="5">Citigroup</FONT></B>

<DIV>&nbsp;</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">PART&nbsp;II</FONT></B>

<P align="center">
<B><FONT size="2">INFORMATION NOT REQUIRED IN
PROSPECTUS</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;13.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Other Expenses of Issuance and
    Distribution</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the various
expenses to be incurred in connection with the sale and
distribution of the securities covered by this prospectus, all
of which will be borne by the registrant. All amounts shown are
estimates except the SEC filing fee.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="81%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Regulatory filing fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,893</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Legal fees and expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Accounting fees and expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Printing expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">250,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT size="2">Total expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">671,893</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;14.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Indemnification of Directors and
    Officers</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Indemnification Under the Certificate of
Incorporation and Bylaws of Charter Communications,
Inc.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Charter Communications, Inc.&#146;s certificate
of incorporation provides that a director of Charter
Communications, Inc. shall not be personally liable to Charter
Communications, Inc. or its shareholders for monetary damages
for breach of fiduciary duty as a director, except for
liability: (i)&nbsp;for any breach of the directors&#146; duty
of loyalty to Charter Communications, Inc. or its shareholders;
(ii)&nbsp;for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law;
(iii)&nbsp;under Section&nbsp;174 of the Delaware General
Corporation law; or (iv)&nbsp;for any transaction from which the
director derived an improper personal benefit. Charter
Communications, Inc.&#146;s bylaws require Charter
Communications, Inc., to the fullest extent authorized by the
Delaware General Corporation Law, to indemnify any person who
was or is made a party or is threatened to be made a party or is
otherwise involved in any action, suit or proceeding by reason
of the fact that he is or was a director or officer of Charter
Communications, Inc. or is or was serving at the request of
Charter Communications, Inc. as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other entity or enterprise, in each
case, against all expense, liability and loss (including
attorneys&#146; fees, judgments, amounts paid in settlement,
fines, ERISA excise taxes or penalties) reasonably incurred or
suffered by such person in connection therewith.
</FONT>

<P align="left">
<B><FONT size="2">Indemnification Under the Delaware General
Corporation Law</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;145 of the Delaware General
Corporation Law, authorizes a corporation to indemnify any
person who was or is a party, or is threatened to be made a
party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses,
including attorneys&#146; fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding, if
the person acted in good faith and in a manner the person
reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the
person&#146;s conduct was unlawful. In addition, the Delaware
General Corporation Law does not permit indemnification in any
threatened, pending or completed action or suit by or in the
right of the corporation in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable to the corporation, unless and only to the extent that
the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for
such expenses, which such court shall deem proper. To the extent
that a present or former director or officer of a corporation
has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of
any claim, issue or matter, such person shall be indemnified
against expenses, including attorneys&#146; fees, actually and
reasonably incurred by such person. Indemnity is
</FONT>

<P align="center"><FONT size="2">II-1
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">mandatory to the extent a claim, issue or matter
has been successfully defended. The Delaware General Corporation
Law also allows a corporation to provide for the elimination or
limit of the personal liability of a director to the corporation
or its shareholders for monetary damages for breach of fiduciary
duty as a director, provided that such provision shall not
eliminate or limit the liability of a director
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;for any breach of the director&#146;s
    duty of loyalty to the corporation or its shareholders,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;for acts or omissions not in good faith
    or which involve intentional misconduct or a knowing violation
    of law,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;for unlawful payments of dividends or
    unlawful stock purchases or redemptions,&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iv)&nbsp;for any transaction from which the
    director derived an improper personal benefit. These provisions
    will not limit the liability of directors or officers under the
    federal securities laws of the United States.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the SEC such indemnification is
against public policy as expressed in the Act and is therefore
unenforceable.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;15.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Recent Sales of Unregistered
    Securities.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;29, 2004, Charter Communications,
Inc. issued 2,385,705&nbsp;shares of its Class&nbsp;A common
stock in exchange for $10&nbsp;million aggregate principal
amount of Charter&#146;s 5.75%&nbsp;convertible senior notes due
2005 in a privately negotiated transaction. The shares of
Class&nbsp;A common stock issued in this exchange were exempt
from registration under Section&nbsp;3(a)(9) of the Securities
Act of 1933.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;6, 2004, Charter Communications, Inc.
issued 4,867,113&nbsp;shares of its Class&nbsp;A common stock in
exchange for $20&nbsp;million aggregate principal amount of
Charter&#146;s 5.75%&nbsp;convertible senior notes due 2005 in a
privately negotiated transaction. The shares of Class&nbsp;A
common stock issued in this exchange were exempt from
registration under Section&nbsp;3(a)(9) of the Securities Act of
1933.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;22, 2004, Charter
Communications, Inc. issued and sold $862.5&nbsp;million
original principal amount of 5.875%&nbsp;convertible senior
notes due 2009. The notes were sold in a private transaction to
qualified institutional buyers, and the sale was exempt from
registration by virtue of Section&nbsp;4(2) of the Securities
Act of 1933 and Rule&nbsp;506 of Regulation&nbsp;D. The notes
were eligible for resale to qualified institutional buyers
pursuant to Rule&nbsp;144A of the Securities Act of 1933. The
initial conversion rate, subject to adjustment in certain
circumstances, will be 413.2231&nbsp;shares of Charter&#146;s
Class&nbsp;A common stock per $1,000 original principal amount
of notes, which represents a conversion price of approximately
$2.42&nbsp;per share. Consequently, the notes are convertible
into an aggregate of approximately 356,405,000&nbsp;shares of
Class&nbsp;A common stock. A portion of the net proceeds from
the sale of the notes were used to purchase a portfolio of
U.S.&nbsp;Treasury securities which are pledged as security for
the notes and which Charter expects to use to fund the first six
scheduled interest payments on the notes. Charter also intends
to use a portion of the net proceeds to redeem outstanding
indebtedness in the aggregate principal amount of
$588&nbsp;million. Excess proceeds will be used for general
corporate purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December&nbsp;2003, subject to certain
conditions and finalizing appropriate documentation, Charter
agreed to issue 18,638 shares of Class&nbsp;A common stock in
exchange for cancellation of an option to purchase 186,385
shares which was issued in 2001 as compensation for services.
The exchange is scheduled to be consummated in 2005. In
addition, we agreed to issue to the same holder a new option to
purchase an additional 289,268 shares of Class&nbsp;A common
stock for an exercise price of $3.905 per share. The issuances
were in exchange for services rendered or to be rendered, and
were exempt from registration pursuant to Section&nbsp;4(2)
under the Securities Act of 1933 and Rule 506 of
Regulation&nbsp;D.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;8, 2005, pursuant to a court
approved settlement of certain class action claims brought
against Charter and various individuals, Charter issued
13.4&nbsp;million shares of its Class&nbsp;A common stock to a
claims administrator to be held in escrow for the benefit of the
class pending any appeals of the court approval. The issuance of
the shares is exempt from registration pursuant to
Section&nbsp;3(a)(10) of the Securities Act of 1933, as amended.
</FONT>

<P align="center"><FONT size="2">II-2
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;16.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Exhibits</FONT></I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;1**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Underwriting Agreement.
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Purchase and Contribution Agreement, entered into
    as of June 1999, by and among BCI (USA), LLC, William Bresnan,
    Blackstone BC Capital Partners L.P., Blackstone BC Offshore
    Capital Partners L.P., Blackstone Family Investment
    Partnership&nbsp;III L.P., TCID of Michigan, Inc. and TCI
    Bresnan LLC and Charter Communications Holding Company, LLC
    (incorporated by reference to Exhibit&nbsp;2.11 to Amendment
    No.&nbsp;2 to the registration statement on Form&nbsp;S-1 of
    Charter Communications, Inc. filed on September&nbsp;28, 1999
    (File No.&nbsp;333-83887)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Amendment to Purchase and Contribution
    Agreement dated as of February&nbsp;14, 2000, by and among BCI
    (USA), LLC, William J. Bresnan, Blackstone BC Capital Partners
    L.P., Blackstone BC Offshore Capital Partners, L.P., Blackstone
    Family Media&nbsp;III L.P. (as assignee of Blackstone Family
    Investment&nbsp;III, L.P.), TCID of Michigan, Inc., TCI Bresnan,
    LLC and Charter Communications Holding Company, LLC.
    (incorporated by reference to Exhibit&nbsp;2.11(a) to the
    current report on Form&nbsp;8-K filed by Charter Communications,
    Inc. on February&nbsp;29, 2000 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Asset Purchase Agreement, dated as of
    September&nbsp;28, 2001, between High Speed Access Corp. and
    Charter Communications Holding Company, LLC (including as
    Exhibit&nbsp;A, the Form of Voting Agreement, as Exhibit&nbsp;B,
    the form of Management Agreement, as Exhibit&nbsp;C, the form of
    License Agreement, and as Exhibit&nbsp;D, the Form of Billing
    Letter Agreement) (incorporated by reference to
    Exhibit&nbsp;10.1 to Amendment No.&nbsp;6 to Schedule&nbsp;13D
    filed by Charter Communications, Inc. and others with respect to
    High Speed Access Corp., filed on October&nbsp;1, 2001 (File
    No.&nbsp;005-56431)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Asset Purchase Agreement, dated August&nbsp;29,
    2001, by and between Charter Communications
    Entertainment&nbsp;I, LLC, Interlink Communications Partners,
    LLC, and Rifkin Acquisitions Partners, LLC and Enstar Income
    Program&nbsp;II-1,&nbsp;L.P., Enstar Income Program&nbsp;II-2,
    L.P., Enstar Income Program&nbsp;IV-3, L.P., Enstar Income/
    Growth Program Six-A,&nbsp;L.P., Enstar IV/ PBD Systems Venture,
    and Enstar Cable of Macoupin County (incorporated by reference
    to Exhibit&nbsp;2.1 to the current report of Form&nbsp;8-K filed
    by Enstar&nbsp;IV-2,&nbsp;L.P. on September&nbsp;13, 2001 (File
    No.&nbsp;000-15706)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Letter of Amendment, dated September&nbsp;10,
    2001, by and between Charter Communications
    Entertainment&nbsp;I, LLC, Interlink Communications Partners,
    LLC, and Rifkin Acquisition Partners, LLC and Enstar Income
    Program&nbsp;II-1,&nbsp;L.P., Enstar Income Program&nbsp;II-2,
    L.P., Enstar Income Program IV-3,&nbsp;L.P., Enstar Income/
    Growth Program Six-A,&nbsp;L.P., Enstar IV/ PBD Systems Venture,
    and Enstar Cable of Macoupin County (incorporated by reference
    to Exhibit&nbsp;2.1 to the current report of Form&nbsp;8-K filed
    by Enstar&nbsp;IV-2,&nbsp;L.P. on September&nbsp;13, 2001 (File
    No.&nbsp;000-15706)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Letter of Amendment, dated April&nbsp;10, 2002,
    by and between Charter Communications Entertainment&nbsp;I, LLC,
    Interlink Communications Partners, LLC, and Rifkin Acquisition
    Partners, LLC and Enstar Income Program&nbsp;II-1,&nbsp;L.P.,
    Enstar Income Program&nbsp;II-2, L.P., Enstar Income
    Program&nbsp;IV-3,&nbsp;L.P., Enstar Income/ Growth Program
    Six-A,&nbsp;L.P., Enstar IV/ PBD&nbsp;Systems Venture, and
    Enstar Cable of Macoupin County (incorporated by reference to
    Exhibit&nbsp;2.1 to the current report on Form&nbsp;8-K filed by
    Enstar Income Program&nbsp;IV-1,&nbsp;L.P. on April&nbsp;22,
    2002 (File No.&nbsp;000-15705)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Asset Purchase Agreement, dated April&nbsp;10,
    2002, by and between Charter Communications
    Entertainment&nbsp;I, LLC, and Enstar Income Program&nbsp;II-1,
    L.P. (incorporated by reference to Exhibit&nbsp;2.2 to the
    current report on Form&nbsp;8-K filed by Enstar Income
    Program&nbsp;II-1, L.P. on April&nbsp;26, 2002
    (File&nbsp;No.&nbsp;000-14508)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Purchase Agreement, dated May&nbsp;29, 2003, by
    and between Falcon Video Communications, L.P. and WaveDivision
    Holdings, LLC (incorporated by reference to Exhibit&nbsp;2.1 to
    Charter&nbsp;Communications, Inc.&#146;s current report on
    Form&nbsp;8-K filed on May&nbsp;30, 2003
    (File&nbsp;No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Asset Purchase Agreement, dated September&nbsp;3,
    2003, by and between Charter Communications&nbsp;VI, LLC, The
    Helicon Group, L.P., Hornell Television Service, Inc., Interlink
    Communications Partners, LLC, Charter Communications Holdings,
    LLC and Atlantic Broadband Finance, LLC (incorporated by
    reference to Exhibit&nbsp;2.1 to Charter Communications,
    Inc.&#146;s current report on Form&nbsp;8-K/A filed on
    September&nbsp;3, 2003 (File&nbsp;No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Restated Certificate of Incorporation of Charter
    Communications, Inc. (Originally incorporated July&nbsp;22,
    1999) (incorporated by reference to Exhibit&nbsp;3.1 to
    Amendment No.&nbsp;3 to the registration statement on
    Form&nbsp;S-1 of Charter Communications, Inc. filed on
    October&nbsp;18, 1999 (File No.&nbsp;333-83887)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certificate of Amendment of Restated Certificate
    of Incorporation of Charter Communications, Inc. filed
    May&nbsp;10, 2001 (incorporated by reference to
    Exhibit&nbsp;3.1(b) to the annual report of Form&nbsp;10-K of
    Charter Communications, Inc. filed on March&nbsp;29, 2002 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated By-laws of Charter
    Communications, Inc. as of November&nbsp;5, 1999 (incorporated
    by reference to Exhibit&nbsp;3.2 to the quarterly report on
    Form&nbsp;10-Q filed by Charter Communications, Inc. on
    November&nbsp;14, 2001 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Fourth Amendment to Amended and Restated By-Laws
    of Charter Communications, Inc. adopted as of October&nbsp;3,
    2003 (incorporated by reference to Exhibit&nbsp;No.&nbsp;3.3 to
    the quarterly report on Form&nbsp;10-Q filed by Charter
    Communications, Inc. on November&nbsp;3, 2003 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Fifth Amendment to Amended and Restated By-Laws
    of Charter Communications, Inc. adopted as of October&nbsp;28,
    2003 (incorporated by reference to Exhibit&nbsp;No.&nbsp;3.3 to
    the quarterly report on Form&nbsp;10-Q filed by Charter
    Communications, Inc. on November&nbsp;3, 2003 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2(d)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Sixth Amendment to the Amended and Restated
    By-Laws of Charter Communications, Inc. adopted as of
    September&nbsp;24, 2004 (incorporated by reference to
    Exhibit&nbsp;99.1 to the current report on Form&nbsp;8-K of
    Charter Communications, Inc. filed on September&nbsp;30, 2004
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2(e)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Seventh Amendment to the Amended and Restated
    By-Laws of Charter Communications, Inc. adopted as of
    October&nbsp;21, 2004 (incorporated by reference to
    Exhibit&nbsp;3.1 to the current report on Form&nbsp;8-K of
    Charter Communications, Inc. filed on October&nbsp;22, 2004
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2(f)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Eighth Amendment to the Amended and Restated
    By-Laws of Charter Communications,&nbsp;Inc. adopted as of
    December&nbsp;14, 2004 (incorporated by reference to
    Exhibit&nbsp;3.1 to the current report on Form&nbsp;8-K of
    Charter Communications,&nbsp;Inc. filed on December&nbsp;15,
    2004 (File&nbsp;No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated May&nbsp;30, 2001 between Charter
    Communications, Inc. and BNY Midwest Trust Company as Trustee
    governing 4.75%&nbsp;Convertible Senior Notes due 2006
    (incorporated by reference to Exhibit&nbsp;4.1(b) to the current
    report on Form&nbsp;8-K filed by Charter Communications, Inc. on
    June&nbsp;1, 2001 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certificate of Designation of Series&nbsp;A
    Convertible Redeemable Preferred Stock of Charter
    Communications, Inc. and related Certificate of Correction of
    Certificate of Designation (incorporated by reference to
    Exhibit&nbsp;3.1 to the quarterly report on Form&nbsp;10-Q filed
    by Charter Communications, Inc. on November&nbsp;14, 2001 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture relating to the 5.875% convertible
    senior notes due 2009, dated as of November 2004, by and among
    Charter Communications, Inc. and Wells Fargo Bank, N.A. as
    trustee (incorporated by reference to Exhibit 10.1 to the
    current report on Form&nbsp;8-K of Charter Communications, Inc.
    filed on November&nbsp;30, 2004 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">5.875% convertible senior notes due 2009 Resale
    Registration Rights Agreement, dated November&nbsp;22, 2004, by
    and among Charter Communications, Inc. and Citigroup Global
    Markets Inc. and Morgan Stanley and Co. Incorporated as
    representatives of the initial purchasers (incorporated by
    reference to Exhibit&nbsp;10.2 to the current report on
    Form&nbsp;8-K of Charter Communications, Inc. filed on
    November&nbsp;30, 2004 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Share Loan Registration Rights Agreement, dated
    November&nbsp;22, 2004, by and between Charter Communications,
    Inc. and Citigroup Global Markets Inc. (incorporated by
    reference to Exhibit&nbsp;10.3 to the current report on
    Form&nbsp;8-K of Charter Communications, Inc. filed on
    November&nbsp;30, 2004 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Collateral Pledge and Security Agreement, dated
    as of November&nbsp;22, 2004, by and between Charter
    Communications, Inc. and Wells Fargo Bank, N.A. as trustee and
    collateral agent (incorporated by reference to Exhibit&nbsp;10.4
    to the current report on Form&nbsp;8-K of Charter
    Communications, Inc. filed on November&nbsp;30, 2004 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Collateral Pledge and Security Agreement, dated
    as of November&nbsp;22, 2004 among Charter Communications, Inc.,
    Charter Communications Holding Company, LLC and Wells Fargo
    Bank, N.A. as trustee and collateral agent (incorporated by
    reference to Exhibit&nbsp;10.5 to the current report on
    Form&nbsp;8-K of Charter Communications, Inc. filed on
    November&nbsp;30, 2004 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Gibson, Dunn&nbsp;&#38; Crutcher LLP
    regarding legality.
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture, dated as of April&nbsp;9, 1998, by
    among Renaissance Media (Louisiana) LLC, Renaissance Media
    (Tennessee) LLC, Renaissance Media Capital Corporation,
    Renaissance Media Group LLC and United States Trust Company of
    New York, as trustee (incorporated by reference to
    Exhibit&nbsp;4.1 to the registration statement on Forms&nbsp;S-4
    of Renaissance Media Group LLC, Renaissance Media (Tennessee)
    LLC, Renaissance Media (Louisiana) LLC and Renaissance Media
    Capital Corporation filed on June&nbsp;12, 1998 (File
    No.&nbsp;333-56679)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture relating to the 8.250%&nbsp;Senior
    Notes due 2007, dated as of March&nbsp;17, 1999, between Charter
    Communications Holdings, LLC, Charter Communications Holdings
    Capital Corporation and Harris Trust and Savings Bank
    (incorporated by reference to Exhibit&nbsp;4.1(a) to Amendment
    No.&nbsp;2 to the registration statement on Form&nbsp;S-4 of
    Charter Communications Holdings, LLC and Charter Communications
    Holdings Capital Corporation filed on June&nbsp;22, 1999 (File
    No.&nbsp;333-77499)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture relating to the 8.625%&nbsp;Senior
    Notes due 2009, dated as of March&nbsp;17, 1999, among Charter
    Communications Holdings, LLC, Charter Communications Holdings
    Capital Corporation and Harris Trust and Savings Bank
    (incorporated by reference to Exhibit&nbsp;4.2(a) to Amendment
    No.&nbsp;2 to the registration statement on Form&nbsp;S-4 of
    Charter Communications Holdings, LLC and Charter Communications
    Holdings Capital Corporation filed on June&nbsp;22, 1999 (File
    No.&nbsp;333-77499)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture relating to the
    8.625% Senior Notes due 2009, dated as of September&nbsp;28,
    2005, among Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee (incorporated by reference to
    Exhibit&nbsp;10.3 to the current report on Form&nbsp;8-K of
    Charter Communications,&nbsp;Inc. filed on October&nbsp;4, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture relating to the 9.920%&nbsp;Senior
    Discount Notes due 2011, dated as of March&nbsp;17, 1999, among
    Charter Communications Holdings, LLC, Charter Communications
    Holdings Capital Corporation and Harris Trust and Savings Bank
    (incorporated by reference to Exhibit&nbsp;4.3(a) to Amendment
    No.&nbsp;2 to the registration statement on Form&nbsp;S-4 of
    Charter Communications Holdings, LLC and Charter Communications
    Holdings Capital Corporation filed on June&nbsp;22, 1999 (File
    No.&nbsp;333-77499)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture relating to the
    9.920% Senior Discount Notes due 2011, dated as of
    September&nbsp;28, 2005, among Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee (incorporated by reference to
    Exhibit&nbsp;10.4 to the current report on Form&nbsp;8-K of
    Charter Communications,&nbsp;Inc. filed on October&nbsp;4, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture relating to the 10.00%&nbsp;Senior
    Notes due 2009, dated as of January&nbsp;12, 2000, between
    Charter Communications Holdings, LLC, Charter Communications
    Holdings Capital Corporation and Harris Trust and Savings Bank
    (incorporated by reference to Exhibit&nbsp;4.1(a) to the
    registration statement on Form&nbsp;S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on January&nbsp;25, 2000 (File
    No.&nbsp;333-95351)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture relating to the
    10.00% Senior Notes due 2009, dated as of September&nbsp;28,
    2005, between Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee (incorporated by reference to
    Exhibit&nbsp;10.5 to the current report on Form&nbsp;8-K of
    Charter Communications,&nbsp;Inc. filed on October&nbsp;4, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture relating to the 10.25%&nbsp;Senior
    Notes due 2010, dated as of January&nbsp;12, 2000, among Charter
    Communications Holdings, LLC, Charter Communications Holdings
    Capital Corporation and Harris Trust and Savings Bank
    (incorporated by reference to Exhibit&nbsp;4.2(a) to the
    registration statement on Form&nbsp;S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on January&nbsp;25, 2000 (File
    No.&nbsp;333-95351)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture relating to the
    10.25% Senior Notes due 2010, dated as of September&nbsp;28,
    2005, among Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee (incorporated by reference to
    Exhibit&nbsp;10.6 to the current report on Form&nbsp;8-K of
    Charter Communications,&nbsp;Inc. filed on October&nbsp;4, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture relating to the 11.75%&nbsp;Senior
    Discount Notes due 2010, dated as of January&nbsp;12, 2000,
    among Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and Harris Trust and
    Savings Bank (incorporated by reference to Exhibit&nbsp;4.3(a)
    to the registration statement on Form&nbsp;S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on January&nbsp;25, 2000 (File
    No.&nbsp;333-95351)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture relating to the
    11.75% Senior Discount Notes due 2010, among Charter
    Communications Holdings, LLC, Charter Communications Holdings
    Capital Corporation and BNY Midwest Trust Company as Trustee,
    dated as of September&nbsp;28, 2005 (incorporated by reference
    to Exhibit&nbsp;10.7 to the current report on Form&nbsp;8-K of
    Charter Communications,&nbsp;Inc. filed on October&nbsp;4, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.8(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of January&nbsp;10, 2001
    between Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee governing 10.750%&nbsp;senior notes due
    2009 (incorporated by reference to Exhibit&nbsp;4.2(a) to the
    registration statement on Form&nbsp;S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on February&nbsp;2, 2001 (File
    No.&nbsp;333-54902)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.8(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture dated as of
    September&nbsp;28, 2005 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 10.750% Senior Notes
    due 2009 (incorporated by reference to Exhibit&nbsp;10.8 to the
    current report on Form&nbsp;8-K of Charter
    Communications,&nbsp;Inc. filed on October&nbsp;4, 2005 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.9(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of January&nbsp;10, 2001
    between Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee governing 11.125%&nbsp;senior notes due
    2011 (incorporated by reference to Exhibit&nbsp;4.2(b) to the
    registration statement on Form&nbsp;S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on February&nbsp;2, 2001 (File
    No.&nbsp;333-54902)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.9(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture dated as of
    September&nbsp;28, 2005, between Charter Communications
    Holdings, LLC, Charter Communications Capital Corporation and
    BNY Midwest Trust Company governing 11.125% Senior Notes due
    2011 (incorporated by reference to Exhibit&nbsp;10.9 to the
    current report on Form&nbsp;8-K of Charter
    Communications,&nbsp;Inc. filed on October&nbsp;4, 2005 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.10(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of January&nbsp;10, 2001
    between Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee governing 13.500%&nbsp;senior discount
    notes due 2011 (incorporated by reference to Exhibit&nbsp;4.2(c)
    to the registration statement on Form&nbsp;S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on February&nbsp;2, 2001 (File
    No.&nbsp;333-54902)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.10(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture dated as of
    September&nbsp;28, 2005, between Charter Communications
    Holdings, LLC, Charter Communications Holdings Capital
    Corporation and BNY Midwest Trust Company as Trustee governing
    13.500% Senior Discount Notes due 2011 (incorporated by
    reference to Exhibit&nbsp;10.10 to the current report on
    Form&nbsp;8-K of Charter Communications,&nbsp;Inc. filed on
    October&nbsp;4, 2005 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.11(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of May&nbsp;15, 2001 between
    Charter Communications Holdings, LLC, Charter Communications
    Holdings Capital Corporation and BNY Midwest Trust Company as
    Trustee governing 9.625%&nbsp;Senior Notes due 2009
    (incorporated by reference to Exhibit&nbsp;10.2(a) to the
    current report on Form&nbsp;8-K filed by Charter Communications,
    Inc. on June&nbsp;1, 2001 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.11(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture dated as of
    January&nbsp;14, 2002 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 9.625%&nbsp;Senior
    Notes due 2009 (incorporated by reference to
    Exhibit&nbsp;10.2(a) to the current report on Form&nbsp;8-K
    filed by Charter Communications, Inc. on January&nbsp;15, 2002
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.11(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Supplemental Indenture dated as of
    June&nbsp;25, 2002 between Charter Communications Holdings, LLC,
    Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 9.625%&nbsp;Senior
    Notes due 2009 (incorporated by reference to Exhibit&nbsp;4.1 to
    the quarterly report on Form&nbsp;10-Q filed by Charter
    Communications, Inc. on August&nbsp;6, 2002 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.11(d)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Third Supplemental Indenture dated as of
    September&nbsp;28, 2005 between Charter Communications Holdings,
    LLC, Charter Communications Capital Corporation and BNY Midwest
    Trust Company as Trustee governing 9.625% Senior Notes due 2009
    (incorporated by reference to Exhibit&nbsp;10.11 to the current
    report on Form&nbsp;8-K of Charter Communications,&nbsp;Inc.
    filed on October&nbsp;4, 2005 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of May&nbsp;15, 2001 between
    Charter Communications Holdings, LLC, Charter Communications
    Holdings Capital Corporation and BNY Midwest Trust Company as
    Trustee governing 10.000%&nbsp;Senior Notes due 2011
    (incorporated by reference to Exhibit&nbsp;10.3(a) to the
    current report on Form&nbsp;8-K filed by Charter Communications,
    Inc. on June&nbsp;1, 2001 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture dated as of
    January&nbsp;14, 2002 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 10.000%&nbsp;Senior
    Notes due 2011 (incorporated by reference to
    Exhibit&nbsp;10.3(a) to the current report on Form&nbsp;8-K
    filed by Charter Communications, Inc. on January&nbsp;15, 2002
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Supplemental Indenture dated as of
    June&nbsp;25, 2002 between Charter Communications Holdings, LLC,
    Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 10.000%&nbsp;Senior
    Notes due 2011 (incorporated by reference to Exhibit&nbsp;4.2 to
    the quarterly report on Form&nbsp;10-Q filed by Charter
    Communications, Inc. on August&nbsp;6, 2002 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12(d)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Third Supplemental Indenture dated as of
    September&nbsp;28, 2005 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing the 10.000% Senior
    Notes due&nbsp;2011 (incorporated by reference to
    Exhibit&nbsp;10.12 to the current report on Form&nbsp;8-K of
    Charter Communications,&nbsp;Inc. filed on October&nbsp;4, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.13(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of May&nbsp;15, 2001 between
    Charter Communications Holdings, LLC, Charter Communications
    Holdings Capital Corporation and BNY Midwest Trust Company as
    Trustee governing 11.750%&nbsp;Senior Discount Notes due 2011
    (incorporated by reference to Exhibit&nbsp;10.4(a) to the
    current report on Form&nbsp;8-K filed by Charter Communications,
    Inc. on June&nbsp;1, 2001 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.13(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture dated as of
    September&nbsp;28, 2005 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 11.750% Senior
    Discount Notes due 2011 (incorporated by reference to
    Exhibit&nbsp;10.13 to the current report on Form&nbsp;8-K of
    Charter Communications,&nbsp;Inc. filed on October&nbsp;4, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">4.75% Mirror Note in the principal amount of
    $632.5&nbsp;million dated as of May&nbsp;30, 2001, made by
    Charter Communications Holding Company, LLC, a Delaware limited
    liability company, in favor of Charter Communications, Inc., a
    Delaware corporation (incorporated by reference to
    Exhibit&nbsp;4.5 to the quarterly report on Form&nbsp;10-Q filed
    by Charter Communications, Inc. on August&nbsp;6, 2002 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.15(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of January&nbsp;14, 2002
    between Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee governing 12.125%&nbsp;Senior Discount
    Notes due 2012 (incorporated by reference to
    Exhibit&nbsp;10.4(a) to the current report on Form&nbsp;8-K
    filed by Charter Communications, Inc. on January&nbsp;15, 2002
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.15(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture dated as of
    June&nbsp;25, 2002 between Charter Communications Holdings, LLC,
    Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 12.125%&nbsp;Senior
    Discount Notes due 2012 (incorporated by reference to
    Exhibit&nbsp;4.3 to the quarterly report on Form&nbsp;10-Q filed
    by Charter Communications, Inc. on August&nbsp;6, 2002 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.15(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Supplemental Indenture dated as of
    September&nbsp;28, 2005 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 12.125% Senior
    Discount Notes due 2012 (incorporated by reference to
    Exhibit&nbsp;10.14 to the current report on Form&nbsp;8-K of
    Charter Communications,&nbsp;Inc. filed on October&nbsp;4, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture relating to the 10.25%&nbsp;Senior
    Notes due 2010, dated as of September&nbsp;23, 2003, among
    CCH&nbsp;II, LLC, CCH&nbsp;II Capital Corporation and Wells
    Fargo Bank, National Association (incorporated by reference to
    Exhibit&nbsp;10.1 to the current report on Form&nbsp;8-K of
    Charter Communications Inc. filed on September&nbsp;26, 2003
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture relating to the 8 3/4%&nbsp;Senior
    Notes due 2013, dated as of November&nbsp;10, 2003, by and among
    CCO Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo
    Bank, N.A., as trustee (incorporated by reference to
    Exhibit&nbsp;4.1 to Charter Communications, Inc.&#146;s current
    report on Form&nbsp;8-K filed on November&nbsp;12, 2003 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture relating to the 8%&nbsp;senior second
    lien notes due 2012 and 8 3/8%&nbsp;senior second lien notes due
    2014, dated as of April&nbsp;27, 2004, by and among Charter
    Communications Operating, LLC, Charter Communications Operating
    Capital Corp. and Wells Fargo Bank, N.A. as trustee
    (incorporated by reference to Exhibit&nbsp;10.32 to Amendment
    No.&nbsp;2 to the registration statement on Form&nbsp;S-4 of
    CCH&nbsp;II, LLC filed on May&nbsp;5, 2004 (File
    No.&nbsp;333-111423)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Share Lending Agreement, dated as of
    November&nbsp;22, 2004 between Charter Communications, Inc.,
    Citigroup Global Markets Limited, through Citigroup Global
    Markets, Inc. (incorporated by reference to Exhibit&nbsp;10.6 to
    the current report on Form&nbsp;8-K of Charter Communications,
    Inc. filed on November&nbsp;30, 2004 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Holdco Mirror Notes Agreement, dated as of
    November&nbsp;22, 2004, by and between Charter Communications,
    Inc. and Charter Communications Holding Company, LLC
    (incorporated by reference to Exhibit&nbsp;10.7 to the current
    report on Form&nbsp;8-K of Charter Communications, Inc. filed on
    November&nbsp;30, 2004 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Unit Lending Agreement, dated as of
    November&nbsp;22, 2004, by and between Charter Communications,
    Inc. and Charter Communications Holding Company, LLC
    (incorporated by reference to Exhibit&nbsp;10.8 to the current
    report on Form&nbsp;8-K of Charter Communications, Inc. filed on
    November&nbsp;30, 2004 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">5.875% Mirror Convertible Senior Note due 2009,
    in the principal amount of $862,500,000 dated as of
    November&nbsp;22, 2004 made by Charter Communications Holding
    Company, LLC, a Delaware limited liability company, in favor of
    Charter Communications, Inc., a Delaware limited liability
    company, in favor of Charter Communications, Inc., a Delaware
    corporation (incorporated by reference to Exhibit&nbsp;10.9 to
    the current report on Form&nbsp;8-K of Charter Communications,
    Inc. filed on November&nbsp;30, 2004 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of December 15, 2004 among CCO
    Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo Bank,
    N.A., as trustee (incorporated by reference to Exhibit&nbsp;10.1
    to the current report on Form 8-K of CCO Holdings, LLC filed on
    December&nbsp;21, 2004 (File No. 333-112593)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Exchange and Registration Rights Agreement dated
    December 15, 2004 by and among CCO Holdings, LLC, CCO Holdings
    Capital Corp, on the one hand, and Credit Suisse First Boston
    LLC and Citigroup Global Markets Inc, on the other hand, as
    representatives (incorporated by reference to Exhibit 10.2 to
    the current report on Form 8-K of CCO Holdings, LLC filed on
    December&nbsp;21, 2004 (File No. 333-112593)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of September&nbsp;28, 2005
    among CCH&nbsp;I Holdings,&nbsp;LLC and CCH&nbsp;I Holdings
    Capital Corp., as Issuers and Charter Communications Holdings,
    LLC, as Parent Guarantor, and The Bank of New York Trust
    Company, NA, as Trustee, governing: 11.125% Senior Accreting
    Notes due 2014, 9.920% Senior Accreting Notes due 2014, 10.000%
    Senior Accreting Notes due 2014, 11.75% Senior Accreting Notes
    due 2014, 13.50% Senior Accreting Notes due 2014, 12.125% Senior
    Accreting Notes due 2015 (incorporated by reference to
    Exhibit&nbsp;10.1 to the current report on Form&nbsp;8-K of
    Charter Communications,&nbsp;Inc. filed on October&nbsp;4, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of September&nbsp;28, 2005
    among CCH&nbsp;I, LLC and CCH&nbsp;I Capital&nbsp;Corp., as
    Issuers, Charter Communications Holdings, LLC, as Parent
    Guarantor, and The Bank of New&nbsp;York Trust Company, NA, as
    Trustee, governing 11.00% Senior Secured Notes due&nbsp;2015
    (incorporated by reference to Exhibit&nbsp;10.2 to the current
    report on Form&nbsp;8-K of Charter Communications,&nbsp;Inc.
    filed on October&nbsp;4, 2005 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pledge Agreement made by CCH&nbsp;I, LLC in favor
    of The Bank of New York Trust Company, NA, as Collateral Agent
    dated as of September&nbsp;28, 2005 (incorporated by reference
    to Exhibit&nbsp;10.15 to the current report on Form&nbsp;8-K of
    Charter Communications, Inc. filed on October&nbsp;4, 2005 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consulting Agreement, dated as of March&nbsp;10,
    1999, by and between Vulcan Northwest Inc., Charter
    Communications, Inc. (now called Charter Investment, Inc.) and
    Charter Communications Holdings, LLC (incorporated by reference
    to Exhibit&nbsp;10.3 to Amendment No.&nbsp;4 to the registration
    statement on Form&nbsp;S-4 of Charter Communications Holdings,
    LLC and Charter Communications Holdings Capital Corporation
    filed on July&nbsp;22, 1999 (File No.&nbsp;333-77499)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Letter Agreement, dated September&nbsp;21, 1999,
    by and among Charter Communications, Inc., Charter Investment,
    Inc., Charter Communications Holding Company, Inc. and Vulcan
    Ventures Inc. (incorporated by reference to Exhibit&nbsp;10.22
    to Amendment No.&nbsp;3 to the registration statement on
    Form&nbsp;S-1 of Charter Communications, Inc. filed on
    October&nbsp;18, 1999 (File No.&nbsp;333-83887)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Exchange Agreement, dated as of
    November&nbsp;12, 1999 by and among Charter Investment, Inc.,
    Charter Communications, Inc., Vulcan Cable&nbsp;III Inc. and
    Paul G. Allen (incorporated by reference to Exhibit&nbsp;10.13
    to Amendment No.&nbsp;3 to the registration statement on
    Form&nbsp;S-1 of Charter Communications, Inc. filed on
    October&nbsp;18, 1999 (File No.&nbsp;333-83887)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.31(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Amended and Restated Mutual Services
    Agreement, dated as of December&nbsp;21, 2000, by and between
    Charter Communications, Inc., Charter Investment, Inc. and
    Charter Communications Holding Company, LLC (incorporated by
    reference to Exhibit&nbsp;10.2(b) to the registration statement
    on Form&nbsp;S-4 of Charter Communications Holdings, LLC and
    Charter Communications Holdings Capital Corporation filed on
    February&nbsp;2, 2001 (File No.&nbsp;333-54902)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.31(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Letter Agreement, dated June&nbsp;19, 2003, by
    and among Charter Communications, Inc., Charter Communications
    Holding Company, LLC and Charter Investment, Inc. regarding
    Mutual Services Agreement (incorporated by reference to Exhibit
    No.&nbsp;10.5(b) to the quarterly report on Form&nbsp;10-Q filed
    by Charter Communications, Inc. on August&nbsp;5, 2003 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.31(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Amended and Restated Mutual Services
    Agreement, dated as of June&nbsp;19, 2003 between Charter
    Communications, Inc. and Charter Communications Holding Company,
    LLC (incorporated by reference to Exhibit&nbsp;10.5(a) to the
    quarterly report on Form&nbsp;10-Q filed by Charter
    Communications, Inc. on August&nbsp;5, 2003 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Limited Liability Company
    Agreement for Charter Communications Holding Company, LLC made
    as of August&nbsp;31, 2001 (incorporated by reference to
    Exhibit&nbsp;10.9 to the quarterly report on Form&nbsp;10-Q
    filed by Charter Communications, Inc. on November&nbsp;14, 2001
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Limited Liability Company
    Agreement for CC&nbsp;VIII,&nbsp;LLC, dated as of March&nbsp;31,
    2003 (incorporated by reference to Exhibit&nbsp;10.27 to the
    annual report on Form&nbsp;10-K of Charter Communications, Inc.
    filed on April&nbsp;15, 2003 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-10
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Limited Liability Company
    Agreement of Charter Communications Operating, LLC, dated as of
    June&nbsp;19, 2003 (incorporated by reference to
    Exhibit&nbsp;No.&nbsp;10.2 to the quarterly report on
    Form&nbsp;10-Q filed by Charter Communications, Inc. on
    August&nbsp;5, 2003 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Management Agreement, dated
    as of June&nbsp;19, 2003, between Charter Communications
    Operating, LLC and Charter Communications, Inc. (incorporated by
    reference to Exhibit&nbsp;10.4 to the quarterly report on
    Form&nbsp;10-Q filed by Charter Communications, Inc. on
    August&nbsp;5, 2003 (File No.&nbsp;333-83887)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Credit Agreement among
    Charter Communications Operating, LLC, CCO Holdings, LLC and
    certain lenders and agents named therein dated April&nbsp;27,
    2004 (incorporated by reference to Exhibit&nbsp;10.25 to
    Amendment No.&nbsp;2 to the registration statement on
    Form&nbsp;S-4 of CCH&nbsp;II, LLC filed on May&nbsp;5, 2004
    (File No.&nbsp;333-111423)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Letter Agreement between Charter Communications,
    Inc. and Charter Investment Inc. and Vulcan Cable III Inc.
    amending the Amended and Restated Limited Liability Company
    Agreement of Charter Communications Holding Company, LLC, dated
    as of November&nbsp;22, 2004 (incorporated by reference to
    Exhibit&nbsp;10.10 to the current report on Form&nbsp;8-K of
    Charter Communications, Inc. filed on November&nbsp;30, 2004
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.38(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Stipulation of Settlement, dated as of
    January&nbsp;24, 2005, regarding settlement of Consolidated
    Federal Class&nbsp;Action entitled in Re&nbsp;Charter
    Communications, Inc. Securities Litigation. (incorporated by
    reference to Exhibit&nbsp;10.48 to the Annual Report on
    Form&nbsp;10-K filed by Charter Communications, Inc. on
    March&nbsp;3, 2005 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.38(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment to Stipulation of Settlement, dated as
    of May&nbsp;23, 2005, regarding settlement of Consolidated
    Federal Class Action entitled In Re Charter Communications, Inc.
    Securities Litigation (incorporated by reference to
    Exhibit&nbsp;10.35(b) to Amendment No.&nbsp;3 to the
    registration statement on Form&nbsp;S-1 filed by Charter
    Communications, Inc. on June&nbsp;8, 2005 (File
    No.&nbsp;333-121186)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Settlement Agreement and Mutual Release, dated as
    of February&nbsp;1, 2005, by and among Charter Communications,
    Inc. and certain other insureds, on the other hand, and Certain
    Underwriters at Lloyd&#146;s of London and certain subscribers,
    on the other hand. (incorporated by reference to
    Exhibit&nbsp;10.49 to the annual report on Form&nbsp;10-K filed
    by Charter Communications, Inc. on March&nbsp;3, 2005 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Stipulation of Settlement, dated as of
    January&nbsp;24, 2005, regarding settlement of Federal
    Derivative Action, Arthur&nbsp;J. Cohn v.&nbsp;Ronald&nbsp;L.
    Nelson et al and Charter Communications, Inc. (incorporated by
    reference to Exhibit&nbsp;10.50 to the annual report on
    Form&nbsp;10-K filed by Charter Communications, Inc. on
    March&nbsp;3, 2005 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.41(a)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Letter Agreement, dated May&nbsp;25, 1999,
    between Charter Communications, Inc. and Marc Nathanson
    (incorporated by reference to Exhibit&nbsp;10.36 to the
    registration statement on Form&nbsp;S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on January&nbsp;25, 2000 (File
    No.&nbsp;333-95351)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.41(b)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Letter Agreement, dated March&nbsp;27, 2000,
    between CC&nbsp;VII&nbsp;Holdings, LLC and Marc Nathanson,
    amending the Letter Agreement dated May&nbsp;25, 1999
    (incorporated by reference to Exhibit&nbsp;10.13(b) to the
    annual report on Form&nbsp;10-K of Charter Communications, Inc.
    filed on April&nbsp;15, 2003 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.42(a)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Charter Communications Holdings, LLC 1999 Option
    Plan (incorporated by reference to Exhibit&nbsp;10.4 to
    Amendment No.&nbsp;4 to the registration statement on
    Form&nbsp;S-4 of Charter Communications Holdings, LLC and
    Charter Communications Holdings Capital Corporation filed on
    July&nbsp;22, 1999 (File No.&nbsp;333-77499)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-11
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.42(b)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Assumption Agreement regarding Option Plan, dated
    as of May&nbsp;25, 1999, by and between Charter Communications
    Holdings, LLC and Charter Communications Holding Company, LLC
    (incorporated by reference to Exhibit&nbsp;10.13 to Amendment
    No.&nbsp;6 to the registration statement on Form&nbsp;S-4 of
    Charter Communications Holdings, LLC and Charter Communications
    Holdings Capital Corporation filed on August&nbsp;27, 1999 (File
    No.&nbsp;333-77499)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.42(c)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Amendment No.&nbsp;1 to the Charter
    Communications Holdings, LLC 1999 Option Plan (incorporated by
    reference to Exhibit&nbsp;10.10(c) to Amendment No.&nbsp;4 to
    the registration statement on Form&nbsp;S-1 of Charter
    Communications, Inc. filed on November&nbsp;1, 1999 (File
    No.&nbsp;333-83887)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.42(d)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;2 to the Charter
    Communications Holdings, LLC 1999 Option Plan (incorporated by
    reference to Exhibit&nbsp;10.4(c) to the annual report on
    Form&nbsp;10-K filed by Charter Communications, Inc. on
    March&nbsp;30, 2000 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.42(e)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;3 to the Charter
    Communications 1999 Option Plan (incorporated by reference to
    Exhibit&nbsp;10.14(e) to the annual report of Form&nbsp;10-K of
    Charter Communications, Inc. filed on March&nbsp;29, 2002 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.42(f)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;4 to the Charter
    Communications 1999 Option Plan (incorporated by reference to
    Exhibit&nbsp;10.10(f) to the annual report on Form&nbsp;10-K of
    Charter Communications, Inc. filed on April&nbsp;15, 2003 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43(a)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Charter Communications, Inc. 2001 Stock Incentive
    Plan (incorporated by reference to Exhibit&nbsp;10.25 to the
    quarterly report on Form&nbsp;10-Q filed by Charter
    Communications, Inc. on May&nbsp;15, 2001 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43(b)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;1 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan (incorporated by
    reference to Exhibit&nbsp;10.11(b) to the annual report on
    Form&nbsp;10-K of Charter Communications, Inc. filed on
    April&nbsp;15, 2003 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43(c)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;2 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan (incorporated by
    reference to Exhibit&nbsp;10.10 to the quarterly report on
    Form&nbsp;10-Q filed by Charter Communications, Inc. on
    November&nbsp;14, 2001 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43(d)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;3 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan effective
    January&nbsp;2, 2002 (incorporated by reference to
    Exhibit&nbsp;10.15(c) to the annual report of Form&nbsp;10-K of
    Charter Communications, Inc. filed on March&nbsp;29, 2002 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43(e)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;4 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan (incorporated by
    reference to Exhibit&nbsp;10.11(e) to the annual report on
    Form&nbsp;10-K of Charter Communications, Inc. filed on
    April&nbsp;15, 2003 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43(f)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;5 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan (incorporated by
    reference to Exhibit&nbsp;10.11(f) to the annual report on
    Form&nbsp;10-K of Charter Communications, Inc. filed on
    April&nbsp;15, 2003 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43(g)+*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;6 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan effective
    December&nbsp;23, 2004.
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43(h)+*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;7 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan effective
    August&nbsp;23, 2005.
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43(i)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Description of Long-Term Incentive Program to the
    Charter Communications, Inc. 2001 Stock Incentive Plan
    (incorporated by reference to Exhibit&nbsp;10.11(g) to the
    annual report on Form&nbsp;10-K filed by Charter Communications,
    Inc. on March&nbsp;15, 2004 (File&nbsp;No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.44(a)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Offer Letter, dated December&nbsp;2,
    2003 by and between Charter Communications, Inc. and Derek Chang
    (incorporated by reference to Exhibit&nbsp;10.24 to the annual
    report on Form&nbsp;10-K filed by Charter Communications, Inc.
    on March&nbsp;15, 2004 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-12
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.44(b)+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment to Employment Offer Letter, dated
    January&nbsp;27, 2005, by and between Charter Communications,
    Inc. and Derek Chang (incorporated by reference to
    Exhibit&nbsp;99.1 to the current report on Form&nbsp;8-K of
    Charter Communications, Inc. filed January&nbsp;28, 2005 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.45+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Agreement between Charter
    Communications, Inc. and Margaret&nbsp;A. &#147;Maggie&#148;
    Bellville, entered into as of April&nbsp;27, 2003 (Incorporated
    by reference to Exhibit&nbsp;10.1 to the quarterly report on
    Form&nbsp;10-Q filed by Charter Communications, Inc. on
    November&nbsp;3, 2003 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.46+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Separation Agreement and Release for Margaret A.
    Bellville, dated as of September&nbsp;16, 2004 (incorporated by
    reference to Exhibit&nbsp;10.1 to the quarterly report on
    Form&nbsp;10-Q filed by Charter Communications, Inc. on
    November&nbsp;4, 2004 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.47+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Executive Services Agreement, dated as of
    January&nbsp;17, 2005, between Charter Communications, Inc. and
    Robert P. May (incorporated by reference to Exhibit&nbsp;99.1 to
    the current report on Form&nbsp;8-K of Charter Communications,
    Inc. filed on January&nbsp;21, 2005 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.48+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Separation Agreement and Release for
    Steven&nbsp;A. Schumm, dated as of February&nbsp;8, 2005
    (incorporated by reference to Exhibit&nbsp;99.1 to the current
    report on Form&nbsp;8-K filed by Charter Communications, Inc. on
    February&nbsp;11, 2005 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.49+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Agreement, dated as of October&nbsp;8,
    2001, by and between Carl E. Vogel and Charter Communications,
    Inc. (Incorporated by reference to Exhibit&nbsp;10.4 to the
    quarterly report on Form&nbsp;10-Q filed by Charter
    Communications, Inc. on November&nbsp;14, 2001 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.50+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Separation Agreement and Release for Carl&nbsp;E.
    Vogel, dated as of February&nbsp;17, 2005 (incorporated by
    reference to Exhibit &nbsp;99.1 to the current report on
    Form&nbsp;8-K filed by Charter Communications, Inc. on
    February&nbsp;22, 2005 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.51+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Separation Agreement and Release for
    Thomas&nbsp;A. Cullen, dated as of March&nbsp;15, 2005
    (incorporated by reference to Exhibit&nbsp;99.1 to the current
    report on Form&nbsp;8-K filed by Charter Communications, Inc. on
    March&nbsp;17, 2005 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.52+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Description of Charter Communications, Inc. 2005
    Executive Bonus Plan (incorporated by reference to
    Exhibit&nbsp;10.51 to the annual report on Form&nbsp;10-K filed
    by Charter Communications, Inc. on March&nbsp;3, 2005 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.53+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Agreement, dated as of April 1, 2005,
    by and between Michael J. Lovett and Charter Communications,
    Inc. (incorporated by reference to Exhibit&nbsp;10.11 to the
    quarterly report on Form&nbsp;10-Q filed by Charter
    Communications, Inc. on May&nbsp;3, 2005 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.54+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Letter Agreement, dated April&nbsp;15, 2005, by
    and between Charter Communications, Inc. and Paul E. Martin
    (incorporated by reference to Exhibit&nbsp;99.1 to the current
    report on Form&nbsp;8-K of Charter Communications, Inc. filed
    April&nbsp;19, 2005 (File&nbsp;No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.55+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">2005 Executive Cash Award Plan dated as of
    June&nbsp;9, 2005 (incorporated by reference to
    Exhibit&nbsp;99.1 to the current report on Form&nbsp;8-K of
    Charter Communications, Inc. filed June&nbsp;15, 2005 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.56+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Restricted Stock Agreement, dated as of
    July&nbsp;13, 2005, by and between Robert&nbsp;P. May and
    Charter Communications, Inc. (incorporated by reference to
    Exhibit&nbsp;99.1 to the current report on Form&nbsp;8-K of
    Charter Communications, Inc. filed July&nbsp;13, 2005 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.57+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Restricted Stock Agreement, dated as of
    July&nbsp;13, 2005, by and between Michael J. Lovett and Charter
    Communications, Inc. (incorporated by reference to
    Exhibit&nbsp;99.2 to the current report on Form&nbsp;8-K of
    Charter Communications, Inc. filed July&nbsp;13, 2005 (File
    No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-13
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.58+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Agreement, dated as of August&nbsp;9,
    2005, by and between Neil Smit and Charter Communications, Inc.
    (incorporated by reference to Exhibit&nbsp;99.1 to the current
    report on Form&nbsp;8-K of Charter Communications, Inc. filed on
    August&nbsp;15, 2005 (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.59+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Agreement dated as of
    September&nbsp;2, 2005, by and between Paul E. Martin and
    Charter Communications, Inc. (incorporated by reference to
    Exhibit&nbsp;99.1 to the current report on Form&nbsp;8-K of
    Charter Communications, Inc. filed on September&nbsp;9, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.60+</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Agreement dated as of
    September&nbsp;2, 2005, by and between Wayne H. Davis and
    Charter Communications, Inc. (incorporated by reference to
    Exhibit&nbsp;99.2 to the current report on Form&nbsp;8-K of
    Charter Communications, Inc. filed on September&nbsp;9, 2005
    (File No.&nbsp;000-27927)).
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Subsidiaries of Charter Communications, Inc.
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of KPMG LLP
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Gibson, Dunn&nbsp;&#38; Crutcher LLP
    (included with Exhibit 5.1)
    </FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of attorney (included in signature page)
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">&nbsp;*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Filed herewith
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">**&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To be filed
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">+&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Management compensatory plan or arrangement
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;17.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Undertakings</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">The Undersigned Registrant Hereby Undertakes
That:</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;For purpose of determining any liability
    under the Securities Act of 1933, the information omitted from
    the form of prospectus filed as part of this registration
    statement in reliance upon Rule&nbsp;430A and contained in a
    form of prospectus filed by the registrant pursuant to
    Rule&nbsp;424(b)(2) or (4)&nbsp;or 497(h) under the Securities
    Act shall be deemed to be part of this registration statement as
    of the time it was declared effective;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;For the purpose of determining any
    liability under the Securities Act of 1933, each post-effective
    amendment that contains a form of prospectus shall be deemed to
    be a new registration statement relating to the securities
    offered therein, and the offering of such securities at that
    time shall be deemed to be the initial bona fide offering
    thereof.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
</FONT>

<P align="center"><FONT size="2">II-14
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this registration
statement on Form&nbsp;S-1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of
St.&nbsp;Louis, State of Missouri, on October&nbsp;5, 2005.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">CHARTER COMMUNICATIONS, INC.,
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Registrant
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">/s/ PAUL E. MARTIN
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Paul
    E. Martin
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="8%"></TD>
    <TD width="52%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:</FONT></TD>
    <TD align="left">
    <FONT size="2">Senior Vice President, <BR>
     Interim Chief Financial Officer, <BR>
     Principal Accounting Officer <BR>
     and Corporate Controller
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints Neil
Smit, Paul E. Martin and Thomas J. Hearity, with full power to
act as his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to the
registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any other regulatory
authority, granting unto said attorney-in-fact and agent, full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed below
by the following persons in the capacities and on the dates
indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ PAUL G. ALLEN<BR>
    <HR size="1" noshade>Paul G. Allen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chairman of the Board of Directors
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">October&nbsp;5, 2005
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ NEIL SMIT<BR>
    <HR size="1" noshade>Neil Smit
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer, Director
    (Principal Executive Officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">October&nbsp;5, 2005
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ PAUL E. MARTIN<BR>
    <HR size="1" noshade>Paul E. Martin
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Senior Vice President,<BR>
    Interim Chief Financial Officer,<BR>
    Principal Accounting Officer and<BR>
    Corporate Controller (Principal Financial Officer and Principal
    Accounting Officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">October&nbsp;5, 2005
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ W. LANCE CONN<BR>
    <HR size="1" noshade>W. Lance Conn
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">October&nbsp;5, 2005
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-15
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ NATHANIEL A. DAVIS<BR>
    <HR size="1" noshade>Nathaniel A. Davis
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">September&nbsp;20, 2005
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ JONATHAN L. DOLGEN<BR>
    <HR size="1" noshade>Jonathan L. Dolgen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">September&nbsp;23, 2005
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ ROBERT P. MAY<BR>
    <HR size="1" noshade>Robert P. May
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">October&nbsp;5, 2005
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ DAVID C. MERRITT<BR>
    <HR size="1" noshade>David C. Merritt
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">October&nbsp;5, 2005
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ MARC B. NATHANSON<BR>
    <HR size="1" noshade>Marc B. Nathanson
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">October&nbsp;5, 2005
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ JO ALLEN PATTON<BR>
    <HR size="1" noshade>Jo Allen Patton
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">October&nbsp;5, 2005
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ JOHN H. TORY<BR>
    <HR size="1" noshade>John H. Tory
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">October&nbsp;5, 2005
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ LARRY W. WANGBERG<BR>
    <HR size="1" noshade>Larry W. Wangberg
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">September&nbsp;21, 2005
    </FONT></TD>
</TR>

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<P align="center"><FONT size="2">II-16
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</HTML>
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S-1
Table of Contents
As filed with the Securities and Exchange
Commission on October 5, 2005
Registration
No. 333-
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Charter Communications, Inc.
(Exact name of registrant as specified in its
Charter)
Delaware
4841
43-1857213
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
12405 POWERSCOURT DRIVE
ST. LOUIS, MISSOURI 63131
(314) 965-0555
(Address, including zip code, and telephone
number, including area code,
of registrant principal executive
offices)
Paul E. Martin
Senior Vice President, Interim Chief Financial
Officer, Principal Accounting Officer and Corporate
Controller
12405 Powerscourt Drive
St. Louis, Missouri 63131
(314) 965-0555
(Name, address, including zip code, and
telephone number,
including area code, of agent for
service)
Copies to:
Dennis J. Friedman
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166
(212) 351-4000
Jeremy W. Dickens
Brian A. Haskel
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8000
Approximate date of commencement of proposed
sale to the public:
As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this
form are to be offered on a delayed or continuous basis pursuant
to Rule 415 under the Securities Act of 1933, check the
following
box.
o
If this form is filed to register additional
securities for an offering pursuant to Rule 462(b) under
the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.
o
If this form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.
o
If this form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.
o
If delivery of the prospectus is expected to be
made pursuant to Rule 434, please check the following
box.
o
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Proposed Maximum
Proposed Maximum
Amount of Registration
Securities to be Registered
Amount to be Registered
Offering Price Per Unit
Aggregate Offering Price
Fee(1)
Class A Common Stock
122,830,000 shares
$1.58
$193,457,250
$22,770
(1)
Calculated pursuant to Rule 457(c) under the
    Securities Act solely for the purpose of calculating the
    registration fee on the basis of the average of the high and low
    prices of the Class A Common Stock as reported on the
    Nasdaq National Market on October 3, 2005.
The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or
until this Registration Statement shall become effective on such
date as the Commission, acting pursuant to said
Section 8(a), may determine.
Table of Contents
The information in this
prospectus is not complete and may be changed. We may not sell
these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state or
jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED
OCTOBER 5, 2005
PROSPECTUS
122,830,000 Shares
Charter Communications, Inc.
Class A Common Stock
$           per
share
The shares of our Class A common stock
offered hereby are shares that we will loan to Citigroup Global
Markets Limited, as borrower, through Citigroup Global Markets
Inc., as agent, pursuant to a share lending agreement.
Our Class A common stock is quoted on the Nasdaq
National Market under the symbol "CHTR." The last
reported sale price of our Class A common stock on the Nasdaq
National Market on October 3, 2005 was $1.50 per share.
Investing in our Class A common stock involves risks.
See "Risk Factors" beginning on page 11.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal
offense.
Per Share
Total
Public Offering Price
$
$
Under the share lending agreement, we will
receive a loan fee of $.001 for each share that we lend. We have
been advised by Citigroup Global Markets Limited that it, or its
affiliates, intend(s) to use the short sales of the shares of
our Class A common stock offered pursuant to this
prospectus to facilitate transactions by which investors in our
5.875% convertible senior notes due 2009 issued on
November 22, 2004 will hedge their investments in the
5.875% convertible senior notes. See "Share Lending
Agreement" and "Underwriting" on pages 183
and 188, respectively, of this prospectus. We will not
receive any of the proceeds from the sale of the shares of
Class A common stock in this offering.
THE SHARES OFFERED HEREBY ARE NOT BEING OFFERED
TO, AND MAY NOT BE PURCHASED BY, ANY PERSON WHO HOLDS AN OPEN
SHORT POSITION IN OUR CLASS A COMMON STOCK, ANY PERSON WHO
IS PURCHASING THE SHARES ON BEHALF OF OR FOR THE ACCOUNT OF SUCH
A PERSON OR ANY PERSON WHO HAS AN ARRANGEMENT OR UNDERSTANDING
TO RESELL, LEND OR OTHERWISE TRANSFER (DIRECTLY OR INDIRECTLY)
THE SHARES TO SUCH A PERSON. PURCHASERS IN THIS OFFERING WILL BE
REQUIRED TO CERTIFY THE FOREGOING IN WRITING. SEE "NOTICE
TO INVESTORS" ON PAGE ii OF THIS PROSPECTUS.
The shares of our Class A common stock are
being offered on a "best efforts" basis. "Best
efforts" means that Citigroup Global Markets Limited is not
under any obligation to borrow and sell any of the shares
offered hereby. Citigroup Global Markets Limited has informed us
that it will use its best efforts to sell the shares offered
pursuant to this prospectus, provided that it intends to borrow
and sell the shares offered hereby only to the extent there is
interest by investors in the 5.875% convertible senior notes in
establishing hedge positions and there is corresponding demand
by purchasers for the shares. Accordingly, there is no assurance
that all or any portion of the shares offered hereby will be
sold.
The offering will be at a fixed price and will
not be conducted on a continuous or delayed basis. The offering
will terminate on or
before                  ,
2005, and the underwriter expects to deliver the shares to
purchasers on or
about                  ,
2005.
Citigroup
,
2005
You should rely only on the information contained
in this prospectus. We have not authorized anyone to provide you
with information that is different from that contained in this
prospectus. We are offering to sell shares of our common stock
only in jurisdictions where offers and sales are permitted. The
information in this prospectus is complete and accurate only as
of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of shares.
TABLE OF CONTENTS
Disclosure Regarding
    Forward-Looking Statements
i
Additional Information
ii
Notice to Investors
ii
Summary
1
Risk Factors
11
Use of Proceeds
27
Price Range of Common Stock
    and Dividend Policy
28
Capitalization
29
Unaudited Pro Forma
    Consolidated Financial Statements
32
Selected Historical
    Consolidated Financial Data
41
Supplementary Quarterly
    Financial Data
43
Management's Discussion
    and Analysis of Financial Condition and Results of Operations
44
Business
78
Regulation and
    Legislation
95
Management
100
Security Ownership of
    Certain Beneficial Owners and Management
120
Certain Relationships and
    Related Transactions
124
Description of Certain
    Indebtedness
144
Description of Capital Stock
    and Membership Units
170
Shares Eligible for Future
    Sale
179
Certain United States Tax
    Considerations for Non-United States Holders
181
Share Lending Agreement
183
Underwriting
188
Legal Matters
189
Experts
189
Index to Financial
    Statements
F-1
Form of Investor
    Acknowledgment
A-1
EX-10.43.G: AMENDMENT NO. 6 TO 2001 STOCK INCENTIVE PLAN
EX-10.43.H: AMENDMENT NO. 7 TO 2001 STOCK INCENTIVE PLAN
EX-21.1: SUBSIDIARIES
EX-23.1: CONSENT OF KPMG LLP
DISCLOSURE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus includes forward-looking
statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act,
regarding, among other things, our plans, strategies and
prospects, both business and financial. Although we believe that
our plans, intentions and expectations reflected in or suggested
by these forward-looking statements are reasonable, we cannot
assure you that we will achieve or realize these plans,
intentions or expectations. Forward-looking statements are
inherently subject to risks, uncertainties and assumptions. Many
of the forward-looking statements contained in this prospectus
may be identified by the use of forward-looking words such as
"believe," "expect," "anticipate,"
"should," "planned," "will,"
"may," "intend," "estimated" and
"potential," among others. Important factors that
could cause actual results to differ materially from the
forward-looking statements we make in
i
Table of Contents
this prospectus are set forth in this prospectus
and in other reports or documents that we file from time to time
with the Securities and Exchange Commission, or SEC, and
include, but are not limited to:
•
the availability, in general, of funds to meet
    interest payment obligations under our debt and to fund our
    operations and necessary capital expenditures, either through
    cash flows from operating activities, further borrowings or
    other sources and, in particular, our ability to be able to
    provide under applicable debt instruments, such funds (by
    dividend, investment or otherwise) to the applicable obligor of
    such debt;
•
our ability to sustain and grow revenues and cash
    flows from operating activities by offering video, high-speed
    Internet, telephone and other services and to maintain and grow
    a stable customer base, particularly in the face of increasingly
    aggressive competition from other service providers;
•
our ability to comply with all covenants in our
    indentures and credit facilities, any violation of which would
    result in a violation of the applicable facility or indenture
    and could trigger a default of other obligations under
    cross-default provisions;
•
our ability to pay or refinance debt prior to or
    when it becomes due and/or to take advantage of market
    opportunities and market windows to refinance that debt in the
    capital markets, through new issuances, exchange offers or
    otherwise, including restructuring our balance sheet and
    leverage position;
•
our ability to obtain programming at reasonable
    prices or to pass programming cost increases on to our customers;
•
general business conditions, economic uncertainty
    or slowdown; and
•
the effects of governmental regulation, including
    but not limited to local franchise authorities, on our business.
All forward-looking statements attributable to us
or any person acting on our behalf are expressly qualified in
their entirety by this cautionary statement.
ADDITIONAL INFORMATION
We have filed with the SEC a registration
statement on Form S-1 to register the sale of the
securities covered by this prospectus. This prospectus, which
forms part of that registration statement, does not contain all
the information included in the registration statement. For
further information about us and the securities described in
this prospectus, you should refer to the registration statement
and its exhibits.
Our Class A common stock is quoted on the
Nasdaq National Market under the symbol "CHTR." We
file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy at
prescribed rates any document we file at the SEC's public
reference room at Room 1200, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference
room. Our SEC filings are also available to the public at the
SEC's website at www.sec.gov.
NOTICE TO INVESTORS
The shares offered hereby are not being offered
to, and may not be purchased by, any person who has an open
short position in Charter's Class A common stock at
the time of the sale, any person who is purchasing the shares on
behalf of or for the account of such a person or any person who
has an arrangement or understanding to resell, lend or otherwise
transfer (directly or indirectly) the shares to such a person.
Each purchaser of Charter's Class A
common stock in this offering must execute and deliver the
Investor Acknowledgement set forth on Annex A hereto to
Citigroup by facsimile to (646) 843-3922.
ii
Table of Contents
SUMMARY
This summary contains a general discussion of our
business, and summary financial information. It does not contain
all the information that you should consider before making an
investment decision regarding our Class A common stock. For
a more complete understanding of an investment in our
Class A common stock, you should read this entire
prospectus. Unless otherwise noted, all business data in this
summary is as of June 30, 2005.
Unless otherwise stated, the discussion in
this prospectus of our business and operations includes the
business and operations of Charter Communications, Inc. and its
subsidiaries. Unless the context otherwise requires, the terms
"we," "us" and "our" refer to
Charter Communications, Inc. and its direct and indirect
subsidiaries on a consolidated basis. The term
"Charter" refers to the issuer, Charter
Communications, Inc.
Our Business
We are a broadband communications company
operating in the United States, with approximately
6.19 million customers at June 30, 2005. Through our
broadband network of coaxial and fiber optic cable, we offer our
customers traditional cable video programming (analog and
digital, which we refer to as "video" service),
high-speed cable Internet access, advanced broadband cable
services (such as video on demand ("VOD"), high
definition television service, and interactive television) and,
in some of our markets, we offer telephone service. See
"Business — Products and Services" for
further description of these terms, including
"customers."
At June 30, 2005, we served approximately
5.94 million analog video customers, of which approximately
2.69 million were also digital video customers. We also
served approximately 2.02 million high-speed Internet
customers (including approximately 234,600 who received only
high-speed Internet services). We also provided telephone
service to approximately 67,800 customers as of that date.
Our principal executive offices are located at
Charter Plaza, 12405 Powerscourt Drive, St. Louis,
Missouri 63131. Our telephone number is (314) 965-0555 and
we have a website accessible at www.charter.com. The information
posted or linked on our website is not part of this prospectus
and you should rely solely on the information contained in this
prospectus and the related documents to which we refer herein
when deciding to make an investment in our Class A common
stock.
Strategy
Our principal financial goal is to maximize our
return on invested capital. To do so, we will focus on
increasing revenues, growing our customer base, improving
customer retention and enhancing customer satisfaction by
providing reliable, high-quality service offerings, superior
customer service and attractive bundled offerings.
Specifically, in the near term, we are focusing
on:
•
improving the overall value to our customers of
    our service offerings, relative to pricing;
•
developing more sophisticated customer care
    capabilities through investment in our customer care and
    marketing infrastructure, including targeted marketing
    capabilities;
•
executing growth strategies for new services,
    including digital simulcast, VOD, telephone, and digital video
    recorder service ("DVR");
•
managing our operating costs by exercising
    discipline in capital and operational spending; and
•
identifying opportunities to continue to improve
    our balance sheet and liquidity.
We have begun an internal operational improvement
initiative aimed at helping us gain new customers and retain
existing customers, which is focused on customer care, technical
operations and sales. We intend to continue efforts to focus
management attention on instilling a customer service oriented
culture throughout the company and to give those areas of our
operations priority of resources for staffing levels, training
budgets and financial incentives for employee performance in
those areas.
1
Table of Contents
We believe that our high-speed Internet service
will continue to provide a substantial portion of our revenue
growth in the near future. We also plan to continue to expand
our marketing of high-speed Internet service to the business
community, which we believe has shown an increasing interest in
high-speed Internet service and private network services.
Additionally, we plan to continue to prepare additional markets
for telephone launches in 2005.
We believe we offer our customers an excellent
choice of services through a variety of bundled packages,
particularly with respect to our digital video and high-speed
Internet services, as well as telephone in certain markets. Our
digital platform enables us to offer a significant number and
variety of channels, and we offer customers the opportunity to
choose among groups of channel offerings, including premium
channels, and to combine selected programming with other
services such as high-speed Internet, high definition television
(in selected markets) and VOD (in selected markets).
We continue to pursue opportunities to improve
our liquidity. Our efforts in this regard resulted in the
completion of a number of transactions in 2004 and 2005, as
follows:
•
the September 2005 exchange by Charter
    Communications Holdings, LLC ("Charter Holdings"),
    CCH I, LLC ("CCH I") and CCH I Holdings, LLC
    ("CIH") of approximately $6.8 billion in total
    principal amount of outstanding debt securities of Charter
    Holdings in a private placement for new debt securities;
•
the August 2005 sale by, our subsidiaries, CCO
    Holdings, LLC ("CCO Holdings") and CCO Holdings
    Capital Corp. of $300 million of 8 3/4% senior notes due
    2013;
•
the March and June 2005 issuance of
    $333 million of Charter Communications Operating, LLC
    ("Charter Operating") notes in exchange for
    $346 million of Charter Holdings notes;
•
the March and June 2005 repurchase of
    $131 million of our 4.75% convertible senior notes due
    2006 leaving $25 million in principal amount outstanding;
•
the March 2005 redemption of all of CC V
    Holdings, LLC's outstanding 11.875% senior discount notes
    due 2008 at a total cost of $122 million;
•
the December 2004 sale by our subsidiaries, CCO
    Holdings and CCO Holdings Capital Corp. of $550 million of
    senior floating rate notes due 2010;
•
the November 2004 sale of the $862.5 million
    of 5.875% convertible senior notes due 2009 and the December
    2004 redemption of all of our outstanding 5.75% convertible
    senior notes due 2005 ($588 million principal amount);
•
the April 2004 sale of $1.5 billion of
    senior second lien notes by our subsidiary, Charter Operating,
    together with the concurrent refinancing of its credit
    facilities; and
•
the sale in the first half of 2004 of non-core
    cable systems for a total of $735 million, the proceeds of
    which were used to reduce indebtedness.
Recent Events
Charter Holdings, CCH I and CIH Exchange
    Offer
On September 28, 2005, Charter Holdings and
its wholly owned subsidiaries, CCH I and CIH, completed the
exchange of approximately $6.8 billion in total principal
amount of outstanding debt securities of Charter Holdings in a
private placement for new debt securities capturing
$545 million of discount and extending maturities. Holders
of Charter Holdings notes due in 2009-2010 tendered
$3.4 billion principal amount of notes for
$2.9 billion principal amount of new 11% CCH I notes
due 2015. Holders of Charter Holdings notes due 2011-2012
tendered $845 million principal amount of notes for
$662 million principal amount of 11% CCH I notes due
2015. In addition, holders of Charter Holdings notes due
2011-2012 tendered $2.5 billion principal amount of notes
for $2.5 billion principal amount of new CIH notes. Each
series of new CIH notes have the same coupon and provisions for
payment of cash interest as the series of old Charter Holdings
notes for which such CIH notes were exchanged. In addition, the
maturities for each series were extended three years.
2
Table of Contents
New President and Chief Executive
    Officer
On August 9, 2005, Neil Smit was appointed
as our President and Chief Executive Officer, replacing Robert
May effective August 22, 2005, who has served in both
positions on an interim basis since January 2005. Mr. May
will remain on our board of directors and serve as a member of
our compensation committee and our strategic planning committee.
During the last year, we have experienced a number of other
changes in our senior management. See "Risk
Factors — Risks Related to Our Business —
Recent management changes could disrupt operations."
CCO Holdings Note Offering
On August 17, 2005, CCO Holdings issued
$300 million in debt securities, the proceeds of which will
be used for general corporate purposes, including the potential
payment of dividends or distributions to its parent companies,
including Charter Holdings, to pay interest expense.
Consummation of Prior Share Borrow
    Transaction
On July 29, 2005, we issued
27,170,000 shares of Class A common stock in a public
offering (the "prior share borrow transaction"). As
with the shares offered hereby, the shares were issued pursuant
to the share lending agreement described herein under
"Share Lending Agreement," pursuant to which we had
previously agreed to loan up to 150 million shares to
Citigroup Global Markets Limited ("CGML"). Because
less than the full 150 million shares covered by the share
lending agreement were sold in the prior share borrow
transaction, we remain obligated to issue, at CGML's
request, up to an additional 122,830,000 additional loaned
shares in up to three additional subsequent registered public
offerings pursuant to the share lending agreement. Those
remaining shares constitute the shares offered hereby.
As with this offering, the prior share borrow
transaction was conducted to facilitate transactions by which
investors in Charter's 5.875% convertible senior notes due
2009 issued on November 22, 2004, hedged their investments
in those convertible senior notes. Charter did not receive any
of the proceeds from the sale of shares in the prior share
borrow transaction. However, under the share lending agreement,
Charter received a loan fee of $.001 for each share that it lent
to CGML.
Approval and Funding of Litigation Settlement;
    Issuance of Shares
On June 30, 2005, the Federal District Court
for the Eastern District of Missouri entered its final approval
of the Stipulation of Settlement, as amended, of certain
shareholder class action and derivative lawsuits filed against
Charter which are more fully described in
"Business — Legal Proceedings." On
July 8, 2005, Charter delivered to the claims administrator
its portion of the settlement consideration under the
Stipulation in the form of 13.4 million shares of
Class A common stock and approximately $63 million in
cash, and Charter has paid $4.5 million to its insurance
carriers to satisfy certain outstanding claims in connection
with the settlement. Two notices of appeal were filed relating
to the settlement. On September 26, 2005, the
U.S. Court of Appeals for the Eighth Circuit entered
Judgment dismissing the appeals pursuant to stipulation by the
parties. See "Business — Legal Proceedings."
Hurricane Katrina
We have cable, broadband and related operations
in the parts of Louisiana, Mississippi and Georgia which were
impacted by hurricane Katrina. Approximately 3% of our total
customers lost service. Service to the majority of those
customers has since been restored. However, we have only
recently been allowed access to some service areas and are
therefore in the early stages of assessing damages. As a result,
we are not able to estimate the impact to our financial results
at this time.
3
Table of Contents
The Offering
Total shares of Class A common stock offered by
    us hereby
122,830,000 shares
Approximate number of shares of Class A common
    stock to be outstanding after the offering
471.4 million shares (including the shares
    offered hereby, 27.2 million shares issued on July 29,
    2005 pursuant to the share lending agreement and
    13.4 million shares issued on July 8, 2005 in
    connection with a litigation settlement)
Nasdaq National Market Symbol
CHTR
The shares of our Class A common stock
offered hereby are shares that we will loan to Citigroup Global
Markets Limited pursuant to a share lending agreement, dated as
of November 22, 2004, which we refer to as the "share
lending agreement." Under the share lending agreement, we
will receive a loan fee of $.001 per share. We will not receive
any proceeds from this offering. See "Share Lending
Agreement" and "Underwriting."
THE SHARES OFFERED HEREBY ARE NOT BEING OFFERED
TO, AND MAY NOT BE PURCHASED BY, ANY PERSON WHO HOLDS AN OPEN
SHORT POSITION IN OUR CLASS A COMMON STOCK, ANY PERSON WHO
IS PURCHASING THE SHARES ON BEHALF OF OR FOR THE ACCOUNT OF SUCH
A PERSON OR ANY PERSON WHO HAS AN ARRANGEMENT OR UNDERSTANDING
TO RESELL, LEND OR OTHERWISE TRANSFER (DIRECTLY OR INDIRECTLY)
THE SHARES TO SUCH A PERSON.
PURCHASERS IN THE OFFERING WILL BE REQUIRED TO
CERTIFY THE FOREGOING IN WRITING. SEE "NOTICE TO
INVESTORS" ON PAGE ii AND FORM OF INVESTOR
ACKNOWLEDGMENT ON PAGE A-1.
Risk Factors
Investing in our Class A common stock involves
substantial risk. See the "Risk Factors" section of
this prospectus for a description of certain of the risks you
should consider before investing in our Class A common
stock.
4
Table of Contents
Organizational Structure
The chart below sets forth the organizational
structure of Charter and its principal direct and indirect
subsidiaries. The equity ownership, voting percentages and
indebtedness amounts shown below are approximations as of
June 30, 2005 on the pro forma basis described in
"Unaudited Pro Forma Consolidated Financial
Statements" (including giving effect to the issuance of the
shares offered hereby) and do not give effect to any exercise,
conversion or exchange of then outstanding options, preferred
stock, convertible notes and other convertible or exchangeable
securities.
(1)
Charter acts as the sole manager of Charter
    Holdco and its direct and indirect limited liability company
    subsidiaries. Charter's certificate of incorporation
    requires that its principal assets be securities of Charter
    Holdco, the terms of which mirror the terms of securities issued
    by Charter. See "Description of Capital Stock and
    Membership Units." Also, on July 8, 2005, Charter
    issued 13.4 million shares of Class A common stock
    pursuant to a litigation settlement. See
    "Business — Legal Proceedings."
(2)
These membership units are held by Charter
    Investment, Inc. and Vulcan Cable III Inc., each of which
    is 100% owned by Paul G. Allen, our Chairman and controlling
    shareholder. They are exchangeable at any time on a one-for-one
    basis for shares of Charter Class A common stock.
(3)
The percentages shown in this table reflect the
    issuance of the 122.8 million shares of Class A common
    stock offered hereby as well as the 27.2 million shares of
    Class A common stock issued on July 29, 2005 and the
    corresponding issuance of an equal number of mirror membership
    units by Charter Holdco to Charter. However, for accounting
    purposes, Charter's common equity interest in Charter
    Holdco will remain at 47%, and Paul G. Allen's
    ownership of Charter Holdco will remain at 53%. These
5
Table of Contents
percentages exclude the 150 million mirror
    membership units issued or to be issued to Charter due to the
    required return of the issued mirror units upon return of the
    shares offered hereby pursuant to the share lending agreement.
    See "Share Lending Agreement."
(4)
Represents 100% of the preferred membership
    interests in CC VIII, LLC, a subsidiary of CC V
    Holdings, LLC. An issue has arisen regarding the ultimate
    ownership of such CC VIII, LLC membership interests
    following Mr. Allen's acquisition of those interests
    on June 6, 2003. See "Certain Relationships and
    Related Transactions — Transactions Arising out
    of Our Organizational Structure and Mr. Allen's Investment
    in Charter Communications, Inc. and Its
    Subsidiaries — Equity Put
    Rights — CC VIII."
6
Table of Contents
Summary Consolidated Financial Data
Charter is a holding company whose principal
assets are a controlling common equity interest in Charter
Communications Holding Company, LLC and "mirror" notes
that are payable by Charter Communications Holding Company, LLC
to Charter which have the same principal amount and terms as
those of Charter's convertible senior notes. Charter
Communications Holding Company, LLC is a holding company whose
primary assets are equity interests in our cable operating
subsidiaries and intercompany loan receivables. Charter
consolidates Charter Communications Holding Company, LLC on the
basis of voting control. Charter Communications Holding Company,
LLC's limited liability agreement provides that so long as
Charter's Class B common stock retains its special
voting rights, Charter will maintain 100% voting interest in
Charter Communications Holding Company, LLC. Voting control
gives Charter full authority and control over the operations of
Charter Communications Holding Company, LLC.
The following table presents summary financial
and other data for Charter and its subsidiaries and has been
derived from the audited consolidated financial statements of
Charter and its subsidiaries for the three years ended
December 31, 2004 and the unaudited consolidated financial
statements of Charter and its subsidiaries for the six months
ended June 30, 2005 and 2004. The consolidated financial
statements of Charter and its subsidiaries for the years ended
December 31, 2002 to 2004 have been audited by KPMG LLP, an
independent registered public accounting firm. The pro forma
data set forth below represent our unaudited pro forma
consolidated financial statements after giving effect to the
following transactions as if they occurred on January 1 of
the respective period for the statement of operations data and
other financial data and as of the last day of the respective
period for the operating data and balance sheet data:
(1) the disposition of certain assets in
    March and April 2004 for total proceeds of $735 million and
    the use of such proceeds in each case to pay down credit
    facilities;
(2) the issuance and sale of
    $550 million of CCO Holdings senior floating rate notes in
    December 2004 and $1.5 billion of Charter Operating senior
    second lien notes in April 2004;
(3) an increase in amounts outstanding under
    the Charter Operating credit facilities in April 2004 and the
    use of such funds, together with the proceeds from the sale of
    the Charter Operating senior second lien notes, to refinance
    amounts outstanding under the credit facilities of our
    subsidiaries, CC VI Operating, CC VIII Operating and Falcon;
(4) the issuance and sale of
    $863 million of 5.875% convertible senior notes in November
    2004 with proceeds used for (i) the purchase of certain
    U.S. government securities pledged as security for the
    5.875% convertible senior notes (and which we expect to use to
    fund the first six interest payments thereon),
    (ii) redemption of the outstanding 5.75% convertible senior
    notes due 2005 and (iii) general corporate purposes;
(5) the repayment of $530 million of
    borrowings under the Charter Operating revolving credit facility
    with net proceeds from the issuance and sale of the CCO Holdings
    senior floating rate notes in December 2004, which were included
    in our cash balance at December 31, 2004;
(6) the redemption of all of CC
    V Holdings, LLC's outstanding 11.875% senior discount
    notes due 2008 with cash on hand;
(7) the issuance and sale of
    $300 million of 8 3/4% CCO Holdings senior notes in August
    2005 and the use of a portion of such proceeds to pay financing
    costs and accrued interest in the exchange transaction
    referenced below;
(8) the exchange of $3.4 billion
    principal amount of Charter Holdings' notes scheduled to
    mature in 2009 and 2010 for CCH I notes and the exchange of
    $3.4 billion principal amount of Charter Holdings'
    notes scheduled to mature in 2011 and 2012 for CIH notes and
    CCH I notes; and
(9) the issuance of 27.2 million shares
    in July 2005 and the shares offered hereby pursuant to the share
    lending agreement, the sole effect of which is to increase
    common shares issued and outstanding. See "Share Lending
    Agreement."
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The following information should be read in
conjunction with "Selected Historical Consolidated
Financial Data," "Capitalization,"
"Unaudited Pro Forma Consolidated Financial
Statements," "Management's Discussion and
Analysis of Financial Condition and Results of Operations,"
"Share Lending Agreement" and the historical
consolidated financial statements and related notes included
elsewhere in this prospectus.
Year Ended December 31,
Six Months Ended June 30,
2002
2003
2004
2004
2004
2005
Actual
Actual
Actual
Pro Forma(a)
Pro Forma(a)
Pro Forma(a)
(Dollars in millions, except per share, share and customer data)
Statement of Operations Data:
Revenues:
Video
$
3,420
$
3,461
$
3,373
$
3,352
$
1,674
$
1,703
High-speed Internet
337
556
741
738
346
441
Advertising sales
302
263
289
288
131
140
Commercial
161
204
238
236
112
134
Other
346
335
336
334
161
176
Total revenues
4,566
4,819
4,977
4,948
(b)
2,424
2,594
Costs and Expenses:
Operating (excluding depreciation and
    amortization)
1,807
1,952
2,080
2,068
1,015
1,128
Selling, general and administrative
963
940
971
967
479
493
Depreciation and amortization
1,436
1,453
1,495
1,489
728
759
Impairment of franchises
4,638
—
2,433
2,433
—
—
Asset impairment charges
—
—
—
—
—
39
(Gain) loss on sale of assets, net
3
5
(86
)
20
2
4
Option compensation expense, net
5
4
31
31
26
8
Special charges, net
36
21
104
104
97
2
Unfavorable contracts and other settlements
—
(72
)
(5
)
(5
)
—
—
Total costs and expenses
8,888
4,303
7,023
7,107
2,347
2,433
Income (loss) from operations
(4,322
)
516
(2,046
)
(2,159
)
77
161
Interest expense, net
(1,503
)
(1,557
)
(1,670
)
(1,679
)
(829
)
(850
)
Gain (loss) on derivative instruments and hedging
    activities, net
(115
)
65
69
69
56
26
Loss on debt to equity conversions
—
—
(23
)
(23
)
(23
)
—
Gain (loss) on extinguishment of debt
—
267
(31
)
—
—
13
Other, net
(4
)
(16
)
3
3
—
21
Loss before minority interest, income taxes and
    cumulative effect of accounting change
(5,944
)
(725
)
(3,698
)
(3,789
)
(719
)
(629
)
Minority interest(c)
3,176
377
19
19
(10
)
(6
)
Loss before income taxes and cumulative effect of
    accounting change
(2,768
)
(348
)
(3,679
)
(3,770
)
(729
)
(635
)
Income tax benefit (expense)
460
110
103
118
(82
)
(46
)
Loss before cumulative effect of accounting
    change, net of tax
$
(2,308
)
$
(238
)
$
(3,576
)
$
(3,652
)
$
(811
)
$
(681
)
Loss per common share, basic and diluted(d)
$
(7.85
)
$
(0.82
)
$
(11.92
)
$
(12.16
)
$
(2.72
)
$
(2.24
)
Weighted-average common shares outstanding, basic
    and diluted
294,440,261
294,597,519
300,291,877
300,291,877
297,814,091
303,465,474
Other Financial Data:
Capital expenditures
$
2,167
$
854
$
924
$
922
$
388
$
542
Deficiencies of earnings to cover fixed charges(e)
$
5,944
$
725
$
3,698
$
3,789
$
719
$
629
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December 31,
June 30,
2003
2003
2004
2004
2005
Actual
Pro Forma
Actual
Actual
Actual
Operating Data (end of period)(f):
Analog video customers
6,431,300
6,200,500
5,991,500
6,133,200
5,943,100
Digital video customers
2,671,900
2,588,600
2,674,700
2,650,200
2,685,600
Residential high-speed Internet customers
1,565,600
1,527,800
1,884,400
1,711,400
2,022,200
Telephone customers
24,900
24,900
45,400
31,200
67,800
Pro Forma
As of June 30,
2005
(Dollars in millions)
Balance Sheet Data (end of period):
Cash and cash equivalents
$
157
Total assets
16,908
Accounts payable and accrued expenses
1,110
Long-term debt(c)
18,996
Other long-term liabilities
682
Minority interest(d)
659
Shareholders' deficit
(4,608
)
(a)
Actual revenues exceeded pro forma revenues for
    the year ended December 31, 2004 and the six months ended
    June 30, 2004 and 2005 by $29 million,
    $29 million and $0, respectively. Pro forma loss before
    cumulative effect of accounting change, net of tax exceeded
    actual loss before cumulative effect of accounting change, net
    of tax by $76 million and $103 million for the year
    ended December 31, 2004 and the six months ended
    June 30, 2004, respectively. Actual loss before cumulative
    effect of accounting change, net of tax exceeded pro forma loss
    before cumulative effect of accounting change, net of tax by
    $26 million for the six months ended June 30, 2005.
    The unaudited pro forma financial information required
    allocation of certain revenues and expenses and such information
    has been presented for comparative purposes and is not intended
    (a) to provide any indication of what our actual financial
    position or results of operations would have been had the
    transactions described above been completed on the dates
    indicated or (b) to project our results of operations for
    any future date.
(b)
Pro forma 2004 revenue by quarter is as follows:
2004
Pro Forma
Revenue
(In millions)
1st Quarter
$
1,185
2nd Quarter
1,239
3rd Quarter
1,248
4th Quarter
1,276
Total pro forma revenue
$
4,948
(c)
The pro forma balance sheet amounts of CIH and
    CCH I notes issued in exchange for Charter Holdings notes
    are presented in accordance with generally accepted accounting
    principles ("GAAP"). GAAP requires that the CIH notes
    issued in exchange for Charter Holdings notes and the CCH I
    notes issued in exchange for the 8.625% Charter Holdings senior
    notes due 2009 be recorded at the current accreted values of the
    old Charter Holdings notes as opposed to the current accreted
    values of the new CIH or CCH I notes.
(d)
Minority interest represents the percentage of
    Charter Communications Holding Company, LLC not owned by
    Charter, plus preferred membership interests in CC VIII,
    LLC, an indirect subsidiary of Charter Holdco. Paul G. Allen
    indirectly holds the preferred membership units in CC VIII,
    LLC as a result of the exercise of a put right originally
    granted in connection with the Bresnan transaction in 2000. An
    issue has arisen regarding the ultimate ownership of the
    CC VIII, LLC membership interests following the
    consummation of the Bresnan put transaction on June 6,
    2003. See "Certain Relationships and Related
    Transactions — Transactions Arising Out of Our
    Organizational Structure and Mr. Allen's Investment in
    Charter and Its Subsidiaries — Equity Put
    Rights — CC VIII." Effective January 1,
    2005, Charter ceased recognizing minority interest in earnings
    or losses of CC VIII, LLC for financial reporting purposes
    until such time as the resolution of the issue is determinable
    or certain other events occur. Reported losses allocated to
    minority interest on the statement of operations are
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Table of Contents
limited to the extent of any remaining minority
    interest on the balance sheet related to Charter Communications
    Holding Company, LLC. Because minority interest in Charter
    Communications Holding Company, LLC was substantially eliminated
    at December 31, 2003, beginning in 2004, Charter absorbs
    substantially all losses before income taxes that otherwise
    would have been allocated to minority interest. This resulted in
    an approximate additional $2.0 billion of loss before
    cumulative effect of accounting change for the year ended
    December 31, 2004. Under our existing capital structure,
    Charter will absorb substantially all future losses.
(e)
Loss per common share, basic and diluted, assumes
    none of the membership units of Charter Communications Holding
    Company, LLC are exchanged for Charter common stock and none of
    the outstanding options to purchase membership units of Charter
    Communications Holding Company, LLC that are automatically
    exchanged for Charter common stock are exercised. Basic loss per
    share equals loss before cumulative effect of accounting change
    less dividends on preferred stock-redeemable divided by weighted
    average shares outstanding. If the membership units were
    exchanged or options exercised, the effects would be
    antidilutive. Therefore, basic and diluted loss per common share
    is the same.
(f)
Earnings include net loss plus fixed charges.
    Fixed charges consist of interest expense and an estimated
    interest component of rent expense.
(g)
See "Business — Products and
    Services" for definitions of the terms contained in this
    section.
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RISK FACTORS
An investment in our Class A common stock
entails the following risks. You should carefully consider these
risk factors, as well as the other information contained in this
prospectus, before making a decision to invest in our
Class A common stock.
Risks Related to Significant Indebtedness of
Us and Our Subsidiaries
We may not generate (or, in general, have
    available to the applicable obligor) sufficient cash flow or
    access to additional external liquidity sources to fund our
    capital expenditures, ongoing operations and debt
    obligations.
Our ability to service our debt and to fund our
planned capital expenditures and ongoing operations will depend
on both our ability to generate cash flow and our access to
additional external liquidity sources, and in general our
ability to provide (by dividend or otherwise), such funds to the
applicable issuer of the debt obligation. Our ability to
generate cash flow is dependent on many factors, including:
•
our future operating performance;
•
the demand for our products and services;
•
general economic conditions and conditions
    affecting customer and advertiser spending;
•
competition and our ability to stabilize customer
    losses; and
•
legal and regulatory factors affecting our
    business.
Some of these factors are beyond our control. If
we are unable to generate sufficient cash flow and/or access
additional external liquidity sources, we may not be able to
service and repay our debt, operate our business, respond to
competitive challenges or fund our other liquidity and capital
needs. Cash flows from operating activities and amounts
available under our credit facilities may not be sufficient to
permit us to fund our operations and satisfy our interest
payment and principal repayment obligations that come due in
2006 and we believe such amounts will not be sufficient to fund
our operations and satisfy such obligations thereafter. See
"Management's Discussion and Analysis of Financial
Condition and Results of Operations — Liquidity and
Capital Resources."
Additionally, franchise valuations performed in
accordance with the requirements of Statement of Financial
Accounting Standards ("SFAS") No. 142,
Goodwill and Other Intangible Assets
, are based on the
projected cash flows derived by selling products and services to
new customers in future periods. Declines in future cash flows
could result in lower valuations which in turn may result in
impairments to the franchise assets in our financial statements.
Charter Operating may not be able to access
    funds under its credit facilities if it fails to satisfy the
    covenant restrictions in its credit facilities, which could
    adversely affect our financial condition and our ability to
    conduct our business.
Our subsidiaries have historically relied on
access to credit facilities in order to fund operations and to
service parent company debt, and we expect such reliance to
continue in the future. Unused availability under the Charter
Operating credit facilities was approximately $870 million
as of June 30, 2005. However, Charter Operating's
access to these funds is subject to its satisfaction of the
covenants and conditions to borrowing in those facilities that
are more fully described in "Management's Discussion
and Analysis of Financial Condition and Results of
Operations — Description of Our Outstanding
Debt — Charter Operating Credit Facilities" and
under "Description of Certain Indebtedness —
Charter Operating Credit Facilities" in this prospectus.
An event of default under the credit facilities
or indentures, if not waived, could result in the acceleration
of those debt obligations and, consequently, other debt
obligations. Such acceleration could result in the exercise of
remedies by our creditors and could force us to seek the
protection of the bankruptcy laws, which could materially
adversely impact our ability to operate our business and to make
11
Table of Contents
payments under our debt instruments. In addition,
an event of default under the credit facilities, such as the
failure to maintain the applicable required financial ratios,
would prevent additional borrowing under our subsidiary credit
facilities, which could materially adversely affect our ability
to operate our business and to make payments under our debt
instruments.
We and our subsidiaries have a significant
    amount of existing debt and may incur significant additional
    debt, including secured debt, in the future, which could
    adversely affect our financial health and our ability to react
    to changes in our business.
Charter and its subsidiaries have a significant
amount of debt and may (subject to applicable restrictions in
their debt instruments) incur additional debt in the future. As
of June 30, 2005, after giving effect to the issuance and
sale of the CCO Holdings senior notes and the exchange of
$3.4 billion principal amount of Charter Holdings'
notes scheduled to mature in 2009 and 2010 for CCH I notes
and the exchange of $3.4 billion principal amount of
Charter Holdings' notes scheduled to mature in 2011 and
2012 for CIH notes and CCH I notes, our total debt would
have been approximately $19.0 billion, our
shareholders' deficit would have been approximately
$4.6 billion and the deficiency of earnings to cover fixed
charges for the six month period ended June 30, 2005 would
have been approximately $629 million. The maturities of
these obligations are set forth in "Description of Certain
Indebtedness."
We will need to raise additional capital and/or
receive distributions or payments from our subsidiaries in order
to satisfy our debt obligations. However, because of our
significant indebtedness, our ability to raise additional
capital at reasonable rates or at all is uncertain, and the
ability of our subsidiaries to make distributions or payments to
us is subject to availability of funds and restrictions under
our and our subsidiaries' applicable debt instruments as
more fully described in "Description of Certain
Indebtedness." If we were to raise capital through the
issuance of additional equity or to engage in a recapitalization
or other similar transaction, our shareholders could suffer
significant dilution.
Our significant amount of debt could have other
important consequences to you. For example, the debt will or
could:
•
require us to dedicate a significant portion of
    our cash flow from operating activities to payments on our debt,
    which will reduce our funds available for working capital,
    capital expenditures and other general corporate expenses;
•
limit our flexibility in planning for, or
    reacting to, changes in our business, the cable and
    telecommunications industries and the economy at large;
•
place us at a disadvantage as compared to our
    competitors that have proportionately less debt;
•
make us vulnerable to interest rate increases,
    because a significant amount of our borrowings are, and will
    continue to be, at variable rates of interest;
•
expose us to increased interest expense as we
    refinance our existing lower interest rate instruments;
•
adversely affect our relationship with customers
    and suppliers;
•
limit our ability to borrow additional funds in
    the future, if we need them, due to applicable financial and
    restrictive covenants in our debt; and
•
make it more difficult for us to satisfy our
    obligations to the holders of our notes and for our subsidiaries
    to satisfy their obligations to their lenders under their credit
    facilities and to their noteholders.
Due to our significant amount of debt, we did not
pay dividends on our preferred stock at March 31 or
June 30, 2005, because our Board of Directors was unable to
conclude with sufficient certainty that we had surplus under
Delaware law with which to pay such a dividend.
A default by one of our subsidiaries under its
debt obligations could result in the acceleration of those
obligations, the obligations of our other subsidiaries and our
obligations under our convertible notes. We and our subsidiaries
may incur substantial additional debt in the future. If current
debt levels increase, the related risks that we and you now face
will intensify.
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The agreements and instruments governing
    our debt and the debt of our subsidiaries contain restrictions
    and limitations that could significantly affect our ability to
    operate our business, as well as significantly affect our
    liquidity, and adversely affect you, as a
    shareholder.
The Charter Operating credit facilities and the
indentures governing our and our subsidiaries' public debt
contain a number of significant covenants that could adversely
affect our ability to operate our business, as well as
significantly affect our liquidity, and therefore could
adversely affect our results of operations and the price of our
Class A common stock. These covenants restrict our and our
subsidiaries' ability to:
•
incur additional debt;
•
repurchase or redeem equity interests and debt;
•
issue equity;
•
make certain investments or acquisitions;
•
pay dividends or make other distributions;
•
receive distributions from our subsidiaries;
•
dispose of assets or merge;
•
enter into related party transactions;
•
grant liens; and
•
pledge assets.
Furthermore, Charter Operating's credit
facilities require our subsidiaries to, among other things,
maintain specified financial ratios, meet specified financial
tests and provide audited financial statements, with an
unqualified opinion from our independent auditors. See
"Description of Certain Indebtedness" for a summary of
our outstanding indebtedness and a description of our credit
facilities and other indebtedness and for details on our debt
covenants and future liquidity. Charter Operating's ability
to comply with these provisions may be affected by events beyond
our control.
The breach of any covenants or obligations in the
foregoing indentures or credit facilities, not otherwise waived
or amended, could result in a default under the applicable debt
agreement or instrument and could trigger acceleration of the
related debt, which in turn could trigger defaults under other
agreements governing our long-term indebtedness. See
"Management's Discussion and Analysis of Financial
Condition and Results of Operations — Liquidity and
Capital Resources." In addition, the secured lenders under
the Charter Operating credit facilities and the holders of the
Charter Operating senior second-lien notes could foreclose on
their collateral, which includes equity interests in our
subsidiaries, and exercise other rights of secured creditors.
Any default under those credit facilities, the indentures
governing our convertible notes or our subsidiaries' debt
could adversely affect our growth, our financial condition and
our results of operations and our ability to make payments on
our notes and Charter Operating's credit facilities and
other debt of our subsidiaries. See "Description of Certain
Indebtedness" for a summary of outstanding indebtedness and
a description of credit facilities and other indebtedness.
All of our and our subsidiaries'
    outstanding debt is subject to change of control provisions. We
    may not have the ability to raise the funds necessary to fulfill
    our obligations under our indebtedness following a change of
    control, which would place us in default under the applicable
    debt instruments.
We may not have the ability to raise the funds
necessary to fulfill our obligations under our convertible
senior notes and our subsidiaries' senior notes, senior
discount notes, senior floating rate notes and credit facilities
following a change of control. Under the indentures governing
our convertible senior notes, upon the occurrence of specified
change of control events, we are required to offer to repurchase
all of our outstanding convertible senior notes. However,
Charter may not have sufficient funds at the time of
13
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the change of control event to make the required
repurchase of its convertible senior notes, and our subsidiaries
are limited in their ability to make distributions or other
payments to us to fund any required repurchase. In addition, a
change of control under our subsidiaries' credit facilities
and indentures governing our subsidiaries' notes would
require the repayment of borrowings totaling $18.4 billion
at June 30, 2005 under those credit facilities and
indentures. Because such credit facilities and notes are
obligations of our subsidiaries, the credit facilities and our
subsidiaries' notes would have to be repaid by our
subsidiaries before their assets could be available to us to
repurchase our convertible senior notes. Additionally, our
subsidiaries may not have sufficient funds at the time of the
change of control to make the required repurchases or
repayments. Our failure to make or complete a change of control
offer would place us in default under our convertible senior
notes. The failure of our subsidiaries to make a change of
control offer or repay the amounts outstanding under their
credit facilities would place them in default under these
agreements and could result in a default under the indentures
governing our convertible senior notes and our
subsidiaries' credit facilities and notes.
Paul G. Allen and his affiliates are not
    obligated to purchase equity from, contribute to or loan funds
    to us or any of our subsidiaries in the future.
Paul G. Allen and his affiliates have purchased
equity, contributed funds and provided other financial support
to Charter and Charter Holdco in the past. However,
Mr. Allen and his affiliates are not obligated to purchase
equity from, contribute to or loan funds to us or any of our
subsidiaries in the future.
Risks Related to Our Business
We operate in a very competitive business
    environment, which affects our ability to attract and retain
    customers and can adversely affect our business and operations.
    We have lost a significant number of customers to direct
    broadcast satellite competition and further loss of customers
    could have a material negative impact on our
    business.
The industry in which we operate is highly
competitive and has become more so in recent years. In some
instances, we compete against companies with fewer regulatory
burdens, easier access to financing, greater personnel
resources, greater brand name recognition and long-established
relationships with regulatory authorities and customers.
Increasing consolidation in the cable industry and the repeal of
certain ownership rules may provide additional benefits to
certain of our competitors, either through access to financing,
resources or efficiencies of scale.
Our principal competitor for video services
throughout our territory is direct broadcast satellite
television services, also known as DBS. Competition from DBS,
including intensive marketing efforts, aggressive pricing and
the ability of DBS to provide certain services that we are in
the process of developing, has had an adverse impact on our
ability to retain customers. DBS has grown rapidly over the last
several years and continues to do so. The cable industry,
including us, has lost a significant number of subscribers to
DBS competition, and we face serious challenges in this area in
the future. We believe that competition from DBS service
providers may present greater challenges in areas of lower
population density, and that our systems service a higher
concentration of such areas than those of other major cable
service providers.
Local telephone companies and electric utilities
can offer video and other services in competition with us and
they increasingly may do so in the future. Certain telephone
companies have begun more extensive deployment of fiber in their
networks that will enable them to begin providing video
services, as well as telephone and high bandwidth Internet
access services, to residential and business customers. Some of
these telephone companies have obtained, and are now seeking,
franchises or operating authorizations that are less burdensome
than existing Charter franchises. The subscription television
industry also faces competition from free broadcast television
and from other communications and entertainment media.
Further loss of customers to DBS or other
alternative video and Internet services could have a material
negative impact on the value of our business and its performance.
With respect to our Internet access services, we
face competition, including intensive marketing efforts and
aggressive pricing, from "dial-up" and digital
subscriber line ("DSL"). DSL service is
competitive
14
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with high-speed Internet service over cable
systems. Telephone companies (which already have telephone lines
into the household, an existing customer base and other
operational functions in place) and other companies offer DSL
service. In addition, DBS providers have entered into joint
marketing arrangements with Internet access providers to offer
bundled video and Internet service, which competes with our
ability to provide bundled services to our customers.
In order to attract new customers, from time to
time we make promotional offers, including offers of temporarily
reduced-price or free service. These promotional programs result
in significant advertising, programming and operating expenses,
and also require us to make capital expenditures to acquire
additional digital set-top terminals. Customers who subscribe to
our services as a result of these offerings may not remain
customers for any significant period of time following the end
of the promotional period. A failure to retain existing
customers and customers added through promotional offerings or
to collect the amounts they owe us could have a material adverse
effect on our business and financial results.
Mergers, joint ventures and alliances among
franchised, wireless or private cable operators, satellite
television providers, local exchange carriers and others, may
provide additional benefits to some of our competitors, either
through access to financing, resources or efficiencies of scale,
or the ability to provide multiple services in direct
competition with us.
We cannot assure you that our cable systems will
allow us to compete effectively. Additionally, as we expand our
offerings to include other telecommunications services, and to
introduce new and enhanced services, we will be subject to
competition from other providers of the services we offer. We
cannot predict the extent to which competition may affect our
business and operations in the future. See
"Business — Competition."
Charter's dispute with Paul G. Allen
    concerning the ownership of an interest in CC VIII, LLC could
    adversely impact the value of our common stock, our ability to
    repay our debt and our ability to obtain future
    financing.
As part of our acquisition of the cable systems
owned by Bresnan Communications Company Limited Partnership in
February 2000, CC VIII, LLC, our indirect limited liability
company subsidiary, issued, after adjustments, 24,273,943
Class A preferred membership units (which we refer to
collectively as the CC VIII interest) with a value and an
initial capital account of approximately $630 million to
certain sellers affiliated with AT&T Broadband, subsequently
owned by Comcast Corporation (which we refer to as the Comcast
sellers). Our controlling shareholder, Paul G. Allen,
granted the Comcast sellers the right to sell to him the
CC VIII interest for approximately $630 million plus
4.5% interest annually from February 2000 (which we refer to as
the Comcast put right). In April 2002, the Comcast sellers
exercised the Comcast put right in full, and this transaction
was consummated on June 6, 2003. Accordingly,
Mr. Allen has become the holder of the CC VIII interest,
indirectly through an affiliate.
We are in a dispute with Mr. Allen as to
whether he is entitled to retain the CC VIII interest, or
whether he must exchange that interest for units of our
subsidiary, Charter Holdco. The dispute concerns whether the
documentation for the Bresnan transaction was correct and
complete with regard to the ultimate ownership of the
CC VIII interest following consummation of the Comcast put
right. The law firm that prepared the documents for the Bresnan
transaction brought this matter to the attention of Charter and
representatives of Mr. Allen in 2002. After subsequently
conducting an investigation of the relevant facts and
circumstances, a Special Committee of Charter's Board of
Directors determined that a "scrivener's error"
had occurred in February 2000 in connection with the preparation
of the Bresnan transaction documents, resulting in the
inadvertent deletion of a provision that would have required an
automatic exchange of the CC VIII interest for
24,273,943 Charter Holdco membership units if the Comcast
sellers exercised the Comcast put right and sold the
CC VIII interest to Mr. Allen or his affiliates.
Mr. Allen disagrees with the Special Committee's
determinations and contends that the transaction is accurately
reflected in the transaction documentation and contemporaneous
and subsequent company public disclosures. If the Special
Committee and Mr. Allen are unable to reach a resolution through
an ongoing mediation process or to agree on an alternative
dispute resolution process, the Special Committee intends to
seek resolution of this dispute
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through judicial proceedings in an action that
would be commenced, after appropriate notice, in the Delaware
Court of Chancery against Mr. Allen and his affiliates seeking
contract reformation, declaratory relief as to the respective
rights of the parties regarding this dispute and alternative
forms of legal and equitable relief. This dispute and related
matters (including certain issues associated with the ultimate
disposition of the interest in CC VIII) are more fully
described in "Certain Relationships and Related
Transactions — Transactions Arising Out of Our
Organizational Structure and Mr. Allen's Investment in
Charter and Its Subsidiaries — Equity Put
Rights — CC VIII."
If it is determined that Mr. Allen is
entitled to retain the CC VIII interest, then our indirect
interest in CC VIII would continue to exclude the value of
Mr. Allen's interest in CC VIII, consistent with
our current treatment of the CC VIII interest in our
financial statements. As a result, the amounts available for
repayment of our creditors, including creditors of our
subsidiaries, would not include the value represented by
Mr. Allen's CC VIII interest, and the value of
our Class A common stock similarly would not reflect any
value attributable to Mr. Allen's CC VIII
interest. Further, such retained interest in CC VIII could
reduce our borrowing capacity (due to a portion of the equity
interest being held by a party other than Charter or a Charter
subsidiary) or make it more difficult for us to secure financing
for our CC VIII subsidiary due to concerns as to possible
claims that could be asserted by Mr. Allen as the holder of
a minority interest in CC VIII. In addition, if it is
determined that Mr. Allen is entitled to retain the
CC VIII interest, such retention could complicate efforts
to sell our CC VIII subsidiary or its assets to a third
party, and Mr. Allen could be entitled to receive a portion
of the proceeds of such a sale, thereby reducing the amount of
such proceeds that would otherwise be available to us and our
security holders.
We are currently the subject of certain
    lawsuits and other legal matters, the unfavorable outcome of
    which could adversely affect our business and financial
    condition.
A number of putative federal class action
lawsuits were filed in the U.S. District Court for the
Eastern District of Missouri against Charter and certain of our
former and present officers and directors alleging violations of
securities laws, and were consolidated for pretrial purposes. In
addition, a number of shareholder derivative lawsuits were filed
against us in the same and other jurisdictions. A shareholders
derivative suit was filed in the U.S. District Court for
the Eastern District of Missouri against Charter and our then
current directors. Also, three shareholder derivative suits were
filed in Missouri state court against Charter, our then current
directors and our former independent auditor. These state court
actions were consolidated. The federal shareholder derivative
suit and the consolidated derivative suit each alleged that the
defendants breached their fiduciary duties.
Charter entered into Stipulations of Settlement
setting forth proposed terms of settlement for the
above-described class actions and derivative suits. On
May 23, 2005 the United States District Court for the
Eastern District of Missouri conducted the final fairness
hearing for the actions, and it issued its final order approving
the settlement on June 30, 2005. Members of the class had
30 days from the issuance of that order to file an appeal
challenging the approval. Two notices of appeal were filed
relating to the settlement. Those appeals were directed to the
amount of fees that the attorneys for the class were to receive
and to the fairness of the settlement. On September 26,
2005, the U.S. Court of Appeals for the Eighth Circuit
entered Judgment dismissing the appeals pursuant to stipulation
by the parties.
Furthermore, we are also a party to, or otherwise
involved in, other lawsuits, claims, proceedings and legal
matters that have arisen in the ordinary course of conducting
our business, certain of which are described in
"Business — Legal Proceedings." In addition,
our restatement of our 2000, 2001 and 2002 financial statements
could lead to additional or expanded claims or investigations.
We cannot predict with certainty the ultimate
outcome of any of the lawsuits, claims, proceedings and other
legal matters to which we are a party, or in which we are
otherwise involved, due to, among other things, (i) the
inherent uncertainties of litigation and legal matters
generally, (ii) the remaining conditions to the
finalization of certain litigation and other settlements and
resolutions to which we are parties, (iii) the outcome of
appeals and (iv) the need for us to comply with, and/or
otherwise implement, certain covenants, conditions,
undertakings, procedures and other obligations that would be, or
have been, imposed under the terms of settlements and
resolutions of legal matters we have entered into.
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An unfavorable outcome in any of the lawsuits
pending against us, or in any other legal matter, including
those described herein, or our failure to comply with or
properly implement the terms of the settlements and resolutions
of legal matters we have entered into, could result in
substantial potential liabilities and otherwise have a material
adverse effect on our business, consolidated financial condition
and results of operations, in our liquidity, our operations,
and/or our ability to comply with any debt covenants. Further,
these legal matters, and our actions in response to them, could
result in substantial potential liabilities, additional defense
and other costs, increase our indemnification obligations,
divert management's attention, and/or adversely affect our
ability to execute our business and financial strategies.
See "Business — Legal
Proceedings" for additional information concerning these
and other litigation matters.
We have a history of net losses and expect
    to continue to experience net losses. Consequently, we may not
    have the ability to finance future operations.
We have had a history of net losses and expect to
continue to report net losses for the foreseeable future. Our
net losses are principally attributable to insufficient revenue
to cover the interest costs on our debt, the depreciation
expenses that we incur resulting from the capital investments we
have made in our cable properties, and the amortization and
impairment of our franchise intangibles. We expect that these
expenses (other than amortization and impairment of franchises)
will remain significant, and we expect to continue to report net
losses for the foreseeable future. We reported losses before
cumulative effect of accounting change of $2.3 billion for
2002, $238 million for 2003 and $3.6 billion for 2004
and $708 million and $707 million for the six months
ended June 30, 2004 and 2005, respectively. Continued
losses would reduce our cash available from operations to
service our indebtedness, as well as limit our ability to
finance our operations.
We may not have the ability to pass our
    increasing programming costs on to our customers, which would
    adversely affect our cash flow and operating
    margins.
Programming has been, and is expected to continue
to be, our largest operating expense item. In recent years, the
cable industry has experienced a rapid escalation in the cost of
programming, particularly sports programming. We expect
programming costs to continue to increase because of a variety
of factors, including inflationary or negotiated annual
increases, additional programming being provided to customers
and increased costs to purchase programming. The inability to
fully pass these programming cost increases on to our customers
would have an adverse impact on our cash flow and operating
margins. As measured by programming costs, and excluding premium
services (substantially all of which were renegotiated and
renewed in 2003), as of July 7, 2005, approximately 9% of
our current programming contracts were expired, and
approximately another 21% were scheduled to expire at or before
the end of 2005. There can be no assurance that these agreements
will be renewed on favorable or comparable terms. Our
programming costs increased by approximately 6% in 2004 and we
expect our programming costs in 2005 to increase at a higher
rate than in 2004. To the extent that we are unable to reach
agreement with certain programmers on terms that we believe are
reasonable we may be forced to remove such programming channels
from our line-up, which could result in a further loss of
customers.
If our required capital expenditures exceed
    our projections, we may not have sufficient funding, which could
    adversely affect our growth, financial condition and results of
    operations.
During the six months ended June 30, 2005,
we spent approximately $542 million on capital
expenditures. During 2005, we expect capital expenditures to be
approximately $1 billion. The actual amount of our capital
expenditures depends on the level of growth in high-speed
Internet customers and in the delivery of other advanced
services, as well as the cost of introducing any new services.
We may need additional capital if there is accelerated growth in
high-speed Internet customers or in the delivery of other
advanced services. If we cannot obtain such capital from
increases in our cash flow from operating activities, additional
borrowings or other sources, our growth, financial condition and
results of operations could suffer materially.
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Our inability to respond to technological
    developments and meet customer demand for new products and
    services could limit our ability to compete
    effectively.
Our business is characterized by rapid
technological change and the introduction of new products and
services. We cannot assure you that we will be able to fund the
capital expenditures necessary to keep pace with unanticipated
technological developments, or that we will successfully
anticipate the demand of our customers for products and services
requiring new technology. Our inability to maintain and expand
our upgraded systems and provide advanced services in a timely
manner, or to anticipate the demands of the marketplace, could
materially adversely affect our ability to attract and retain
customers. Consequently, our growth, financial condition and
results of operations could suffer materially.
We may not be able to carry out our
    strategy to improve operating results by standardizing and
    streamlining operations and procedures.
In prior years, we experienced rapid growth
through acquisitions of a number of cable operators and the
rapid rebuild and rollout of advanced services. Our future
success will depend in part on our ability to standardize and
streamline our operations. The failure to implement a consistent
corporate culture and management, operating or financial systems
or procedures necessary to standardize and streamline our
operations and effectively operate our enterprise could have a
material adverse effect on our business, results of operations
and financial condition.
Recent management changes could disrupt
    operations.
Since August 2004, we have experienced a number
of changes in our senior management, including changes in our
Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer, Executive Vice President of Finance and
Strategy and Interim co-Chief Financial Officer and our
Executive Vice President, General Counsel and Secretary. The
individual currently serving as Chief Financial Officer is
serving in an interim capacity. In addition, Neil Smit assumed
the positions of President and Chief Executive Officer effective
August 22, 2005 and on September 26, 2005, it was
announced that Grier Raclin will become the Executive Vice
President, General Counsel and Corporate Secretary. These senior
management changes could disrupt our ability to manage our
business as we transition to and integrate a new management
team, and any such disruption could adversely affect our
operations, growth, financial condition and results of
operations.
Malicious and abusive Internet practices
    could impair our high-speed Internet services.
Our high-speed Internet customers utilize our
network to access the Internet and, as a consequence, we or they
may become victim to common malicious and abusive Internet
activities, such as unsolicited mass advertising
(i.e., "spam") and dissemination of viruses,
worms and other destructive or disruptive software. These
activities could have adverse consequences on our network and
our customers, including degradation of service, excessive call
volume to call centers and damage to our or our customers'
equipment and data. Significant incidents could lead to customer
dissatisfaction and, ultimately, loss of customers or revenue,
in addition to increased costs to us to service our customers
and protect our network. Any significant loss of high-speed
Internet customers or revenue or significant increase in costs
of serving those customers could adversely affect our growth,
financial condition and results of operations.
We could be deemed an "investment
    company" under the Investment Company Act of 1940. This
    would impose significant restrictions on us and would be likely
    to have a material adverse impact on our growth, financial
    condition and results of operation.
Our principal assets are our equity interests in
Charter Holdco and certain indebtedness of Charter Holdco. If
our membership interest in Charter Holdco were to constitute
less than 50% of the voting securities issued by Charter Holdco,
then our interest in Charter Holdco could be deemed an
"investment security" for purposes of the Investment
Company Act. This may occur, for example, if a court determines
that the Class B common stock is no longer entitled to
special voting rights and, in accordance with the
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terms of the Charter Holdco limited liability
company agreement, our membership units in Charter Holdco were
to lose their special voting privileges. A determination that
such interest was an investment security could cause us to be
deemed to be an investment company under the Investment Company
Act, unless an exemption from registration were available or we
were to obtain an order of the Securities and Exchange
Commission excluding or exempting us from registration under the
Investment Company Act.
If anything were to happen which would cause us
to be deemed an investment company, the Investment Company Act
would impose significant restrictions on us, including severe
limitations on our ability to borrow money, to issue additional
capital stock and to transact business with affiliates. In
addition, because our operations are very different from those
of the typical registered investment company, regulation under
the Investment Company Act could affect us in other ways that
are extremely difficult to predict. In sum, if we were deemed to
be an investment company it could become impractical for us to
continue our business as currently conducted and our growth, our
financial condition and our results of operations could suffer
materially.
If a court determines that the Class B
    common stock is no longer entitled to special voting rights, we
    would lose our rights to manage Charter Holdco. In addition to
    the investment company risks discussed above, this could
    materially impact the value of the Class A common
    stock.
If a court determines that the Class B
common stock is no longer entitled to special voting rights,
Charter would no longer have a controlling voting interest in,
and would lose its right to manage, Charter Holdco. If this were
to occur:
•
we would retain our proportional equity interest
    in Charter Holdco but would lose all of our powers to direct the
    management and affairs of Charter Holdco and its subsidiaries;
    and
•
we would become strictly a passive investment
    vehicle and would be treated under the Investment Company Act as
    an investment company.
This result, as well as the impact of being
treated under the Investment Company Act as an investment
company, could materially adversely impact:
•
the liquidity of the Class A common stock;
•
how the Class A common stock trades in the
    marketplace;
•
the price that purchasers would be willing to pay
    for the Class A common stock in a change of control
    transaction or otherwise; and
•
the market price of the Class A common stock.
Uncertainties that may arise with respect to the
nature of our management role and voting power and
organizational documents as a result of any challenge to the
special voting rights of the Class B common stock,
including legal actions or proceedings relating thereto, may
also materially adversely impact the value of the Class A
common stock.
Risks Related to Mr. Allen's
Controlling Position
The failure by Mr. Allen to maintain a
    minimum voting and economic interest in us could trigger a
    change of control default under our subsidiary's credit
    facilities.
The Charter Operating credit facilities provide
that the failure by Mr. Allen to maintain a 35% direct or
indirect voting interest in the applicable borrower would result
in a change of control default. Such a default could result in
the acceleration of repayment of our and our subsidiaries'
indebtedness, including borrowings under the Charter Operating
credit facilities.
Mr. Allen controls our stockholder
    voting and may have interests that conflict with your
    interests.
Mr. Allen has the ability to control us.
Through his control as of August 31, 2005 of approximately
91% of the voting power of our capital stock prior to completion
of this offering, Mr. Allen is entitled to elect all but
one of our board members and effectively has the voting power to
elect the remaining board member as well. Mr. Allen thus
has the ability to control fundamental corporate transactions
requiring
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equity holder approval, including, but not
limited to, the election of all of our directors, approval of
merger transactions involving us and the sale of all or
substantially all of our assets.
Mr. Allen is not restricted from investing
in, and has invested and engaged in, other businesses involving
or related to the operation of cable television systems, video
programming, high-speed Internet service, telephone or business
and financial transactions conducted through broadband
interactivity and Internet services. Mr. Allen may also
engage in other businesses that compete or may in the future
compete with us.
Mr. Allen's control over our management
and affairs could create conflicts of interest if he is faced
with decisions that could have different implications for him,
us and the holders of our Class A common stock. Further,
Mr. Allen could effectively cause us to enter into
contracts with another entity in which he owns an interest or to
decline a transaction into which he (or another entity in which
he owns an interest) ultimately enters.
Current and future agreements between us and
either Mr. Allen or his affiliates may not be the result of
arm's-length negotiations. Consequently, such agreements
may be less favorable to us than agreements that we could
otherwise have entered into with unaffiliated third parties. See
"Certain Relationships and Related Transactions."
We are not permitted to engage in any
    business activity other than the cable transmission of video,
    audio and data unless Mr. Allen authorizes us to pursue
    that particular business activity, which could adversely affect
    our ability to offer new products and services outside of the
    cable transmission business and to enter into new businesses,
    and could adversely affect our growth, financial condition and
    results of operations.
Our certificate of incorporation and Charter
Holdco's limited liability company agreement provide that
Charter and Charter Holdco and our subsidiaries, cannot engage
in any business activity outside the cable transmission business
except for specified businesses. This will be the case unless we
first offer the opportunity to pursue the particular business
activity to Mr. Allen, he decides not to pursue it and he
consents to our engaging in the business activity. The cable
transmission business means the business of transmitting video,
audio (including telephone services), and data over cable
television systems owned, operated or managed by us from time to
time. These provisions may limit our ability to take advantage
of attractive business opportunities.
The loss of Mr. Allen's services
    could adversely affect our ability to manage our
    business.
Mr. Allen is Chairman of our board of
directors and provides strategic guidance and other services to
us. If we were to lose his services, our growth, financial
condition and results of operations could be adversely impacted.
The special tax allocation provisions of
    the Charter Holdco limited liability company agreement may cause
    us in some circumstances to pay more taxes than if the special
    tax allocation provisions were not in effect.
Charter Holdco's limited liability company
agreement provided that through the end of 2003, net tax losses
of Charter Holdco that would otherwise have been allocated to us
based generally on our percentage ownership of outstanding
common membership units of Charter Holdco would instead be
allocated to the membership units held by Vulcan Cable III
Inc. and Charter Investment, Inc. The purpose of these special
tax allocation provisions was to allow Mr. Allen to take
advantage for tax purposes of the losses generated by Charter
Holdco. However, beginning in 2002, due to tax capital account
limitations, certain net tax losses of Charter Holdco were
allocated to us and have continued to be so allocated since that
time. The limited liability company agreement further provides
that beginning at the time that Charter Holdco generates net tax
profits (as determined under the applicable federal income tax
rules for determining book profits), the net tax profits that
would otherwise have been allocated to us based generally on our
percentage of outstanding common membership units of Charter
Holdco will instead generally be allocated to membership units
held by Vulcan Cable III Inc. and Charter Investment, Inc.
In some situations, the special tax allocation provisions could
result in our having to pay taxes in an amount that is more or
less than if Charter Holdco had allocated net tax losses and net
tax profits to its members
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based generally on the percentage of outstanding
common membership units owned by such members from the time of
the completion of the offering. See "Description of Capital
Stock and Membership Units — Special Tax Allocation
Provisions." For further discussion on the details of the
tax allocation provisions see "Management's Discussion
and Analysis of Financial Condition and Results of
Operations — Critical Accounting Policies and
Estimates — Income Taxes."
The issuance of our Class A common
    stock offered hereby pursuant to the share lending agreement, as
    well as possible future conversions of our convertible notes,
    significantly increase the risk that we will experience an
    ownership change in the future for tax purposes, resulting in a
    material limitation on the use of a substantial amount of our
    existing net operating loss carryforwards.
As of June 30, 2005, Charter had
approximately $5.7 billion of tax net operating losses
(resulting in a gross deferred tax asset of approximately
$2.3 billion) expiring in the years 2010 through 2025. Due
to uncertainties in projected future taxable income, valuation
allowances have been established against the gross deferred tax
assets for book accounting purposes except for deferred benefits
available to offset certain deferred tax liabilities. Currently,
such tax net operating losses can accumulate and be used to
offset any future taxable income of Charter. An "ownership
change" as defined in Section 382 of the Internal
Revenue Code of 1986, as amended, would place significant
limitations, on an annual basis, on the use of such net
operating losses to offset any future taxable income we may
generate. Such limitations, in conjunction with the net
operating loss expiration provisions, could effectively
eliminate our ability to use a substantial portion of our net
operating losses to offset future taxable income. The shares
issued hereby are being issued pursuant to a share lending
agreement. See "Share Lending Agreement." While the
tax treatment of the issuance of shares offered hereby pursuant
to a borrowing transaction under the share lending agreement is
uncertain, we do not believe that this issuance would result in
our experiencing an ownership change. However, future
transactions and the timing of such transactions could cause an
ownership change. Such transactions include additional issuances
of common stock by us (including but not limited to issuances
upon future conversion of our 5.875% convertible senior
notes or as contemplated in the proposed settlement of
derivative class action litigation), reacquisitions of the
borrowed shares by us, or acquisitions or sales of shares by
certain holders of our shares, including persons who have held,
currently hold, or accumulate in the future five percent or more
of our outstanding stock (including upon an exchange by Paul
Allen or his affiliates, directly or indirectly, of membership
units of Charter Holdco into our Class A common stock).
Many of the foregoing transactions are beyond our control.
Risks Related to Regulatory and Legislative
Matters
Our business is subject to extensive
    governmental legislation and regulation, which could adversely
    affect our business.
Regulation of the cable industry has increased
cable operators' administrative and operational expenses
and limited their revenues. Cable operators are subject to,
among other things:
•
rules governing the provision of cable equipment
    and compatibility with new digital technologies;
•
rules and regulations relating to subscriber
    privacy;
•
limited rate regulation;
•
requirements governing when a cable system must
    carry a particular broadcast station and when it must first
    obtain consent to carry a broadcast station;
•
rules for franchise renewals and
    transfers; and
•
other requirements covering a variety of
    operational areas such as equal employment opportunity,
    technical standards and customer service requirements.
Additionally, many aspects of these regulations
are currently the subject of judicial proceedings and
administrative or legislative proposals. There are also ongoing
efforts to amend or expand the federal, state and local
regulation of some of our cable systems, which may compound the
regulatory risks we already
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face. Certain states and localities are
considering new telecommunications taxes that could increase
operating expenses.
Our cable systems are operated under
    franchises that are subject to non-renewal or termination. The
    failure to renew a franchise in one or more key markets could
    adversely affect our business.
Our cable systems generally operate pursuant to
franchises, permits and similar authorizations issued by a state
or local governmental authority controlling the public
rights-of-way. Many franchises establish comprehensive
facilities and service requirements, as well as specific
customer service standards and monetary penalties for
non-compliance. In many cases, franchises are terminable if the
franchisee fails to comply with significant provisions set forth
in the franchise agreement governing system operations.
Franchises are generally granted for fixed terms and must be
periodically renewed. Local franchising authorities may resist
granting a renewal if either past performance or the prospective
operating proposal is considered inadequate. Franchise
authorities often demand concessions or other commitments as a
condition to renewal. In some instances, franchises have not
been renewed at expiration, and we have operated and are
operating under either temporary operating agreements or without
a license while negotiating renewal terms with the local
franchising authorities. Approximately 11% of our franchises,
covering approximately 11% of our video customers, were expired
as of June 30, 2005. Approximately 4% of additional
franchises, covering approximately an additional 5% of our video
customers, will expire on or before December 31, 2005, if
not renewed prior to expiration.
We cannot assure you that we will be able to
comply with all significant provisions of our franchise
agreements and certain of our franchisors have from time to time
alleged that we have not complied with these agreements.
Additionally, although historically we have renewed our
franchises without incurring significant costs, we cannot assure
you that we will be able to renew, or to renew as favorably, our
franchises in the future. A termination of or a sustained
failure to renew a franchise in one or more key markets could
adversely affect our business in the affected geographic area.
Our cable systems are operated under
    franchises that are non-exclusive. Accordingly, local
    franchising authorities can grant additional franchises and
    create competition in market areas where none existed
    previously, resulting in overbuilds, which could adversely
    affect results of operations.
Our cable systems are operated under
non-exclusive franchises granted by local franchising
authorities. Consequently, local franchising authorities can
grant additional franchises to competitors in the same
geographic area or operate their own cable systems. In addition,
certain telephone companies are seeking authority to operate in
local communities without first obtaining a local franchise. As
a result, competing operators may build systems in areas in
which we hold franchises. In some cases municipal utilities may
legally compete with us without obtaining a franchise from the
local franchising authority.
Different legislative proposals have been
introduced in the United States Congress and in some state
legislatures that would greatly streamline cable franchising.
This legislation is intended to facilitate entry by new
competitors, particularly local telephone companies. Such
legislation has already passed in at least one state but is now
subject to court challenge. Although various legislative
proposals provide certain regulatory relief for incumbent cable
operators, these proposals are generally viewed as being more
favorable to new entrants.
The existence of more than one cable system
operating in the same territory is referred to as an overbuild.
These overbuilds could adversely affect our growth, financial
condition and results of operations by creating or increasing
competition. As of June 30, 2005, we are aware of overbuild
situations impacting approximately 5% of our estimated homes
passed, and potential overbuild situations in areas servicing
approximately 2% of our estimated homes passed. Additional
overbuild situations may occur in other systems.
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Local franchise authorities have the
    ability to impose additional regulatory constraints on our
    business, which could further increase our
    expenses.
In addition to the franchise agreement, cable
authorities in some jurisdictions have adopted cable regulatory
ordinances that further regulate the operation of cable systems.
This additional regulation increases the cost of operating our
business. We cannot assure you that the local franchising
authorities will not impose new and more restrictive
requirements. Local franchising authorities also have the power
to reduce rates and order refunds on the rates charged for basic
services.
Further regulation of the cable industry
    could cause us to delay or cancel service or programming
    enhancements or impair our ability to raise rates to cover our
    increasing costs, resulting in increased losses.
Currently, rate regulation is strictly limited to
the basic service tier and associated equipment and installation
activities. However, the Federal Communications Commission
("FCC") and the U.S. Congress continue to be
concerned that cable rate increases are exceeding inflation. It
is possible that either the FCC or the U.S. Congress will
again restrict the ability of cable system operators to
implement rate increases. Should this occur, it would impede our
ability to raise our rates. If we are unable to raise our rates
in response to increasing costs, our losses would increase.
There has been considerable legislative interest
recently in requiring cable operators to offer historically
bundled programming services on an á la carte basis.
Although the FCC last year made a recommendation to Congress
against the imposition of an á la carte mandate, it is
still possible that new marketing restrictions could be adopted
in the future. Such restrictions could adversely affect our
operations.
Actions by pole owners might subject us to
    significantly increased pole attachment costs.
Pole attachments are cable wires that are
attached to poles. Cable system attachments to public utility
poles historically have been regulated at the federal or state
level, generally resulting in favorable pole attachment rates
for attachments used to provide cable service. The FCC clarified
that a cable operator's favorable pole rates are not
endangered by the provision of Internet access, and that
approach ultimately was upheld by the Supreme Court of the
United States. Despite the existing regulatory regime, utility
pole owners in many areas are attempting to raise pole
attachment fees and impose additional costs on cable operators
and others. In addition, the favorable pole attachment rates
afforded cable operators under federal law can be increased by
utility companies if the operator provides telecommunications
services, as well as cable service, over cable wires attached to
utility poles. Any significant increased costs could have a
material adverse impact on our profitability and discourage
system upgrades and the introduction of new products and
services.
We may be required to provide access to our
    networks to other Internet service providers, which could
    significantly increase our competition and adversely affect our
    ability to provide new products and services.
A number of companies, including independent
Internet service providers, or ISPs, have requested local
authorities and the FCC to require cable operators to provide
non-discriminatory access to cable's broadband
infrastructure, so that these companies may deliver Internet
services directly to customers over cable facilities. In a June
2005 ruling, commonly referred to as
Brand X
, the
Supreme Court upheld an FCC decision (and overruled a
conflicting Ninth Circuit opinion) making it much less likely
that any non-discriminatory "open access" requirements
(which are generally associated with common carrier regulation
of "telecommunications services") will be imposed on
the cable industry by local, state or federal authorities. The
Supreme Court held that the FCC was correct in classifying cable
provided Internet service as an "information service,"
rather than a "telecommunications service." This
favorable regulatory classification limits the ability of
various governmental authorities to impose open access
requirements on cable-provided Internet service. Given how
recently
Brand X
was decided, however, the nature of
any legislative or regulatory response remains uncertain. The
imposition of open access requirements could materially affect
our business.
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If we were required to allocate a portion of our
bandwidth capacity to other Internet service providers, we
believe that it would impair our ability to use our bandwidth in
ways that would generate maximum revenues.
Changes in channel carriage regulations
    could impose significant additional costs on us.
Cable operators also face significant regulation
of their channel carriage. They currently can be required to
devote substantial capacity to the carriage of programming that
they would not carry voluntarily, including certain local
broadcast signals, local public, educational and government
access programming, and unaffiliated commercial leased access
programming. This carriage burden could increase in the future,
particularly if cable systems were required to carry both the
analog and digital versions of local broadcast signals (dual
carriage) or to carry multiple program streams included with a
single digital broadcast transmission (multicast carriage).
Additional government-mandated broadcast carriage obligations
could disrupt existing programming commitments, interfere with
our preferred use of limited channel capacity and limit our
ability to offer services that would maximize customer appeal
and revenue potential. Although the FCC issued a decision in
February 2005, confirming an earlier ruling against mandating
either dual carriage or multicast carriage, that decision has
been appealed. In addition, the FCC could reverse its own ruling
or Congress could legislate additional carriage obligations.
Offering voice communications service may
    subject us to additional regulatory burdens, causing us to incur
    additional costs.
In 2002, we began to offer voice communications
services on a limited basis over our broadband network. We
continue to explore development and deployment of Voice over
Internet Protocol or VoIP services. The regulatory requirements
applicable to VoIP service are unclear although the FCC has
declared that certain VoIP services are not subject to
traditional state public utility regulation. The full extent of
the FCC preemption of VoIP services is not yet clear.
Expanding our offering of these services may require us to
obtain certain authorizations, including federal, state and
local licenses. We may not be able to obtain such authorizations
in a timely manner, or conditions could be imposed upon such
licenses or authorizations that may not be favorable to us.
Furthermore, telecommunications companies generally are subject
to significant regulation, including payments to the Federal
Universal Service Fund and the intercarrier compensation regime,
and it may be difficult or costly for us to comply with such
regulations, were it to be determined that they applied to VoIP
offerings such as ours. The FCC has already determined that VoIP
providers must comply with traditional 911 emergency service
obligations ("E911") and has imposed a specific
timeframe for VoIP providers to accommodate law enforcement
wiretaps. Based on a recent FCC release, we are now seeking
subscriber acknowledgement of E911 limitations so as to minimize
the risk of potential sanctions. In addition, pole attachment
rates are higher for providers of telecommunications services
than for providers of cable service. If there were to be a final
legal determination by the FCC, a state Public Utility
Commission, or appropriate court that VoIP services are subject
to these higher rates, our pole attachment costs could increase
significantly, which could adversely affect our financial
condition and results of operations.
Additional Risks Related to this
Offering
The market price of our Class A common
    stock may be volatile, which could cause the value of your
    investment to decline.
It is impossible to predict whether the price of
our Class A common stock will rise or fall. Trading prices
of our Class A common stock will be influenced by our
operating results and prospects and by economic, financial,
regulatory and other factors. In addition, general market
conditions, including the level of, and fluctuations in, the
trading prices of stocks generally, and sales of substantial
amounts of our Class A common stock by us in the market
after this offering, or the perception that such sales may
occur, could affect the price of our Class A common stock.
The price of our Class A common stock also
could be affected by any sales of our Class A common stock
by investors who view our recently issued
5.875% convertible senior notes as a more attractive means
24
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of equity participation in our company. Some
investors in our Class A common stock may decide to sell
some or all of their shares and purchase our 5.875% convertible
senior notes instead. Such sales of our Class A common
stock could cause the trading price to decline. The hedging or
arbitrage trading activity that has developed and could further
develop with respect to our Class A common stock as a
result of the November 2004 issuance of our
5.875% convertible senior notes could also cause a decline
or retard any increase in the trading price of our Class A
common stock since investors in the convertible senior notes may
sell short our Class A common stock in order to establish
initial hedge positions, and may increase those positions,
particularly as the trading price of our Class A common
stock increases, in order to hedge their 5.875% convertible
senior notes. See "Share Lending Agreement."
In addition to the hedging transactions that were
facilitated by the prior share borrow transaction, we understand
that many holders of our 5.875% convertible senior notes
have also been able to borrow shares of our Class A common
stock for the purpose of establishing short positions in the
stock. To the extent that those same holders seek to establish
short positions with Citigroup through private hedging
transactions in connection with this offering, we believe such
holders are likely to seek to close out their existing share
borrow arrangements using shares purchased in the open market.
Such purchases could cause extreme volatility in the trading
price of our Class A common stock, including temporary
increases in the price as short term demand increases.
The market price of our Class A common
    stock could be adversely affected by the large number of
    additional shares of Class A common stock eligible for
    issuance in the future.
As of June 30, 2005, 304,941,082 shares
of Class A common stock were issued and outstanding, and
50,000 shares of Class B common stock were issued and
outstanding. An additional 27,170,000 shares of
Class A common stock were subsequently issued in the prior
share borrow transaction. An additional 339,132,031 shares
of Class A common stock were issuable upon conversion of
outstanding units of Charter Holdco (increasing by
24,273,943 shares if Mr. Allen is required to
contribute his CC VIII membership interest to Charter
Holdco), and 29,067,828 shares were issuable upon the
exercise of outstanding options under our option plans. Also,
approximately 356 million shares are now issuable upon
conversion of our recently issued 5.875% convertible senior
notes due 2009. Furthermore, 13.4 million additional shares
have been issued in connection with the settlement of certain
outstanding litigation matters and will be available for
immediate resale if and when released from escrow, as more fully
described in "Business — Legal Proceedings."
All of the 339,132,031 shares of Class A common stock
issuable upon exchange of Charter Holdco membership units and
all shares of the Class A common stock issuable upon
conversion of shares of our Class B common stock will have
"demand" and/or "piggyback" registration
rights attached to them. All of the 356 million shares
issuable upon conversion of the 5.875% convertible senior
notes are eligible for resale pursuant to a shelf registration
statement. If less than all of the remaining
122,830,000 shares of Class A common stock covered by
the share lending agreement are sold in this offering, Citigroup
will have the right under the share lending agreement to borrow
the unsold portion of those shares in the future, and a
registration rights agreement will obligate Charter to file, at
Citigroup's request, up to three additional registration
statements with respect to these unsold shares until
November 16, 2006. The sale of a substantial number of
shares of Class A common stock or the perception that such
sales could occur could adversely affect the market price for
the Class A common stock because the sale could cause the
amount of the Class A common stock available for sale in
the market to exceed the demand for the Class A common
stock and could also make it more difficult for us to sell
equity securities or equity-related securities in the future at
a time and price that we deem appropriate. This could adversely
affect our ability to fund our current and future obligations.
See "Shares Eligible for Future Sale."
The failure to maintain a minimum share
    price of $1.00 per share of Class A common stock could
    result in delisting of our shares on the Nasdaq National Market,
    which would harm the market price of our Class A common
    stock.
In order to retain our listing on the Nasdaq
National Market we are required to maintain a minimum bid price
of $1.00 per share. Although, as of October 3, 2005, the
trading price of our Class A common stock was
$1.50 per share, our stock has traded below this $1.00
minimum in the recent past. If the bid price falls below the
$1.00 minimum for more than 30 consecutive trading days, we will
have
25
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180 days to satisfy the $1.00 minimum bid
price for a period of at least 10 trading days. If we are unable
to take action to increase the bid price per share (either by
reverse stock split or otherwise), we could be subject to
delisting from the Nasdaq National Market.
The failure to maintain our listing on the Nasdaq
National Market would harm the liquidity of our Class A
common stock and would have adverse effect on the market price
of our common stock. If the stock were to trade it would likely
trade on the OTC "pink sheets," which provide
significantly less liquidity than does Nasdaq. As a result, the
liquidity of our common stock would be impaired, not only in the
number of shares which could be bought and sold, but also
through delays in the timing of transactions, reduction in
security analysts' and news media's coverage and lower
prices for our common stock than might otherwise be attained. In
addition, our common stock would become subject to the
low-priced security or so-called "penny stock" rules
that impose additional sales practice requirements on
broker-dealers who sell such securities.
The effect of the issuance of our shares of
    Class A common stock pursuant to the share lending
    agreement and upon conversion of our 5.875% convertible notes,
    including sales of our Class A common stock in short sale
    transactions by the holders of the 5.875% convertible notes, may
    have a negative effect on the market price of our Class A
    common stock.
We have agreed pursuant to a share lending
agreement to lend to Citigroup Global Markets Limited up to
150 million shares of our common stock, including the
122.8 million shares that are being offered pursuant to
this prospectus and the 27.2 million shares issued in July
2005. In addition, in November 2004, we sold $862.5 million
original aggregate principal amount of 5.875% convertible senior
notes due 2009, which are currently convertible into
approximately 356 million shares of our Class A common
stock. We have been advised by Citigroup Global Markets Limited
that it or an affiliate intends to facilitate the establishment
by holders of those convertible notes of hedged positions in the
convertible notes. While issuance of shares upon the conversion
of the convertible notes may result in a reduction of an equal
number in the outstanding borrowed shares under the share
lending agreement, the increase in the number of shares of our
Class A common stock issued or issuable pursuant to the
share lending agreement or upon conversion of the
5.875% convertible senior notes could have a negative
effect on the market price of our Class A common stock.
Since there will be more shares sold or available for sale, the
market price of our Class A common stock may decline or not
increase as much as it might have without the availability of
such shares. The market price of our Class A common stock
also could decline as a result of other short sales of our
Class A common stock by the purchasers of the
5.875% convertible senior notes to hedge their investment
in the convertible notes. In addition to the hedging
transactions facilitated by the prior share borrow transaction,
we understand that many investors in our 5.875% convertible
senior notes have also already hedged their investment by
selling additional shares of our Class A common stock short
in order to establish initial hedge positions. This offering may
result in establishment of hedged positions by other holders or
in replacement of existing hedged position by those holders who
are already hedged. We expect that all such hedged parties may
increase those positions as the market price of the Class A
common stock increases, since such price increases will increase
the likelihood that such holders will convert their 5.875%
convertible senior notes and receive Class A common stock.
Therefore, such short sales could retard any increase in the
market price of our Class A common stock or cause a
decline. See "Business — Legal Proceedings,"
"Share Lending Agreement" and "Underwriting."
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USE OF PROCEEDS
None of the proceeds from the sale of our
Class A common stock offered by this prospectus will be
received by us. However, pursuant to the share lending
agreement, we will receive a loan fee of $0.001 for each share
that we lend to Citigroup Global Markets Limited, which will be
used for general corporate purposes. See "Share Lending
Agreement."
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PRICE RANGE OF COMMON STOCK AND DIVIDEND
POLICY
Our Class A common stock is quoted on the
Nasdaq National Market under the symbol "CHTR." The
following table sets forth, for the periods indicated, the range
of high and low last reported sale price per share of
Class A common stock on the Nasdaq National Market. There
is no established trading market for our Class B common
stock.
2005
High
Low
First Quarter
$
2.30
$
1.35
Second Quarter
$
1.53
$
0.90
Third Quarter
$
1.71
$
1.14
Fourth Quarter through October 3
$
1.50
$
1.50
2004
High
Low
First Quarter
$
5.43
$
3.99
Second Quarter
$
4.70
$
3.61
Third Quarter
$
3.90
$
2.61
Fourth Quarter
$
3.01
$
2.03
2003
High
Low
First Quarter
$
1.73
$
0.76
Second Quarter
$
4.18
$
0.94
Third Quarter
$
5.50
$
3.32
Fourth Quarter
$
4.71
$
3.72
2002
High
Low
First Quarter
$
16.85
$
9.10
Second Quarter
$
11.53
$
2.96
Third Quarter
$
4.65
$
1.81
Fourth Quarter
$
2.27
$
0.76
As of June 30, 2005, there were
3,797 holders of record of our Class A common stock,
one holder of our Class B common stock, and 10 holders
of record of our Series A Convertible Redeemable Preferred
Stock.
The last reported sale price of our Class A
common stock on the Nasdaq National Market on October 3,
2005 was $1.50 per share.
We have never paid and do not expect to pay any
cash dividends on our Class A common stock in the
foreseeable future. Charter Holdco is required under certain
circumstances to pay distributions pro rata to all its common
members to the extent necessary for any common member to pay
taxes incurred with respect to its share of taxable income
attributed to Charter Holdco. Covenants in the indentures and
credit agreements governing the debt of our subsidiaries
restrict their ability to make distributions to us and,
accordingly, limit our ability to declare or pay cash dividends.
We intend to cause Charter Holdco and its subsidiaries to retain
future earnings, if any, to finance the operation of the
business of Charter Holdco and its subsidiaries. In addition, we
may only pay dividends from legally available surplus under
Delaware law. Charter elected not to declare the March 31
and June 30, 2005 dividends on its Series A
Convertible Redeemable Preferred Stock because it was unable to
conclude with certainty that it had such surplus. Under the
Certificate of Designation governing the Series A
Convertible Redeemable Preferred Stock, we may not pay dividends
on our common stock unless and until the full cumulative
dividends on all outstanding shares of the Series A
Preferred Stock have been paid for all past dividend periods and
sufficient funds shall have been set aside for payment of the
dividend on the Series A Convertible Redeemable Preferred
Stock for the then current dividend period.
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CAPITALIZATION
The following table sets forth as of
June 30, 2005, on a consolidated basis:
•
cash and cash equivalents;
•
the actual (historical) capitalization of
    Charter;
•
the capitalization of Charter, on a pro forma
    basis to reflect:
(1) the issuance and sale of
    $300 million principal amount of CCO Holdings 8 3/4% senior
    notes due 2013 and the use of a portion of such proceeds to pay
    financing costs and accrued interest in the exchange transaction
    referenced below; and
(2) the exchange of $3.4 billion
    principal amount of Charter Holdings' notes scheduled to
    mature in 2009 and 2010 for CCH I notes and the exchange of
    $3.4 billion principal amount of Charter Holdings'
    notes scheduled to mature in 2011 and 2012 for CIH notes and
    CCH I notes.
The following information should be read in
conjunction with "Selected Historical Consolidated
Financial Data," "Unaudited Pro Forma Consolidated
Financial Statements," "Management's Discussion
and Analysis of Financial Condition and Results of
Operations" and the historical consolidated financial
statements and related notes included elsewhere in this
prospectus.
Historical
Pro Forma
(Dollars in millions)
Cash and cash equivalents
$
40
$
157
Long-term debt:
Charter Communications, Inc.:
5.875% convertible senior notes due 2009(a)
$
838
$
838
4.75% convertible senior notes due 2006
25
25
Charter Holdings:
Senior and senior discount notes(b)
8,339
1,728
CIH:
Senior and senior discount notes(c)(d)
—
2,380
CCH I:
11.00% senior notes due 2015(d)
—
3,686
CCH II:
10.250% senior notes due 2010
1,601
1,601
CCO Holdings:
8 3/4% senior notes due 2013
500
794
Senior floating rate notes due 2010
550
550
Charter Operating:
8.000% senior second lien notes due 2012
1,100
1,100
8 3/8% senior second lien notes due 2014
733
733
Renaissance:
10.00% senior discount notes due 2008
116
116
Credit facilities:
Charter Operating(e)
5,445
5,445
Total long-term debt
19,247
18,996
Preferred stock —
    redeemable(f)
55
55
Minority interest(g)
659
659
Shareholders' deficit:
Class A common stock; $.001 par value;
    1.75 billion shares authorized; 304,941,082 shares
    issued and outstanding(h)
—
—
Class B common stock; $.001 par value;
    750 million shares authorized; 50,000 shares issued
    and outstanding
—
—
Preferred stock; $.001 par value;
    250 million shares authorized; no non-redeemable shares
    issued and outstanding
—
—
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Historical
Pro Forma
(Dollars in millions)
Additional paid-in-capital
4,802
4,802
Accumulated deficit
(9,905
)
(9,411
)
Accumulated other comprehensive loss
1
1
Total shareholders' deficit
(5,102
)
(4,608
)
Total capitalization
$
14,859
$
15,102
(a)
Represents $863 million of 5.875%
    convertible senior notes of which $30 million, related to
    certain provisions of the 5.875% convertible senior notes that
    for accounting purposes were derivatives which required
    bifurcation, was recorded as accounts payable and accrued
    expenses and other long-term liabilities with the resulting
    long-term debt of $832 million. The debt has accreted to
    $838 million at June 30, 2005 and will accrete to the
    $863 million face value over three years, the duration of
    our pledged securities.
Historical
Pro Forma
(Dollars in millions)
(b)
Represents the following Charter Holdings notes:
8.250% senior notes due 2007
$
105
$
105
8.625% senior notes due 2009
1,243
293
9.920% senior discount notes due 2011
1,108
198
10.000% senior notes due 2009
640
154
10.250% senior notes due 2010
318
49
11.750% senior discount notes due 2010
450
43
10.750% senior notes due 2009
874
131
11.125% senior notes due 2011
500
217
13.500% senior discount notes due 2011
629
88
9.625% senior notes due 2009
638
107
10.000% senior notes due 2011
708
136
11.750% senior discount notes due 2011
851
113
12.125% senior discount notes due 2012
275
94
Total
$
8,339
$
1,728
Pro Forma
(Dollars in millions)
(c)
Represents the following CIH notes:
11.125% senior notes due 2014
$
151
9.920% senior discount notes due 2014
471
10.000% senior notes due 2014
299
11.750% senior discount notes due 2014
737
13.500% senior discount notes due 2014
541
12.125% senior discount notes due 2015
181
Total
$
2,380
(d)
The pro forma balance sheet amounts of CIH and
    CCH I notes issued in exchange for Charter Holdings notes
    are presented in accordance with GAAP. GAAP requires that the
    CIH notes issued in exchange for Charter Holdings notes and the
    CCH I notes issued in exchange for the 8.625% Charter
    Holdings senior notes due 2009 be recorded at the current
    accreted values of the old Charter Holdings notes as opposed to
    the current accreted values of the new CIH or CCH I notes.
(e)
Unused total potential availability under our
    credit facilities was $870 million as of June 30,
    2005. However, Charter Operating's access to these funds is
    subject to its satisfaction of the covenants and conditions to
    borrowing in those facilities that are more fully described in
    "Management's Discussion and Analysis of Financial
    Condition and Results of Operations — Description of
    Our Outstanding Debt — Charter Operating Credit
    Facilities" and "Description of Certain
    Indebtedness — Charter Operating Credit
    Facilities."
(f)
In connection with Charter's acquisition of
    Cable USA, Inc. and certain cable system assets from affiliates
    of Cable USA, Inc., Charter issued 545,259 shares of
    Series A Convertible Redeemable Preferred Stock valued at
    and with a liquidation preference of $55 million. Holders
    of the preferred
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stock have no voting rights but are entitled to
    receive cumulative cash dividends at an annual rate of 5.75%,
    payable quarterly or 7.75% if not paid but accrued. Beginning
    January 1, 2005, Charter is accruing the dividend on its
    Series A Convertible Redeemable Preferred Stock. The
    preferred stock is redeemable by Charter at its option on or
    after August 31, 2004 and must be redeemed by Charter at
    any time upon a change of control, or if not previously redeemed
    or converted, on August 31, 2008. The preferred stock is
    convertible, in whole or in part, at the option of the holders
    from April 1, 2002 through August 31, 2008, into
    shares of Class A common stock at an initial conversion
    rate equal to a conversion price of $24.71 per share of
    Class A common stock, subject to certain customary
    adjustments.
(g)
Minority interest consists of preferred
    membership interests in CC VIII, LLC, an indirect subsidiary of
    Charter Communications Holding Company, LLC. Paul G. Allen
    indirectly holds the preferred membership units in CC VIII as a
    result of the exercise of put rights originally granted in
    connection with the Bresnan transaction in 2000. An issue has
    arisen regarding the ultimate ownership of the CC VIII
    membership interests following the consummation of the Bresnan
    put transaction on June 6, 2003. See "Certain
    Relationships and Related Transactions — Transactions
    Arising Out of Our Organizational Structure and
    Mr. Allen's Investment in Charter and its
    Subsidiaries — Equity Put Rights — CC
    VIII."
(h)
Although the shares offered by this prospectus
    and issued in July 2005 will be considered issued and
    outstanding, we do not expect they will impact our earnings per
    share under current accounting literature. See "Share
    Lending Agreement" for further discussion related to the
    accounting of the share lending agreement. Pro forma for the
    issuance of these shares, at June 30, 2005 there were
    454,941,082 shares issued and outstanding.
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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS
The following unaudited pro forma consolidated
financial statements are based on the historical consolidated
financial statements of Charter, adjusted on a pro forma basis
to reflect the following transactions as if they had occurred on
January 1, 2004 (for the unaudited pro forma consolidated
statement of operations) and as of June 30, 2005 for the
unaudited pro forma consolidated balance sheet:
(1) the disposition of certain assets in
    March and April 2004 for total proceeds of $735 million and
    the use of such proceeds in each case to pay down credit
    facilities;
(2) the issuance and sale of
    $550 million of CCO Holdings senior floating rate notes in
    December 2004 and $1.5 billion of Charter Operating senior
    second lien notes in April 2004;
(3) an increase in amounts outstanding under
    the Charter Operating credit facilities in April 2004 and the
    use of such funds, together with the proceeds from the sale of
    the Charter Operating senior second lien notes, to refinance
    amounts outstanding under the credit facilities of our
    subsidiaries, CC VI Operating, CC VIII Operating and
    Falcon;
(4) the issuance and sale of
    $863 million of 5.875% convertible senior notes in November
    2004 with proceeds used for (i) the purchase of certain
    U.S. government securities pledged as security for the
    5.875% convertible senior notes (and which we expect to use to
    fund the first six interest payments thereon),
    (ii) redemption of outstanding 5.75% convertible senior
    notes due 2005 and (iii) general corporate purposes;
(5) the repayment of $530 million of
    borrowings under the Charter Operating revolving credit facility
    with net proceeds from the issuance and sale of the CCO Holdings
    senior floating rate notes in December 2004, which were included
    in our cash balance at December 31, 2004;
(6) the redemption of all of CC V
    Holdings, LLC's outstanding 11.875% senior discount notes
    due 2008 with cash on hand;
(7) the issuance and sale of
    $300 million of 8 3/4% CCO Holdings senior notes in August
    2005 and the use of a portion of such proceeds to pay financing
    costs and accrued interest in the exchange transaction
    referenced below;
(8) the exchange of $3.4 billion
    principal amount of Charter Holdings' notes scheduled to
    mature in 2009 and 2010 for CCH I notes and the exchange of
    $3.4 billion principal amount of Charter Holdings'
    notes scheduled to mature in 2011 and 2012 for CIH notes and
    CCH I notes; and
(9) the issuance of 27.2 million shares
    in July 2005 and the shares offered hereby pursuant to a
    share lending agreement, the sole effect of which is to increase
    common shares issued and outstanding. See "Share Lending
    Agreement."
The unaudited pro forma adjustments are based on
information available to us as of the date of this prospectus
and certain assumptions that we believe are reasonable under the
circumstances such adjustments may be subject to change based on
the finalization of the accounting for the above transactions.
The Unaudited Pro Forma Consolidated Financial Statements
required allocation of certain revenues and expenses and such
information has been presented for comparative purposes and is
not intended (a) to provide any indication of what our
actual financial position or results of operations would have
been had the transactions described above been completed on the
dates indicated or (b) to project our results of operations
for any future date.
32
Table of Contents
CHARTER COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF
OPERATIONS
For the Six Months Ended June 30,
2004
Asset
Financing
Historical
Dispositions(a)
Transactions(b)
Pro Forma
(Dollars in millions, except per share and share amounts)
Revenues
Video
$
1,695
$
(21
)
$
—
$
1,674
High-speed Internet
349
(3
)
—
346
Advertising sales
132
(1
)
—
131
Commercial
114
(2
)
—
112
Other
163
(2
)
—
161
Total
2,453
(29
)
—
2,424
Costs and Expenses
Operating (excluding depreciation and
    amortization)
1,027
(12
)
—
1,015
Selling, general and administrative
483
(4
)
—
479
Depreciation and amortization
734
(6
)
—
728
(Gain) loss on sale of assets, net
(104
)
106
—
2
Option compensation expense, net
26
—
—
26
Special charges, net
97
—
—
97
2,263
84
—
2,347
Income from operations
190
(113
)
—
77
Interest expense, net
(803
)
4
(30
)
(829
)
Gain on derivative instruments and hedging
    activities, net
56
—
—
56
Loss on debt to equity conversions
(23
)
—
—
(23
)
Loss on extinguishment of debt
(21
)
—
21
—
Other, net
—
—
—
—
(791
)
4
(9
)
(796
)
Loss before minority interest, income taxes, and
    cumulative effect of accounting change
(601
)
(109
)
(9
)
(719
)
Minority interest
(10
)
—
—
(10
)
Loss before income taxes and cumulative effect of
    accounting change
(611
)
(109
)
(9
)
(729
)
Income tax benefit
(97
)
15
—
(82
)
Loss before cumulative effect of accounting change
$
(708
)
$
(94
)
$
(9
)
$
(811
)
Loss per common share, basic and diluted
$
(2.39
)
$
(2.72
)
Weighted average common shares outstanding, basic
    and diluted(c)
297,814,091
297,814,091
33
Table of Contents
(a)
Represents the elimination of operating results
    related to the disposition of certain assets in March and April
    2004 and a reduction of interest expense related to the use of
    the net proceeds from such sales to repay a portion of our
    subsidiaries' credit facilities.
(b)
Represents adjustment to interest expense
    associated with the completion of the financing transactions
    discussed in pro forma assumptions two through eight (in
    millions):
Interest on the Charter Operating senior second
    lien notes issued in April 2004 and the amended and restated
    Charter Operating credit facilities
$
114
Amortization of deferred financing costs
8
Less — Historical interest expense for
    Charter Operating credit facilities and on subsidiary credit
    facilities repaid
(83
)
39
Interest on $863 million of 5.875%
    convertible senior notes issued in November 2004
25
Amortization of deferred financing costs
2
Less — Interest from $144 million
    of securities pledged for interest payments on convertible notes
(1
)
Historical interest expense on $588 million
    of 5.75% convertible senior notes retired with proceeds
(19
)
7
Interest on $550 million of CCO Holdings
    senior floating rate notes issued in December 2004
18
Amortization of deferred financing costs
1
Less — Historical interest expense for
    Charter Operating's revolving credit facility repaid with
    cash on hand in February 2005
(13
)
Historical interest expense for the CC V
    Holdings, LLC 11.875% senior discount notes repaid with cash on
    hand in March 2005
(7
)
(1
)
Interest on $300 million of CCO Holdings 8
    3/4% senior notes issued in August 2005
13
Interest on new CCH I notes issued in September
    2005 in exchange for CCH notes
186
Amortization of deferred financing costs
3
Less — Historical interest expense on
    CCH notes exchanged for CCH I notes
(217
)
(28
)
Net increase in interest expense
$
30
Adjustment to loss on extinguishment of debt
    represents the elimination of the write-off of deferred
    financing fees and third party costs related to the Charter
    Operating refinancing in April 2004.
(c)
Loss per common share, basic and diluted assumes
    none of the membership units of Charter Communications Holding
    Company, LLC are exchanged for Charter common stock and none of
    the outstanding options to purchase membership units of Charter
    Communications Holding Company, LLC that are automatically
    exchanged for Charter common stock are exercised. Basic loss per
    share equals loss before cumulative effect of accounting change
    less dividends on preferred stock-redeemable divided by weighted
    average shares outstanding. If the membership units were
    exchanged or options exercised, the effects would be
    antidilutive. Therefore, basic and diluted loss per common share
    is the same. Although the shares offered by this prospectus will
    be considered issued and outstanding, we do not expect they will
    impact our earnings per share under current accounting
    literature. See "Share Lending Agreement" for further
    discussion related to the accounting of the share lending
    agreement.
34
Table of Contents
CHARTER COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF
OPERATIONS
For the Year Ended December 31,
2004
Asset
Financing
Historical
Dispositions(a)
Transactions(b)
Pro Forma
(Dollars in millions, except per share and share amounts)
Revenues
Video
$
3,373
$
(21
)
$
—
$
3,352
High-speed Internet
741
(3
)
—
738
Advertising sales
289
(1
)
—
288
Commercial
238
(2
)
—
236
Other
336
(2
)
—
334
Total
4,977
(29
)
—
4,948
Costs and Expenses
Operating (excluding depreciation and
    amortization)
2,080
(12
)
—
2,068
Selling, general and administrative
971
(4
)
—
967
Depreciation and amortization
1,495
(6
)
—
1,489
Impairments of franchises
2,433
—
—
2,433
Gain (loss) on sale of assets, net
(86
)
106
—
20
Option compensation expense, net
31
—
—
31
Special charges, net
104
—
—
104
Unfavorable contracts and other settlements
(5
)
—
—
(5
)
7,023
84
—
7,107
Loss from operations
(2,046
)
(113
)
—
(2,159
)
Interest expense, net
(1,670
)
4
(13
)
(1,679
)
Gain on derivative instruments and hedging
    activities, net
69
—
—
69
Loss on debt to equity conversions
(23
)
—
—
(23
)
Loss on extinguishment of debt
(31
)
—
31
—
Other, net
3
—
—
3
(1,652
)
4
18
(1,630
)
Loss before minority interest, income taxes, and
    cumulative effect of accounting change
(3,698
)
(109
)
18
(3,789
)
Minority interest
19
—
—
19
Loss before income taxes and cumulative effect of
    accounting change
(3,679
)
(109
)
18
(3,770
)
Income tax benefit
103
15
—
118
Loss before cumulative effect of accounting change
$
(3,576
)
$
(94
)
$
18
$
(3,652
)
Loss per common share, basic and diluted
$
(11.92
)
$
(12.16
)
Weighted average common shares outstanding, basic
    and diluted(c)
300,291,877
300,291,877
35
Table of Contents
(a)
Represents the elimination of operating results
    related to the disposition of certain assets in March and April
    2004 and a reduction of interest expense related to the use of
    the net proceeds from such sales to repay a portion of our
    subsidiaries' credit facilities.
(b)
Represents adjustment to interest expense
    associated with the completion of the financing transactions
    discussed in pro forma assumptions two through eight (in
    millions):
Interest on the Charter Operating senior second
    lien notes issued in April 2004 and the amended and
    restated Charter Operating credit facilities
$
114
Amortization of deferred financing costs
8
Less — Historical interest expense for
    Charter Operating credit facilities and on subsidiary credit
    facilities repaid
(83
)
39
Interest on $863 million of 5.875%
    convertible senior notes issued in November 2004
45
Amortization of deferred financing costs
4
Less — Interest from $144 million
    of securities pledged for interest payments on convertible notes
(2
)
Historical interest expense on $588 million
    of 5.75% convertible senior notes retired with proceeds
(37
)
10
Interest on $550 million of CCO Holdings
    senior floating rate notes issued in December 2004
35
Amortization of deferred financing costs
2
Less — Historical interest expense for
    Charter Operating's revolving credit facility repaid with
    cash on hand in February 2005
(30
)
Historical interest expense for the CC V
    Holdings, LLC 11.875% senior discount notes repaid with cash on
    hand in March 2005
(13
)
(6
)
Interest on $300 million of CCO Holdings 8
    3/4% senior notes issued in August 2005
27
Interest on new CCH I notes issued in
    September 2005 in exchange for CCH notes
372
Amortization of deferred financing costs
6
Less — Historical interest expense on
    CCH notes exchanged for CCH I notes
(435
)
(57
)
Net increase in interest expense
$
13
Adjustment to loss on extinguishment of debt
    represents the elimination of the write-off of deferred
    financing fees and third party costs related to the Charter
    Operating refinancing in April 2004 and the elimination of the
    premium paid to retire the 5.75% convertible senior notes and
    the write-off of the related deferred financing fees.
(c)
Loss per common share, basic and diluted assumes
    none of the membership units of Charter Communications Holding
    Company, LLC are exchanged for Charter common stock and none of
    the outstanding options to purchase membership units of Charter
    Communications Holding Company, LLC that are automatically
    exchanged for Charter common stock are exercised. Basic loss per
    share equals loss before cumulative effect of accounting change
    less dividends on preferred stock-redeemable divided by weighted
    average shares outstanding. If the membership units were
    exchanged or options exercised, the effects would be
    antidilutive. Therefore, basic and diluted loss per common share
    is the same. Although the shares offered by this prospectus will
    be considered issued and outstanding, we do not expect they will
    impact our earnings per share under current accounting
    literature. See "Share Lending Agreement" for further
    discussion related to the accounting of the share lending
    agreement.
36
Table of Contents
CHARTER COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF
OPERATIONS
For the Six Months Ended June 30,
2005
Financing
Historical
Transactions(a)
Pro Forma
(Dollars in millions, except per share and share amounts)
Revenues
Video
$
1,703
$
—
$
1,703
High-speed Internet
441
—
441
Advertising sales
140
—
140
Commercial
134
—
134
Other
176
—
176
Total revenues
2,594
—
2,594
Costs and Expenses
Operating (excluding depreciation and
    amortization)
1,128
—
1,128
Selling, general and administrative
493
—
493
Depreciation and amortization
759
—
759
Asset impairment charges
39
—
39
Loss on sale of assets, net
4
—
4
Option compensation expense, net
8
—
8
Special charges, net
2
—
2
2,433
—
2,433
Income from operations
161
—
161
Interest expense, net
(871
)
21
(850
)
Gain on derivative instruments and hedging
    activities, net
26
—
26
Gain on extinguishment of debt
8
5
13
Gain on investments
21
—
21
(816
)
26
(790
)
Loss before minority interest and income taxes
(655
)
26
(629
)
Minority interest
(6
)
—
(6
)
Loss before income taxes
(661
)
26
(635
)
Income tax expense
(46
)
—
(46
)
Loss before cumulative effect of accounting change
$
(707
)
$
26
$
(681
)
Loss per common share, basic and diluted
$
(2.34
)
$
(2.24
)
Weighted average common shares outstanding, basic
    and diluted(b)
303,465,474
303,465,474
37
Table of Contents
(a)
Represents adjustment to interest expense
    associated with the completion of the financing transactions
    discussed in pro forma assumptions five through eight (in
    millions):
Less — Historical interest expense for
    Charter Operating's revolving credit facility repaid with
    cash on hand in February 2005
$
(3
)
Historical interest expense for the CC V Holdings
    11.875% senior discount notes repaid with cash on hand in
    March 2005
(3
)
(6
)
Interest on $300 million of CCO Holdings
    8 3/4% senior notes issued in August 2005
13
Interest on new CCH I notes issued in September
    2005 in exchange for CCH notes
186
Amortization of deferred financing costs
3
Less — Historical interest expense on
    CCH notes exchanged for CCH I notes
(217
)
(28
)
Net increase in interest expense
$
(21
)
Adjustment to loss on extinguishment of debt
    represents the elimination of losses related to the redemption
    of CC V Holdings, LLC 11.875% notes due 2008.
(b)
Loss per common share, basic and diluted assumes
    none of the membership units of Charter Communications Holding
    Company, LLC are exchanged for Charter common stock and none of
    the outstanding options to purchase membership units of Charter
    Communications Holding Company, LLC that are automatically
    exchanged for Charter common stock are exercised. Basic loss per
    share equals loss before cumulative effect of accounting change
    less dividends on preferred stock-redeemable divided by weighted
    average shares outstanding. If the membership units were
    exchanged or options exercised, the effects would be
    antidilutive. Therefore, basic and diluted loss per common share
    is the same. Although the shares offered by this prospectus will
    be considered issued and outstanding, we do not expect they will
    impact our earnings per share under current accounting
    literature. See "Share Lending Agreement" for further
    discussion related to the accounting of the share lending
    agreement.
38
Table of Contents
CHARTER COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE
SHEET
As of June 30, 2005
Financing
Historical
Transactions
Pro Forma
(Dollars in millions)
ASSETS
Current assets:
Cash and cash equivalents
$
40
$
117
(a)
$
157
Accounts receivable, net
183
—
183
Prepaid expenses and other current assets
82
—
82
Total current assets
305
117
422
Investment in cable properties:
Property, plant and equipment, net
6,075
—
6,075
Franchises, net
9,839
—
9,839
Total investment in cable properties, net
15,914
—
15,914
Other noncurrent assets
560
12
(b)
572
Total assets
$
16,779
$
129
$
16,908
LIABILITIES AND SHAREHOLDERS'
    DEFICIT
Current liabilities:
Accounts payable and accrued expenses
$
1,224
$
(114
)(c)
$
1,110
Total current liabilities
1,224
(114
)
1,110
Long-term debt
19,247
(251
)(d)
18,996
Deferred management fees — related
    party
14
—
14
Other long-term liabilities
682
—
682
Minority interest
659
—
659
Preferred stock —
    redeemable
55
—
55
Shareholders' deficit:
Class A common stock
—
—
—
Class B common stock
—
—
—
Preferred stock
—
—
—
Additional paid-in capital
4,802
—
4,802
Accumulated deficit
(9,905
)
494
(e)
(9,411
)
Accumulated other comprehensive income
1
—
1
Total shareholders' deficit
(5,102
)
494
(4,608
)
Total liabilities and shareholders'
    deficit
$
16,779
$
129
$
16,908
(a)
Represents increase in cash as a result of
    $289 million of net proceeds from the issuance of
    $300 million principal amount of 8 3/4% CCO Holdings
    senior notes in August 2005 and the use of $172 million of
    cash to repay $114 million of accrued interest on CCH notes
    tendered for CCH I notes and to pay $58 million of
    estimated financing fees in connection with the exchange offer.
39
Table of Contents
(b)
Represents $5 million of deferred financing
    fees related to the CCO Holdings offering and
    $39 million of deferred financing fees related to the
    exchange offer offset by $32 million of deferred financing
    fees related to the old CCH notes tendered for CCH I notes
    that will be written off.
(c)
Represents accrued interest as of June 30,
    2005 on CCH notes tendered for CCH I notes to be paid at
    closing of the exchange offer.
(d)
Represents the adjustment to debt as a result of
    the completion of the exchange offer and the issuance of
    $300 million principal amount of 8 3/4% CCO Holdings
    senior notes.
CCH notes tendered
$
6,611
Less — New CCH I notes issued
(3,686
)
Book value of new CIH notes issued
(2,380
)
Net decrease in debt from exchange offer
545
Less — Issuance of
    $300 million of 8 3/4% CCO Holdings senior notes
(294
)
Net decrease in debt
$
251
The pro forma balance sheet amounts of CIH and
    CCH I notes issued in exchange for Charter Holdings notes
    are presented in accordance with GAAP. GAAP requires that the
    CIH notes issued in exchange for Charter Holdings notes and the
    CCH I notes issued in exchange for the 8.625% Charter
    Holdings senior notes due 2009 be recorded at the current
    accreted values of the old Charter Holdings notes as opposed to
    the current accreted values of the new CIH or CCH I notes.
(e)
Represents the adjustment to accumulated deficit
    as a result of the expected gain on extinguishment of debt
    related to the exchange offers.
Net discount captured on exchange offer
$
545
Less — CCH deferred financing fees
    associated with notes tendered for CCH I notes to be
    written off
(32
)
Financing fees associated with CIH and CCH I
    notes not capitalizable
(19
)
Expected gain on extinguishment of debt
$
494
40
Table of Contents
SELECTED HISTORICAL CONSOLIDATED FINANCIAL
DATA
The following table presents summary financial
and other data for Charter and its subsidiaries, and has been
derived from (i) the audited consolidated financial
statements of Charter and its subsidiaries for the five years
ended December 31, 2004 and (ii) the unaudited
consolidated financial statements of Charter and its
subsidiaries for the six months ended June 30, 2004 and
2005. The consolidated financial statements of Charter and its
subsidiaries for each of the years ended December 31, 2000
to 2004 have been audited by KPMG LLP, an independent registered
public accounting firm. The following information should be read
in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
and the historical consolidated financial statements and related
notes included elsewhere in this prospectus.
Six Months Ended
Year Ended December 31,
June 30,
2000
2001
2002
2003
2004
2004
2005
(Dollars in millions, except share and per share amounts)
Statement of Operations Data:
Revenues
$
3,141
$
3,807
$
4,566
$
4,819
$
4,977
$
2,453
$
2,594
Costs and Expenses:
Operating (excluding depreciation and
    amortization)
1,187
1,486
1,807
1,952
2,080
1,027
1,128
Selling, general and administrative
606
826
963
940
971
483
493
Depreciation and amortization
2,398
2,683
1,436
1,453
1,495
734
759
Impairment of franchises
—
—
4,638
—
2,433
—
—
Asset impairment charges
—
—
—
—
—
—
39
(Gain) loss on sale of assets, net
—
10
3
5
(86
)
(104
)
4
Option compensation expense (income), net
38
(5
)
5
4
31
26
8
Special charges, net
—
18
36
21
104
97
2
Unfavorable contracts and other settlements
—
—
—
(72
)
(5
)
—
—
4,229
5,018
8,888
4,303
7,023
2,263
2,433
Income (loss) from operations
(1,088
)
(1,211
)
(4,322
)
516
(2,046
)
190
161
Interest expense, net
(1,040
)
(1,310
)
(1,503
)
(1,557
)
(1,670
)
(803
)
(871
)
Gain (loss) on derivative instruments and hedging
    activities, net
—
(50
)
(115
)
65
69
56
26
Loss on debt to equity conversions
—
—
—
—
(23
)
(23
)
—
Gain (loss) on extinguishment of debt
—
—
—
267
(31
)
(21
)
8
Other, net
(20
)
(59
)
(4
)
(16
)
3
—
21
Loss before minority interest, income taxes and
    cumulative effect of accounting change
(2,148
)
(2,630
)
(5,944
)
(725
)
(3,698
)
(601
)
(655
)
Minority interest(a)
1,280
1,461
3,176
377
19
(10
)
(6
)
Loss before income taxes and cumulative effect of
    accounting change
(868
)
(1,169
)
(2,768
)
(348
)
(3,679
)
(611
)
(661
)
Income tax benefit (expense)
10
12
460
110
103
(97
)
(46
)
Loss before cumulative effect of accounting change
(858
)
(1,157
)
(2,308
)
(238
)
(3,576
)
(708
)
(707
)
Cumulative effect of accounting change, net of tax
—
(10
)
(206
)
—
(765
)
—
—
Net loss
(858
)
(1,167
)
(2,514
)
(238
)
(4,341
)
(708
)
(707
)
Dividends on preferred stock —
    redeemable
—
(1
)
(3
)
(4
)
(4
)
(2
)
(2
)
Net loss applicable to common stock
$
(858
)
$
(1,168
)
$
(2,517
)
$
(242
)
$
(4,345
)
$
(710
)
$
(709
)
Loss per common share, basic and diluted
$
(3.80
)
$
(4.33
)
$
(8.55
)
$
(0.82
)
$
(14.47
)
$
(2.39
)
$
(2.34
)
Weighted-average common shares outstanding, basic
    and diluted
225,697,775
269,594,386
294,440,261
294,597,519
300,291,877
297,814,091
303,465,474
41
Table of Contents
Six Months Ended
Year Ended December 31,
June 30,
2000
2001
2002
2003
2004
2004
2005
(Dollars in millions, except share and per share amounts)
Other Data:
Deficiencies of earnings to cover fixed charges(a)
$
2,148
$
2,630
$
5,944
$
725
$
3,698
$
601
$
655
Balance Sheet Data (end of period):
Total assets
$
24,352
$
26,463
$
22,384
$
21,364
$
17,673
$
20,519
$
16,779
Long-term debt
13,061
16,343
18,671
18,647
19,464
18,411
19,247
Minority interest(b)
4,571
4,434
1,050
689
648
713
659
Redeemable securities
1,104
—
—
—
—
—
—
Preferred stock — redeemable
—
51
51
55
55
55
55
Shareholders' equity (deficit)
2,767
2,585
41
(175
)
(4,406
)
(797
)
(5,102
)
(a)
Earnings include net loss plus fixed charges.
    Fixed charges consist of interest expense and an estimated
    interest component of rent expense.
(b)
Minority interest represents the percentage of
    Charter Communications Holding Company, LLC not owned by
    Charter, plus preferred membership interests in CC VIII, LLC, an
    indirect subsidiary of Charter. Paul G. Allen indirectly holds
    the preferred membership units in CC VIII, LLC as a result of
    the exercise of a put right originally granted in connection
    with the Bresnan transaction in 2000. An issue has arisen
    regarding the ultimate ownership of the CC VIII, LLC membership
    interest following the consummation of the Bresnan put
    transaction on June 6, 2003. See "Certain
    Relationships and Related Transactions — Transactions
    Arising Out of Our Organizational Structure and
    Mr. Allen's Investment in Charter and Its
    Subsidiaries — Equity Put Rights — CC
    VIII." Effective January 1, 2005, Charter ceased
    recognizing minority interest in earnings and losses of
    CC VIII, LLC for financial reporting purposes until such
    time as the resolution of the issue is determinable or other
    events occur. Reported losses allocated to minority interest on
    the statement of operations are limited to the extent of any
    remaining minority interest on the balance sheet related to
    Charter Communications Holding Company, LLC. Because minority
    interest in Charter Communications Holding Company, LLC was
    substantially eliminated at December 31, 2003, beginning in
    2004, Charter began to absorb substantially all losses before
    income taxes that otherwise would have been allocated to
    minority interest. As a result of negative equity at Charter
    Communications Holding Company, LLC, during the year ended
    December 31, 2004, no additional losses were allocated to
    minority interest, resulting in an approximate additional
    $2.4 billion of net losses. Under our existing capital
    structure, Charter will absorb substantially all future losses.
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SUPPLEMENTARY QUARTERLY FINANCIAL
DATA
The following tables present quarterly financial
data for the periods presented on the consolidated statements of
operations (Dollars in millions, except share and per share
amounts):
Three Months Ended
Three Months Ended
March 31, 2005
June 30, 2005
Revenues
$
1,271
$
1,323
Income from operations
51
110
Loss before minority interest and income taxes
(334
)
(321
)
Net loss applicable to common stock
(353
)
(356
)
Basic and diluted loss per common share
(1.16
)
(1.18
)
Weighted-average shares outstanding
303,308,880
303,620,347
Year Ended December 31, 2004
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Revenues
$
1,214
$
1,239
$
1,248
$
1,276
Income (loss) from operations
175
15
(2,344
)
108
Loss before minority interest, income taxes and
    cumulative effect of accounting change
(235
)
(366
)
(2,776
)
(321
)
Net loss applicable to common stock
(294
)
(416
)
(3,295
)
(340
)
Basic and diluted loss per common share before
    cumulative effect of accounting change
(1.00
)
(1.39
)
(8.36
)
(1.12
)
Basic and diluted loss per common share
(1.00
)
(1.39
)
(10.89
)
(1.12
)
Weighted-average shares outstanding
295,106,077
300,522,815
302,604,978
302,934,348
Year Ended December 31, 2003
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Revenues
$
1,178
$
1,217
$
1,207
$
1,217
Income from operations
77
112
117
210
Income (loss) before minority interest and
    income taxes
(301
)
(286
)
23
(161
)
Net income (loss) applicable to common stock
(182
)
(38
)
36
(58
)
Basic income (loss) per common share
(0.62
)
(0.13
)
0.12
(0.20
)
Diluted Income (loss) per common share
(0.62
)
(0.13
)
0.07
(0.20
)
Weighted-average shares outstanding, basic
294,466,137
294,474,596
294,566,878
294,875,504
Weighted-average shares outstanding, diluted
294,466,137
294,474,596
637,822,843
294,875,504
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MANAGEMENT'S DISCUSSION AND
ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Reference is made to "Disclosure Regarding
Forward-Looking Statements," which describes important
factors that could cause actual results to differ from
expectations and non-historical information contained herein. In
addition, the following discussion should be read in conjunction
with the audited consolidated financial statements of Charter
Communications, Inc. and subsidiaries as of and for the years
ended December 31, 2004, 2003 and 2002 and the unaudited
consolidated financial statements of Charter Communications,
Inc. and subsidiaries as of and for the six months ended
June 30, 2005.
Introduction
In 2004 and 2005, we completed several
transactions that improved our liquidity. Our efforts in this
regard resulted in the completion of a number of transactions in
2004 and 2005, as follows:
•
the September 2005 exchange by Charter Holdings,
    CCH I and CIH of approximately $6.8 billion in total
    principal amount of outstanding debt securities of Charter
    Holdings in a private placement for new debt securities;
•
the August 2005 sale by our subsidiaries,
    CCO Holdings and CCO Holdings Capital Corp., of
    $300 million of 8 3/4% senior notes due 2013;
•
the March and June 2005 issuance of
    $333 million of Charter Operating notes in exchange for
    $346 million of Charter Holdings notes;
•
the March and June 2005 repurchase of
    $131 million of our 4.75% convertible senior notes due 2006
    leaving $25 million in principal amount outstanding;
•
the March 2005 redemption of all of CC V
    Holdings, LLC's outstanding 11.875% senior discount notes
    due 2008 at a total cost of $122 million;
•
the December 2004 sale by our subsidiaries,
    CCO Holdings and CCO Holdings Capital Corp., of
    $550 million of senior floating rate notes due 2010;
•
the November 2004 sale of
    $862.5 million of 5.875% convertible senior notes due 2009
    and the December 2004 redemption of all of our outstanding
    5.75% convertible senior notes due 2005 ($588 million
    principal amount);
•
the April 2004 sale of $1.5 billion of
    senior second-lien notes by our subsidiary, Charter Operating,
    together with the concurrent refinancing of its credit
    facilities; and
•
the sale in the first half of 2004 of non-core
    cable systems for a total of $735 million, the proceeds of which
    were used to reduce indebtedness.
During the years 1999 through 2001, we grew
significantly, principally through acquisitions of other cable
businesses financed by debt and, to a lesser extent, equity. We
have no current plans to pursue any significant acquisitions.
However, we may pursue exchanges of non-strategic assets or
divestitures, such as the sale of cable systems to Atlantic
Broadband Finance, LLC discussed under
"— Liquidity and Capital Resources —
Sale of Assets," below. We therefore do not believe that
our historical growth rates are accurate indicators of future
growth.
The industry's and our most significant
operational challenges in 2004 and 2003 included competition
from DBS providers and DSL service providers. See
"Business — Competition." We believe that
competition from DBS has resulted in net analog video customer
losses and decreased growth rates for digital video customers.
Competition from DSL providers combined with limited
opportunities to expand our customer base now that approximately
30% of our analog video customers subscribe to our high-speed
Internet services has resulted in decreased growth rates for
high-speed Internet customers. In the recent past, we have grown
revenues by offsetting video customer losses with price
increases and sales of incremental advanced services such as
high-speed Internet, video on demand, digital video recorders
and high definition television. We expect to continue to grow
revenues through continued growth in high-speed Internet and
incremental new services including telephone, high definition
television, VOD and DVR service.
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Historically, our ability to fund operations and
investing activities has depended on our continued access to
credit under our credit facilities. We expect we will continue
to borrow under our credit facilities from time to time to fund
cash needs. The occurrence of an event of default under our
credit facilities could result in borrowings from these
facilities being unavailable to us and could, in the event of a
payment default or acceleration, trigger events of default under
the indentures governing our outstanding notes and would have a
material adverse effect on us. Approximately $15 million of
indebtedness under our credit facilities is scheduled to mature
during the remainder of 2005. We expect to fund payment of such
indebtedness through borrowings under our revolving credit
facility. See "— Liquidity and Capital
Resources."
Acquisitions
The following table sets forth information
regarding our significant acquisitions from January 1, 2000
to December 31, 2002 (none in 2003, 2004 or 2005):
Purchase Price
Securities
Acquired
Acquisition
Cash
Assumed
Issued/Other
Total
Customers
Date
Paid
Debt
Consideration
Price
(approx)
(Dollars in millions)
Interlake
1/00
$
13
$
—
$
—
$
13
6,000
Bresnan
2/00
1,100
963
1,014
(a)
3,077
695,800
Capital Cable
4/00
60
—
—
60
23,200
Farmington
4/00
15
—
—
15
5,700
Kalamazoo
9/00
—
—
171
(b)
171
50,700
Total 2000 Acquisitions
$
1,188
$
963
$
1,185
$
3,336
781,400
AT&T Systems
6/01
$
1,711
$
—
$
25
$
1,736
(c)
551,100
Cable USA
8/01
45
—
55
(d)
100
30,600
Total 2001 Acquisitions
$
1,756
$
—
$
80
$
1,836
581,700
High Speed Access Corp.
2/02
78
—
—
78
N/A
Enstar Limited Partnership Systems
4/02
48
—
—
48
21,600
Enstar Income Program II-1, L.P.
9/02
15
—
—
15
6,400
Total 2002 Acquisitions
$
141
$
—
$
—
$
141
28,000
Total 2000-2002 Acquisitions
$
3,085
$
963
$
1,265
$
5,313
1,391,100
(a)
Comprised of $385 million in equity in
    Charter Holdco and $629 million of equity in CC VIII.
(b)
In connection with this transaction, we acquired
    all of the outstanding stock of Cablevision of Michigan in
    exchange for 11,173,376 shares of Charter Class A
    common stock.
(c)
Comprised of approximately $1.7 billion, as
    adjusted, in cash and a cable system located in Florida valued
    at approximately $25 million, as adjusted.
(d)
In connection with this transaction, at the
    closing we and Charter Holdco acquired all of the outstanding
    stock of Cable USA and the assets of related affiliates in
    exchange for cash and 505,664 shares of Charter
    Series A convertible redeemable preferred stock. In the
    first quarter of 2003, an additional $0.34 million in cash
    was paid and 39,595 additional shares of Charter Series A
    convertible redeemable preferred stock were issued to certain
    sellers.
All acquisitions were accounted for under the
purchase method of accounting and results of operations were
included in our consolidated financial statements from their
respective dates of acquisition.
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We have no current plans to pursue any
significant acquisitions. However, we will continue to evaluate
opportunities to consolidate our operations through the sale of
cable systems to, or exchange of like-kind assets with, other
cable operators as such opportunities arise, and on a very
limited basis, consider strategic new acquisitions. Our primary
criteria in considering these opportunities are the
rationalization of our operations into geographic clusters and
the potential financial benefits we expect to ultimately realize
as a result of the sale, exchange, or acquisition.
Overview of Operations
Approximately 86% of our revenues for both the
six months ended June 30, 2005 and for the year ended
December 31, 2004, respectively, are attributable to
monthly subscription fees charged to customers for our video,
high-speed Internet, telephone and commercial services provided
by our cable systems. Generally, these customer subscriptions
may be discontinued by the customer at any time. The remaining
14% of revenue is derived primarily from advertising revenues,
franchise fee revenues, which are collected by us but then paid
to local franchising authorities, pay-per-view and VOD
programming where users are charged a fee for individual
programs viewed, installation or reconnection fees charged to
customers to commence or reinstate service, and commissions
related to the sale of merchandise by home shopping services. We
have increased revenues during the past three years, primarily
through the sale of digital video and high-speed Internet
services to new and existing customers and price increases on
video services offset in part by dispositions of systems. Going
forward, our goal is to increase revenues by stabilizing our
analog video customer base, implementing price increases on
certain services and packages and increasing the number of our
customers who purchase high-speed Internet services, digital
video and new products and services such as telephone, VOD, high
definition television and DVR service. To accomplish this, we
are increasing prices for certain services and we are offering
new bundling of services combining digital video and our
advanced services (such as high-speed Internet service and high
definition television) at what we believe are attractive price
points. See "Business — Sales and Marketing"
for more details.
Our success in our efforts to grow revenues and
improve margins will be impacted by our ability to compete
against companies with often fewer regulatory burdens, easier
access to financing, greater personnel resources, greater brand
name recognition and long-established relationships with
regulatory authorities and customers. Additionally, controlling
our cost of operations is critical, particularly cable
programming costs, which have historically increased at rates in
excess of inflation and are expected to continue to increase.
See "Business — Programming" for more
details. We are attempting to control our costs of operations by
maintaining strict controls on expenses. More specifically, we
are focused on managing our cost structure by renegotiating
programming agreements to reduce the rate of historical
increases in programming cost, managing our workforce to control
increases and improve productivity, and leveraging our size in
purchasing activities.
Our expenses primarily consist of operating
costs, selling, general and administrative expenses,
depreciation and amortization expense and interest expense.
Operating costs primarily include programming costs, the cost of
our workforce, cable service related expenses, advertising sales
costs, franchise fees and expenses related to customer billings.
Our income from operations decreased from $190 million for
the six months ended June 30, 2004 to $161 million for
the six months ended June 30, 2005. We had a positive
operating margin (defined as income (loss) from operations
divided by revenues) of 6% and 8% for the six months ended
June 30, 2005 and 2004, respectively. The decline in income
from operations and operating margin for the six months ended
June 30, 2005 is principally due to the one-time gain as a
result of the sale of certain cable systems in Florida,
Pennsylvania, Maryland, Delaware and West Virginia to Atlantic
Broadband Finance, LLC of approximately $106 million,
recognized in the six months ended June 30, 2004 offset by
$85 million recorded in special charges as part of the
terms set forth in memoranda of understanding regarding
settlement of the consolidated Federal Class Action and Federal
Derivative Action which did not recur in 2005. For the years
ended December 31, 2004 and 2002, loss from operations was
$2.0 billion and $4.3 billion, respectively. For the
year ended December 31, 2003, income from operations was
$516 million. Operating margin was 11% for the year ended
December 31, 2003, whereas for the years ending
December 31, 2004 and 2002, we had negative operating
margin of
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41% and 95%, respectively. The improvement in
income from operations and operating margin from 2002 to 2003
was principally due to a $4.6 billion franchise impairment
charge in the fourth quarter of 2002 which did not recur in 2003
and the recognition of gains in 2003 of $93 million related
to unfavorable contracts and other settlements and gain on sale
of systems. Although we do not expect charges for impairment in
the future of comparable magnitude, potential charges could
occur due to changes in market conditions.
We have a history of net losses. Further, we
expect to continue to report net losses for the foreseeable
future. Our net losses are principally attributable to
insufficient revenue to cover the interest costs on our high
level of debt, the depreciation expenses that we incur resulting
from the capital investments we have made in our cable
properties and the amortization and impairment of our franchise
intangibles. We expect that these expenses (other than
impairment of franchises) will remain significant, and we
therefore expect to continue to report net losses for the
foreseeable future. Additionally, because minority interest in
Charter Holdco was substantially eliminated at December 31,
2003, beginning in the first quarter of 2004, we began to absorb
substantially all future losses before income taxes that
otherwise would have been allocated to minority interest. This
resulted in an additional $2.4 billion of net loss for the
year ended December 31, 2004. Under our existing capital
structure, future losses will continue to be absorbed by
Charter. Effective January 1, 2005, we ceased recognizing
minority interest in earnings or losses of CC VIII, LLC for
financial reporting purposes until the dispute between Charter
and Mr. Allen regarding the preferred membership interests
in CC VIII, LLC is determinable or other events occur.
Critical Accounting Policies and
Estimates
Certain of our accounting policies require our
management to make difficult, subjective or complex judgments.
Management has discussed these policies with the Audit Committee
of Charter's board of directors and the Audit Committee has
reviewed the following disclosure. We consider the following
policies to be the most critical in understanding the estimates,
assumptions and judgments that are involved in preparing our
financial statements and the uncertainties that could affect our
results of operations, financial condition and cash flows:
•
Capitalization of labor and overhead costs;
•
Useful lives of property, plant and equipment;
•
Impairment of property, plant, and equipment,
    franchises, and goodwill;
•
Income taxes; and
•
Litigation.
In addition, there are other items within our
financial statements that require estimates or judgment but are
not deemed critical, such as the allowance for doubtful
accounts, but changes in judgment, or estimates in these other
items could also have a material impact on our financial
statements.
Capitalization of labor and overhead
costs.
The cable industry is capital
intensive, and a large portion of our resources are spent on
capital activities associated with extending, rebuilding, and
upgrading our cable network. As of June 30, 2005 and
December 31, 2004 and 2003, the net carrying amount of our
property, plant and equipment (consisting primarily of cable
network assets) was approximately $6.1 billion
(representing 36% of total assets), $6.3 billion
(representing 36% of total assets) and $7.0 billion
(representing 33% of total assets), respectively. Total capital
expenditures for the six months ended June 30, 2005 and the
years ended December 31, 2004, 2003 and 2002 were
approximately $542 million, $924 million,
$854 million and $2.2 billion, respectively.
Costs associated with network construction,
initial customer installations, installation refurbishments and
the addition of network equipment necessary to provide advanced
services are capitalized. Costs capitalized as part of initial
customer installations include materials, direct labor, and
certain indirect costs. These indirect costs are associated with
the activities of personnel who assist in connecting and
activating the new service and consist of compensation and
overhead costs associated with these support functions.
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The costs of disconnecting service at a
customer's dwelling or reconnecting service to a previously
installed dwelling are charged to operating expense in the
period incurred. Costs for repairs and maintenance are charged
to operating expense as incurred, while equipment replacement
and betterments, including replacement of cable drops from the
pole to the dwelling, are capitalized.
We make judgments regarding the installation and
construction activities to be capitalized. We capitalize direct
labor and certain indirect costs ("overhead") using
standards developed from actual costs and applicable operational
data. We calculate standards for items such as the labor rates,
overhead rates and the actual amount of time required to perform
a capitalizable activity. For example, the standard amounts of
time required to perform capitalizable activities are based on
studies of the time required to perform such activities.
Overhead rates are established based on an analysis of the
nature of costs incurred in support of capitalizable activities
and a determination of the portion of costs that is directly
attributable to capitalizable activities. The impact of changes
that resulted from these studies were not significant in the
periods presented.
Labor costs directly associated with capital
projects are capitalized. We capitalize direct labor costs
associated with personnel based upon the specific time devoted
to network construction and customer installation activities.
Capitalizable activities performed in connection with customer
installations include such activities as:
•
Scheduling a "truck roll" to the
    customer's dwelling for service connection;
•
Verification of serviceability to the
    customer's dwelling (i.e., determining whether the
    customer's dwelling is capable of receiving service by our
    cable network and/or receiving advanced or Internet services);
•
Customer premise activities performed by in-house
    field technicians and third-party contractors in connection with
    customer installations, installation of network equipment in
    connection with the installation of expanded services and
    equipment replacement and betterment; and
•
Verifying the integrity of the customer's
    network connection by initiating test signals downstream from
    the headend to the customer's digital set-top terminal.
Judgment is required to determine the extent to
which overhead is incurred as a result of specific capital
activities, and therefore should be capitalized. The primary
costs that are included in the determination of the overhead
rate are (i) employee benefits and payroll taxes associated
with capitalized direct labor, (ii) direct variable costs
associated with capitalizable activities, consisting primarily
of installation and construction vehicle costs, (iii) the
cost of support personnel, such as dispatch, that directly
assist with capitalizable installation activities, and
(iv) indirect costs directly attributable to capitalizable
activities.
While we believe our existing capitalization
policies are appropriate, a significant change in the nature or
extent of our system activities could affect management's
judgment about the extent to which we should capitalize direct
labor or overhead in the future. We monitor the appropriateness
of our capitalization policies, and perform updates to our
internal studies on an ongoing basis to determine whether facts
or circumstances warrant a change to our capitalization
policies. We capitalized direct labor and overhead of
$91 million, $164 million, $174 million and
$335 million for the six months ended June 30, 2005
and the years ended December 31, 2004, 2003 and 2002,
respectively. Capitalized internal direct labor and overhead
costs significantly decreased in 2004 and 2003 compared to 2002
primarily due to the substantial completion of the upgrade of
our systems and a decrease in the amount of capitalizable
installation costs.
Useful lives of property, plant and
equipment.
We evaluate the
appropriateness of estimated useful lives assigned to our
property, plant and equipment, based on annual studies of such
useful lives, and revise such lives to the extent warranted by
changing facts and circumstances. Any changes in estimated
useful lives as a result of these studies, which were not
significant in the periods presented, will be reflected
prospectively beginning in the period in which the study is
completed. The effect of a one-year decrease in the weighted
average remaining useful life of our property, plant and
equipment would be an increase in
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depreciation expense for the year ended
December 31, 2004 of approximately $296 million. The
effect of a one-year increase in the weighted average useful
life of our property, plant and equipment would be a decrease in
depreciation expense for the year ended December 31, 2004
of approximately $198 million.
Depreciation expense related to property, plant
and equipment totaled $753 million, $1.5 billion,
$1.5 billion and $1.4 billion, representing
approximately 31%, 21%, 34% and 16% of costs and expenses, for
the six months ended June 30, 2005 and for the years ended
December 31, 2004, 2003 and 2002, respectively.
Depreciation is recorded using the straight-line composite
method over management's estimate of the estimated useful
lives of the related assets as listed below:
Cable distribution systems
7-20  years
Customer equipment and installations
3-5 years
Vehicles and equipment
1-5 years
Buildings and leasehold improvements
5-15  years
Furniture and fixtures
5 years
Impairment of property, plant and equipment,
franchises and goodwill.
As discussed
above, the net carrying value of our property, plant and
equipment is significant. We also have recorded a significant
amount of cost related to franchises, pursuant to which we are
granted the right to operate our cable distribution network
throughout our service areas. The net carrying value of
franchises as of June 30, 2005, December 31, 2004 and
2003 was approximately $9.8 billion (representing 59% of
total assets), $9.9 billion (representing 56% of total
assets) and $13.7 billion (representing 64% of total
assets), respectively. Furthermore, our noncurrent assets
included approximately $52 million of goodwill.
We adopted SFAS No. 142 on
January 1, 2002. SFAS No. 142 requires that
franchise intangible assets that meet specified indefinite-life
criteria no longer be amortized against earnings, but instead
must be tested for impairment annually based on valuations, or
more frequently as warranted by events or changes in
circumstances. In determining whether our franchises have an
indefinite-life, we considered the exclusivity of the franchise,
the expected costs of franchise renewals, and the technological
state of the associated cable systems with a view to whether or
not we are in compliance with any technology upgrading
requirements. We have concluded that as of June 30, 2005,
December 31, 2004, 2003 and 2002 more than 99% of our
franchises qualify for indefinite-life treatment under
SFAS No. 142, and that less than one percent of our
franchises do not qualify for indefinite-life treatment due to
technological or operational factors that limit their lives.
Costs of finite-lived franchises, along with costs associated
with franchise renewals, are amortized on a straight-line basis
over 10 years, which represents management's best
estimate of the average remaining useful lives of such
franchises. Franchise amortization expense was $2 million
and $4 million for the six months ended June 30, 2005
and for the year ended December 31, 2004, respectively, and
$9 million for each of the years ended December 31,
2003 and 2002. We expect that amortization expense on franchise
assets will be approximately $3 million annually for each
of the next five years. Actual amortization expense in future
periods could differ from these estimates as a result of new
intangible asset acquisitions or divestitures, changes in useful
lives and other relevant factors. Our goodwill is also deemed to
have an indefinite life under SFAS No. 142.
SFAS No. 144,
Accounting for
Impairment or Disposal of Long-Lived Assets
, requires that
we evaluate the recoverability of our property, plant and
equipment and franchise assets which did not qualify for
indefinite-life treatment under SFAS No. 142 upon the
occurrence of events or changes in circumstances which indicate
that the carrying amount of an asset may not be recoverable.
Such events or changes in circumstances could include such
factors as the impairment of our indefinite life franchises
under SFAS No. 142, changes in technological advances,
fluctuations in the fair value of such assets, adverse changes
in relationships with local franchise authorities, adverse
changes in market conditions or poor operating results. Under
SFAS No. 144, a long-lived asset is deemed impaired
when the carrying amount of the asset exceeds the projected
undiscounted future cash flows associated with the asset. No
impairments of long-lived assets were recorded in the years
ended December 31, 2004, 2003 or 2002. We were also
required to evaluate the recoverability of our indefinite-life
franchises, as well as goodwill, as of
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January 1, 2002 upon adoption of
SFAS No. 142, and on an annual basis or more
frequently as deemed necessary.
Under both SFAS No. 144 and
SFAS No. 142, if an asset is determined to be
impaired, it is required to be written down to its estimated
fair market value. We determine fair market value based on
estimated discounted future cash flows, using reasonable and
appropriate assumptions that are consistent with internal
forecasts. Our assumptions include these and other factors:
penetration rates for analog and digital video and high-speed
Internet, revenue growth rates, expected operating margins and
capital expenditures. Considerable management judgment is
necessary to estimate future cash flows, and such estimates
include inherent uncertainties, including those relating to the
timing and amount of future cash flows and the discount rate
used in the calculation.
Based on the guidance prescribed in Emerging
Issues Task Force ("EITF") Issue No. 02-7,
Unit of Accounting for Testing of Impairment of
Indefinite-Lived Intangible Assets
, franchises were
aggregated into essentially inseparable asset groups to conduct
the valuations. The asset groups generally represent geographic
clustering of our cable systems into groups by which such
systems are managed. Management believes such groupings
represent the highest and best use of those assets. We
determined that our franchises were impaired upon adoption of
SFAS No. 142 on January 1, 2002 and as a result
recorded the cumulative effect of a change in accounting
principle of $206 million (approximately $572 million
before minority interest effects of $306 million and tax
effects of $60 million). As required by
SFAS No. 142, the standard has not been retroactively
applied to results for the period prior to adoption.
Our valuations, which are based on the present
value of projected after tax cash flows, result in a value of
property, plant and equipment, franchises, customer
relationships and our total entity value. The value of goodwill
is the difference between the total entity value and amounts
assigned to the other assets. The use of different valuation
assumptions or definitions of franchises or customer
relationships, such as our inclusion of the value of selling
additional services to our current customers within customer
relationships versus franchises, could significantly impact our
valuations and any resulting impairment.
Franchises, for valuation purposes, are defined
as the future economic benefits of the right to solicit and
service potential customers (customer marketing rights), and the
right to deploy and market new services such as interactivity
and telephone to the potential customers (service marketing
rights). Fair value is determined based on estimated discounted
future cash flows using assumptions consistent with internal
forecasts. The franchise after-tax cash flow is calculated as
the after-tax cash flow generated by the potential customers
obtained and the new services added to those customers in future
periods. The sum of the present value of the franchises'
after-tax cash flow in years 1 through 10 and the continuing
value of the after-tax cash flow beyond year 10 yields the fair
value of the franchise. Prior to the adoption of EITF Topic
D-108,
Use of the Residual Method to Value Acquired Assets
Other than Goodwill
, discussed below, we followed a residual
method of valuing our franchise assets, which had the effect of
including goodwill with the franchise assets.
We follow the guidance of EITF Issue 02-17,
Recognition of Customer Relationship Intangible Assets
Acquired in a Business Combination
, in valuing customer
relationships. Customer relationships, for valuation purposes,
represent the value of the business relationship with our
existing customers and are calculated by projecting future
after-tax cash flows from these customers including the right to
deploy and market additional services such as interactivity and
telephone to these customers. The present value of these
after-tax cash flows yields the fair value of the customer
relationships. Substantially all our acquisitions occurred prior
to January 1, 2002. We did not record any value associated
with the customer relationship intangibles related to those
acquisitions. For acquisitions subsequent to January 1,
2002, we did assign a value to the customer relationship
intangible, which is amortized over its estimated useful life.
In September 2004, EITF Topic D-108,
Use of
the Residual Method to Value Acquired Assets Other than
Goodwill,
was issued, which requires the direct method of
separately valuing all intangible assets and does not permit
goodwill to be included in franchise assets. We performed an
impairment assessment as of September 30, 2004, and adopted
Topic D-108 in that assessment resulting in a total franchise
impairment of approximately $3.3 billion. We recorded a
cumulative effect of accounting change of $765 million
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(approximately $875 million before tax
effects of $91 million and minority interest effects of
$19 million) for the year ended December 31, 2004
representing the portion of our total franchise impairment
attributable to no longer including goodwill with franchise
assets. The effect of the adoption was to increase net loss and
loss per share by $765 million and $2.55 for the year ended
December 31, 2004. The remaining $2.4 billion of the
total franchise impairment was attributable to the use of lower
projected growth rates and the resulting revised estimates of
future cash flows in our valuation and was recorded as
impairment of franchises in our consolidated statements of
operations for the year ended December 31, 2004. Sustained
analog video customer losses by us and our industry peers in the
third quarter of 2004 primarily as a result of increased
competition from DBS providers and decreased growth rates in our
and our industry peers' high speed Internet customers in
the third quarter of 2004, in part as a result of increased
competition from DSL providers, led us to lower our projected
growth rates and accordingly revise our estimates of future cash
flows from those used at October 1, 2003. See
"Business — Competition."
The valuation completed at October 1, 2003
showed franchise values in excess of book value and thus
resulted in no impairment. Our annual impairment assessment as
of October 1, 2002, based on revised estimates from
January 1, 2002 of future cash flows and projected
long-term growth rates in our valuation, led to the recognition
of a $4.6 billion impairment charge in the fourth quarter
of 2002.
The valuations used in our impairment assessments
involve numerous assumptions as noted above. While economic
conditions, applicable at the time of the valuation, indicate
the combination of assumptions utilized in the valuations are
reasonable, as market conditions change so will the assumptions
with a resulting impact on the valuation and consequently the
potential impairment charge.
Sensitivity Analysis.
The effect on the impairment charge
recognized in the third quarter of 2004 of the indicated
increase/decrease in the selected assumptions is shown below:
Percentage/
Percentage Point
Impairment Charge
Assumption
Change
Increase/(Decrease)
(Dollars in millions)
Annual Operating Cash Flow(1)
+/- 5%
$
(890)/$921
Long-Term Growth Rate(2)
+/- 1 pts
(3)
(1,579)/1,232
Discount Rate
+/- 0.5 pts
(3)
1,336/(1,528)
(1)
Operating Cash Flow is defined as revenues less
    operating expenses and selling general and administrative
    expenses.
(2)
Long-Term Growth Rate is the rate of cash flow
    growth beyond year ten.
(3)
A percentage point change of one point equates to
    100 basis points.
Income Taxes.
All
operations are held through Charter Holdco and its direct and
indirect subsidiaries. Charter Holdco and the majority of its
subsidiaries are not subject to income tax. However, certain of
these subsidiaries are corporations and are subject to income
tax. All of the taxable income, gains, losses, deductions and
credits of Charter Holdco are passed through to its members:
Charter, Charter Investment, Inc. and Vulcan Cable III Inc.
Charter is responsible for its share of taxable income or loss
of Charter Holdco allocated to it in accordance with the Charter
Holdco limited liability company agreement ("LLC
Agreement") and partnership tax rules and regulations.
The LLC Agreement provided for certain special
allocations of net tax profits and net tax losses (such net tax
profits and net tax losses being determined under the applicable
federal income tax rules for determining capital accounts).
Under the LLC Agreement, through the end of 2003, net tax losses
of Charter Holdco that would otherwise have been allocated to
Charter based generally on its percentage ownership of
outstanding common units were allocated instead to membership
units held by Vulcan Cable III Inc. and Charter Investment,
Inc. (the "Special Loss Allocations") to the extent of
their respective capital account balances. After 2003, under the
LLC Agreement, net tax losses of Charter Holdco are allocated to
Charter, Vulcan Cable III Inc. and Charter Investment, Inc.
based generally on their respective percentage ownership of
outstanding common units to the extent of their respective
capital
51
Table of Contents
account balances. The LLC Agreement further
provides that, beginning at the time Charter Holdco generates
net tax profits, the net tax profits that would otherwise have
been allocated to Charter based generally on its percentage
ownership of outstanding common membership units will instead
generally be allocated to Vulcan Cable III Inc. and Charter
Investment, Inc. (the "Special Profit Allocations").
The Special Profit Allocations to Vulcan Cable III Inc. and
Charter Investment, Inc. will generally continue until the
cumulative amount of the Special Profit Allocations offsets the
cumulative amount of the Special Loss Allocations. The amount
and timing of the Special Profit Allocations are subject to the
potential application of, and interaction with, the Curative
Allocation Provisions described in the following paragraph. The
LLC Agreement generally provides that any additional net tax
profits are to be allocated among the members of Charter Holdco
based generally on their respective percentage ownership of
Charter Holdco common membership units.
Because the respective capital account balance of
each of Vulcan Cable III Inc. and Charter Investment, Inc.
was reduced to zero by December 31, 2002, certain net tax
losses of Charter Holdco that were to be allocated for 2002,
2003, 2004 and possibly later years, subject to resolution of
the issue described in "Certain Relationships and Related
Transactions — Transactions Arising out of Our
Organizational Structure and Mr. Allen's Investment in
Charter Communications, Inc. and Its Subsidiaries —
Equity Put Rights — CC VIII," to Vulcan
Cable III Inc. and Charter Investment, Inc. instead have
been and will be allocated to Charter (the "Regulatory
Allocations"). The LLC Agreement further provides that, to
the extent possible, the effect of the Regulatory Allocations is
to be offset over time pursuant to certain curative allocation
provisions (the "Curative Allocation Provisions") so
that, after certain offsetting adjustments are made, each
member's capital account balance is equal to the capital
account balance such member would have had if the Regulatory
Allocations had not been part of the LLC Agreement. The
cumulative amount of the actual tax losses allocated to Charter
as a result of the Regulatory Allocations through the year ended
December 31, 2004 is approximately $4.0 billion.
As a result of the Special Loss Allocations and
the Regulatory Allocations referred to above, the cumulative
amount of losses of Charter Holdco allocated to Vulcan
Cable III Inc. and Charter Investment, Inc. is in excess of
the amount that would have been allocated to such entities if
the losses of Charter Holdco had been allocated among its
members in proportion to their respective percentage ownership
of Charter Holdco common membership units. The cumulative amount
of such excess losses was approximately $2.1 billion
through December 31, 2003 and $1.0 billion through
December 31, 2004.
In certain situations, the Special Loss
Allocations, Special Profit Allocations, Regulatory Allocations
and Curative Allocation Provisions described above could result
in Charter paying taxes in an amount that is more or less than
if Charter Holdco had allocated net tax profits and net tax
losses among its members based generally on the number of common
membership units owned by such members. This could occur due to
differences in (i) the character of the allocated income
(e.g., ordinary versus capital), (ii) the allocated amount
and timing of tax depreciation and tax amortization expense due
to the application of section 704(c) under the Internal
Revenue Code, (iii) the potential interaction between the
Special Profit Allocations and the Curative Allocation
Provisions, (iv) the amount and timing of alternative
minimum taxes paid by Charter, if any, (v) the
apportionment of the allocated income or loss among the states
in which Charter Holdco does business, and (vi) future
federal and state tax laws. Further, in the event of new capital
contributions to Charter Holdco, it is possible that the tax
effects of the Special Profit Allocations, Special Loss
Allocations, Regulatory Allocations and Curative Allocation
Provisions will change significantly pursuant to the provisions
of the income tax regulations or the terms of a contribution
agreement with respect to such contributions. Such change could
defer the actual tax benefits to be derived by Charter with
respect to the net tax losses allocated to it or accelerate the
actual taxable income to Charter with respect to the net tax
profits allocated to it. As a result, it is possible under
certain circumstances, that Charter could receive future
allocations of taxable income in excess of its currently
allocated tax deductions and available tax loss carryforwards.
The ability to utilize net operating loss carryforwards is
potentially subject to certain limitations as discussed below.
In addition, under their exchange agreement with
Charter, Vulcan Cable III Inc. and Charter Investment, Inc.
may exchange some or all of their membership units in Charter
Holdco for Charter's
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Table of Contents
Class B common stock, be merged with
Charter, or be acquired by Charter in a non-taxable
reorganization. If such an exchange were to take place prior to
the date that the Special Profit Allocation provisions had fully
offset the Special Loss Allocations, Vulcan Cable III Inc.
and Charter Investment, Inc. could elect to cause Charter Holdco
to make the remaining Special Profit Allocations to Vulcan
Cable III Inc. and Charter Investment, Inc. immediately
prior to the consummation of the exchange. In the event Vulcan
Cable III Inc. and Charter Investment, Inc. choose not to
make such election or to the extent such allocations are not
possible, Charter would then be allocated tax profits
attributable to the membership units received in such exchange
pursuant to the Special Profit Allocation provisions.
Mr. Allen has generally agreed to reimburse Charter for any
incremental income taxes that Charter would owe as a result of
such an exchange and any resulting future Special Profit
Allocations to Charter. The ability of Charter to utilize net
operating loss carryforwards is potentially subject to certain
limitations (see "Risk Factors — Risks Related to
Mr. Allen's Controlling Position"). If Charter were to
become subject to such limitations (whether as a result of an
exchange described above or otherwise), and as a result were to
owe taxes resulting from the Special Profit Allocations, then
Mr. Allen may not be obligated to reimburse Charter for
such income taxes.
As of June 30, 2005 and December 31,
2004 and 2003, we have recorded net deferred income tax
liabilities of $259 million, $216 million and
$417 million, respectively. Additionally, as of
June 30, 2005, December 31, 2004 and 2003, we have
deferred tax assets of $3.8 billion, $3.5 billion and
$1.7 billion, respectively, which primarily relate to
financial and tax losses allocated to Charter from Charter
Holdco. We are required to record a valuation allowance when it
is more likely than not that some portion or all of the deferred
income tax assets will not be realized. Given the uncertainty
surrounding our ability to utilize our deferred tax assets,
these items have been offset with a corresponding valuation
allowance of $3.4 billion, $3.2 billion and
$1.3 billion at June 30, 2005, December 31, 2004
and 2003, respectively.
Charter Holdco is currently under examination by
the Internal Revenue Service for the tax years ending
December 31, 2000, 2002 and 2003. Our results (excluding
Charter and our indirect corporate subsidiaries) for these years
are subject to this examination. Management does not expect the
results of this examination to have a material adverse effect on
our consolidated financial condition, results of operations or
our liquidity, including our ability to comply with our debt
covenants.
Litigation.
Legal
contingencies have a high degree of uncertainty. When a loss
from a contingency becomes estimable and probable, a reserve is
established. The reserve reflects management's best
estimate of the probable cost of ultimate resolution of the
matter and is revised accordingly as facts and circumstances
change and, ultimately when the matter is brought to closure. We
have established reserves for certain matters including those
described in "Business — Legal Proceedings."
If any of the litigation matters pending against us, including
those described in "Business — Legal
Proceedings" is resolved unfavorably resulting in payment
obligations in excess of management's best estimate of the
outcome, such resolution could have a material adverse effect on
our consolidated financial condition, results of operations or
our liquidity.
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Table of Contents
Results of Operations
Six Months Ended June 30, 2005 Compared
to Six Months Ended June 30, 2004
The following table sets forth the percentages of
revenues that items in the accompanying consolidated statements
of operations constituted for the periods presented (dollars in
millions, except per share and share data):
Six Months Ended June 30,
2005
2004
Revenues
$
2,594
100
%
$
2,453
100
%
Costs and expenses:
Operating (excluding depreciation and
    amortization)
1,128
44
%
1,027
42
%
Selling, general and administrative
493
19
%
483
19
%
Depreciation and amortization
759
29
%
734
30
%
Asset impairment charges
39
2
%
—
—
(Gain) loss on sale of assets, net
4
—
(104
)
(4
)%
Option compensation expense, net
8
—
26
1
%
Special charges, net
2
—
97
4
%
2,433
94
%
2,263
92
%
Income from operations
161
6
%
190
8
%
Interest expense, net
(871
)
(803
)
Gain on derivative instruments and hedging
    activities, net
26
56
Loss on debt to equity conversions
—
(23
)
Gain (loss) on extinguishment of debt
8
(21
)
Gain on investments
21
—
(816
)
(791
)
Loss before minority interest and income taxes
(655
)
(601
)
Minority interest
(6
)
(10
)
Loss before income taxes
(661
)
(611
)
Income tax expense
(46
)
(97
)
Net loss
(707
)
(708
)
Dividends on preferred stock – redeemable
(2
)
(2
)
Net loss applicable to common stock
$
(709
)
$
(710
)
Loss per common share, basic and diluted
$
(2.34
)
$
(2.39
)
Weighted average common shares outstanding, basic
    and diluted
303,465,474
297,814,091
Revenues.
Revenues
increased by $141 million, or 6%, from $2.5 billion
for the six months ended June 30, 2004 to $2.6 billion
for the six months ended June 30, 2005. This increase is
principally the result of an increase of 310,800 and 35,400
high-speed Internet and digital video customers, respectively,
as well as price increases for video and high-speed Internet
services, and is offset partially by a decrease of 190,100
analog video customers. The cable system sales to Atlantic
Broadband Finance, LLC, which closed in March and April 2004
(referred to in this section as the "System Sales")
reduced the increase in revenues by $29 million. Our goal is to
increase revenues by improving customer service which we believe
will stabilize our analog video customer base, implementing
price increases on certain services and packages and increasing
the number of customers who purchase high-speed Internet
services, digital video and advanced products and services such
as telephone, VOD, high definition television and digital video
recorder service.
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Table of Contents
Average monthly revenue per analog video customer
increased to $72.38 for the six months ended June 30, 2005
from $65.39 for the six months ended June 30, 2004
primarily as a result of incremental revenues from advanced
services and price increases. Average monthly revenue per analog
video customer represents total revenue for the six months ended
during the respective period, divided by six, divided by the
average number of analog video customers during the respective
period.
Revenues by service offering were as follows
(dollars in millions):
Six Months Ended June 30,
2005
2004
2005 over 2004
% of
% of
%
Revenues
Revenues
Revenues
Revenues
Change
Change
Video
$
1,703
66%
$
1,695
69%
$
8
—
High-speed Internet
441
17%
349
14%
92
26
%
Advertising sales
140
5%
132
5%
8
6
%
Commercial
134
5%
114
5%
20
18
%
Other
176
7%
163
7%
13
8
%
$
2,594
100%
$
2,453
100%
$
141
6
%
Video revenues consist primarily of revenues from
analog and digital video services provided to our non-commercial
customers. Video revenues increased by $8 million for the
six months ended June 30, 2005 compared to the six months
ended June 30, 2004. Approximately $68 million of the
increase was the result of price increases and incremental video
revenues from existing customers and approximately
$8 million resulted from an increase in digital video
customers. The increases were offset by decreases of
approximately $21 million resulting from the System Sales
and approximately an additional $47 million related to a
decrease in analog video customers.
Revenues from high-speed Internet services
provided to our non-commercial customers increased
$92 million, or 26%, from $349 million for the six
months ended June 30, 2004 to $441 million for the six
months ended June 30, 2005. Approximately $68 million
of the increase related to the increase in the average number of
customers receiving high-speed Internet services, whereas
approximately $27 million related to the increase in
average price of the service. The increase in high-speed
Internet revenues was reduced by approximately $3 million
as a result of the System Sales.
Advertising sales revenues consist primarily of
revenues from commercial advertising customers, programmers and
other vendors. Advertising sales increased $8 million, or
6%, from $132 million for the six months ended June 30,
2004 to $140 million for the six months ended June 30,
2005, primarily as a result of an increase in new advertising
sales customers and in advertising rates. The increase was
offset by a decrease of $1 million as a result of the
System Sales. For the six months ended June 30, 2005 and
2004, we received $7 million and $6 million in advertising
sales revenues from vendors.
Commercial revenues consist primarily of revenues
from cable video and high-speed Internet services to our
commercial customers. Commercial revenues increased
$20 million, or 18%, from $114 million for the six
months ended June 30, 2004 to $134 million for the six
months ended June 30, 2005, primarily as a result of an
increase in commercial high-speed Internet revenues. The
increase was reduced by approximately $2 million as a
result of the System Sales.
Other revenues consist of revenues from franchise
fees, telephone revenue, equipment rental, customer
installations, home shopping, dial-up Internet service, late
payment fees, wire maintenance fees and other miscellaneous
revenues. Other revenues increased $13 million, or 8%, from
$163 million for the six months ended June 30, 2004 to
$176 million for the six months ended June 30, 2005.
The increase was primarily the result of an increase in
telephone revenue of $6 million, installation revenue of
$5 million and franchise fees of $4 million and was
partially offset by approximately $2 million as a result of the
System Sales.
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Table of Contents
Operating
Expenses.
Operating
expenses increased $101 million, or 10%, from
$1.0 billion for the six months ended June 30, 2004 to
$1.1 billion for the six months ended June 30, 2005.
The increase in operating expenses was reduced by
$12 million as a result of the System Sales. Programming
costs included in the accompanying condensed consolidated
statements of operations were $709 million and
$663 million, representing 29% of total costs and expenses
for each of the six months ended June 30, 2005 and 2004,
respectively. Key expense components as a percentage of revenues
were as follows (dollars in millions):
Six Months Ended June 30,
2005
2004
2005 over 2004
% of
% of
%
Expenses
Revenues
Expenses
Revenues
Change
Change
Programming
$
709
28%
$
663
27%
$
46
7%
Advertising sales
50
2%
48
2%
2
4%
Service
369
14%
316
13%
53
17%
$
1,128
44%
$
1,027
42%
$
101
10%
Programming costs consist primarily of costs paid
to programmers for analog, premium, digital channels, VOD and
pay-per-view programming. The increase in programming costs of
$46 million, or 7%, for the six months ended June 30,
2005 over the six months ended June 30, 2004 was a result
of price increases, particularly in sports programming,
partially offset by decreases in analog video customers.
Additionally, the increase in programming costs was reduced by
$9 million as a result of the System Sales. Programming
costs were offset by the amortization of payments received from
programmers in support of launches of new channels of
$18 million and $28 million for the six months ended
June 30, 2005 and 2004, respectively. Programming costs for
the six months ended June 30, 2004 also include a
$4 million reduction related to the settlement of a dispute
with TechTV, Inc. See Note 17 to the condensed consolidated
financial statements included elsewhere in this prospectus.
Our cable programming costs have increased in
every year we have operated in excess of U.S. inflation and
cost-of-living increases, and we expect them to continue to
increase because of a variety of factors, including inflationary
or negotiated annual increases, additional programming being
provided to customers and increased costs to purchase
programming. In 2005, programming costs have increased and we
expect they will continue to increase at a higher rate than in
2004. These costs will be determined in part on the outcome of
programming negotiations in 2005 and will likely be subject to
offsetting events or otherwise affected by factors similar to
the ones mentioned in the preceding paragraph. Our increasing
programming costs will result in declining operating margins for
our video services to the extent we are unable to pass on cost
increases to our customers. We expect to partially offset any
resulting margin compression from our traditional video services
with revenue from advanced video services, increased high-speed
Internet revenues, advertising revenues and commercial service
revenues.
Advertising sales expenses consist of costs
related to traditional advertising services provided to
advertising customers, including salaries, benefits and
commissions. Advertising sales expenses increased
$2 million, or 4%, primarily as a result of increased
salary, benefit and commission costs. Service costs consist
primarily of service personnel salaries and benefits, franchise
fees, system utilities, Internet service provider fees,
maintenance and pole rent expense. The increase in service costs
of $53 million, or 17%, resulted primarily from increased
labor and maintenance costs to support our infrastructure,
increased equipment maintenance, an increase in franchise fees
as a result of increased revenues and higher fuel prices. The
increase in service costs was reduced by $3 million as a
result of the System Sales.
Selling, General and Administrative
Expenses.
Selling, general
and administrative expenses increased by $10 million, or
2%, from $483 million for the six months ended
June 30, 2004 to $493 million for the six months ended
June 30, 2005. The increase in selling, general and
administrative expenses was reduced
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Table of Contents
by $4 million as a result of the System
Sales. Key components of expense as a percentage of revenues
were as follows (dollars in millions):
Six Months Ended June 30,
2005
2004
2005 over 2004
% of
% of
%
Expenses
Revenues
Expenses
Revenues
Change
Change
General and administrative
$
427
16%
$
416
17%
$
11
3%
Marketing
66
3%
67
2%
(1
)
(1
)%
$
493
19%
$
483
19%
$
10
2%
General and administrative expenses consist
primarily of salaries and benefits, rent expense, billing costs,
call center costs, internal network costs, bad debt expense and
property taxes. The increase in general and administrative
expenses of $11 million, or 3%, resulted primarily from
increases in professional fees of $15 million and salaries
and benefits of $13 million, offset by the System Sales of
$4 million and decreases in bad debt expense of
$10 million.
Marketing expenses decreased $1 million, or
1%, as a result of a decrease in expenditures as a result of
disciplined spending and more targeted marketing tactics. We
expect marketing expenditures to increase for the remainder of
2005.
Depreciation and
Amortization.
Depreciation and
amortization expense increased by $25 million, or 3%, from
$734 million for the six months ended June 30, 2004 to
$759 million for the six months ended June 30, 2005.
The increase in depreciation was related to an increase in
capital expenditures.
Asset Impairment
Charges.
Asset impairment charges for
the six months ended June 30, 2005 represent the write-down
of assets related to three pending cable asset sales to fair
value less costs to sell. See Note 3 to the condensed
consolidated financial statements included elsewhere in this
prospectus.
(Gain) Loss on Sale of Assets, Net.
Loss on sale of assets of
$4 million for the six months ended June 30, 2005
primarily represents the loss recognized on the disposition of
plant and equipment. Gain on sale of assets of $104 million
for the six months ended June 30, 2004 primarily represents
the pretax gain realized on the sale of systems to Atlantic
Broadband Finance, LLC which closed on March 1 and
April 30, 2004.
Option Compensation Expense,
Net.
Option compensation expense of
$8 million for the six months ended June 30, 2005
primarily represents options expensed in accordance with SFAS
No. 123,
Accounting for Stock-Based Compensation
.
Option compensation expense of $26 million for the six
months ended June 30, 2004 primarily represents the expense
of approximately $8 million related to a stock option
exchange program, under which our employees were offered the
right to exchange all stock options (vested and unvested) issued
under the 1999 Charter Communications Option Plan and 2001 Stock
Incentive Plan that had an exercise price over $10 per share for
shares of restricted Charter Class A common stock or, in
some instances, cash. The exchange offer closed in February
2004. Additionally, during the six months ended June 30,
2004, we recognized approximately $6 million related to the
performance shares granted under the Charter Long-Term Incentive
Program and approximately $12 million related to options
granted following the adoption of SFAS No. 123.
Special Charges,
Net.
Special charges of
$2 million for the six months ended June 30, 2005
represents $4 million of severance and related costs of our
management realignment offset by approximately $2 million
related to an agreed upon cash discount on settlement of the
consolidated Federal Class Action and Federal Derivative
Action. See "— Legal Proceedings." Special
charges of $97 million for the six months ended June 30,
2004 represents approximately $85 million as part of the
terms set forth in memoranda of understanding regarding
settlement of the consolidated Federal Class Action and
Federal Derivative Action and approximately $9 million of
litigation costs related to the tentative settlement of the
South Carolina national class action suit, which settlements are
subject to final
57
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documentation and court approval and
approximately $3 million of severance and related costs of
our workforce reduction.
Interest Expense,
Net.
Net interest expense increased by
$68 million, or 8%, from $803 million for the six
months ended June 30, 2004 to $871 million for the six
months ended June 30, 2005. The increase in net interest
expense was a result of approximately $9 million of
liquidated damages on our 5.875% convertible senior notes
combined with an increase in our average borrowing rate from
8.50% in the six months ended June 30, 2004 to 8.89% in the
six months ended June 30, 2005 and an increase of
$997 million in average debt outstanding from
$18.4 billion for the six months ended June 30, 2004
compared to $19.4 billion for the six months ended
June 30, 2005. This was offset partially by
$27 million in gains related to embedded derivatives in
Charter's 5.875% convertible senior notes issued in
November 2004. See Note 9 to the condensed consolidated
financial statements included elsewhere in this prospectus.
Gain on Derivative Instruments and Hedging
Activities, Net.
Net gain on
derivative instruments and hedging activities decreased
$30 million from $56 million for the six months ended
June 30, 2004 to $26 million for the six months ended
June 30, 2005. The decrease is primarily a result of a
decrease in gains on interest rate agreements, which do not
qualify for hedge accounting under SFAS No. 133, which
decreased from $54 million for the six months ended
June 30, 2004 to $25 million for the six months ended
June 30, 2005.
Loss on debt to equity
conversions.
Loss on debt to equity
conversions of $23 million for the six months ended
June 30, 2004 represents the loss recognized from privately
negotiated exchanges in the aggregate of $30 million
principal amount of Charter's 5.75% convertible senior
notes held by two unrelated parties for shares of Charter
Class A common stock, which resulted in the issuance of
more shares in the exchange transaction than would have been
issued under the original terms of the convertible senior notes.
Gain (loss) on extinguishment of
debt.
Gain on extinguishment of debt
of $8 million for the six months ended June 30, 2005
primarily represents approximately $10 million related to
the issuance of Charter Operating notes in exchange for Charter
Holdings notes and approximately $4 million related to the
repurchase of $131 million principal amount of our 4.75%
convertible senior notes due 2006. These gains were offset by
approximately $5 million of losses related to the
redemption of our subsidiary's, CC V Holdings, LLC, 11.875%
notes due 2008. See Note 6 to the condensed consolidated
financial statements included elsewhere in this prospectus. Loss
on extinguishment of debt of $21 million for the six months
ended June 30, 2004 represents the write-off of deferred
financing fees and third party costs related to the Charter
Operating refinancing in April 2004.
Gain on investments.
Gain on investments of $21 million for the six months ended
June 30, 2005 primarily represents a gain realized on an
exchange of our interest in an equity investee for an investment
in a larger enterprise.
Minority Interest.
Minority interest represents the 2% accretion of the preferred
membership interests in our indirect subsidiary, CC VIII, LLC,
and in 2004, the pro rata share of the profits and losses of CC
VIII, LLC. Effective January 1, 2005, we ceased recognizing
minority interest in earnings or losses of CC VIII for financial
reporting purposes until the dispute between Charter and
Mr. Allen regarding the preferred membership interests in
CC VIII is resolved. See Note 7 to the condensed consolidated
financial statements included elsewhere in this prospectus.
Additionally, reported losses allocated to minority interest on
the statement of operations are limited to the extent of any
remaining minority interest on the balance sheet related to
Charter Holdco. Because minority interest in Charter Holdco is
substantially eliminated, Charter absorbs substantially all
losses before income taxes that otherwise would be allocated to
minority interest. Subject to any changes in Charter
Holdco's capital structure, future losses will continue to
be substantially absorbed by Charter.
Income Tax
Expense.
Income tax expense
of $46 million and $97 million was recognized for the
six months ended June 30, 2005 and 2004, respectively. The
income tax expense is recognized through increases in deferred
tax liabilities related to our investment in Charter Holdco, as
well as through current
58
Table of Contents
federal and state income tax expense and
increases in the deferred tax liabilities of certain of our
indirect corporate subsidiaries. Additionally, the sale of
certain systems to Atlantic Broadband Finance, LLC on
March 1, 2004 resulted in income tax expense of
$15 million for the six months ended June 30, 2004.
Net Loss.
Net loss
decreased by $1 million, from $708 million for the six
months ended June 30, 2004 to $707 million for the six
months ended June 30, 2005 as a result of the factors
described above.
Preferred stock
dividends.
On August 31, 2001,
Charter issued 505,664 shares (and on February 28, 2003
issued an additional 39,595 shares) of Series A Convertible
Redeemable Preferred Stock in connection with the Cable USA
acquisition, on which Charter pays quarterly cumulative cash
dividends at an annual rate of 5.75% if paid or 7.75% if accrued
on a liquidation preference of $100 per share. Beginning
January 1, 2005, Charter is accruing the dividend on its
Series A Convertible Redeemable Preferred Stock.
Loss Per Common
Share.
The loss per common share
decreased by $0.05, from $2.39 per common share for the six
months ended June 30, 2004 to $2.34 per common share for
the six months ended June 30, 2005 as a result of the
factors described above.
Year Ended December 31, 2004,
December 31, 2003 and December 31, 2002
The following table sets forth the percentages of
revenues that items in the accompanying consolidated statements
of operations constitute for the indicated periods (dollars in
millions, except per share and share data):
Year Ended December 31,
2004
2003
2002
Revenues
$
4,977
100
%
$
4,819
100
%
$
4,566
100
%
Costs and Expenses:
Operating (excluding depreciation and
    amortization)
2,080
42
%
1,952
40
%
1,807
40
%
Selling, general and administrative
971
19
%
940
20
%
963
21
%
Depreciation and amortization
1,495
30
%
1,453
30
%
1,436
31
%
Impairment of franchises
2,433
49
%
—
—
4,638
102
%
(Gain) loss on sale of assets, net
(86
)
(2
)%
5
—
3
—
Option compensation expense, net
31
1
%
4
—
5
—
Special charges, net
104
2
%
21
—
36
1
%
Unfavorable contracts and other settlements
(5
)
—
(72
)
(1
)%
—
—
7,023
141
%
4,303
89
%
8,888
195
%
Income (loss) from operations
(2,046
)
(41
)%
516
11
%
(4,322
)
(95
)%
Interest expense, net
(1,670
)
(1,557
)
(1,503
)
Gain (loss) on derivative instruments and hedging
    activities, net
69
65
(115
)
Loss on debt to equity conversions
(23
)
—
—
Gain (loss) on extinguishment of debt
(31
)
267
—
Other, net
3
(16
)
(4
)
Loss before minority interest, income taxes and
    cumulative effect of accounting change
(3,698
)
(725
)
(5,944
)
Minority interest
19
377
3,176
Loss before income taxes and cumulative effect of
    accounting change
(3,679
)
(348
)
(2,768
)
Income tax benefit
103
110
460
Loss before cumulative effect of accounting change
(3,576
)
(238
)
(2,308
)
Cumulative effect of accounting change, net of tax
(765
)
—
(206
)
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Year Ended December 31,
2004
2003
2002
Net loss
(4,341
)
(238
)
(2,514
)
Dividends on preferred stock —
    redeemable
(4
)
(4
)
(3
)
Net loss applicable to common stock
$
(4,345
)
$
(242
)
$
(2,517
)
Loss per common share, basic and diluted
$
(14.47
)
$
(0.82
)
$
(8.55
)
Weighted average common shares outstanding
300,291,877
294,597,519
294,440,261
Year Ended December 31, 2004 Compared to
Year Ended December 31, 2003
Revenues.
Revenues
increased by $158 million, or 3%, from $4.8 billion
for the year ended December 31, 2003 to $5.0 billion
for the year ended December 31, 2004. This increase is
principally the result of an increase of 318,800 and
2,800 high-speed Internet customers and digital video
customers, respectively, as well as price increases for video
and high-speed Internet services, and is offset partially by a
decrease of 439,800 analog video customers. Included in the
reduction in analog video customers and reducing the increase in
digital video and high-speed Internet customers are 230,800
analog video customers, 83,300 digital video customers and
37,800 high-speed Internet customers sold in the cable system
sales to Atlantic Broadband Finance, LLC, which closed in March
and April 2004 (collectively, with the cable system sale to
WaveDivision Holdings, LLC in October 2003, referred to in this
section as the "System Sales"). The System Sales
reduced the increase in revenues by $160 million.
Average monthly revenue per analog video customer
increased from $61.92 for the year ended December 31, 2003
to $68.02 for the year ended December 31, 2004 primarily as
a result of price increases and incremental revenues from
advanced services. Average monthly revenue per analog video
customer represents total annual revenue, divided by twelve,
divided by the average number of analog video customers during
the respective period.
Revenues by service offering were as follows
(dollars in millions):
Year Ended December 31,
2004
2003
2004 over 2003
% of
% of
%
Revenues
Revenues
Revenues
Revenues
Change
Change
Video
$
3,373
68
%
$
3,461
72
%
$
(88
)
(3
)%
High-speed Internet
741
15
%
556
12
%
185
33
%
Advertising sales
289
6
%
263
5
%
26
10
%
Commercial
238
4
%
204
4
%
34
17
%
Other
336
7
%
335
7
%
1
—
$
4,977
100
%
$
4,819
100
%
$
158
3
%
Video revenues consist primarily of revenues from
analog and digital video services provided to our non-commercial
customers. Video revenues decreased by $88 million, or 3%,
from $3.5 billion for the year ended December 31, 2003
to $3.4 billion for the year ended December 31, 2004.
Approximately $116 million of the decrease was the result
of the System Sales and approximately an additional
$65 million related to a decline in analog video customers.
These decreases were offset by increases of approximately
$66 million resulting from price increases and incremental
video revenues from existing customers and approximately
$27 million resulting from an increase in digital video
customers.
Revenues from high-speed Internet services
provided to our non-commercial customers increased
$185 million, or 33%, from $556 million for the year
ended December 31, 2003 to $741 million for the year
ended December 31, 2004. Approximately $163 million of
the increase related to the increase in the average number of
customers receiving high-speed Internet services, whereas
approximately $35 million related to the increase in
average price of the service. The increase in high-speed
Internet revenues was reduced by approximately $12 million
as a result of the System Sales.
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Table of Contents
Advertising sales revenues consist primarily of
revenues from commercial advertising customers, programmers and
other vendors. Advertising sales increased $26 million, or
10%, from $263 million for the year ended December 31,
2003 to $289 million for the year ended December 31,
2004 primarily as a result of an increase in national
advertising campaigns and election related advertising. The
increase was offset by a decrease of $7 million as a result
of the System Sales. For the years ended December 31, 2004
and 2003, we received $16 million and $15 million,
respectively, in advertising revenue from vendors.
Commercial revenues consist primarily of revenues
from cable video and high-speed Internet services to our
commercial customers. Commercial revenues increased
$34 million, or 17%, from $204 million for the year
ended December 31, 2003, to $238 million for the year
ended December 31, 2004, primarily as a result of an
increase in commercial high-speed Internet revenues. The
increase was reduced by approximately $14 million as a
result of the System Sales.
Other revenues consist of revenues from franchise
fees, telephone revenue, equipment rental, customer
installations, home shopping, dial-up Internet service, late
payment fees, wire maintenance fees and other miscellaneous
revenues. For the year ended December 31, 2004 and 2003,
franchise fees represented approximately 49% and 48%,
respectively, of total other revenues. Other revenues increased
$1 million from $335 million for the year ended
December 31, 2003 to $336 million for the year ended
December 31, 2004. The increase was primarily the result of
an increase in home shopping and infomercial revenue and was
partially offset by approximately $11 million as a result
of the System Sales.
Operating expenses.
Operating expenses increased
$128 million, or 7%, from $2.0 billion for the year
ended December 31, 2003 to $2.1 billion for the year
ended December 31, 2004. The increase in operating expenses
was reduced by approximately $59 million as a result of the
System Sales. Programming costs included in the accompanying
consolidated statements of operations were $1.3 billion and
$1.2 billion, representing 63% and 64% of total operating
expenses for the years ended December 31, 2004 and 2003,
respectively. Key expense components as a percentage of revenues
were as follows (dollars in millions):
Year Ended December 31,
2004
2003
2004 over 2003
% of
% of
%
Expenses
Revenues
Expenses
Revenues
Change
Change
Programming
$
1,319
27
%
$
1,249
26
%
$
70
6
%
Advertising sales
98
2
%
88
2
%
10
11
%
Service
663
13
%
615
12
%
48
8
%
$
2,080
42
%
$
1,952
40
%
$
128
7
%
Programming costs consist primarily of costs paid
to programmers for analog, premium and digital channels and
pay-per-view programming. The increase in programming costs of
$70 million, or 6%, for the year ended December 31,
2004 over the year ended December 31, 2003 was a result of
price increases, particularly in sports programming, an
increased number of channels carried on our systems, and an
increase in digital video customers, partially offset by a
decrease in analog video customers. Additionally, the increase
in programming costs was reduced by $42 million as a result
of the System Sales. Programming costs were offset by the
amortization of payments received from programmers in support of
launches of new channels of $59 million and
$62 million for the years ended December 31, 2004 and
2003, respectively. Programming costs for the year ended
December 31, 2004 also include a $5 million reduction
related to the settlement of a dispute with TechTV, Inc., a
related party. See Note 22 to the consolidated financial
statements included elsewhere in this prospectus.
Advertising sales expenses consist of costs
related to traditional advertising services provided to
advertising customers, including salaries, benefits and
commissions. Advertising sales expenses increased
$10 million, or 11%, primarily as a result of increased
salary, benefit and commission costs. The increase in
advertising sales expenses was reduced by $2 million as a
result of the System Sales. Service costs consist primarily of
service personnel salaries and benefits, franchise fees, system
utilities, Internet service provider fees, maintenance and pole
rental expense. The increase in service costs of
$48 million, or 8%, resulted
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Table of Contents
primarily from additional activity associated
with ongoing infrastructure maintenance. The increase in service
costs was reduced by $15 million as a result of the System
Sales.
Selling, general and administrative
expenses.
Selling, general and
administrative expenses increased by $31 million, or 3%,
from $940 million for the year ended December 31, 2003
to $971 million for the year ended December 31, 2004.
The increase in selling, general and administrative expenses was
reduced by $22 million as a result of the System Sales. Key
components of expense as a percentage of revenues were as
follows (dollars in millions):
Year Ended December 31,
2004
2003
2004 over 2003
% of
% of
%
Expenses
Revenues
Expenses
Revenues
Change
Change
General and administrative
$
849
17
%
$
833
18
%
$
16
2
%
Marketing
122
2
%
107
2
%
15
14
%
$
971
19
%
$
940
20
%
$
31
3
%
General and administrative expenses consist
primarily of salaries and benefits, rent expense, billing costs,
call center costs, internal network costs, bad debt expense and
property taxes. The increase in general and administrative
expenses of $16 million, or 2%, resulted primarily from
increases in costs associated with our commercial business of
$21 million, third party call center costs resulting from
increased emphasis on customer service of $10 million and
bad debt expense of $10 million offset by decreases in
costs associated with salaries and benefits of $21 million
and rent expense of $3 million.
Marketing expenses increased $15 million, or
14%, as a result of an increased investment in marketing and
branding campaigns.
Depreciation and
amortization.
Depreciation and
amortization expense increased by $42 million, or 3%, to
$1.5 billion in 2004. The increase in depreciation related
to an increase in capital expenditures, which was partially
offset by lower depreciation as the result of the System Sales.
Impairment of
franchises.
We performed an impairment
assessment during the third quarter of 2004. The use of lower
projected growth rates and the resulting revised estimates of
future cash flows in our valuation, primarily as a result of
increased competition, led to the recognition of a
$2.4 billion impairment charge for the year ended
December 31, 2004.
(Gain) loss on sale of assets,
net.
Gain on sale of assets of
$86 million for the year ended December 31, 2004
primarily represents the pretax gain of $106 million
realized on the sale of systems to Atlantic Broadband Finance,
LLC which closed in March and April 2004 offset by losses
recognized on the disposition of plant and equipment. Loss on
sale of assets of $5 million for the year ended
December 31, 2003 represents the loss recognized on the
disposition of plant and equipment offset by a gain of
$21 million recognized on the sale of cable systems in Port
Orchard, Washington which closed on October 1, 2003.
Option compensation expense,
net.
Option compensation expense of
$31 million for the year ended December 31, 2004
primarily represents $22 million related to options granted
and expensed in accordance with SFAS No. 123,
Accounting for Stock-Based Compensation
. Additionally,
during the year ended December 31, 2004, we expensed
approximately $8 million related to a stock option exchange
program, under which our employees were offered the right to
exchange all stock options (vested and unvested) issued under
the 1999 Charter Communications Option Plan and 2001 Stock
Incentive Plan that had an exercise price over $10 per
share for shares of restricted Charter Class A common stock
or, in some instances, cash. The exchange offer closed in
February 2004. Option compensation expense of $4 million
for the year ended December 31, 2003 primarily represents
options expensed in accordance with SFAS No. 123,
Accounting for Stock-Based Compensation
. See Note 19
to our consolidated financial statements included elsewhere in
this prospectus for more information regarding our option
compensation plans.
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Special charges,
net.
Special charges of
$104 million for the year ended December 31, 2004
represents approximately $85 million of aggregate value of
the Charter Class A common stock and warrants to purchase
Charter Class A common stock contemplated to be issued as
part of a settlement of the consolidated federal class actions,
state derivative actions and federal derivative action lawsuits,
approximately $10 million of litigation costs related to
the tentative settlement of a South Carolina national class
action suit, all of which settlements are subject to final
documentation and court approval and approximately
$12 million of severance and related costs of our workforce
reduction and realignment. Special charges for the year ended
December 31, 2004 were offset by $3 million received
from a third party in settlement of a dispute. Special charges
of $21 million for the year ended December 31, 2003
represents approximately $26 million of severance and
related costs of our workforce reduction partially offset by a
$5 million credit from a settlement from the Internet
service provider Excite@Home related to the conversion of about
145,000 high-speed Internet customers to our Charter Pipeline
service in 2001.
Unfavorable contracts and other settlements.
Unfavorable contracts and other
settlements of $5 million for the year ended
December 31, 2004 relates to changes in estimated legal
reserves established in connection with prior business
combinations, which based on an evaluation of current facts and
circumstances, are no longer required.
Unfavorable contracts and other settlements of
$72 million for the year ended December 31, 2003
represents the settlement of estimated liabilities recorded in
connection with prior business combinations. The majority of
this benefit (approximately $52 million) is due to the
renegotiation in 2003 of a major programming contract, for which
a liability had been recorded for the above market portion of
that agreement in connection with a 1999 and a 2000 acquisition.
The remaining benefit relates to the reversal of previously
recorded liabilities, which are no longer required.
Interest expense,
net.
Net interest expense increased by
$113 million, or 7%, from $1.6 billion for the year
ended December 31, 2003 to $1.7 billion for the year
ended December 31, 2004. The increase in net interest
expense was a result of an increase in our average borrowing
rate from 7.99% in the year ended December 31, 2003 to
8.66% in the year ended December 31, 2004 partially offset
by a decrease of $306 million in average debt outstanding
from $18.9 billion in 2003 to $18.6 billion in 2004.
Gain (loss) on derivative instruments and
hedging activities, net.
Net gain on
derivative instruments and hedging activities increased
$4 million from a gain of $65 million for the year
ended December 31, 2003 to a gain of $69 million for
the year ended December 31, 2004. The increase is primarily
the result of an increase in gains on interest rate agreements
that do not qualify for hedge accounting under
SFAS No. 133,
Accounting for Derivative Instruments
and Hedging Activities
, which increased from a gain of
$57 million for the year ended December 31, 2003 to a
gain of $65 million for the year ended December 31,
2004. This was coupled with a decrease in gains on interest rate
agreements, as a result of hedge ineffectiveness on designated
hedges, which decreased from $8 million for the year ended
December 31, 2003 to $4 million for the year ended
December 31, 2004.
Loss on debt to equity conversions.
Loss on debt to equity conversions of
$23 million for the year ended December 31, 2004
represents the loss recognized from privately negotiated
exchanges of a total of $30 million principal amount of
Charter's 5.75% convertible senior notes held by two
unrelated parties for shares of Charter Class A common
stock. The exchange resulted in the issuance of more shares in
the exchange transaction than would have been issuable under the
original terms of the convertible senior notes.
Gain (loss) on extinguishment of
debt.
Loss on extinguishment of debt
of $31 million for the year ended December 31, 2004
represents the write-off of deferred financing fees and third
party costs related to the Charter Communications Operating
refinancing in April 2004 and the redemption of our
5.75% convertible senior notes due 2005 in
December 2004. Gain on extinguishment of debt of
$267 million for the year ended December 31, 2003
represents the gain realized on the purchase of an aggregate
$609 million principal amount of our outstanding
convertible senior notes and $1.3 billion principal amount
of Charter Holdings' senior notes and senior discount notes
in consideration for an aggregate of $1.6 billion principal
amount of 10.25% notes due
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Table of Contents
2010 issued by our indirect subsidiary,
CCH II. The gain is net of the write-off of deferred
financing costs associated with the retired debt of
$27 million.
Other, net.
Net
other expense decreased by $19 million from
$16 million in 2003 to income of $3 million in 2004.
Other expense in 2003 included $11 million associated with
amending a revolving credit facility of our subsidiaries and
costs associated with terminated debt transactions that did not
recur in 2004. In addition, gains on equity investments
increased $7 million in 2004 over 2003.
Minority interest.
Minority interest represents the 2% accretion of the preferred
membership interests in our indirect subsidiary, CC VIII,
LLC, and since June 6, 2003, the pro rata share of the
profits and losses of CC VIII, LLC. See "Certain
Relationships and Related Transactions — Transactions
Arising out of Our Organizational Structure and
Mr. Allen's Investment in Charter Communications, Inc.
and Its Subsidiaries — Equity Put Rights —
CC VIII." Reported losses allocated to minority
interest on the statement of operations are limited to the
extent of any remaining minority interest on the balance sheet
related to Charter Holdco. Because minority interest in Charter
Holdco was substantially eliminated at December 31, 2003,
beginning in the first quarter of 2004, Charter began to absorb
substantially all future losses before income taxes that
otherwise would have been allocated to minority interest. For
the year ended December 31, 2003, 53.5% of our losses were
allocated to minority interest. As a result of negative equity
at Charter Holdco during the year ended December 31, 2004,
no additional losses were allocated to minority interest,
resulting in an additional $2.4 billion of net losses.
Under our existing capital structure, future losses will be
substantially absorbed by Charter.
Income tax benefit.
Income tax benefit of $103 million and $110 million
was recognized for the years ended December 31, 2004 and
2003, respectively. The income tax benefits were realized as a
result of decreases in certain deferred tax liabilities related
to our investment in Charter Holdco as well as decreases in the
deferred tax liabilities of certain of our indirect corporate
subsidiaries.
The income tax benefit recognized in the year
ended December 31, 2004 was directly related to the
impairment of franchises as discussed above. The deferred tax
liabilities decreased as a result of the write-down of franchise
assets for financial statement purposes, but not for tax
purposes. We do not expect to recognize a similar benefit
associated with the impairment of franchises in future periods.
However, the actual tax provision calculations in future periods
will be the result of current and future temporary differences,
as well as future operating results.
The income tax benefit recognized in the year
ended December 31, 2003 was directly related to the tax
losses allocated to Charter from Charter Holdco. In the second
quarter of 2003, Charter started receiving tax loss allocations
from Charter Holdco. Previously, the tax losses had been
allocated to Vulcan Cable III Inc. and Charter Investment,
Inc. in accordance with the Special Loss Allocations provided
under the Charter Holdco limited liability company agreement. We
do not expect to recognize a similar benefit related to our
investment in Charter Holdco after 2003 related to tax loss
allocations received from Charter Holdco, due to limitations
associated with our ability to offset future tax benefits
against the remaining deferred tax liabilities. However, the
actual tax provision calculations in future periods will be the
result of current and future temporary differences, as well as
future operating results.
Cumulative effect of accounting change, net of
tax.
Cumulative effect of accounting
change of $765 million (net of minority interest effects of
$19 million and tax effects of $91 million) in 2004
represents the impairment charge recorded as a result of our
adoption of EITF Topic D-108.
Net loss.
Net loss
increased by $4.1 billion from $238 million in 2003 to
$4.3 billion in 2004 as a result of the factors described
above. The impact to net loss in 2004 of the impairment of
franchises, cumulative effect of accounting change and the
reduction in losses allocated to minority interest was to
increase net loss by approximately $3.7 billion. The impact
to net loss in 2003 of the gain on the sale of systems,
unfavorable contracts and settlements and gain on debt exchange,
net of income tax impact, was to decrease net loss by
$168 million.
Preferred stock
dividends.
On August 31, 2001, in
connection with the Cable USA acquisition, Charter issued
505,664 shares (and on February 28, 2003 issued an
additional 39,595 shares) of Series A
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Table of Contents
Convertible Redeemable Preferred Stock, on which
it pays or accrues a quarterly cumulative cash dividend at an
annual rate of 5.75% if paid or 7.75% if accrued on a
liquidation preference of $100 per share.
Loss per common
share.
The loss per common share
increased by $13.65, from $0.82 per common share for the
year ended December 31, 2003 to $14.47 per common
share for the year ended December 31, 2004 as a result of
the factors described above.
Year Ended December 31, 2003 Compared to
Year Ended December 31, 2002
Revenues.
Revenues
increased by $253 million, or 6%, from $4.6 billion
for the year ended December 31, 2002 to $4.8 billion
for the year ended December 31, 2003. This increase is
principally the result of an increase of 427,500 high-speed
Internet customers, as well as price increases for video and
high-speed Internet services, and is offset partially by a
decrease of 147,500 and 10,900 in analog and digital video
customers, respectively. Included within the decrease of analog
and digital video customers and reducing the increase of
high-speed Internet customers are 25,500 analog video customers,
12,500 digital video customers and 12,200 high-speed Internet
customers sold in the Port Orchard, Washington sale on
October 1, 2003.
Average monthly revenue per analog video customer
increased from $56.91 for the year ended December 31, 2002
to $61.92 for the year ended December 31, 2003 primarily as
a result of price increases and incremental revenues from
advanced services. Average monthly revenue per analog video
customer represents total annual revenue, divided by twelve,
divided by the average number of analog video customers during
the respective period.
Revenues by service offering were as follows
(dollars in millions):
Year Ended December 31,
2003
2002
2003 over 2002
Revenues
% of Revenues
Revenues
% of Revenues
Change
% Change
Video
$
3,461
72
%
$
3,420
75
%
$
41
1
%
High-speed Internet
556
12
%
337
7
%
219
65
%
Advertising sales
263
5
%
302
7
%
(39
)
(13
)%
Commercial
204
4
%
161
3
%
43
27
%
Other
335
7
%
346
8
%
(11
)
(3
)%
$
4,819
100
%
$
4,566
100
%
$
253
6
%
Video revenues consist primarily of revenues from
analog and digital video services provided to our non-commercial
customers. Video revenues increased by $41 million, or 1%,
for the year ended December 31, 2003 compared to the year
ended December 31, 2002. Video revenues increased
approximately $65 million due to price increases and
incremental video revenues from existing customers and
$82 million as a result of increases in the average number
of digital video customers, which were partially offset by a
decrease of approximately $106 million as a result of a
decline in analog video customers.
Revenues from high-speed Internet services
provided to our non-commercial customers increased
$219 million, or 65%, from $337 million for the year
ended December 31, 2002 to $556 million for the year
ended December 31, 2003. Approximately $206 million of
the increase related to the increase in the average number of
customers, whereas approximately $13 million related to the
increase in the average price of the service. The increase in
customers was primarily due to the addition of high-speed
Internet customers in our existing service areas. We were also
able to offer this service to more of our customers, as the
estimated percentage of homes passed that could receive
high-speed Internet service increased from 82% as of
December 31, 2002 to 87% as of December 31, 2003 as a
result of our system upgrades.
Advertising sales revenues consist primarily of
revenues from commercial advertising customers, programmers and
other vendors. Advertising sales decreased $39 million, or
13%, from $302 million for the year ended December 31,
2002, to $263 million for the year ended December 31,
2003, primarily as a
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result of a decrease in advertising from vendors
of approximately $64 million offset partially by an
increase in local advertising sales revenues of approximately
$25 million. For the years ended December 31, 2003 and
2002, we received $15 million and $79 million,
respectively, in advertising revenue from vendors.
Commercial revenues consist primarily of revenues
from video and high-speed Internet services to our commercial
customers. Commercial revenues increased $43 million, or
27%, from $161 million for the year ended December 31,
2002, to $204 million for the year ended December 31,
2003, primarily due to an increase in commercial high-speed
Internet revenues.
Other revenues consist of revenues from franchise
fees, equipment rental, customer installations, home shopping,
dial-up Internet service, late payment fees, wire maintenance
fees and other miscellaneous revenues. For the years ended
December 31, 2003 and 2002, franchise fees represented
approximately 48% and 46%, respectively, of total other
revenues. Other revenues decreased $11 million, or 3%, from
$346 million for the year ended December 31, 2002 to
$335 million for the year ended December 31, 2003. The
decrease was due primarily to a decrease in franchise fees after
an FCC ruling in March 2002, no longer requiring the collection
of franchise fees for high-speed Internet services. Franchise
fee revenues are collected from customers and remitted to
franchise authorities.
The decrease in accounts receivable of 27%
compared to the increase in revenues of 6% is primarily due to
the timing of collection of receivables from programmers for
fees associated with the launching of their networks coupled
with our tightened credit and collections policy. These fees
from programmers are not recorded as revenue but, rather, are
recorded as reductions of programming expense on a straight-line
basis over the term of the contract. Programmer receivables
decreased $40 million, or 57%, from $70 million as of
December 31, 2002 to $30 million as of
December 31, 2003.
Operating expenses.
Operating expenses increased
$145 million, or 8%, from $1.8 billion for the year
ended December 31, 2002 to $2.0 billion for the year
ended December 31, 2003. Programming costs included in the
accompanying consolidated statements of operations were
$1.2 billion and $1.2 billion, representing 64% and
65% of total operating expenses for the years ended
December 31, 2003 and 2002, respectively. Key expense
components as a percentage of revenues were as follows (dollars
in millions):
Year Ended December 31,
2003
2002
2003 over 2002
% of
% of
%
Expenses
Revenues
Expenses
Revenues
Change
Change
Programming
$
1,249
26
%
$
1,166
26
%
$
83
7
%
Advertising sales
88
2
%
87
2
%
1
1
%
Service
615
12
%
554
12
%
61
11
%
$
1,952
40
%
$
1,807
40
%
$
145
8
%
Programming costs consist primarily of costs paid
to programmers for analog, premium and digital channels and
pay-per-view programs. The increase in programming costs of
$83 million, or 7%, was due to price increases,
particularly in sports programming, and due to an increased
number of channels carried on our systems, partially offset by
decreases in analog and digital video customers. Programming
costs were offset by the amortization of payments received from
programmers in support of launches of new channels against
programming costs of $62 million and $57 million for
the years ended December 31, 2003 and 2002, respectively.
Advertising sales expenses consist of costs
related to traditional advertising services provided to
advertising customers, including salaries and benefits and
commissions. Advertising sales expenses increased
$1 million, or 1%, primarily due to increased sales
commissions, taxes and benefits. Service costs consist primarily
of service personnel salaries and benefits, franchise fees,
system utilities, Internet service provider fees, maintenance
and pole rental expense. The increase in service costs of
$61 million, or 11%, resulted primarily from additional
activity associated with ongoing infrastructure maintenance and
customer service, including activities associated with our
promotional programs.
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Selling, general and administrative
expenses.
Selling, general and
administrative expenses decreased by $23 million, or 2%,
from $963 million for the year ended December 31, 2002
to $940 million for the year ended December 31, 2003.
Key components of expense as a percentage of revenues were as
follows (dollars in millions):
Year Ended December 31,
2003
2002
2003 over 2002
% of
% of
%
Expenses
Revenues
Expenses
Revenues
Change
Change
General and administrative
$
833
18
%
$
810
18
%
$
23
3
%
Marketing
107
2
%
153
3
%
(46
)
(30
)%
$
940
20
%
$
963
21
%
$
(23
)
(2
)%
General and administrative expenses consist
primarily of salaries and benefits, rent expense, billing costs,
call center costs, internal network costs, bad debt expense and
property taxes. The increase in general and administrative
expenses of $23 million, or 3%, resulted primarily from
increases in salaries and benefits of $4 million, call
center costs of $25 million and internal network costs of
$16 million. These increases were partially offset by a
decrease in bad debt and collection expense of $27 million
as a result of our strengthened credit policies.
Marketing expenses decreased $46 million, or
30%, due to reduced promotional activity related to our service
offerings including reductions in advertising, telemarketing and
direct sales activities.
Depreciation and
amortization.
Depreciation and
amortization expense increased by $17 million, or 1%, from
$1.4 billion in 2002 to $1.5 billion in 2003 due
primarily to an increase in depreciation expense related to
additional capital expenditures in 2003 and 2002.
Impairment of
franchises.
We performed our annual
impairment assessments as of October 1, 2002 and 2003.
Revised estimates of future cash flows and the use of a lower
projected long-term growth rate in our valuation led to a
$4.6 billion impairment charge in the fourth quarter of
2002. Our 2003 assessment performed on October 1, 2003 did
not result in an impairment.
Loss on sale of assets,
net.
Loss on sale of assets for the
year ended December 31, 2003 represents $26 million of
losses related to the disposition of fixed assets offset by the
$21 million gain recognized on the sale of cable systems in
Port Orchard, Washington on October 1, 2003. Loss on sale
of assets for the year ended December 31, 2002 represents
losses related to the disposition of fixed assets.
Option compensation expense,
net.
Option compensation expense
decreased by $1 million for the year ended
December 31, 2003 compared to the year ended
December 31, 2002. Option compensation expense includes
expense related to exercise prices on certain options that were
issued prior to our initial public offering in 1999 that were
less than the estimated fair values of our common stock at the
time of grant. Compensation expense was recognized over the
vesting period of such options and was recorded until the last
vesting period lapsed in April 2004. On January 1, 2003, we
adopted SFAS No. 123,
Accounting for Stock-Based
Compensation
, using the prospective method under which we
will recognize compensation expense of a stock-based award to an
employee over the vesting period based on the fair value of the
award on the grant date.
Special charges,
net.
Special charges of
$21 million for the year ended December 31, 2003
represent approximately $26 million of severance and
related costs of our ongoing initiative to reduce our workforce
partially offset by a $5 million credit from a settlement
from the Internet service provider Excite@Home related to the
conversion of about 145,000 high-speed Internet customers to our
Charter Pipeline service in 2001. In the fourth quarter of 2002,
we recorded a special charge of $35 million, of which
$31 million was associated with our workforce reduction
program. The remaining $4 million is related to legal and
other costs associated with our shareholder lawsuits and
governmental investigations.
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Unfavorable contracts and other
settlements.
Unfavorable contracts and
other settlements of $72 million for the year ended
December 31, 2003 represents the settlement of estimated
liabilities recorded in connection with prior business
combinations. The majority of this benefit (approximately
$52 million) is due to the renegotiation in 2003 of a major
programming contract, for which a liability had been recorded
for the above market portion of that agreement in connection
with a 1999 and a 2000 acquisition. The remaining benefit
relates to the reversal of previously recorded liabilities,
which, based on an evaluation of current facts and
circumstances, are no longer required.
Interest expense,
net.
Net interest expense increased by
$54 million, or 4%, from $1.5 billion for the year
ended December 31, 2002 to $1.6 billion for the year
ended December 31, 2003. The increase in net interest
expense was a result of increased average debt outstanding in
2003 of $18.9 billion compared to $17.8 billion in
2002, partially offset by a decrease in our average borrowing
rate from 8.02% in 2002 to 7.99% in 2003. The increased debt was
primarily used for capital expenditures.
Gain (loss) on derivative instruments and
hedging activities, net.
Net gain on
derivative instruments and hedging activities increased
$180 million from a loss of $115 million for the year
ended December 31, 2002 to a gain of $65 million for
the year ended December 31, 2003. The increase is primarily
due to an increase in gains on interest rate agreements, which
do not qualify for hedge accounting under
SFAS No. 133,
Accounting for Derivative Instruments
and Hedging Activities
, which increased from a loss of
$101 million for the year ended December 31, 2002 to a
gain of $57 million for the year ended December 31,
2003.
Gain (loss) on extinguishment of
debt.
Net gain on extinguishment of
debt of $267 million for the year ended December 31,
2003 represents the gain realized on the purchase, in a
non-monetary transaction, of a total of $609 million
principal amount of our outstanding convertible senior notes and
$1.3 billion principal amount of Charter Holdings'
senior notes and senior discount notes in consideration for a
total of $1.6 billion principal amount of 10.25% notes
due 2010 issued by our indirect subsidiary, CCH II. The
gain is net of the write-off of deferred financing costs
associated with the retired debt of $27 million.
Other expense, net.
Other expense increased by $12 million from $4 million
in 2002 to $16 million in 2003. This increase is primarily
due to increases in costs associated with amending a revolving
credit facility of our subsidiaries and costs associated with
terminated debt transactions.
Minority interest.
Minority interest represents the allocation of losses to the
minority interest based on ownership of Charter Holdco, the 10%
dividend on preferred membership units in our indirect
subsidiary, Charter Helicon, LLC and the 2% accretion of the
preferred membership interests in our indirect subsidiary, CC
VIII, LLC, and since June 6, 2003, the pro rata share of
the profits of CC VIII, LLC. See "Certain Relationships and
Related Transactions — Transactions Arising Out of Our
Organizational Structure and Mr. Allen's Investment in
Charter Communications, Inc. and Its Subsidiaries —
Equity Put Rights — CC VIII."
Income tax benefit.
Income tax benefit of $110 million and $460 million
was recognized for the years ended December 31, 2003 and
2002, respectively. The income tax benefits were realized as a
result of decreases in certain deferred tax liabilities related
to our investment in Charter Holdco as well as decreases in the
deferred tax liabilities of certain of our indirect corporate
subsidiaries.
The income tax benefit recognized in the year
ended December 31, 2003 was directly related to the tax
losses allocated to Charter from Charter Holdco. In the second
quarter of 2003, Charter started receiving tax loss allocations
from Charter Holdco. Previously, the tax losses had been
allocated to Vulcan Cable III Inc. and Charter Investment,
Inc. in accordance with the Special Loss Allocations provided
under the Charter Holdco limited liability company agreement. We
do not expect to recognize a similar benefit after 2003 related
to tax loss allocations received from Charter Holdco, due to
limitations associated with our ability to offset future tax
benefits against the remaining deferred tax liabilities.
However, the actual tax provision calculations in future periods
will be the result of current and future temporary differences,
as well as future operating results.
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The income tax benefit recognized in the year
ended December 31, 2002 was directly related to the
impairment of franchises associated with the adoption of
SFAS No. 142.
Cumulative effect of accounting change, net of
tax.
Cumulative effect of accounting
change in 2002 represents the impairment charge recorded as a
result of adopting SFAS No. 142.
Net loss.
Net loss
decreased by $2.3 billion, or 91%, from $2.5 billion
in 2002 to $238 million in 2003 as a result of the factors
described above. The impact of the gain on sale of system,
unfavorable contracts and settlements and gain on debt exchange,
net of minority interest and income tax impacts, was to decrease
net loss by $168 million in 2003. The impact of the
impairment of franchises and the cumulative effect of accounting
change, net of minority interest and income tax impacts, was to
increase net loss by $1.6 billion in 2002.
Preferred stock
dividends.
On August 31, 2001, in
connection with the Cable USA acquisition, Charter issued
505,664 shares (and on February 28, 2003 issued an
additional 39,595 shares) of Series A Convertible
Redeemable Preferred Stock on which it pays or accrues a
quarterly cumulative cash dividend at an annual rate of 5.75% if
paid or 7.75% if accrued on a liquidation preference of
$100 per share.
Loss per common
share.
Loss per common share decreased
by $7.73, from $8.55 per common share for the year ended
December 31, 2002 to $0.82 per common share for the
year ended December 31, 2003 as a result of the factors
described above.
Liquidity and Capital Resources
Introduction
This section contains a discussion of our
liquidity and capital resources, including a discussion of our
cash position, sources and uses of cash, access to credit
facilities and other financing sources, historical financing
activities, cash needs, capital expenditures and outstanding
debt.
Overview
We have a significant level of debt. For the
remainder of 2005, $15 million of our debt matures, and in
2006, an additional $55 million matures. In 2007 and
beyond, significant additional amounts will become due under our
remaining long-term debt obligations.
On September 28, 2005, Charter Holdings and
its wholly owned subsidiaries, CCH I and CIH, completed the
exchange of approximately $6.8 billion total principal
amount of outstanding debt securities of Charter Holdings in a
private placement for new debt securities. Holders of Charter
Holdings notes due in 2009-2010 tendered $3.4 billion
principal amount of notes for $2.9 billion principal amount
of new 11% CCH I notes due 2015. Holders of Charter
Holdings notes due 2011-2012 tendered $845 million
principal amount of notes for $662 million principal amount
of 11% CCH I notes due 2015. In addition, holders of
Charter Holdings notes due 2011-2012 tendered $2.5 billion
principal amount of notes for $2.5 billion principal amount
of new CIH notes. Each series of new CIH notes have the same
coupon and provisions for payment of cash interest as the series
of old Charter Holdings notes for which such CIH notes were
exchanged. In addition, the maturities for each series were
extended three years. On August 17, 2005, CCO Holdings
issued $300 million in debt securities, the proceeds of
which will be used for general corporate purposes, including the
potential payment of dividends or distributions to its parent
companies, including Charter Holdings, to pay interest expense.
Our business requires significant cash to fund
debt service costs, capital expenditures and ongoing operations.
We have historically funded our debt service costs, operating
activities and capital requirements through cash flows from
operating activities, borrowings under the credit facilities,
sales of assets, issuances of debt and equity securities and
cash on hand. However, the mix of funding sources changes from
period to period. For the six months ended June 30,
2005, we generated $181 million of net cash flows from
operating activities after paying cash interest of
$744 million. In addition, we used approximately
$542 million for purchases of property, plant and
equipment. Finally, we had net cash flows used in financing
activities of $314 million, which included, among other
things, approximately $705 million in repayment of
outstanding borrowings under the Charter Operating revolving
credit facility. This repayment was the primary reason cash on
hand decreased by $610 million to $40 million at
June 30, 2005. We expect that our mix of sources of
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funds will continue to change in the future based
on overall needs relative to our cash flow and on the
availability of funds under our credit facilities, our access to
the debt and equity markets, the timing of possible asset sales
and our ability to generate cash flows from operating
activities. We continue to explore asset dispositions as one of
several possible actions that we could take in the future to
improve our liquidity, but we do not presently consider future
asset sales as a significant source of liquidity.
We expect that cash on hand, cash flows from
operating activities and the amounts available under our credit
facilities will be adequate to meet our cash needs in 2005. Cash
flows from operating activities and amounts available under our
credit facilities may not be sufficient to permit us to fund our
operations and satisfy our interest and principal repayment
obligations that come due in 2006 and, we believe, such amounts
will not be sufficient to fund our operations and satisfy such
interest and principal repayment obligations thereafter.
It is likely that we will require additional
funding to repay debt maturing after 2006. We are working with
our financial advisors to address such funding requirements.
However, there can be no assurance that such funding will be
available to us. Although Mr. Allen and his affiliates have
purchased equity from us in the past, Mr. Allen and his
affiliates are not obligated to purchase equity from, contribute
to or loan funds to us in the future.
Credit Facilities and Covenants
Our ability to operate depends upon, among other
things, our continued access to capital, including credit under
the Charter Operating credit facilities. These credit
facilities, along with our indentures, contain certain
restrictive covenants, some of which require us to maintain
specified financial ratios and meet financial tests and to
provide audited financial statements with an unqualified opinion
from our independent auditors. As of June 30, 2005, we are
in compliance with the covenants under our indentures and credit
facilities and we expect to remain in compliance with those
covenants for the next twelve months. As of June 30, 2005,
we had borrowing availability under our credit facilities of
$870 million, none of which was restricted due to
covenants. Continued access to our credit facilities is subject
to our remaining in compliance with the covenants of these
credit facilities, including covenants tied to our operating
performance. If our operating performance results in
non-compliance with these covenants, or if any of certain other
events of non-compliance under these credit facilities or
indentures governing our debt occurs, funding under the credit
facilities may not be available and defaults on some or
potentially all of our debt obligations could occur. An event of
default under the covenants governing any of our debt
instruments could result in the acceleration of our payment
obligations under that debt and, under certain circumstances, in
cross-defaults under our other debt obligations, which could
have a material adverse effect on our consolidated financial
condition and results of operations.
The Charter Operating credit facilities required
us to redeem the CC V Holdings, LLC notes as a result of the
Charter Holdings leverage ratio becoming less than 8.75 to 1.0.
In satisfaction of this requirement, in March 2005, CC V
Holdings, LLC redeemed all of its outstanding notes, at 103.958%
of principal amount, plus accrued and unpaid interest to the
date of redemption. The total cost of the redemption including
accrued and unpaid interest was approximately $122 million
and was funded with borrowings under the Charter Operating
credit facilities.
Specific Limitations
Our ability to make interest payments on our
convertible senior notes, and, in 2006 and 2009, to repay the
outstanding principal of our convertible senior notes of
$25 million and $863 million, respectively, will
depend on our ability to raise additional capital and/or on
receipt of payments or distributions from Charter Holdco or its
subsidiaries, including CIH, CCH I, CCH II, CCO
Holdings and Charter Operating. Distributions by Charter's
subsidiaries to a parent company (including Charter and Charter
Holdco) for payment of principal on Charter's convertible
senior notes, however, are restricted by the indentures
governing the CIH notes, the CCH I notes, the CCH II
notes, CCO Holdings notes and Charter Operating notes, unless
under their respective indentures there is no default and a
specified leverage ratio test is met at the time of such event.
During the six months ended June 30, 2005, Charter Holdings
distributed $60 million to Charter Holdco. As of
June 30, 2005, Charter Holdco was owed $62 million in
intercompany
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loans from its subsidiaries, which were available
to pay interest and principal on Charter's convertible
senior notes. In addition, Charter has $122 million of
governmental securities pledged as security for the next five
semi-annual interest payments on Charter's 5.875%
convertible senior notes.
The indentures governing the Charter Holdings
notes permit Charter Holdings to make distributions to Charter
Holdco for payment of interest or principal on the convertible
senior notes, only if, after giving effect to the distribution,
Charter Holdings can incur additional debt under the leverage
ratio of 8.75 to 1.0, there is no default under Charter
Holdings' indentures and other specified tests are met. For
the quarter ended June 30, 2005, there was no default under
Charter Holdings' indentures and other specified tests were
met. However, Charter Holdings did not meet the leverage ratio
of 8.75 to 1.0 based on June 30, 2005 financial results. As
a result, distributions from Charter Holdings to Charter or
Charter Holdco are currently restricted and will continue to be
restricted until that test is met. During this restriction
period, the indentures governing the Charter Holdings notes
permit Charter Holdings and its subsidiaries to make specified
investments in Charter Holdco or Charter, up to an amount
determined by a formula, as long as there is no default under
the indentures.
In accordance with the registration rights
agreement entered into with our initial sale, we were required
to register for resale by April 21, 2005 our 5.875%
convertible senior notes due 2009, issued in November 2004.
Since these convertible notes were not registered by that date,
we paid or will pay liquidated damages totaling $0.5 million
through July 14, 2005, the day prior to the effective date
of the registration statement. In addition, in accordance with
the share lending agreement entered into in connection with the
initial sale of our 5.875% convertible senior notes due 2009, we
were required to register by April 1, 2005 150 million
shares of our Class A common stock that Charter was
obligated to lend to Citigroup Global Markets Limited
("CGML") at CGML's request. Because this
registration statement was not declared effective by such date,
we paid liquidated damages totaling $11 million from
April 2, 2005 through July 17, 2005, the day before
the effective date of the registration statement. The liquidated
damages were recorded as interest expense in the condensed
consolidated statements of operations included elsewhere in this
prospectus.
Our significant amount of debt could negatively
affect our ability to access additional capital in the future.
No assurances can be given that we will not experience liquidity
problems if we do not obtain sufficient additional financing on
a timely basis as our debt becomes due or because of adverse
market conditions, increased competition or other unfavorable
events. If, at any time, additional capital or borrowing
capacity is required beyond amounts internally generated or
available under our credit facilities or through additional debt
or equity financings, we would consider:
•
issuing equity that would significantly dilute
    existing shareholders;
•
issuing convertible debt or some other securities
    that may have structural or other priority over our existing
    notes and may also significantly dilute Charter's existing
    shareholders;
•
further reducing our expenses and capital
    expenditures, which may impair our ability to increase revenue;
•
selling assets; or
•
requesting waivers or amendments with respect to
    our credit facilities, the availability and terms of which would
    be subject to market conditions.
If the above strategies are not successful, we
could be forced to restructure our obligations or seek
protection under the bankruptcy laws. In addition, if we need to
raise additional capital through the issuance of equity or find
it necessary to engage in a recapitalization or other similar
transaction, our shareholders could suffer significant dilution
and our noteholders might not receive principal and interest
payments to which they are contractually entitled.
Issuance of Charter Operating Notes in
Exchange for Charter Holdings Notes; Repurchase of Convertible
Notes
In March and June 2005, our subsidiary, Charter
Operating, consummated exchange transactions with a small number
of institutional holders of Charter Holdings 8.25% senior
notes due 2007 pursuant to
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which Charter Operating issued, in private
placement transactions, approximately $333 million
principal amount of new notes with terms identical to Charter
Operating's 8.375% senior second lien notes due 2014
in exchange for approximately $346 million of the Charter
Holdings 8.25% senior notes due 2007. In addition, during
the six months ended June 30, 2005, we repurchased, in
private transactions, from a small number of institutional
holders, a total of $131 million principal amount of our
4.75% convertible senior notes due 2006. Approximately
$25 million principal amount of these notes remain
outstanding.
Sale of Assets
In March 2004, we closed the sale of certain
cable systems in Florida, Pennsylvania, Maryland, Delaware and
West Virginia to Atlantic Broadband Finance, LLC. We closed the
sale of an additional cable system in New York to Atlantic
Broadband Finance, LLC in April 2004. The total net
proceeds from the sale of all of these systems were
approximately $735 million. The proceeds were used to repay
a portion of our revolving credit facilities.
Summary of Outstanding Contractual
    Obligations
The following table summarizes our payment
obligations as of December 31, 2004 under our long-term
debt and certain other contractual obligations and commitments
(dollars in millions).
Payments by Period
Less than
1-3
3-5
More than
Total
1 Year
Years
Years
5 Years
Contractual Obligations
Long-Term Debt Principal Payments(1)
$
19,791
$
30
$
917
$
5,898
$
12,946
Long-Term Debt Interest Payments(2)
10,109
1,454
3,348
3,332
1,975
Payments on Interest Rate Instruments(3)
81
50
31
—
—
Capital and Operating Lease Obligations(1)
88
23
30
17
18
Programming Minimum Commitments(4)
1,579
318
719
542
—
Other(5)
272
62
97
46
67
Total
$
31,920
$
1,937
$
5,142
$
9,835
$
15,006
(1)
The table presents maturities of long-term debt
    outstanding as of December 31, 2004 and does not reflect
    the effects of the March 2005 redemption of the CC V
    Holdings, LLC notes. Refer to "Description of Certain
    Indebtedness" and Notes 9 and 23 to our
    December 31, 2004 consolidated financial statements
    included in this prospectus for a description of our long-term
    debt and other contractual obligations and commitments.
(2)
Interest payments on variable debt are estimated
    using amounts outstanding at December 31, 2004 and the
    average implied forward London Interbank Offering Rate (LIBOR)
    rates applicable for the quarter during the interest rate reset
    based on the yield curve in effect at December 31, 2004.
    Actual interest payments will differ based on actual LIBOR rates
    and actual amounts outstanding for applicable periods.
(3)
Represents amounts we will be required to pay
    under our interest rate hedge agreements estimated using the
    average implied forward LIBOR rates applicable for the quarter
    during the interest rate reset based on the yield curve in
    effect at December 31, 2004.
(4)
We pay programming fees under multi-year
    contracts ranging generally from three to six years typically
    based on a flat fee per customer, which may be fixed for the
    term or may in some cases, escalate over the term. Programming
    costs included in the accompanying statements of operations were
    $1.3 billion, $1.2 billion and $1.2 billion for
    the years ended December 31, 2004, 2003 and 2002,
    respectively. Certain of our programming agreements are based on
    a flat fee per month or have guaranteed minimum payments. The
    table sets forth the aggregate guaranteed minimum commitments
    under our programming contracts.
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(5)
"Other" represents other guaranteed
    minimum commitments, which consist primarily of commitments to
    our billing services vendors.
The following items are not included in the
contractual obligations table because the obligations are not
fixed and/ or determinable due to various factors discussed
below. However, we incur these costs as part of our operations:
•
We also rent utility poles used in our
    operations. Generally, pole rentals are cancelable on short
    notice, but we anticipate that such rentals will recur. Rent
    expense incurred for pole rental attachments for the years ended
    December 31, 2004, 2003 and 2002, was $43 million,
    $40 million and $41 million, respectively.
•
We pay franchise fees under multi-year franchise
    agreements based on a percentage of revenues earned from video
    service per year. We also pay other franchise related costs,
    such as public education grants under multi-year agreements.
    Franchise fees and other franchise-related costs included in the
    accompanying statements of operations were $164 million,
    $162 million and $160 million for the years ended
    December 31, 2004, 2003 and 2002, respectively.
•
We also have $166 million in letters of
    credit, primarily to our various worker's compensation,
    property casualty and general liability carriers as collateral
    for reimbursement of claims. These letters of credit reduce the
    amount we may borrow under our credit facilities.
Historical Operating, Financing and
    Investing Activities
We held $40 million in cash and cash
equivalents as of June 30, 2005 compared to
$650 million as of December 31, 2004. The decrease in
cash and cash equivalents reflects the repayment of
approximately $705 million of outstanding borrowings under
the Charter Operating revolving credit facility through a series
of transactions in February 2005.
Operating
Activities.
Net cash provided by
operating activities increased $13 million, or 8%, from
$168 million for the six months ended June 30, 2004 to
$181 million for the six months ended June 30, 2005.
For the six months ended June 30, 2005, net cash provided
by operating activities increased primarily as a result of
changes in operating assets and liabilities that used
$92 million less cash during the six months ended
June 30, 2005 than the corresponding period in 2004
combined with an increase in revenue over cash costs year over
year partially offset by an increase in cash interest expense of
$117 million over the corresponding prior period.
Net cash provided by operating activities
decreased $293 million, or 38%, from $765 million for
the year ended December 31, 2003 to $472 million for
the year ended December 31, 2004. For the year ended
December 31, 2004, net cash provided by operating
activities decreased primarily as a result of changes in
operating assets and liabilities that provided $83 million
less cash during the year ended December 31, 2004 than the
corresponding period in 2003 and an increase in cash interest
expense of $203 million over the corresponding prior
period. The change in operating assets and liabilities is
primarily the result of the benefit in the year ended
December 31, 2003 from collection of receivables from
programmers related to network launches, while accounts
receivable remained essentially flat in the year ended
December 31, 2004.
Net cash provided by operating activities for the
years ended December 31, 2003 and 2002 was
$765 million and $748 million, respectively. Operating
activities provided $17 million more cash in 2003 than in
2002 primarily due to an increase in revenue over cash costs
year over year partially offset by changes in operating assets
and liabilities that provided $82 million less cash in 2003
than in 2002.
Investing
Activities.
Net cash used by investing
activities for the six months ended June 30, 2005 was
$477 million and net cash provided by investing activities
for the six months ended June 30, 2004 was
$273 million. Investing activities used $750 million
more cash during the six months ended June 30, 2005 than
the corresponding period in 2004 primarily as a result of
proceeds from the sale of certain cable
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systems to Atlantic Broadband Finance, LLC in
2004 offset by increased cash used for capital expenditures in
2005.
Net cash used in investing activities for the
year ended December 31, 2004 and 2003 was $243 million
and $817 million, respectively. Investing activities used
$574 million less cash during the year ended
December 31, 2004 than the corresponding period in 2003
primarily as a result of cash provided by proceeds from the sale
of certain cable systems to Atlantic Broadband Finance, LLC and
increased cash used for capital expenditures.
Net cash used in investing activities for the
years ended December 31, 2003 and 2002 was
$817 million and $2.4 billion, respectively. Investing
activities used $1.5 billion less cash in 2003 than in 2002
primarily as a result of reductions in capital expenditures and
acquisitions. Purchases of property, plant and equipment used
$1.3 billion less cash in 2003 than in 2002 as a result of
reduced rebuild and upgrade activities and our efforts to reduce
capital expenditures. Payments for acquisitions used
$139 million less cash in 2003 than in 2002.
Financing
Activities.
Net cash used in financing
activities decreased $130 million from $444 million
for the six months ended June 30, 2004 to $314 million
for the six months ended June 30, 2005. The decrease in
cash used during the six months ended June 30, 2005 as
compared to the corresponding period in 2004, was primarily the
result of a decrease in payments for debt issuance costs and in
net repayments of long-term debt.
Net cash provided by financing activities for the
year ended December 31, 2004 was $294 million and the
net cash used in financing activities for the year ended
December 31, 2003 was $142 million. The increase in
cash provided during the year ended December 31, 2004, as
compared to the corresponding period in 2003, was primarily the
result of an increase in borrowings of long-term debt and
proceeds from issuance of debt reduced by repayments of
long-term debt.
Net cash used in financing activities was
$142 million for the year ended December 31, 2003,
whereas net cash provided by financing activities for the year
ended December 31, 2002 was $1.9 billion. Financing
activities provided $2.1 billion less cash in 2003 than in
2002. The decrease in cash provided in 2003 compared to 2002 was
primarily due to a decrease in borrowings of long-term debt.
Capital Expenditures
We have significant ongoing capital expenditure
requirements. However, we experienced a significant decline in
such requirements starting in 2003. This decline was primarily
the result of a substantial reduction in rebuild costs as our
network had been largely upgraded and rebuilt in prior years.
Capital expenditures, excluding acquisitions of cable systems,
were $542 million, $390 million, $924 million,
$854 million and $2.2 billion for the six months ended
June 30, 2005 and 2004 and the years ended
December 31, 2004, 2003 and 2002, respectively. The
majority of the capital expenditures in 2004 and 2003 related to
our customer premise equipment costs. The majority of the
capital expenditures in 2002 related to our rebuild and upgrade
program and purchases of customer premise equipment. Capital
expenditures for the six months ended June 30, 2005
increased as compared to the six months ended June 30, 2004
as a result of increased spending on support capital related to
our investment in service improvements; scalable infrastructure
related to telephone services, VOD and digital simulcast; and
customer premise equipment primarily related to the continued
demand for advanced digital set-top terminals. See the table
below for more details.
Upgrading our cable systems has enabled us to
offer digital television, high-speed Internet services, VOD,
interactive services, additional channels and tiers, expanded
pay-per-view options and telephone services to a larger customer
base. Our capital expenditures are funded primarily from cash
flows from operating activities, the issuance of debt and
borrowings under credit facilities. In addition, during the six
months ended June 30, 2005 and 2004 and the years ended
December 31, 2004, 2003 and 2002, our liabilities related
to capital expenditures increased $45 million and decreased
$52 million, $43 million, $33 million and
$55 million, respectively.
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During 2005, we expect capital expenditures to be
approximately $1 billion. The increase in capital
expenditures for 2005 compared to 2004 is the result of expected
increases in telephone services and deployment of advanced
digital set-top terminals. We expect that the nature of these
expenditures will continue to be composed primarily of purchases
of customer premise equipment, support capital and for scalable
infrastructure costs. We expect to fund capital expenditures for
2005 primarily from cash flows from operating activities and
borrowings under our credit facilities.
We have adopted capital expenditure disclosure
guidance, which was developed by eleven publicly traded cable
system operators, including Charter, with the support of the
National Cable & Telecommunications Association
("NCTA"). The disclosure is intended to provide more
consistency in the reporting of operating statistics in capital
expenditures and customers among peer companies in the cable
industry. These disclosure guidelines are not required
disclosure under GAAP, nor do they impact our accounting for
capital expenditures under GAAP.
The following table presents our major capital
expenditures categories in accordance with NCTA disclosure
guidelines for the six months ended June 30, 2005 and 2004
and the years ended December 31, 2004, 2003 and 2002
(dollars in millions):
Six Months
Ended
For the Years Ended
June 30,
December 31,
2005
2004
2004
2003
2002
Customer premise equipment(a)
$
228
$
226
$
451
$
380
$
748
Scalable infrastructure(b)
89
33
108
67
261
Line extensions(c)
77
53
131
131
101
Upgrade/ Rebuild(d)
22
16
49
132
777
Support capital(e)
126
62
185
144
280
Total capital expenditures(f)
$
542
$
390
$
924
$
854
$
2,167
(a)
Customer premise equipment includes costs
    incurred at the customer residence to secure new customers,
    revenue units and additional bandwidth revenues. It also
    includes customer installation costs in accordance with
    SFAS 51 and customer premise equipment (e.g., set-top
    terminals and cable modems, etc.).
(b)
Scalable infrastructure includes costs, not
    related to customer premise equipment or our network, to secure
    growth of new customers, revenue units and additional bandwidth
    revenues or provide service enhancements (e.g., headend
    equipment).
(c)
Line extensions include network costs associated
    with entering new service areas (e.g., fiber/coaxial cable,
    amplifiers, electronic equipment, make-ready and design
    engineering).
(d)
Upgrade/rebuild includes costs to modify or
    replace existing fiber/coaxial cable networks, including
    betterments.
(e)
Support capital includes costs associated with
    the replacement or enhancement of non-network assets due to
    technological and physical obsolescence (e.g., non-network
    equipment, land, buildings and vehicles).
(f)
Represents all capital expenditures made during
    the six months ended June 30, 2005 and 2004 and the
    years ended December 31, 2004, 2003 and 2002, respectively.
Interest Rate Risk
We are exposed to various market risks, including
fluctuations in interest rates. We use interest rate risk
management derivative instruments, such as interest rate swap
agreements and interest rate collar agreements (collectively
referred to herein as interest rate agreements) as required
under the terms of the credit facilities of our subsidiaries.
Our policy is to manage interest costs using a mix of fixed and
variable rate debt. Using interest rate swap agreements, we
agree to exchange, at specified intervals through 2007,
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the difference between fixed and variable
interest amounts calculated by reference to an agreed-upon
notional principal amount. Interest rate collar agreements are
used to limit our exposure to, and to derive benefits from,
interest rate fluctuations on variable rate debt to within a
certain range of rates. Interest rate risk management agreements
are not held or issued for speculative or trading purposes.
As of June 30, 2005 and December 31,
2004, our long-term debt totaled approximately
$19.2 billion and $19.5 billion, respectively. This
debt was comprised of approximately $5.4 billion and
$5.5 billion of credit facility debt, $12.9 billion
and $13.0 billion accreted value of high-yield notes and
$863 million and $990 million accreted value of
convertible senior notes, respectively.
As of June 30, 2005 and December 31,
2004, the weighted average interest rate on the credit facility
debt was approximately 7.2% and 6.8%, the weighted average
interest rate on the high-yield notes was approximately 9.9% and
9.9%, and the weighted average interest rate on the convertible
senior notes was approximately 5.8% and 5.7%, respectively,
resulting in a blended weighted average interest rate of 9.0%
and 8.8%, respectively. The interest rate on approximately 81%
and 83% of the total principal amount of our debt was
effectively fixed, including the effects of our interest rate
hedge agreements as of June 30, 2005 and December 31,
2004, respectively. The fair value of our high-yield notes was
$10.9 billion and $12.2 billion at June 30, 2005
and December 31, 2004, respectively. The fair value of our
convertible senior notes was $562 million and
$1.1 billion at June 30, 2005 and December 31,
2004, respectively. The fair value of our credit facilities was
$5.4 billion and $5.5 billion at June 30, 2005
and December 31, 2004, respectively. The fair value of
high-yield and convertible notes is based on quoted market
prices, and the fair value of the credit facilities is based on
dealer quotations.
We do not hold or issue derivative instruments
for trading purposes. We do, however, have certain interest rate
derivative instruments that have been designated as cash flow
hedging instruments. Such instruments effectively convert
variable interest payments on certain debt instruments into
fixed payments. For qualifying hedges, SFAS No. 133 allows
derivative gains and losses to offset related results on hedged
items in the consolidated statement of operations. We have
formally documented, designated and assessed the effectiveness
of transactions that receive hedge accounting. For the six
months ended June 30, 2005 and 2004 and the years ended
December 31, 2004, 2003 and 2002, net gain (loss) on
derivative instruments and hedging activities includes gains of
$1 million, $2 million, $4 million and
$8 million and losses of $14 million, respectively,
which represent cash flow hedge ineffectiveness on interest rate
hedge agreements arising from differences between the critical
terms of the agreements and the related hedged obligations.
Changes in the fair value of interest rate agreements designated
as hedging instruments of the variability of cash flows
associated with floating-rate debt obligations that meet the
effectiveness criteria of SFAS No. 133 are reported in
accumulated other comprehensive loss. For the six months ended
June 30, 2005 and 2004 and the years ended
December 31, 2004, 2003 and 2002, a gain of
$9 million, $29 million, $42 million and
$48 million and losses of $65 million, respectively,
related to derivative instruments designated as cash flow
hedges, was recorded in accumulated other comprehensive loss and
minority interest. The amounts are subsequently reclassified
into interest expense as a yield adjustment in the same period
in which the related interest on the floating-rate debt
obligations affects earnings (losses).
Certain interest rate derivative instruments are
not designated as hedges as they do not meet the effectiveness
criteria specified by SFAS No. 133. However, management
believes such instruments are closely correlated with the
respective debt, thus managing associated risk. Interest rate
derivative instruments not designated as hedges are marked to
fair value, with the impact recorded as gain (loss) on
derivative instruments and hedging activities in our statements
of operations. For the six months ended June 30, 2005 and
2004 and the years ended December 31, 2004, 2003 and 2002,
net gain (loss) on derivative instruments and hedging
activities includes gains of $25 million, $54 million,
$65 million and $57 million and losses of
$101 million, respectively, for interest rate derivative
instruments not designated as hedges.
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The table set forth below summarizes the fair
values and contract terms of financial instruments subject to
interest rate risk maintained by us as of December 31, 2004
(dollars in millions):
Fair Value at
December 31,
2005
2006
2007
2008
2009
Thereafter
Total
2004
Debt
Fixed Rate
$
—
$
156
$
451
$
228
$
4,260
$
8,631
$
13,726
$
12,807
Average Interest Rate
—
4.75
%
8.25
%
10.93
%
8.85
%
9.32
%
9.12
%
Variable Rate
$
30
$
30
$
280
$
630
$
780
$
4,315
$
6,065
$
6,052
Average Interest Rate
6.47
%
7.08
%
7.17
%
7.45
%
7.73
%
8.40
%
8.14
%
Interest Rate Instruments
Variable to Fixed Swaps
$
990
$
873
$
775
$
—
$
—
$
—
$
2,638
$
(69
)
Average Pay Rate
7.94
%
8.23
%
8.04
%
—
—
—
8.07
%
Average Receive Rate
6.36
%
7.08
%
7.20
%
—
—
—
6.85
%
The notional amounts of interest rate instruments
do not represent amounts exchanged by the parties and, thus, are
not a measure of our exposure to credit loss. The amounts
exchanged are determined by reference to the notional amount and
the other terms of the contracts. The estimated fair value
approximates the costs (proceeds) to settle the outstanding
contracts. Interest rates on variable debt are estimated using
the average implied forward London Interbank Offering Rate
(LIBOR) rates for the year of maturity based on the yield
curve in effect at December 31, 2004.
At June 30, 2005 and December 31, 2004,
we had outstanding $2.2 billion and $2.7 billion and
$20 million and $20 million, respectively, in notional
amounts of interest rate swaps and collars, respectively. The
notional amounts of interest rate instruments do not represent
amounts exchanged by the parties and, thus, are not a measure of
exposure to credit loss. The amounts exchanged are determined by
reference to the notional amount and the other terms of the
contracts.
Recently Issued Accounting Standards
In November 2004, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 153,
Exchanges of Non-monetary Assets — An Amendment of
APB No. 29
. This statement eliminates the
exception to fair value for exchanges of similar productive
assets and replaces it with a general exception for exchange
transactions that do not have commercial substance —
that is, transactions that are not expected to result in
significant changes in the cash flows of the reporting entity.
We adopted this pronouncement effective April 1, 2005. The
exchange transaction discussed in Note 3 to our
consolidated financial statements included elsewhere in this
prospectus, was accounted for under this standard.
In December 2004, the Financial Accounting
Standards Board issued the revised SFAS No. 123,
Share-Based Payment
, which addresses the accounting for
share-based payment transactions in which a company receives
employee services in exchange for (a) equity instruments of
that company or (b) liabilities that are based on the fair
value of the company's equity instruments or that may be
settled by the issuance of such equity instruments. This
statement will be effective for us beginning January 1,
2006. Because we adopted the fair value recognition provisions
of SFAS No. 123 on January 1, 2003, we do not expect
this revised standard to have a material impact on our financial
statements.
We do not believe that any other recently issued,
but not yet effective accounting pronouncements, if adopted,
would have a material effect on our accompanying financial
statements.
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BUSINESS
Overview
We are a broadband communications company
operating in the United States, with approximately
6.19 million customers at June 30, 2005. Through our
broadband network of coaxial and fiber optic cable, we offer our
customers traditional cable video programming (analog and
digital, which we refer to as "video" service),
high-speed cable Internet access, advanced broadband cable
services (such as video on demand ("VOD"), high
definition television service and interactive television) and,
in some of our markets, we offer telephone service. See
"Business — Products and Services" for
further description of these terms, including
"customers."
At June 30, 2005, we served approximately
5.94 million analog video customers, of which approximately
2.69 million were also digital video customers. We also
served approximately 2.02 million high-speed Internet
customers (including approximately 234,600 who received only
high-speed Internet services). We also provided telephone
service to approximately 67,800 customers as of that date.
At June 30, 2005, our investment in cable
properties, long-term debt, accumulated deficit and total
shareholders' deficit were $15.9 billion,
$19.2 billion, $9.9 billion and $5.1 billion,
respectively. Our working capital deficit was $919 million
at June 30, 2005. For the six months ended June 30,
2005, our revenues, net loss applicable to common stock and loss
per common share were approximately $2.6 billion,
$709 million and $2.34, respectively.
We have a history of net losses. Further, we
expect to continue to report net losses for the foreseeable
future. Our net losses are principally attributable to
insufficient revenue to cover the interest costs we incur
because of our high level of debt, the depreciation expenses
that we incur resulting from the capital investments we have
made in our cable properties, and the amortization and
impairment of our franchise intangibles. We expect that these
expenses (other than impairment of franchises) will remain
significant, and we therefore expect to continue to report net
losses for the foreseeable future. Additionally, because
minority interest in Charter Holdco was substantially eliminated
at December 31, 2003, beginning in the first quarter of
2004, we absorb substantially all future losses before income
taxes that otherwise would have been allocated to minority
interest. This resulted in an additional $2.4 billion of
net loss for the year ended December 31, 2004. Under our
existing capital structure, future losses will continue to be
absorbed by Charter.
Charter was organized as a Delaware corporation
in 1999 and completed an initial public offering of its
Class A common stock in November 1999. Charter is a holding
company whose principal assets are an approximate 47% equity
interest and a 100% voting interest in Charter Holdco, the
direct parent of Charter Holdings. Charter also holds certain
preferred equity and indebtedness of Charter Holdco that mirror
the terms of securities issued by Charter. Charter's only
business is to act as the sole manager of Charter Holdco and its
subsidiaries. As sole manager, Charter controls the affairs of
Charter Holdco and its subsidiaries. Certain of our subsidiaries
commenced operations under the "Charter
Communications" name in 1994, and our growth to date has
been primarily due to acquisitions and business combinations,
most notably acquisitions completed from 1999 through 2001,
pursuant to which we acquired a total of approximately
5.5 million customers. We do not expect to make any
significant acquisitions in the foreseeable future, but plan to
evaluate opportunities to consolidate our operations through
exchanges of cable systems with other cable operators, as they
arise. We may also sell certain assets from time to time.
Paul G. Allen owns approximately 53% of Charter Holdco
through affiliated entities. His membership units are
convertible at any time for shares of our Class A common
stock on a one-for-one basis. Paul G. Allen controls
Charter with an as-converted common equity interest of
approximately 57% and a beneficial voting control interest of
approximately 93% as of June 30, 2005.
Business Strategy
Our principal financial goal is to maximize our
return on invested capital. To do so, we will focus on
increasing revenues, growing our customer base, improving
customer retention and enhancing customer
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satisfaction by providing reliable, high-quality
service offerings, superior customer service and attractive
bundled offerings.
Specifically, in the near term, we are focusing
on:
•
improving the overall value to our customers of
    our service offerings, relative to pricing;
•
developing more sophisticated customer care
    capabilities through investment in our customer care and
    marketing infrastructure, including targeted marketing
    capabilities;
•
executing growth strategies for new services,
    including digital simulcast, VOD, telephone, and digital video
    recorder service ("DVR");
•
managing our operating costs by exercising
    discipline in capital and operational spending; and
•
identifying opportunities to continue to improve
    our balance sheet and liquidity.
We have begun an internal operational improvement
initiative aimed at helping us gain new customers and retain
existing customers, which is focused on customer care, technical
operations and sales. We intend to increase efforts to focus
management attention on instilling a customer service oriented
culture throughout the company and to give those areas of our
operations increased priority of resources for staffing levels,
training budgets and financial incentives for employee
performance in those areas.
We believe that our high-speed Internet service
will continue to provide a substantial portion of our revenue
growth in the near future. We also plan to continue to expand
our marketing of high-speed Internet service to the business
community, which we believe has shown an increasing interest in
high-speed Internet service and private network services.
Additionally, we plan to continue to prepare additional markets
for telephone launches in 2005.
We believe we offer our customers an excellent
choice of services through a variety of bundled packages,
particularly with respect to our digital video and high-speed
Internet services as well as telephone in certain markets. Our
digital platform enables us to offer a significant number and
variety of channels, and we offer customers the opportunity to
choose among groups of channel offerings, including premium
channels, and to combine selected programming with other
services such as high-speed Internet, high definition television
(in selected markets) and VOD (in selected markets).
We continue to pursue opportunities to improve
our liquidity. Our efforts in this regard resulted in the
completion of a number of transactions in 2004 and 2005, as
follows:
•
the September 2005 exchange by Charter Holdings,
    CCH I and CIH of approximately $6.8 billion in total
    principal amount of outstanding debt securities of Charter
    Holdings in a private placement for new debt securities;
•
the August 2005 sale by our subsidiaries, CCO
    Holdings and CCO Holdings Capital Corp., of $300 million of
    8 3/4% senior notes due 2013;
•
the March and June 2005 issuance of
    $333 million of Charter Operating notes in exchange for
    $346 million of Charter Holdings notes;
•
the March and June 2005 repurchase of
    $131 million of our 4.75% convertible senior notes due
    2006 leaving $25 million in principal amount outstanding;
•
the March 2005 redemption of all of CC V
    Holdings, LLC's outstanding 11.875% senior discount notes
    due 2008 at a total cost of $122 million;
•
the December 2004 sale by our subsidiaries, CCO
    Holdings and CCO Holdings Capital Corp. of $550 million of
    senior floating rate notes due 2010;
•
the November 2004 sale of $862.5 million of
    5.875% convertible senior notes due 2009 and the December 2004
    redemption of all of our outstanding 5.75% convertible senior
    notes due 2005 ($588 million principal amount);
•
the April 2004 sale of $1.5 billion of
    senior second lien notes by our subsidiary, Charter Operating,
    together with the concurrent refinancing of its credit
    facilities; and
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•
the sale in the first half of 2004 of non-core
    cable systems for $735 million, the proceeds of which were
    used to reduce indebtedness.
Charter Background
In 1998, Mr. Allen acquired approximately
99% of the non-voting economic interests in Marcus Cable, which
owned various operating subsidiaries that served approximately
1.1 million customers. Thereafter, in December 1998, Mr.
Allen acquired, through a series of transactions, approximately
94% of the equity interests of Charter Investment, Inc., which
controlled various operating subsidiaries that serviced
approximately 1.2 million customers.
In March and April of 1999, Mr. Allen
acquired the remaining interests in Marcus Cable and, through a
series of transactions, combined the Marcus companies with the
Charter companies. As a consequence, the former operating
subsidiaries of Marcus Cable and all of the cable systems they
owned came under the ownership of Charter Holdings.
In July 1999, Charter was formed as a wholly
owned subsidiary of Charter Investment, Inc., and in November
1999, Charter completed its initial public offering.
During 1999 and 2000, Charter completed 16 cable
system acquisitions for a total purchase price of
$14.7 billion including $9.1 billion in cash, $3.3
billion of assumed debt, $1.9 billion of equity interests
issued and Charter cable systems valued at $420 million.
These transactions resulted in a net total increase of
approximately 3.9 million customers as of their respective
dates of acquisition.
In February 2001, Charter entered into several
agreements with AT&T Broadband, LLC involving several
strategic cable system transactions that resulted in a net
addition of customers for our systems. In the AT&T
transactions, which closed in June 2001, Charter acquired cable
systems from AT&T Broadband serving approximately 551,000
customers for a total of $1.74 billion consisting of
$1.71 billion in cash and a Charter cable system valued at
$25 million. In 2001, Charter also acquired all of the
outstanding stock of Cable USA, Inc. and the assets of certain
of its related affiliates in exchange for consideration valued
at $100 million (consisting of Series A preferred
stock with a face amount of $55 million and the remainder
in cash and assumed debt).
During 2002, Charter purchased additional cable
systems in Illinois serving approximately 28,000 customers, for
a total cash purchase price of approximately $63 million.
For additional information regarding
Charter's acquisitions see "Management's
Discussion and Analysis of Financial Condition and Results of
Operations — Acquisitions."
In 2003 and 2004, Charter sold certain non-core
cable systems serving approximately 264,100 customers in
Florida, Pennsylvania, Maryland, Delaware, West Virginia and
Washington for an aggregate consideration of approximately
$826 million.
Products and Services
We offer our customers traditional cable video
programming (analog and digital video) as well as high-speed
Internet services and in some areas advanced broadband services
such as high definition television, VOD and interactive
television. We sell our video programming and high-speed
Internet services on a subscription basis, with prices and
related charges, that vary primarily based on the types of
service selected, whether the services are sold as a
"bundle" versus on an "à la carte"
basis, and the equipment necessary to receive the services, with
some variation in prices depending on geographic location. In
addition, we offer telephone service to a limited number of
customers.
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The following table summarizes our customer
statistics for analog and digital video, residential high-speed
Internet, and residential telephone as of June 30, 2005 and
2004:
Approximate as of
June 30,
June 30,
2005(a)
2004(a)
Cable Video Services:
Analog Video:
Residential (non-bulk) analog video customers(b)
5,683,400
5,892,600
Multi-dwelling (bulk) and commercial unit
    customers(c)
259,700
240,600
Analog video customers(b)(c)
5,943,100
6,133,200
Digital Video:
Digital video customers(d)
2,685,600
2,650,200
Non-Video Cable Services:
Residential high-speed Internet customers(e)
2,022,200
1,711,400
Telephone customers(f)
67,800
31,200
(a)
"Customers" include all persons our
    corporate billing records show as receiving service (regardless
    of their payment status), except for complimentary accounts
    (such as our employees). In addition, at June 30, 2005 and
    2004, "customers" include approximately 45,100 and
    58,700 persons whose accounts were over 60 days past due in
    payment, approximately 8,200 and 6,300 persons whose accounts
    were over 90 days past due in payment, and approximately
    4,500 and 2,000 of which were over 120 days past due in
    payment, respectively.
(b)
"Residential (non-bulk) analog video
    customers" include all customers who receive video
    services, except for complimentary accounts (such as our
    employees).
(c)
Included within "video customers" are
    those in commercial and multi-dwelling structures, which are
    calculated on an equivalent bulk unit ("EBU") basis.
    EBU is calculated for a system by dividing the bulk price
    charged to accounts in an area by the most prevalent price
    charged to non-bulk residential customers in that market for the
    comparable tier of service. The EBU method of estimating analog
    video customers is consistent with the methodology used in
    determining costs paid to programmers and has been consistently
    applied year over year. As we increase our effective analog
    prices to residential customers without a corresponding increase
    in the prices charged to commercial service or multi-dwelling
    customers, our EBU count will decline even if there is no real
    loss in commercial service or multi-dwelling customers.
(d)
"Digital video customers" include all
    households that have one or more digital set-top terminals.
    Included in "digital video customers" on June 30,
    2005 and 2004 are approximately 9,700 and 11,400 customers,
    respectively, that receive digital video service directly
    through satellite transmission.
(e)
"High-speed Internet customers"
    represent those customers who subscribe to our high-speed
    Internet service. At June 30, 2005 and 2004, approximately
    1,787,600 and 1,543,000 of these high-speed Internet customers,
    respectively, also receive video services from us and are
    included within our video statistics above.
(f)
"Telephone customers" include all
    households receiving telephone service.
Video Services
Our video service offerings include the following:
•
Basic Analog Video.
All of our video customers receive a package of basic
    programming, which generally consists of local broadcast
    television, local community programming, including governmental
    and public access, and limited satellite-delivered or
    non-broadcast channels, such as weather, shopping and religious
    services. Our basic channel line-up generally has between 15 and
    30 channels.
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•
Expanded Basic
    Video.
This expanded programming level
    includes a package of satellite-delivered or non-broadcast
    channels and generally has between 30 and 50 channels in
    addition to the basic channel line-up.
•
Premium Channels.
These channels provide commercial-free movies, sports and other
    special event entertainment programming. Although we offer
    subscriptions to premium channels on an individual basis, we
    offer an increasing number of premium channel packages and we
    offer premium channels with our advanced services.
•
Pay-Per-View.
These
    channels allow customers to pay on a per event basis to view a
    single showing of a recently released movie, a one-time special
    sporting event, music concert or similar event on a
    commercial-free basis.
•
Digital Video.
We
    offer digital video service to our customers in several
    different service combination packages. All of our digital
    packages include a digital set-top terminal, an interactive
    electronic programming guide, an expanded menu of pay-per-view
    channels and the option to also receive digital packages which
    range from 4 to 30 additional video channels. We also offer our
    customers certain digital packages with one or more premium
    channels that give customers access to several different
    versions of the same premium channel. Some digital tier packages
    focus on the interests of a particular customer demographic and
    emphasize, for example, sports, movies, family or ethnic
    programming. In addition to video programming, digital video
    service enables customers to receive our advanced services such
    as VOD and high definition television. Other digital packages
    bundle digital television with our advanced services, such as
    high-speed Internet services.
•
Video On Demand and Subscription Video on
    Demand.
We offer VOD service, which
    allows customers to access hundreds of movies and other
    programming at any time with digital picture quality. In some
    systems we also offer subscription VOD (SVOD) for a monthly fee
    or included in a digital tier premium channel subscription.
•
High Definition
    Television.
High definition television
    offers our digital customers video programming at a higher
    resolution than the standard analog or digital video image.
•
Digital Video
    Recorder.
DVR service enables
    customers to digitally record programming and to pause and
    rewind live programming.
High-Speed Internet Services
We offer high-speed Internet services to our
residential and commercial customers primarily via cable modems
attached to personal computers. We generally offer our
high-speed Internet service as Charter High-Speed
Internet
TM
. We also offer traditional dial-up
Internet access in a very limited number of our markets.
We ended the second quarter of 2005 with 18%
penetration of high-speed Internet homes passed, an increase
from 16% penetration of high-speed Internet homes passed at
June 30, 2004. This gave us a percentage increase in
high-speed Internet customers of 18% and an increase in
high-speed Internet revenues of 26% in the six months ended
June 30, 2005 compared to the six months ended
June 30, 2004.
Telephone Services
We continue to deploy voice communications
services using VoIP to transmit digital voice signals over our
systems. At June 30, 2005, our telephone service was
available to approximately 1.7 million homes and we were
marketing to approximately 60% of those homes. We will continue
to prepare additional markets for VoIP launches in 2005.
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Commercial Services
We offer integrated network solutions to
commercial and institutional customers. These solutions include
high-speed Internet and video services. In addition, we offer
high-speed Internet services to small businesses.
Sale of Advertising
We receive revenues from the sale of local
advertising on satellite-delivered networks such as MTV®,
CNN® and ESPN®. In any particular market, we generally
insert local advertising on up to 39 channels. Our system
rebuilds have increased the number of available channels on
which we are able to insert local advertising. We also provide
cross-channel advertising to some programmers.
From time to time, certain of our vendors,
including equipment vendors, have purchased advertising from us.
For the six months ended June 30, 2005 and the years ending
December 31, 2004, 2003 and 2002, we had advertising
revenues from vendors of approximately $7 million,
$16 million, $15 million and $79 million,
respectively. These revenues resulted from purchases at market
rates pursuant to binding agreements.
Pricing of Our Products and Services
Our revenues are derived principally from the
monthly fees our customers pay for the services we offer. A
one-time installation fee, which is sometimes waived or
discounted during certain promotional periods, is charged to new
customers. The prices we charge vary based on the level of
service the customer chooses and the geographic market. Most of
our pricing is reviewed and adjusted on an annual basis.
In accordance with the Federal Communications
Commission's rules, the prices we charge for cable-related
equipment, such as set-top terminals and remote control devices,
and for installation services are based on actual costs plus a
permitted rate of return.
Although our cable service offerings vary across
the markets we serve because of various factors including
competition and regulatory factors, our services, when offered
on a stand-alone basis, are typically offered at monthly price
ranges, excluding franchise fees and other taxes, as follows:
Price Range as of
Service
December 31, 2004
Price Range as of
June 30, 2005
Analog video packages
$
7.00
-
$
54.00
Premium channels
$
10.00
-
$
15.00
Pay-per-view events
$
2.99
-
$
179.00
Digital video packages (including high-speed
    Internet service for higher tiers)
$
34.00
-
$
112.00
High-speed Internet service
$
21.95
-
$
59.99
Video on demand (per selection)
$
0.99
-
$
29.99
High definition television
$
3.99
-
$
6.99
Digital video recorder ("DVR")
$
6.99
-
$
9.99
In addition, from time to time we offer free
service or reduced-price service during promotional periods in
order to attract new customers.
Our Network Technology
The following table sets forth the technological
capacity of our systems as of June 30, 2005 based on a
percentage of homes passed:
550 Megahertz
Less than
to
750
870
Two-way
Two-way
550 Megahertz
660 Megahertz
Megahertz
Megahertz
Capability
Enabled
8
%
5%
42%
45%
92%
87%
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As a result of the upgrade of our systems over
the past several years, approximately 92% of the homes passed by
our systems have bandwidth of 550 megahertz or greater.
This bandwidth capacity enables us to offer digital television,
high-speed Internet services and other advanced services. It
also enables us to offer up to 82 analog channels, and even
more channels when our bandwidth is used for digital signal
transmissions. Our increased bandwidth also permits two-way
communication for Internet access, interactive services, and
potentially, telephone services.
As part of our systems upgrade and partly as a
result of system sales, we reduced the number of headends that
serve our customers from 1,138 at January 1, 2001 to 744 at
June 30, 2005. Because headends are the control centers of
a cable system, where incoming signals are amplified, converted,
processed and combined for transmission to the customer,
reducing the number of headends reduces related equipment,
service personnel and maintenance expenditures. We believe that
the headend consolidation, together with our other upgrades,
allows us to provide enhanced picture quality and greater system
reliability. As a result of the upgrade, approximately 84% of
our customers were served by headends serving at least 10,000
customers as of June 30, 2005.
As of June 30, 2005, our cable systems
consisted of approximately 222,300 strand miles, including
approximately 53,600 strand miles of fiber optic cable, passing
approximately 12.3 million households and serving
approximately 6.2 million customers.
We adopted the hybrid fiber coaxial cable
("HFC") architecture as the standard for our systems
upgrades. HFC architecture combines the use of fiber optic cable
with coaxial cable. Fiber optic cable is a communication medium
that uses glass fibers to transmit signals over long distances
with minimum signal loss or distortion. Fiber optic cable has
excellent broadband frequency characteristics, noise immunity
and physical durability and can carry hundreds of video, data
and voice channels over extended distances. Coaxial cable is
less expensive and requires a more extensive signal
amplification in order to obtain the desired transmission levels
for delivering channels. In most systems, we deliver our signals
via fiber optic cable from the headend to a group of nodes, and
use coaxial cable to deliver the signal from individual nodes to
the homes passed served by that node. Our system design enables
a maximum of 500 homes passed to be served by a single node.
Currently, our average node serves approximately 385 homes
passed. Our system design provides for six strands of fiber to
each node, with two strands activated and four strands reserved
for spares and future services. The design also provides reserve
capacity for the addition of future services.
The primary advantages of HFC architecture over
traditional coaxial-only cable networks include:
•
increased bandwidth capacity, for more channels
    and other services;
•
dedicated bandwidth for two-way services, which
    avoids reverse signal interference problems that can occur with
    two-way communication capability; and
•
improved picture quality and service reliability.
We currently maintain a national network
operations center to monitor our data networks and to further
our strategy of providing high quality service. Centralized
monitoring is increasingly important as we increase the number
of high-speed Internet customers utilizing two-way high-speed
Internet service. Our local dispatch centers focus primarily on
monitoring the HFC plant.
Management of Our Systems
Many of the functions associated with our
financial management are centralized, including accounting,
billing, finance and acquisitions, payroll, accounts payable and
benefits administration, information system design and support,
internal audit, purchasing, marketing, programming contract
administration and Internet service, network and circuits
administration. We operate with four divisions. Each division is
supported by operational, financial, marketing and engineering
functions.
Customer Care
We have 36 customer service locations,
including 14 divisional contact centers that serve
approximately 97% of our customers. Our customer care centers
are managed divisionally by a Vice
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President of Customer Care and are supported by a
corporate care team, which oversees and supports deployment and
execution of care strategies and initiatives on a company-wide
basis. This reflects a substantial consolidation of our customer
care function from over 300 service centers in 2001. We
believe that this consolidation will allow us to improve the
consistency of our service delivery and customer satisfaction by
reducing or eliminating the logistical challenges and poor
economies of scale inherent in maintaining and supervising a
larger number of separately managed service centers.
Specifically, through this consolidation, we are
now able to service our customers 24 hours a day, seven
days a week and utilize technologically advanced equipment that
we believe enhances interactions with our customers through more
intelligent call routing, data management, and forecasting and
scheduling capabilities. We believe this consolidation also
allows us to more effectively provide our customer care
specialists with ongoing training intended to improve complaint
resolution, equipment troubleshooting, sales of new and
additional services, and customer retention.
We believe that, despite our consolidation, we
have not yet sufficiently improved in the area of customer care,
and that this lack of improvement has in part led to a continued
net loss of customers. Accordingly, we have begun an internal
operational improvement initiative aimed at helping us gain new
customers and retain existing customers, which is focused on
customer care, among other areas. We have and we intend to
continue to increase our efforts to focus management attention
on instilling a customer service oriented culture throughout the
company and to give those areas of our operations increased
priority of resources for staffing levels, training budgets and
financial incentives for employee performance in those areas.
In a further effort to better serve our
customers, we have also entered into outsource partnership
agreements with two key outsource providers. We believe the
establishment of these relationships expands our ability to
achieve our service objectives and increases our ability to
support marketing activities by providing additional capacity
available to support customer inquiries.
We also utilize our website to enhance customer
care by enabling customers to view and pay their bills online,
obtain useful information and perform various equipment
troubleshooting procedures.
Sales and Marketing
In the third quarter of 2004, Charter shifted
primary responsibility for implementing sales and marketing
strategies to the divisional and system level, with a single
corporate team to ensure compliance with guidelines established
by the corporate marketing department designed to promote
national branding consistency. Our marketing infrastructure is
intended to promote interaction, information flow and sharing of
best practices between our corporate office and our field
offices, which make strategic decisions as to when and how
marketing programs will be implemented.
Due to our focus in 2003 on certain other
operational matters and due to certain financial constraints, we
reduced spending in 2003 on marketing our products and services.
Marketing expenditures increased 14% for the year ended
December 31, 2004 to $122 million. Although marketing
expenditures decreased 1% to $66 million for the six months
ended June 30, 2005, as compared to the six months ended
June 30, 2004, we expect marketing expenditures to increase
for the remainder of 2005.
We monitor government regulation, customer
perception, competition, pricing and product preferences, among
other factors, to increase our responsiveness to our customers.
Our coordinated marketing strategies include door-to-door
solicitation, telemarketing, media advertising, e-marketing,
direct mail solicitation and retail locations. In 2004, we
increased our focus on marketing and selling our services
through consumer electronics retailers and other retailers that
sell televisions or cable modems.
In January 2004, we introduced the first national
branding campaign in Charter's history. The "Get
Hooked" branding initiative was a key focal point of our
national marketing campaigns in 2004, with the
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aim of promoting deeper market penetration and
increased revenue per customer. In 2004, our corporate team
produced eight national "Get Hooked" marketing
campaigns designed to:
•
Promote awareness and loyalty among existing
    customers and attract new customers;
•
Announce the availability of our advanced
    services as we roll them out in our systems;
•
Promote our advanced services (such as DVR, high
    definition television, telephone, VOD and SVOD) with the goal
    that our customers will view their cable connection as one-stop
    shopping for video, voice, high-speed Internet and interactive
    services; and
•
Promote our bundling of digital video and
    high-speed Internet services and pricing strategies.
Programming
General
We believe that offering a wide variety of
programming is an important factor that influences a
customer's decision to subscribe to and retain our cable
services. We rely on market research, customer demographics and
local programming preferences to determine channel offerings in
each of our markets. We obtain basic and premium programming
from a number of suppliers, usually pursuant to a written
contract. Our programming contracts generally continue for a
fixed period of time, usually from three to ten years, and are
subject to negotiated renewal. Some program suppliers offer
financial incentives to support the launch of a channel and
ongoing marketing support or launch fees. We also negotiate
volume discount pricing structures. Programming costs are
usually payable each month based on calculations performed by us
and are subject to adjustment based on the results of periodic
audits by the programmers.
Costs
Programming tends to be made available to us for
a license fee, which is generally paid based on the number of
customers to whom we make such programming available. Such
license fees may include "volume" discounts available
for higher numbers of customers, as well as discounts for
channel placement or service penetration. Some channels are
available without cost to us for a limited period of time, after
which we pay for the programming. For home shopping channels, we
receive a percentage of the amount our customers spend on home
shopping purchases.
Our cable programming costs have increased, in
every year we have operated, in excess of customary inflationary
and cost-of-living type increases. We expect them to continue to
increase due to a variety of factors, including annual increases
imposed by programmers and additional programming being provided
to customers as a result of system rebuilds and bandwidth
reallocation, both of which increase channel capacity.
In particular, sports programming costs have
increased significantly over the past several years. In
addition, contracts to purchase sports programming sometimes
contain built-in cost increases for programming added during the
term of the contract.
Historically, we have absorbed increased
programming costs in large part through increased prices to our
customers. However, with the impact of competition and other
marketplace factors, there is no assurance that we will be able
to continue to do so. In order to maintain or mitigate
reductions of margins despite increasing programming costs, we
plan to continue to migrate certain program services from our
analog level of service to our digital tiers. As we migrate our
programming to our digital tier packages, certain programming
that was previously available to all of our customers via an
analog signal, may be part of an elective digital tier package.
As a result, the customer base upon which we pay programming
fees will proportionately decrease, and the overall expense for
providing that service would likewise decrease. Reductions in
the size of certain programming customer bases may result in the
loss of specific volume discount benefits.
As measured by programming costs, and excluding
premium services (substantially all of which were renegotiated
and renewed in 2003), as of July 7, 2005 approximately 9%
of our current programming contracts were expired, and
approximately another 21% are scheduled to expire at or before
the end of 2005. We plan to seek to renegotiate the terms of our
agreements with certain programmers as these
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agreements come due for renewal. There can be no
assurance that these agreements will be renewed on favorable or
comparable terms. To the extent that we are unable to reach
agreement with certain programmers on terms that we believe are
reasonable, we may be forced to remove such programming channels
from our line-up, which could result in a further loss of
customers. In addition, our inability to fully pass these
programming cost increases on to our customers would have an
adverse impact on our cash flow and operating margins.
Franchises
As of June 30, 2005, our systems operated
pursuant to a total of approximately 4,100 franchises, permits
and similar authorizations issued by local and state
governmental authorities. Each franchise, permit or similar
authorization is awarded by a governmental authority and such
governmental authority often must approve a transfer to another
party. Most franchises are subject to termination proceedings in
the event of a material breach. In addition, most franchises
require us to pay the granting authority a franchise fee of up
to 5.0% of revenues as defined in the various agreements, which
is the maximum amount that may be charged under the applicable
federal law. We are entitled to and generally do pass this fee
through to the customer.
Prior to the scheduled expiration of most
franchises, we initiate renewal proceedings with the granting
authorities. This process usually takes three years but can take
a longer period of time. The Communications Act provides for an
orderly franchise renewal process in which granting authorities
may not unreasonably withhold renewals. In connection with the
franchise renewal process, many governmental authorities require
the cable operator to make certain commitments. Historically we
have been able to renew our franchises without incurring
significant costs, although any particular franchise may not be
renewed on commercially favorable terms or otherwise. Our
failure to obtain renewals of our franchises, especially those
in the major metropolitan areas where we have the most
customers, could have a material adverse effect on our
consolidated financial condition, results of operations or our
liquidity, including our ability to comply with our debt
covenants. Approximately 11% of our franchises, covering
approximately 11% of our analog video customers were expired as
of June 30, 2005. Approximately 4% of additional
franchises, covering approximately 5% of additional analog video
customers will expire on or before December 31, 2005, if
not renewed prior to expiration. We expect to renew
substantially all of these franchises.
Under the Telecommunications Act of 1996 (the
"1996 Telecom Act"), state and local authorities are
prohibited from limiting, restricting or conditioning the
provision of telecommunications services. They may, however,
impose "competitively neutral" requirements and manage
the public rights-of-way. Granting authorities may not require a
cable operator to provide telecommunications services or
facilities, other than institutional networks, as a condition of
an initial franchise grant, a franchise renewal, or a franchise
transfer. The 1996 Telecom Act also limits franchise fees to an
operator's cable-related revenues and clarifies that they
do not apply to revenues that a cable operator derives from
providing new telecommunications services. In a March 2002
decision, the Federal Communications Commission
("FCC") held that revenue derived from the provision
of cable modem service should not be added to franchise fee
payments already limited by federal law to 5% of traditional
cable service revenue. The same decision tentatively limited
local franchising authority regulation of cable modem service.
The FCC decision was appealed and ultimately affirmed by the
Supreme Court in a June 2005 ruling.
Different legislative proposals have been
introduced in the United States Congress and in some state
legislatures that would greatly streamline cable franchising.
This legislation is intended to facilitate entry by new
competitors, particularly local telephone companies. Such
legislation has already passed in at least one state but is now
subject to court challenge. Although various legislative
proposals provide certain regulatory relief for incumbent cable
operators, these proposals are generally viewed as being more
favorable to new entrants.
Competition
We face competition in the areas of price,
service offerings, and service reliability. We compete with
other providers of television signals and other sources of home
entertainment. In addition, as we continue
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to expand into additional services such as
high-speed Internet access and telephone, we face competition
from other providers of each type of service. We operate in a
very competitive business environment, which can adversely
affect our business and operations.
In terms of competition for customers, we view
ourselves as a member of the broadband communications industry,
which encompasses multi-channel video for television and related
broadband services, such as high-speed Internet and other
interactive video services. In the broadband industry, our
principal competitor for video services throughout our territory
is direct broadcast satellite ("DBS"), and in markets
where it is available, our principal competitor for Internet
services is digital subscriber line ("DSL"). We do not
consider other cable operators to be significant one-on-one
competitors in the market overall, as traditional overbuilds are
infrequent and spotty geographically (although in a particular
market, a cable operator overbuilder would likely be a
significant competitor at the local level). As of June 30,
2005, we are aware of traditional overbuild situations in
service areas covering approximately 5% of our total homes
passed and potential overbuilds in areas servicing approximately
2% of our total homes passed.
Although cable operators tend not to be direct
competitors for customers, their relative size may affect the
competitive landscape in terms of how a cable company competes
against non-cable competitors in the marketplace as well as in
relationships with vendors who deal with cable operators. For
example, a larger cable operator might have better access to and
pricing for the multiple types of services cable companies
offer. Also, a larger entity might have different access to
financial resources and acquisition opportunities.
Our key competitors include:
Direct Broadcast Satellite
Direct broadcast satellite ("DBS") is a
significant competitor to cable systems. The DBS industry has
grown rapidly over the last several years, far exceeding the
growth rate of the cable television industry, and now serves
more than 24 million subscribers nationwide. DBS service
allows the subscriber to receive video services directly via
satellite using a relatively small dish antenna. Consistent with
increasing consolidation in the communications industry, News
Corp., one of the world's largest media companies, acquired
a controlling interest in DIRECTV, Inc. ("DirecTV") in
2003, the largest domestic DBS company. This business
combination could further strengthen DirecTV's competitive
posture, particularly through favorable programming arrangements
with various News Corp. affiliates and subsidiaries, such as the
Fox television network. Additionally, EchoStar Communications
Corporation ("EchoStar") and DirecTV both have entered
into joint marketing agreements with major telecommunications
companies to offer bundled packages combining phone, data and
video services.
Video compression technology and high powered
satellites allow DBS providers to offer more than 200 digital
channels from a single satellite, thereby surpassing the typical
analog cable system. In 2003, major DBS competitors offered a
greater variety of channel packages, and were especially
competitive at the lower end pricing, such as a monthly price of
approximately $30 for 75 channels compared to approximately $40
for the closest comparable package in most of our markets. In
addition, while we continue to believe that the initial
investment by a DBS customer exceeds that of a cable customer,
the initial equipment cost for DBS has decreased substantially,
as the DBS providers have aggressively marketed offers to new
customers of incentives for discounted or free equipment,
installation and multiple units. DBS providers are able to offer
service nationwide and are able to establish a national image
and branding with standardized offerings, which together with
their ability to avoid franchise fees of up to 5% of revenues
and property tax, leads to greater efficiencies and lower costs
in the lower tiers of service. However, we believe that many
consumers continue to prefer our stronger local presence in our
markets. We believe that cable-delivered VOD and SVOD service
are superior to DBS service because cable headends can store
thousands of titles which customers can access and control
independently, whereas DBS technology can only make available a
much smaller number of titles with DVR-like customer control. We
also believe that our higher tier products, particularly our
bundled premium packages, are price-competitive with DBS
packages and that many consumers prefer our ability to
economically bundle
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video packages with data packages. Further, cable
providers have the potential in some areas to provide a more
complete "whole house" communications package when
combining video, high-speed Internet and voice. We believe that
this ability to bundle, combined with the introduction of more
new products that DBS cannot readily offer (local high
definition television and local interactive television)
differentiates us from DBS competitors and could enable us to
win back some of our former customers who migrated to satellite.
However, recent joint marketing arrangements between DBS
providers and telecommunications carriers allow similar bundling
of services in certain areas. Competition from DBS service
providers may also present greater challenges in areas of lower
population density, and we believe that our systems serve a
higher concentration of such areas than those of other major
cable service providers.
DBS companies historically were prohibited from
retransmitting popular local broadcast programming. However, a
change to the copyright laws in 1999, which was continued in
2004, eliminated this legal impediment. As a result, DBS
companies now may retransmit such programming, once they have
secured retransmission consent from the popular broadcast
stations they wish to carry, and honor mandatory carriage
obligations of less popular broadcast stations in the same
television markets. In response to the legislation, DirecTV and
EchoStar have been carrying the major network stations in many
of the nation's television markets. DBS, however, is
limited in the local programming it can provide because of the
current capacity limitations of satellite technology. DBS
companies do not offer local broadcast programming in every
U.S. market, although the number of markets covered is
substantial and increasing.
DBS providers have made attempts at widespread
deployment of high-speed Internet access services via satellite
but those services have been technically constrained and of
limited appeal. However, DBS providers have entered into joint
marketing arrangements with telecommunications carriers allowing
them to offer terrestrial DSL services in many markets.
DSL and Other Broadband
    Services
Digital subscriber line ("DSL") service
allows Internet access to subscribers at data transmission
speeds greater than those available over conventional telephone
lines. DSL service therefore is competitive with high-speed
Internet access over cable systems. Most telephone companies
which already have plant, an existing customer base, and other
operational functions in place (such as, billing, service
personnel, etc.) offer DSL service. DSL actively markets its
service and many providers have offered promotional pricing with
a one-year service agreement. The FCC has determined that DSL
service is an "information service," which will remove
DSL service from many traditional telecommunications
regulations. It is also possible that federal legislation could
reduce regulation of Internet services offered by incumbent
telephone companies. Legislative action and the FCC's
decisions and policies in this area are subject to change. We
expect DSL to remain a significant competitor to our data
services. In addition, the further deployment of fiber by
telephone companies into their networks will enable them to
provide higher bandwidth Internet service than provided over
traditional DSL lines.
In addition to terrestrially based DSL,
satellite-based delivery options are in development. Local
wireless Internet services have also begun to operate in many
markets using unlicensed radio spectrum. This service option,
popularly known as "wi-fi", offers another alternative
to cable-based Internet access.
High-speed Internet access facilitates the
streaming of video into homes and businesses. As the quality and
availability of video streaming over the Internet improves,
video streaming likely will compete with the traditional
delivery of video programming services over cable systems. It is
possible that programming suppliers will consider bypassing
cable operators and market their services directly to the
consumer through video streaming over the Internet.
We believe that pricing for residential and
commercial Internet services on our system is generally
comparable to that for similar DSL services and that some
residential customers prefer our ability to bundle Internet
services with video services. However, DSL providers may
currently be in a better position to offer data services to
businesses since their networks tend to be more complete in
commercial areas. They also have the ability to bundle telephone
with Internet services for a higher percentage of their
customers, and that ability is appealing to many consumers.
Joint marketing arrangements between DSL
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providers and DBS providers may allow some
additional bundling of services. Moreover, major telephone
companies, such as SBC and Verizon, are now deploying fiber deep
into their networks that will enable them to offer high
bandwidth video services over their networks, in addition to
established voice and Internet services.
Broadcast Television
Cable television has long competed with broadcast
television, which consists of television signals that the viewer
is able to receive without charge using an "off-air"
antenna. The extent of such competition is dependent upon the
quality and quantity of broadcast signals available through
"off-air" reception compared to the services provided
by the local cable system. Traditionally, cable television has
provided a higher picture quality and more channel offerings
than broadcast television. However, the recent licensing of
digital spectrum by the FCC will provide traditional
broadcasters with the ability to deliver high definition
television pictures and multiple digital-quality program
streams, as well as advanced digital services such as
subscription video and data transmission.
Traditional Overbuilds
Cable systems are operated under non-exclusive
franchises granted by local authorities. More than one cable
system may legally be built in the same area. It is possible
that a franchising authority might grant a second franchise to
another cable operator and that such a franchise might contain
terms and conditions more favorable than those afforded us. In
addition, entities willing to establish an open video system,
under which they offer unaffiliated programmers
non-discriminatory access to a portion of the system's
cable system, may be able to avoid local franchising
requirements. Well financed businesses from outside the cable
industry, such as public utilities that already possess fiber
optic and other transmission lines in the areas they serve, may
over time become competitors. There are a number of cities that
have constructed their own cable systems, in a manner similar to
city-provided utility services. There also has been interest in
traditional overbuilds by private companies. Constructing a
competing cable system is a capital intensive process which
involves a high degree of risk. We believe that in order to be
successful, a competitor's overbuild would need to be able
to serve the homes and businesses in the overbuilt area on a
more cost-effective basis than we can. Any such overbuild
operation would require either significant access to capital or
access to facilities already in place that are capable of
delivering cable television programming.
As of June 30, 2005, we are aware of
overbuild situations impacting approximately 5% of our total
homes passed and potential overbuild situations in areas
servicing approximately 2% of our total homes passed. Additional
overbuild situations may occur in other systems. In response to
such overbuilds, these systems have been designated priorities
for the upgrade of cable plant and the launch of new and
enhanced services. As of June 30, 2005, we have upgraded
many of these systems to at least 750 megahertz two-way HFC
architecture.
Telephone Companies and
    Utilities
The competitive environment has been
significantly affected by technological developments and
regulatory changes enacted under the 1996 Telecom Act, which is
designed to enhance competition in the cable television and
local telephone markets. Federal cross-ownership restrictions
historically limited entry by local telephone companies into the
cable business. The 1996 Telecom Act modified this
cross-ownership restriction, making it possible for local
exchange carriers, who have considerable resources, to provide a
wide variety of video services competitive with services offered
by cable systems.
Telephone companies can lawfully enter the cable
television business, and although activity in this area
historically has been quite limited, recent announcements by
telephone companies indicate a growing interest in offering a
video product. Local exchange carriers do already provide
facilities for the transmission and distribution of voice and
data services, including Internet services, in competition with
our existing or potential interactive services ventures and
businesses. Some telephone companies have begun more extensive
deployment of fiber in their networks that will enable them to
begin providing video services, as well as telephone and
Internet access service. At least one major telephone company,
SBC, plans to provide Internet protocol video over its upgraded
network. SBC contends that its use of this technology should
allow it to
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provide video service without a cable franchise
as required under Title VI of the Communications Act.
Telephone companies deploying fiber more extensively are
attempting through various means (including federal and state
legislation) to weaken or streamline the franchising
requirements applicable to them.
If telephone companies are successful in avoiding
or weakening the franchise and other regulatory requirements
that are applicable to cable operators like Charter, their
competitive posture would be enhanced. We cannot predict the
likelihood of success of the broadband services offered by our
competitors or the impact on us of such competitive ventures.
The large scale entry of major telephone companies as direct
competitors in the video marketplace could adversely affect the
profitability and valuation of established cable systems.
As we expand our offerings to include Internet
access and other telecommunications services, we will be subject
to competition from other telecommunications providers. The
telecommunications industry is highly competitive and includes
competitors with greater financial and personnel resources, who
have brand name recognition and long-standing relationships with
regulatory authorities and customers. Moreover, mergers, joint
ventures and alliances among franchise, wireless or private
cable operators, local exchange carriers and others may result
in providers capable of offering cable television, Internet, and
telecommunications services in direct competition with us. For
example, major local exchange carriers have entered into
arrangements with EchoStar and DirecTV in which they will market
packages combining phone service, DSL and DBS services.
Additionally, we are subject to competition from
utilities which possess fiber optic transmission lines capable
of transmitting signals with minimal signal distortion.
Utilities are also developing broadband over power line
technology, which will allow the provision of Internet and other
broadband services to homes and offices.
Private Cable
Additional competition is posed by satellite
master antenna television systems, or SMATV systems, serving
multiple dwelling units, or MDUs, such as condominiums,
apartment complexes, and private residential communities. These
private cable systems may enter into exclusive agreements with
such MDUs, which may preclude operators of franchise systems
from serving residents of such private complexes. Private cable
systems can offer both improved reception of local television
stations and many of the same satellite-delivered program
services that are offered by cable systems. SMATV systems
currently benefit from operating advantages not available to
franchised cable systems, including fewer regulatory burdens and
no requirement to service low density or economically depressed
communities. Exemption from regulation may provide a competitive
advantage to certain of our current and potential competitors.
Wireless Distribution
Cable systems also compete with wireless program
distribution services such as multi-channel multipoint
distribution systems or "wireless cable," known as
MMDS, which uses low-power microwave frequencies to transmit
television programming over-the-air to paying customers. MMDS
services, however, require unobstructed "line of
sight" transmission paths and MMDS ventures have been quite
limited to date.
The FCC has completed its auction of Multichannel
Video Distribution & Data Service ("MVDDS")
licenses. MVDDS is a new terrestrial video and data fixed
wireless service that the FCC hopes will spur competition to the
cable and DBS industries.
Properties
Our principal physical assets consist of cable
distribution plant and equipment, including signal receiving,
encoding and decoding devices, headend reception facilities,
distribution systems and customer drop equipment for each of our
cable systems.
Our cable plant and related equipment are
generally attached to utility poles under pole rental agreements
with local public utilities and telephone companies, and in
certain locations are buried in
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underground ducts or trenches. We own or lease
real property for signal reception sites and own most of our
service vehicles.
Historically, our subsidiaries have owned the
real property and buildings for our data centers, customer
contact centers and our divisional administrative offices. Since
early 2003 we have reduced our total real estate portfolio
square footage by approximately 17% and have decreased our
operating annual lease costs by approximately 30%. We plan to
continue reducing our number of administrative offices and lease
the space, where possible, while attempting to sell those
existing locations that we believe are no longer required. Our
subsidiaries generally have leased space for business offices
throughout our operating divisions. Our headend and tower
locations are located on owned or leased parcels of land, and we
generally own the towers on which our equipment is located.
Charter Holdco owns the real property and building for our
principal executive offices.
The physical components of our cable systems
require maintenance as well as periodic upgrades to support the
new services and products we introduce. See
"Business — Our Network Technology." We
believe that our properties are generally in good operating
condition and are suitable for our business operations.
Employees
As of June 30, 2005, we had approximately
16,500 full-time equivalent employees. At June 30,
2005, approximately 100 of our employees were represented by
collective bargaining agreements. We have never experienced a
work stoppage.
The corporate office, which includes employees of
Charter and Charter Holdco, is responsible for coordinating and
overseeing our operations. The corporate office performs certain
financial and administrative functions on a centralized basis
such as accounting, taxes, billing, finance and acquisitions,
payroll and benefit administration, information system design
and support, internal audit, purchasing, marketing and
programming contract administration and oversight and
coordination of external auditors and consultants. The corporate
office performs these services on a cost reimbursement basis
pursuant to a management services agreement. See "Certain
Relationships and Related Transactions — Transactions
Arising Out of Our Organizational Structure and
Mr. Allen's Investment in Charter and Its
Subsidiaries — Intercompany Management
Arrangements" and "— Mutual Services
Agreements."
Legal Proceedings
Securities Class Actions and Derivative
    Suits
Fourteen putative federal class action lawsuits
(the "Federal Class Actions") were filed against
Charter and certain of its former and present officers and
directors in various jurisdictions allegedly on behalf of all
purchasers of Charter's securities during the period from
either November 8 or November 9, 1999 through July 17
or July 18, 2002. Unspecified damages were sought by the
plaintiffs. In general, the lawsuits alleged that Charter
utilized misleading accounting practices and failed to disclose
these accounting practices and/or issued false and misleading
financial statements and press releases concerning
Charter's operations and prospects. The Federal Class
Actions were specifically and individually identified in public
filings made by Charter prior to the date of this prospectus. On
March 12, 2003, the Panel transferred the six Federal Class
Actions not filed in the Eastern District of Missouri to that
district for coordinated or consolidated pretrial proceedings
with the eight Federal Class Actions already pending there. The
Court subsequently consolidated the Federal Class Actions into a
single action (the "Consolidated Federal Class
Action") for pretrial purposes. On August 5, 2004, the
plaintiff's representatives, Charter and the individual
defendants who were the subject of the suit entered into a
Memorandum of Understanding setting forth agreements in
principle to settle the Consolidated Federal Class Action. These
parties subsequently entered into Stipulations of Settlement
dated as of January 24, 2005 (described more fully below)
which incorporate the terms of the August 5, 2004
Memorandum of Understanding.
The Consolidated Federal Class Action is
entitled:
•
In re Charter Communications, Inc. Securities
    Litigation, MDL Docket No. 1506 (All Cases), StoneRidge
    Investments Partners, LLC, Individually and On Behalf of All
    Others Similarly
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Situated, v. Charter Communications, Inc.,
    Paul Allen, Jerald L. Kent, Carl E. Vogel, Kent Kalkwarf, David
    G. Barford, Paul E. Martin, David L. McCall, Bill Shreffler,
    Chris Fenger, James H. Smith, III, Scientific-Atlanta,
    Inc., Motorola, Inc. and Arthur Andersen, LLP, Consolidated Case
    No. 4:02-CV-1186-CAS.
On September 12, 2002, a shareholders
derivative suit (the "State Derivative Action") was
filed in the Circuit Court of the City of St. Louis, State
of Missouri (the "Missouri State Court"), against
Charter and its then current directors, as well as its former
auditors. The plaintiffs alleged that the individual defendants
breached their fiduciary duties by failing to establish and
maintain adequate internal controls and procedures.
The consolidated State Derivative Action is
entitled:
•
Kenneth Stacey, Derivatively on behalf of Nominal
    Defendant Charter Communications, Inc., v. Ronald L.
    Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman,
    William Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg,
    Arthur Andersen, LLP and Charter Communications, Inc.
On March 12, 2004, an action substantively
identical to the State Derivative Action was filed in the
Missouri State Court, against Charter and certain of its current
and former directors, as well as its former auditors. On
July 14, 2004, the Court consolidated this case with the
State Derivative Action.
This action is entitled:
•
Thomas Schimmel, Derivatively on behalf on
    Nominal Defendant Charter Communications, Inc., v. Ronald
    L. Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman,
    William D. Savoy, John H. Tory, Carl E. Vogel, Larry W.
    Wangberg, and Arthur Andersen, LLP, and Charter Communications,
    Inc.
Separately, on February 12, 2003, a
shareholders derivative suit (the "Federal Derivative
Action"), was filed against Charter and its then current
directors in the United States District Court for the Eastern
District of Missouri. The plaintiff in that suit alleged that
the individual defendants breached their fiduciary duties and
grossly mismanaged Charter by failing to establish and maintain
adequate internal controls and procedures.
The Federal Derivative Action is entitled:
•
Arthur Cohn, Derivatively on behalf of Nominal
    Defendant Charter Communications, Inc., v. Ronald L.
    Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman,
    William Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg,
    and Charter Communications, Inc.
As noted above, Charter and the individual
defendants entered into a Memorandum of Understanding on
August 5, 2004 setting forth agreements in principle
regarding settlement of the Consolidated Federal
Class Action, the State Derivative Action(s) and the
Federal Derivative Action (the "Actions"). Charter and
various other defendants in those actions subsequently entered
into Stipulations of Settlement dated as of January 24,
2005, setting forth a settlement of the Actions in a manner
consistent with the terms of the Memorandum of Understanding.
The Stipulations of Settlement, along with various supporting
documentation, were filed with the Court on February 2,
2005. On May 23, 2005 the United States District Court for
the Eastern District of Missouri conducted the final fairness
hearing for the Actions, and on June 30, 2005, the Court
issued its final approval of the settlements. Members of the
class had 30 days from the issuance of the June 30
order approving the settlement to file an appeal challenging the
approval. Two notices of appeal were filed relating to the
settlement. Those appeals were directed to the amount of fees
that the attorneys for the class were to receive and to the
fairness of the settlement. On September 26, 2005, the
U.S. Court of Appeals for the Eighth Circuit entered
Judgment dismissing the appeals pursuant to stipulation by the
parties.
As amended, the Stipulations of Settlement
provide that, in exchange for a release of all claims by
plaintiffs against Charter and its former and present officers
and directors named in the Actions, Charter would pay to the
plaintiffs a combination of cash and equity collectively valued
at $144 million, which will include the fees and expenses
of plaintiffs' counsel. Of this amount, $64 million
would be paid in cash (by Charter's insurance carriers) and
the $80 million balance was to be paid (subject to
Charter's right to
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substitute cash therefor described below) in
shares of Charter Class A common stock having an aggregate
value of $40 million and ten-year warrants to purchase
shares of Charter Class A common stock having an aggregate
warrant value of $40 million, with such values in each case
being determined pursuant to formulas set forth in the
Stipulations of Settlement. However, Charter had the right, in
its sole discretion, to substitute cash for some or all of the
aforementioned securities on a dollar for dollar basis. Pursuant
to that right, Charter elected to fund the $80 million
obligation with 13.4 million shares of Charter Class A
common stock (having an aggregate value of approximately
$15 million pursuant to the formula set forth in the
Stipulations of Settlement) with the remaining balance (less an
agreed upon $2 million discount in respect of that portion
allocable to plaintiffs' attorneys' fees) to be paid
in cash. In addition, Charter had agreed to issue additional
shares of its Class A common stock to its insurance carrier
having an aggregate value of $5 million; however, by
agreement with its carrier, Charter has paid $4.5 million
in cash in lieu of issuing such shares. Charter delivered the
settlement consideration to the claims administrator on
July 8, 2005, and it will be held in escrow pending any
appeals of the approval. On July 14, 2005, the Circuit
Court for the City of St. Louis dismissed with prejudice
the State Derivative Action.
As part of the settlements, Charter has committed
to a variety of corporate governance changes, internal practices
and public disclosures, some of which have already been
undertaken and none of which are inconsistent with measures
Charter is taking in connection with the recent conclusion of
the SEC investigation.
Government Investigations
In August 2002, Charter became aware of a grand
jury investigation being conducted by the
U.S. Attorney's Office for the Eastern District of
Missouri into certain of its accounting and reporting practices,
focusing on how Charter reported customer numbers, and its
reporting of amounts received from digital set-top terminal
suppliers for advertising. The U.S. Attorney's Office
publicly stated that Charter was not a target of the
investigation. Charter was also advised by the
U.S. Attorney's Office that no current officer or
member of its board of directors was a target of the
investigation. On July 24, 2003, a federal grand jury
charged four former officers of Charter with conspiracy and mail
and wire fraud, alleging improper accounting and reporting
practices focusing on revenue from digital set-top terminal
suppliers and inflated customer account numbers. Each of the
indicted former officers pled guilty to single conspiracy counts
related to the original mail and wire fraud charges and were
sentenced April 22, 2005. Charter fully cooperated with the
investigation, and following the sentencings, the
U.S. Attorney's Office for the Eastern District of
Missouri announced that its investigation was concluded and that
no further indictments would issue.
Indemnification
Charter was generally required to indemnify,
under certain conditions, each of the named individual
defendants in connection with the matters described above
pursuant to the terms of its bylaws and (where applicable) such
individual defendants' employment agreements. In accordance
with these documents, in connection with the grand jury
investigation, a now-settled SEC investigation and the
above-described lawsuits, some of Charter's current and
former directors and current and former officers have been
advanced certain costs and expenses incurred in connection with
their defense. See "Certain Relationships and Related
Transactions — Other Miscellaneous
Relationships — Indemnification Advances". On
February 22, 2005, Charter filed suit against four of its
former officers who were indicted in the course of the grand
jury investigation. These suits seek to recover the legal fees
and other related expenses advanced to these individuals. One of
these former officers has counterclaimed against Charter
alleging, among other things, that Charter owes him additional
indemnification for legal fees that Charter did not pay and
another of these former officers has counterclaimed against
Charter for accrued sick leave.
Other Litigation
In addition to the matters set forth above,
Charter is also party to other lawsuits and claims that arose in
the ordinary course of conducting its business. In the opinion
of management, after taking into account recorded liabilities,
the outcome of these other lawsuits and claims are not expected
to have a material adverse effect on our consolidated financial
condition, results of operations or our liquidity.
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REGULATION AND LEGISLATION
The following summary addresses the key
regulatory and legislative developments affecting the cable
industry. Cable system operations are extensively regulated by
the FCC, some state governments and most local governments. A
failure to comply with these regulations could subject us to
substantial penalties. Our business can be dramatically impacted
by changes to the existing regulatory framework, whether
triggered by legislative, administrative, or judicial rulings.
Congress and the FCC have expressed a particular interest in
increasing competition in the communications field generally and
in the cable television field specifically. The 1996 Telecom Act
altered the regulatory structure governing the nation's
communications providers. It removed barriers to competition in
both the cable television market and the local telephone market.
We could be materially disadvantaged in the future if we are
subject to regulations that do not equally impact our key
competitors. Congress and the FCC have frequently revisited the
subject of communications regulation, and they are likely to do
so in the future. In addition, franchise agreements with local
governments must be periodically renewed, and new operating
terms may be imposed. Future legislative, regulatory, or
judicial changes could adversely affect our operations. We can
provide no assurance that the already extensive regulation of
our business will not be expanded in the future.
Cable Rate Regulation
The cable industry has operated under a federal
rate regulation regime for more than a decade. The regulations
currently restrict the prices that cable systems charge for
basic service and associated equipment. All other cable
offerings are now universally exempt from rate regulation.
Although rate regulation operates pursuant to a federal formula,
local governments, commonly referred to as local franchising
authorities, are primarily responsible for administering this
regulation. The majority of our local franchising authorities
have never certified to regulate basic cable rates, but they
retain the right to do so (and order rate reductions and
refunds), except in those specific communities facing
"effective competition." Federal law defines effective
competition as existing in a variety of circumstances that
historically were rarely satisfied, but are increasingly likely
to be satisfied with the recent increase in
DBS competition. We already have secured official
recognition by the FCC of effective competition in many of our
communities.
There have been frequent calls to impose expanded
rate regulation on the cable industry. Confronted with rapidly
increasing cable programming costs, it is possible that Congress
may adopt new constraints on the retail pricing or packaging of
cable programming. Such constraints could adversely affect our
operations.
The federal rate regulations also require cable
operators to maintain a "geographically uniform" rate
within each community, except in those communities facing
effective competition. As we attempt to respond to a changing
marketplace with competitive pricing practices, we may face
legal restraints and challenges that impede our ability to
compete.
Must Carry/ Retransmission Consent
Federal law currently includes "must
carry" regulations, which require cable systems to carry
certain local broadcast television stations that the cable
operator would not select voluntarily. Alternatively, popular
commercial television stations can prohibit cable carriage
unless the cable operator first negotiates for
"retransmission consent," which may be conditioned on
significant payments or other concessions. Either option has a
potentially adverse effect on our business. The burden
associated with must carry could increase significantly if cable
systems were required to simultaneously carry both the analog
and digital signals of each television station (dual carriage),
as the broadcast industry transitions from an analog to a
digital format.
The burden could also increase significantly if
cable systems become required to carry multiple program streams
included within a single digital broadcast transmission
(multicast carriage). Additional government-mandated broadcast
carriage obligations could disrupt existing programming
commitments, interfere with our preferred use of limited channel
capacity and limit our ability to offer services that
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would maximize customer appeal and revenue
potential. Although the FCC issued a decision in February 2005,
confirming an earlier ruling against mandating either dual
carriage or multicast carriage, that decision has been appealed.
In addition, the FCC could modify its position or Congress could
legislate additional carriage obligations. In particular,
broadcast carriage burdens may increase as Congress and the FCC
attempt to transition broadcasters to digital spectrum and
reclaim analog spectrum.
There are indications that broadcasters invoking
retransmission consent may be even more forceful in upcoming
negotiations. These negotiations could result in increased
broadcast carriage burdens or the loss of popular programming.
Access Channels
Local franchise agreements often require cable
operators to set aside certain channels for public, educational
and governmental access programming. Federal law also requires
cable systems to designate a portion of their channel capacity
for commercial leased access by unaffiliated third parties.
Increased activity in this area could further burden the channel
capacity of our cable systems.
Access to Programming
The FCC recently extended a regulation
prohibiting video programmers affiliated with cable companies
from favoring cable operators over new competitors and requiring
such programmers to sell their satellite-delivered programming
to other multichannel video distributors. This provision limits
the ability of vertically integrated cable programmers to offer
exclusive programming arrangements to cable companies. DBS
providers traditionally had no similar restriction on exclusive
programming, but the FCC recently imposed that restriction as
part of its approval of the DirecTV-News Corp. merger. The FCC
has also adopted regulations to avoid unreasonable conduct in
retransmission consent negotiations between broadcasters and
multichannel video programming distributors, including cable and
DBS. It imposed special conditions on the DirectTV-News Corp.
merger, including a requirement that Fox affiliated broadcast
stations enter into commercial arbitration for disputes over
retransmission consent. Given the heightened competition and
media consolidation that Charter faces, it is possible that we
will find it increasingly difficult to gain access to popular
programming at favorable terms. Such difficulty could adversely
impact our business.
Ownership Restrictions
Federal regulation of the communications field
traditionally included a host of ownership restrictions, which
limited the size of certain media entities and restricted their
ability to enter into competing enterprises. Through a series of
legislative, regulatory, and judicial actions, most of these
restrictions recently were eliminated or substantially relaxed.
For example, historic restrictions on local exchange carriers
offering cable service within their telephone service area, as
well as those prohibiting broadcast stations from owning cable
systems within their broadcast service area, no longer exist.
Changes in this regulatory area could alter the business
landscape in which we operate, as formidable new competitors
(including electric utilities, local exchange carriers, and
broadcast/media companies) may increasingly choose to offer
cable services.
The FCC previously adopted regulations precluding
any cable operator from serving more than 30% of all domestic
multichannel video subscribers and from devoting more than 40%
of the activated channel capacity of any cable system to the
carriage of affiliated national video programming services.
These cable ownership restrictions were invalidated by the
courts, and the FCC is now considering adoption of replacement
regulations.
Internet Service
Over the past several years, proposals have been
advanced that would require cable operators offering Internet
service to provide non-discriminatory access to unaffiliated
Internet service providers. In a June 2005 ruling, commonly
referred to as
Brand X
, the Supreme Court upheld an FCC
decision (and
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overruled a conflicting Ninth Circuit opinion)
making it much less likely that any non-discriminatory
"open access" requirements (which are generally
associated with common carrier regulation of
"telecommunications services") will be imposed on the
cable industry by local, state or federal authorities. The
Supreme Court held that the FCC was correct in classifying
cable-provided Internet service as an "information
service," rather than a "telecommunications
service." This favorable regulatory classification limits
the ability of various governmental authorities to impose open
access requirements on cable-provided Internet service. Given
the recency of the
Brand X
decision, however, the nature
of any legislative or regulatory response remains uncertain. The
imposition of open access requirements could materially affect
our business.
As the Internet has matured, it has become the
subject of increasing regulatory interest. There is now a host
of federal laws affecting Internet service, including the
Digital Millennium Copyright Act, which affords copyright owners
certain rights against us that could adversely affect our
relationship with any customer accused of violating copyright
laws. Recently enacted Anti-Spam legislation also imposes new
obligations on our operations. The adoption of new Internet
regulations could adversely affect our business.
Phone Service
The 1996 Telecom Act created a more favorable
regulatory environment for us to provide telecommunications
services. In particular, it limited the regulatory role of local
franchising authorities and established requirements ensuring
that we could interconnect with other telephone companies to
provide a viable service. Many implementation details remain
unresolved, and there are substantial regulatory changes being
considered that could impact, in both positive and negative
ways, our primary telecommunications competitors and our own
entry into the field of phone service. The FCC and state
regulatory authorities are considering, for example, whether
common carrier regulation traditionally applied to incumbent
local exchange carriers should be modified. The FCC recently
decided that alternative voice technologies, like certain types
of VoIP, should be regulated only at the federal level, rather
than by individual states. While this decision appears to be a
positive development for VoIP offerings, it is unclear whether
and how the FCC will apply certain types of common carrier
regulations, such as intercarrier compensation and universal
service obligations to alternative voice technology. The FCC
recently imposed traditional 911 emergency service obligations
("E911") on VoIP provided telephone services, as well
as certain additional notice requirements. The treatment of
these regulations and other regulatory matters will affect our
potential expansion into phone service.
Pole Attachments
The Communications Act requires most utilities to
provide cable systems with access to poles and conduits and
simultaneously regulates the rates charged for this access. The
Act specifies that significantly higher rates apply if the cable
plant is providing telecommunications service, as well as
traditional cable service. The FCC has clarified that a cable
operator's favorable pole rates are not endangered by the
provision of Internet access, and that determination was upheld
by the United States Supreme Court. It remains possible that the
underlying pole attachment formula, or its application to
Internet and telecommunications offerings, will be modified in a
manner that substantially increases our pole attachment costs.
Cable Equipment
The FCC has undertaken several steps to promote
competition in the delivery of cable equipment and compatibility
with new digital technology. The FCC has expressly ruled that
cable customers must be allowed to purchase set-top terminals
from third parties and established a multi-year phase-in during
which security functions (which would remain in the
operator's exclusive control) would be unbundled from the
basic converter functions, which could then be provided by third
party vendors. The first phase of implementation has already
passed. A prohibition on cable operators leasing digital set-top
terminals that integrate security and basic navigation functions
was scheduled to go into effect as of July 1, 2006, but the
FCC extended the deadline for one year to July 1, 2007.
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The FCC has adopted rules implementing an
agreement between major cable operators and manufacturers of
consumer electronics on "plug and play" specifications
for one-way digital televisions. The rules require cable
operators to provide "CableCard" security modules and
support to customer owned digital televisions and similar
devices already equipped with built-in set-top terminal
functionality. Cable operators must support basic home recording
rights and copy protection rules for digital programming
content. The FCC's plug and play rules are under appeal,
although the appeal has been stayed pending FCC reconsideration.
The FCC adopted companion "broadcast
flag" rules, requiring cable carriage of a code embedded in
digital broadcast programming that will regulate the further use
of copyright programming. However, the U.S. Circuit Court of
Appeals for the D.C. Circuit recently held that the FCC lacks
jurisdiction to impose the broadcast flag rules.
The FCC is conducting additional related
rulemakings, and the cable and consumer electronics industries
are currently negotiating an agreement that would establish
additional "plug and play" specifications for two-way
digital televisions.
The FCC rules are subject to challenge and
inter-industry negotiations are ongoing. It is unclear how this
process will develop and how it will affect our offering of
cable equipment and our relationship with our customers.
Other Communications Act Provisions and FCC
Regulatory Matters
In addition to the Communications Act provisions
and FCC regulations noted above, there are other statutory
provisions and FCC regulations affecting our business. The
Communications Act, for example, includes cable-specific privacy
obligations. The Act carefully limits our ability to collect and
disclose personal information.
FCC regulations include a variety of additional
areas, including, among other things: (1) equal employment
opportunity obligations; (2) customer service standards;
(3) technical service standards; (4) mandatory
blackouts of certain network, syndicated and sports programming;
(5) restrictions on political advertising;
(6) restrictions on advertising in children's
programming; (7) restrictions on origination cablecasting;
(8) restrictions on carriage of lottery programming;
(9) sponsorship identification obligations;
(10) closed captioning of video programming;
(11) licensing of systems and facilities;
(12) maintenance of public files; and (13) emergency
alert systems.
It is possible that Congress or the FCC will
expand or modify its regulation of cable systems in the future,
and we cannot predict at this time how that might impact our
business. For example, there have been recent discussions about
imposing "indecency" restrictions directly on cable
programming.
Copyright
Cable systems are subject to federal copyright
licensing covering carriage of television and radio broadcast
signals. The possible modification or elimination of this
compulsory copyright license is the subject of continuing
legislative review and could adversely affect our ability to
obtain desired broadcast programming. We cannot predict the
outcome of this legislative activity. Moreover, the Copyright
Office has not yet provided any guidance as to the how the
compulsory copyright license should apply to newly offered
digital broadcast signals.
Copyright clearances for non-broadcast
programming services are arranged through private negotiations.
Cable operators also must obtain music rights for locally
originated programming and advertising from the major music
performing rights organizations. These licensing fees have been
the source of litigation in the past, and we cannot predict with
certainty whether license fee disputes may arise in the future.
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Franchise Matters
Cable systems generally are operated pursuant to
nonexclusive franchises granted by a municipality or other state
or local government entity in order to cross public
rights-of-way. Cable franchises generally are granted for fixed
terms and in many cases include monetary penalties for
noncompliance and may be terminable if the franchisee fails to
comply with material provisions.
The specific terms and conditions of cable
franchises vary materially between jurisdictions. Each franchise
generally contains provisions governing cable operations,
franchise fees, system construction, maintenance, technical
performance, and customer service standards. A number of states
subject cable systems to the jurisdiction of centralized state
government agencies, such as public utility commissions.
Although local franchising authorities have considerable
discretion in establishing franchise terms, there are certain
federal protections. For example, federal law caps local
franchise fees and includes renewal procedures designed to
protect incumbent franchisees from arbitrary denials of renewal.
Even if a franchise is renewed, however, the local franchising
authority may seek to impose new and more onerous requirements
as a condition of renewal. Similarly, if a local franchising
authority's consent is required for the purchase or sale of
a cable system, the local franchising authority may attempt to
impose more burdensome requirements as a condition for providing
its consent.
Different legislative proposals have been
introduced in the United States Congress and in some state
legislatures that would greatly streamline cable franchising.
This legislation is intended to facilitate entry by new
competitors, particularly local telephone companies. Such
legislation has already passed in at least one state but is now
subject to court challenge. Although various legislative
proposals provide certain regulatory relief for incumbent cable
operators, these proposals are generally viewed as being more
favorable to new entrants.
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MANAGEMENT
Directors
The persons listed below are directors of Charter.
Director
Position(s)
Paul G. Allen
Chairman of the board of directors
W. Lance Conn
Director
Nathaniel A. Davis
Director
Jonathan L. Dolgen
Director
Robert P. May
Director
David C. Merritt
Director
Marc B. Nathanson
Director
Jo Allen Patton
Director
Neil Smit
Director, President and Chief Executive Officer
    of Charter
John H. Tory
Director
Larry W. Wangberg
Director
The following sets forth certain biographical
information with respect to the directors listed above.
Paul G. Allen,
52,
has been Chairman of our board of directors since July 1999, and
Chairman of the board of directors of Charter Investment, Inc.
(a predecessor to, and currently an affiliate of, Charter) since
December 1998. Mr. Allen, co-founder of Microsoft
Corporation, has been a private investor for more than
15 years, with interests in over 50 technology,
telecommunications, content and biotech companies.
Mr. Allen's investments include Vulcan Inc., Vulcan
Productions, Inc., the Portland Trail Blazers NBA and Seattle
Seahawks NFL franchises, and investments in DreamWorks LLC and
Oxygen Media. In addition, Mr. Allen is a director of
Vulcan Programming Inc., Vulcan Ventures, Vulcan Inc., Vulcan
Cable III Inc., numerous privately held companies and,
until its sale in May 2004 to an unrelated third party, TechTV
L.L.C.
W. Lance Conn,
37, was elected to our board of directors in September 2004.
Since July 2004, Mr. Conn has served as Executive Vice
President, Investment Management for Vulcan Inc., the investment
and project management company that oversees a diverse
multi-billion dollar portfolio of investments by Paul G. Allen.
Prior to joining Vulcan Inc., Mr. Conn was employed by
America Online, Inc., an interactive online services company,
from March 1996 to May 2003. From 1997 to 2000, Mr. Conn
served in various senior business development roles at America
Online. In 2000, Mr. Conn began supervising all of America
Online's European investments, alliances and business
initiatives. In 2002, he became Senior Vice President of America
Online U.S. where he led a company-wide effort to
restructure and optimize America Online's operations. From
September 1994 until February 1996, Mr. Conn was an
attorney with the Shaw Pittman law firm in Washington, D.C.
Mr. Conn holds a J.D. degree from the University of
Virginia, a master's degree in history from the University
of Mississippi and an A.B. in history from Princeton University.
Nathaniel A. Davis,
51, was elected to our board of directors on August 23,
2005. Since June 2003, Mr. Davis has been Managing Director
and owner of RANND Advisory Group, a technology Consulting
Group, which advises venture capital, telecom and other
technology related firms. From January 2000 through May of 2003,
he was President and Chief Operating Officer of XO
Communication, Inc. XO Communications filed a petition to
reorganize under Chapter 11 of the Bankruptcy Code in June
2002 and completed its restructuring and emerged from
Chapter 11 in January 2003. From October 1998 to December
1999 he was Executive Vice President, Network and Technical
Services of Nextel Communications, Inc. Prior to that, he worked
for MCI Communications from 1982 until 1998 in a number of
positions, including as Chief Financial Officer of MCIT from
November 1996 until October
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1998. Prior to that, Mr. Davis served in a
variety of roles that include Senior Vice President of Network
Operations, Chief Operating Officer of MCImetro, Sr. Vice
President of Finance, Vice President of Systems Development.
Mr. Davis holds a B.S. degree from Stevens Institute of
Technology, an M.S. from Moore School of Engineering and an
M.B.A. from the Wharton School at the University of
Pennsylvania. He is a member of the boards of XM Satellite Radio
Holdings, Inc. and of Mutual of America Capital Management
Corporation.
Jonathan L. Dolgen,
60, was elected to our board of directors in October 2004. Since
July 2004, Mr. Dolgen has also been a Senior Advisor to
Viacom, Inc. a worldwide entertainment and media company, where
he provides advisory services to the current Chairman and Chief
Executive of Viacom, or others designated by him, on an as
requested basis. Since July 2004, Mr. Dolgen has been a
private investor and since September 2004, Mr. Dolgen has
been a principal of Wood River Ventures, LLC, a private start-up
entity that seeks investment and other opportunities primarily
in the media sector. Mr. Dolgen is also a member of the
board of directors of Expedia, Inc. From April 1994 to July
2004, Mr. Dolgen served as Chairman and Chief Executive
Officer of the Viacom Entertainment Group, a unit of Viacom,
where he oversaw various operations of Viacom's businesses,
which during 2003 and 2004 primarily included the operations
engaged in motion picture production and distribution,
television production and distribution, regional theme parks,
theatrical exhibition and publishing. Mr. Dolgen began his
career in the entertainment industry in 1976, and until joining
the Viacom Entertainment Group, served in executive positions at
Columbia Pictures Industries, Inc., Twentieth Century Fox and
Fox, Inc., and Sony Pictures Entertainment. Mr. Dolgen
holds a B.S. degree from Cornell University and a J.D. degree
from New York University.
Robert P. May,
56,
was elected to our board of directors in October 2004 and was
our Interim President and Chief Executive Officer from January
until August 2005. Mr. May has served on the board of
directors of HealthSouth Corporation, a national provider of
healthcare services, since October 2002, and has been its
Chairman since July 2004. Mr. May also served as
HealthSouth Corporation's Interim Chief Executive Officer
from March 2003 until May 2004, and as Interim President of its
Outpatient and Diagnostic Division from August 2003 to January
2004. In September 2005, Mr. May announced that he will
resign from the board of directors of HealthSouth Corporation
effective October 1, 2005. Since March 2001, Mr. May
has been a private investor and principal of RPM Systems, which
provides strategic business consulting services. From March 1999
to March 2001, Mr. May served on the board of directors and
was Chief Executive of PNV Inc., a national telecommunications
company. PNV Inc. filed for bankruptcy in December 2000. Prior
to his employment at PNV Inc., Mr. May was Chief Operating
Officer and a member of the board of directors of Cablevision
Systems Corporation from October 1996 to February 1998, and from
1973 to 1993 he held several senior executive positions with
Federal Express Corporation, including President, Business
Logistics Services. Mr. May was educated at Curry College
and Boston College and attended Harvard Business School's
Program for Management Development.
David C. Merritt,
51, was elected to our board of
directors in July 2003, and was also appointed as Chairman of
the Audit Committee at that time. Since October 2003,
Mr. Merritt has been a Managing Director of Salem Partners,
LLC, an investment banking firm. He was a Managing Director in
the Entertainment Media Advisory Group at Gerard Klauer
Mattison & Co., Inc., a company that provided financial
advisory services to the entertainment and media industries from
January 2001 through April 2003. From July 1999 to November
2000, he served as Chief Financial Officer of CKE Associates,
Ltd., a privately held company with interests in talent
management, film production, television production, music and
news media. He also served as a director of Laser-Pacific Media
Corporation from January 2001 until October 2003 and served as
Chairman of its audit committee. In December 2003, he became a
director of Outdoor Channel Holdings, Inc. Mr. Merritt
joined KPMG in 1975 and served in a variety of capacities during
his years with the firm, including national partner in charge of
the media and entertainment practice and before joining CKE
Associates, Mr. Merritt was an audit and consulting partner
of KPMG for 14 years. Mr. Merritt holds a B.S. degree
in Business and Accounting from California State
University — Northridge.
Marc B. Nathanson,
60, has been a director of Charter
since January 2000 and serves as Vice Chairman of our board of
directors, a non-executive position. Mr. Nathanson is the
Chairman of Mapleton Investments LLC, an investment vehicle
formed in 1999. He also founded and served as Chairman and Chief
Executive
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Officer of Falcon Holding Group, Inc., a cable
operator, and its predecessors, from 1975 until 1999. He served
as Chairman and Chief Executive Officer of Enstar Communications
Corporation, a cable operator, from 1988 until November 1999.
Prior to 1975, Mr. Nathanson held executive positions with
Teleprompter Corporation, Warner Cable and Cypress
Communications Corporation. In 1995, he was appointed by the
President of the United States to the Broadcasting Board of
Governors, and from 1998 through September 2002, served as its
Chairman. Mr. Nathanson holds a bachelors degree in Mass
Communications from the University of Denver and a masters
degree in Political Science from University of California/
Santa Barbara.
Jo Allen Patton,
47,
has been a director of Charter since April 2004. Ms. Patton
joined Vulcan Inc. as Vice President in 1993, and since that
time she has served as an officer and director of many
affiliates of Mr. Allen, including her current position as
President and Chief Executive Officer of Vulcan Inc. since July
2001. Ms. Patton is also President of Vulcan Productions,
an independent feature film and documentary production company,
Vice Chair of First & Goal, Inc., which developed and
operated the Seattle Seahawks NFL stadium, and serves as
Executive Director of the six Paul G. Allen Foundations.
Ms. Patton is a co-founder of the Experience Music Project
museum, as well as the Science Fiction Museum and Hall of Fame.
Ms. Patton is the sister of Mr. Allen.
Neil Smit,
46, was
elected a director and President and Chief Executive Officer of
Charter on August 22, 2005. He had previously worked at
Time Warner, Inc. since 2000, most recently serving as the
President of Time Warner's America Online Access Business.
He also served at America Online ("AOL") as Executive
Vice President, Member Development, Senior Vice President of
AOL's product and programming team, Chief Operating Officer
of AOL Local, Chief Operating Officer of MapQuest. Prior to that
he was a regional vice president with Nabisco and was with
Pillsbury in a number of management positions. Mr. Smit has
a bachelor's of science degree from Duke University and a
master's degree with a focus in international business from
Tufts University's Fletcher School of Law and Diplomacy.
John H. Tory,
51,
has been a director of Charter since December 2001.
Mr. Tory served as the Chief Executive Officer of Rogers
Cable Inc., Canada's largest broadband cable operator, from
1999 until 2003. From 1995 to 1999, Mr. Tory was President
and Chief Executive Officer of Rogers Media Inc., a broadcasting
and publishing company. Prior to joining Rogers, Mr. Tory
was a Managing Partner and member of the executive committee at
Tory Tory DesLauriers & Binnington, one of
Canada's largest law firms. Mr. Tory serves on the
board of directors of Rogers Telecommunications Limited and Cara
Operations Limited and is Chairman of Cara Operations'
Audit Committee. Mr. Tory was educated at University of
Toronto Schools, Trinity College (University of Toronto) and
Osgoode Hall Law School. Effective September 18, 2004,
Mr. Tory was elected Leader of the Ontario Progressive
Conservative Party. On March 17, 2005, he was elected a
Member of the Provincial Parliament and on March 29, 2005,
became the Leader of Her Majesty's Loyal Opposition. On
June 29, 2005, Mr. Tory formally notified Charter that
he intends to resign from its board of directors. The date for
his departure has not yet been determined, but he has indicated
that he will continue to serve on Charter's board, as well
as the audit committee, at least until a replacement director is
named.
Larry W. Wangberg,
63, has been a director of Charter
since January 2002. From August 1997 to May 2004,
Mr. Wangberg was a director of TechTV L.L.C., a cable
television network controlled by Paul Allen. He also served as
its Chairman and Chief Executive Officer from August 1997
through July 2002. In May 2004, TechTV L.L.C. was sold to an
unrelated party. Prior to joining TechTV L.L.C.,
Mr. Wangberg was Chairman and Chief Executive Officer of
StarSight Telecast Inc., an interactive navigation and program
guide company which later merged with Gemstar International,
from 1994 to 1997. Mr. Wangberg was Chairman and Chief
Executive Officer of Times Mirror Cable Television and Senior
Vice President of its corporate parent, Times Mirror Co., from
1983 to 1994. He currently serves on the boards of Autodesk Inc.
and ADC Telecommunications, Inc. Mr. Wangberg holds a
bachelor's degree in Mechanical Engineering and a
master's degree in Industrial Engineering, both from the
University of Minnesota.
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Audit Committee
The Audit Committee, which has a written charter
approved by the board of directors, consisted of three directors
as of March 28, 2005: Charles Lillis, John Tory and David
Merritt, all of whom are independent in accordance with the
applicable corporate governance listing standards of the NASDAQ
National Market. Charter's board of directors has
determined that, in its judgment, David Merritt is an audit
committee financial expert within the meaning of the applicable
federal regulations.
Mr. Lillis resigned from Charter's
board of directors, effective March 28, 2005.
Mr. Lillis was one of three independent members of the
Audit Committee. On August 23, 2005, Nathaniel Davis, who
is independent in accordance with the applicable corporate
governance listing standards of the NASDAQ National Market, was
elected to the Audit Committee.
On June 29, 2005, Mr. Tory formally
notified Charter that he intends to resign from its board of
directors and the board committees on which he serves. The date
for Mr. Tory's departure has not yet been determined,
but he has indicated that he will continue to serve on
Charter's board and its committees at least until a
replacement director is named.
Director Compensation
Each non-employee member of our board receives an
annual retainer of $40,000 in cash plus restricted stock,
vesting one year after the date of grant, with a value on the
date of grant of $50,000. In addition, the Audit Committee chair
receives $25,000 per year, and the chair of each other
committee receives $10,000 per year. Prior to
February 22, 2005, all committee members also received
$1,000 for attendance at each committee meeting. Beginning on
February 22, 2005 each director also receives $1,000 for
telephonic attendance at each meeting of the full board and
$2,000 for in-person attendance. Each director of Charter is
entitled to reimbursement for costs incurred in connection with
attendance at board and committee meetings. Vulcan has informed
us that, in accordance with its internal policy, Mr. Conn
turns over to Vulcan all cash compensation he receives for his
participation on Charter's board of directors or committees
thereof.
Directors who were employees did not receive
additional compensation in 2003 or 2004. Mr. Vogel, who was
our President and Chief Executive Officer in 2004, was the only
director who was also an employee during 2004.
Our Bylaws provide that all directors are
entitled to indemnification to the maximum extent permitted by
law from and against any claims, damages, liabilities, losses,
costs or expenses incurred in connection with or arising out of
the performance by them of their duties for us or our
subsidiaries. In addition, we have been informed by Vulcan that
the bylaws of Vulcan, Inc. also provide that Ms. Patton and
Messrs. Allen and Conn are entitled to similar
indemnification in connection with their service on our Board of
Directors and committees thereof.
Executive Officers
The following persons are executive officers of
Charter Communications, Inc.:
Executive Officers
Position
Paul G. Allen
Chairman of the Board of Directors
Neil Smit
President and Chief Executive Officer
Wayne H. Davis
Executive Vice President and Chief Technical
    Officer
Sue Ann R. Hamilton
Executive Vice President, Programming
Thomas J. Hearity
Senior Vice President, Acting General Counsel and
    Secretary
Michael J. Lovett
Executive Vice President and Chief Operating
    Officer
Paul E. Martin
Senior Vice President, Interim Chief Financial
    Officer, Principal Accounting Officer and Corporate Controller
Lynne F. Ramsey
Senior Vice President, Human Resources
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Information regarding our executive officers who
do not serve as directors is set forth below.
Wayne H. Davis
, 51,
Executive Vice President and Chief Technical Officer. Prior to
his current position, Mr. Davis served as Senior Vice
President, Engineering and Technical Operations, and as
Assistant to the President/ Vice President of Management
Services since July 2002 and prior to that, he was Vice
President of Engineering/ Operations for Charter's National
Region from December 2001. Before joining Charter,
Mr. Davis held the position of Vice President of
Engineering for Comcast Corporation, Inc. Prior to that, he held
various engineering positions including Vice President of
Engineering for Jones Intercable Inc. He began his career in the
cable industry in 1980. He attended the State University of New
York at Albany. Mr. Davis serves as an advisory board
member of Cedar Point Communications, and as a board member of
@Security Broadband Corp., a company in which Charter owns an
equity investment interest. Mr. Davis is also a member of
the Society of Cable Telecommunications Engineers.
Sue Ann R.
Hamilton,
44, Executive Vice
President, Programming. Ms. Hamilton joined Charter as Senior
Vice President of Programming in March 2003 and was promoted to
her current position in April 2005. From March 1999 to November
2002, Ms. Hamilton served as Vice President of Programming for
AT&T Broadband, L.L.C. Prior to that, from October 1993 to
March 1999, Ms. Hamilton held numerous management positions at
AT&T Broadband, L.L.C. and Tele-Communications, Inc. (TCI),
which was acquired by AT&T Broadband, L.L.C. in 1999. Prior
to her cable television career with TCI, she was a partner with
Kirkland & Ellis representing domestic and international
clients in complex commercial transactions and securities
matters. A magna cum laude graduate of Carleton College in
Northfield, Minnesota, Ms. Hamilton received a J.D. degree from
Stanford Law School, where she was Associate Managing Editor of
the
Stanford Law Review
and Editor of the
Stanford
Journal of International Law.
Thomas J. Hearity,
58, Senior Vice President, Acting General Counsel and Secretary.
Mr. Hearity joined Charter as Vice President and Associate
General counsel in September 2003 and was promoted to Senior
Vice President and Associate General Counsel in August 2004. He
was appointed to Acting General Counsel in April 2005 and
appointed Secretary in May 2005. Prior to joining Charter,
Mr. Hearity served as outside counsel for Charter and
several other major wireline and wireless telecommunications
firms from 1996 to 2003. Mr. Hearity served as counsel for
the NYNEX Corporation from 1984 to 1996. Mr. Hearity
graduated with honors and received a B.A. degree in History and
a J.D. degree from the University of Iowa.
Michael J. Lovett
,
44, Executive Vice President and Chief Operating Officer.
Mr. Lovett was promoted to his current position in April
2005. Prior to that he served as Executive Vice President,
Operations and Customer Care from September 2004 through March
2005, and as Senior Vice President, Midwest Division Operations
and as Senior Vice President of Operations Support, since
joining Charter in August 2003 until September 2004.
Mr. Lovett was Chief Operating Officer of Voyant
Technologies, Inc., a voice conferencing hardware/ software
solutions provider, from December 2001 to August 2003. From
November 2000 to December 2001, he was Executive Vice President
of Operations for OneSecure, Inc., a startup company delivering
management/monitoring of firewalls and virtual private networks.
Prior to that, Mr. Lovett was Regional Vice President at
AT&T from June 1999 to November 2000 where he was
responsible for operations. Mr. Lovett was Senior Vice
President at Jones Intercable from October 1989 to June 1999
where he was responsible for operations in nine states.
Mr. Lovett began his career in cable television at Centel
Corporation where he held a number of positions.
Paul E. Martin
, 45,
Senior Vice President, Interim Chief Financial Officer,
Principal Accounting Officer and Corporate Controller.
Mr. Martin has been employed by Charter since March 2000,
when he joined Charter as Vice President and Corporate
Controller. In April 2002, Mr. Martin was promoted to
Senior Vice President, Principal Accounting Officer and
Corporate Controller and in August 2004 was named Interim
co-Chief Financial Officer and in April 2005 was named Interim
Chief Financial Officer. Prior to joining us in March 2000,
Mr. Martin was Vice President and Controller for Operations
and Logistics for Fort James Corporation, a manufacturer of
paper products. From 1995 to February 1999, Mr. Martin was
Chief Financial Officer of Rawlings Sporting Goods Company, Inc.
Mr. Martin received a B.S. degree with honors in Accounting
from the University of Missouri — St. Louis.
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Lynne F. Ramsey
, 48,
Senior Vice President, Human Resources. Ms. Ramsey joined
Charter's Human Resources group in March 2001 and served as
Corporate Vice President, Human Resources. She was promoted to
her current position in July 2004. Before joining Charter, Ms.
Ramsey was Executive Vice President of Human Resources for
Broadband Infrastructure Group from March 2000 through November
2000. From 1994 to 1999, Ms. Ramsey served as Senior Vice
President of Human Resources for Firstar Bank, previously
Mercantile Bank of St. Louis. She served as Vice President
of Human Resources for United Postal Savings from 1982 through
1994, when it was acquired by Mercantile Bank of St. Louis.
Ms. Ramsey received a bachelor's degree in Education from
Maryville College and a master's degree in Human Resources
Management from Washington University.
Compensation Committee Interlocks and Insider
Participation
Until April 2004, when Mr. Savoy resigned
from the board of directors, Charter's Compensation
Committee was comprised of Messrs. Allen, Savoy and
Nathanson. In 2004, Ms. Peretsman and Mr. Merritt served as the
Option Plan Committee that administered the 1999 Charter
Communications Option Plan and the Charter Communications, Inc.
2001 Stock Incentive Plan until Mr. Lillis replaced
Ms. Peretsman on the Option Plan Committee in July 2004.
The Option Plan Committee and the Compensation Committee merged
in February 2005. The Compensation Committee is currently
comprised of Messrs. Allen, May, Merritt and Nathanson.
No member of the Compensation Committee or the
Option Plan Committee was an officer or employee of Charter or
any of its subsidiaries during 2004, except for Mr. Allen,
who served as a non-employee chairman of the Compensation
Committee. Also, Mr. Nathanson was an officer of certain of
our subsidiaries prior to their acquisition by Charter in 1999
and held the title of Vice Chairman of Charter's board of
directors, a non-executive, non-salaried position in 2004.
Mr. Allen is the 100% owner and a director of Vulcan Inc.
and certain of its affiliates, which employed Mr. Savoy,
one of our directors until April 27, 2004, as an executive
officer in the past and currently employs Mr. Conn and Ms.
Patton as executive officers. Mr. Allen also was a director
of and indirectly owned 98% of TechTV, of which
Mr. Wangberg, one of our directors, was a director until
the sale of TechTV to an unrelated third party in May 2004.
Transactions between Charter and members of the Compensation
Committee are more fully described in "— Director
Compensation" and in "Certain Relationships and
Related Transactions — Other Miscellaneous
Relationships."
During 2004, (1) none of our executive
officers served on the compensation committee of any other
company that has an executive officer currently serving on the
board of directors, Compensation Committee or Option Plan
Committee of Charter and (2) except for Carl Vogel who
served as a director of Digeo, Inc., an entity of which Paul
Allen is a director and by virtue of his position as Chairman of
the board of directors of Digeo, Inc. is also a non-employee
executive officer. None of our executive officers served as a
director of another entity, one of whose executive officers
served on the Compensation Committee or Option Plan Committee of
Charter.
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Executive Compensation
Summary Compensation Table
The following table sets forth information
regarding the compensation to those executive officers listed
below for services rendered for the fiscal years ended
December 31, 2002, 2003 and 2004. These officers consist of
the Chief Executive Officer, each of the other four most highly
compensated executive officers as of December 31, 2004, and
one other highly compensated executive officer who served during
2004 but was not an executive officer on December 31, 2004.
Long-Term
Annual Compensation
Compensation Award
Year
Other
Restricted
Securities
All Other
Ended
Annual
Stock
Underlying
Compensation
Name and Principal Position
Dec. 31
Salary($)
Bonus($)
Compensation($)
Awards($)
Options(#)
($)(1)
Carl E. Vogel(2)
2004
1,038,462
500,000
(8)
—
4,658,000
(18)
580,000
42,426
(24)
Former President and
2003
1,000,000
150,000
(9)
30,345
(15)
—
750,000
12,639
(24)
Chief Executive Officer
2002
980,769
330,000
(9)
214,961
(15)
—
1,000,000
10,255
(24)
Margaret A. Bellville(3)
2004
478,366
—
28,309
(16)
612,000
(19)
200,000
204,408
(25)
Former Executive Vice
2003
581,730
203,125
(9)
30,810
(16)
—
—
109,139
(25)
President, Chief Operating
2002
9,615
150,000
(9)(10)
—
—
500,000
—
Officer
Derek Chang(4)
2004
448,077
85,700
(11)
7,255
(17)
395,250
(20)
135,000
5,510
Former Executive Vice
2003
15,385
—
—
192,000
(20)
350,000
—
President of Finance and Strategy, Interim
    co-Chief Financial Officer
Steven A. Schumm(5)
2004
467,308
15,815
(12)
—
862,952
(21)
135,000
12,360
Former Executive Vice
2003
448,077
45,000
—
—
250,000
9,889
President and Chief
2002
436,058
588,000
(13)
—
—
300,000
5,255
Administrative Officer
Curtis S. Shaw(6)
2004
422,115
16,109
—
395,250
(22)
135,000
12,592
Former Executive Vice
2003
275,782
37,500
—
—
250,000
9,411
(26)
President, General Counsel
2002
249,711
281,500
(14)
—
—
100,000
3,096
and Secretary
Michael J. Lovett(7)
2004
291,346
241,888
—
351,570
(23)
172,000
15,150
(27)
Executive Vice President,
2003
81,731
60,000
—
—
100,000
2,400
(27)
Operations and Customer Care
(1)
Except as noted in notes 24 through 27
    below, these amounts consist of matching contributions under our
    401(k) plan, premiums for supplemental life insurance available
    to executives, and long-term disability available to executives.
(2)
Mr. Vogel resigned from all of his positions
    with Charter and its subsidiaries on January 17, 2005.
(3)
Ms. Bellville became the Chief Operating
    Officer of Charter in December 2002 and terminated her
    employment, effective September 30, 2004.
(4)
Mr. Chang was hired as Executive Vice
    President of Finance and Strategy in December 2003, and was
    appointed Interim co-Chief Financial Officer in August 2004.
    Mr. Chang resigned from all positions with Charter and its
    subsidiaries effective April 15, 2005.
(5)
Mr. Schumm's position with Charter and
    its subsidiaries was eliminated, resulting in the termination of
    his employment on January 28, 2005.
(6)
Mr. Shaw resigned from all positions with
    Charter and its subsidiaries effective April 15, 2005.
(7)
Mr. Lovett joined Charter in August 2003 and
    was promoted to Executive Vice President, Chief Operating
    Officer in April 2005.
(8)
Mr. Vogel's bonus for 2004 was a
    mid-year discretionary bonus.
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Table of Contents
(9)
Mr. Vogel's and
    Ms. Bellville's 2002 and 2003 bonuses were determined
    in accordance with the terms of their respective employment
    agreements.
(10)
Includes a one-time signing bonus of $150,000
    pursuant to an employment agreement.
(11)
Mr. Chang's bonus for 2004 represents
    the 2004 portion of a $150,000 special bonus which was paid in
    connection with his continued service as Interim co-Chief
    Financial Officer through April 15, 2005.
(12)
Mr. Schumm's bonus for 2004 was
    determined in accordance with his separation agreement.
(13)
Includes a "stay" bonus representing
    the principal and interest forgiven under employee's
    promissory note, amounting to $363,000 for 2002; and $225,000
    awarded as a bonus for services performed in 2002.
(14)
Includes a "stay" bonus representing
    the principal and interest forgiven under employee's
    promissory note, amounting to $181,500 for 2002; and $100,000
    awarded as a bonus for services performed in 2002.
(15)
Amount attributed to personal use of the
    corporate airplane in 2003 and $100,000 attributed to personal
    use and commuting in the corporate airplane in 2002 and $114,961
    for purchase of a car in 2002.
(16)
Includes (i) for 2004, reimbursement for
    taxes (on a "grossed up" basis) paid in respect of
    prior reimbursements for relocation expenses, and (ii) for
    2003, $26,010 attributed to personal use of the corporate
    airplane and $4,800 for car allowance.
(17)
Includes reimbursement for taxes (on a
    "grossed up" basis) paid in respect of prior
    reimbursements for relocation expenses.
(18)
Includes 340,000 performance shares granted in
    January 2004 under our Long-Term Incentive Program that were to
    vest on the third anniversary of the grant date only if Charter
    meets certain performance criteria. Also includes 680,000
    restricted shares issued in exchange for stock options held by
    the named officer pursuant to the February 2004 option exchange
    program described below, one half of which constituted
    performance shares which were to vest on the third anniversary
    of the grant date only if Charter meets certain performance
    criteria, and the other half of which were to vest over three
    years in equal one-third installments. At December 31,
    2004, the value of all of the named officer's unvested
    restricted stock holdings (including performance shares) was
    $2,310,468, based on a per share market value (closing sale
    price) of $2.24 for our Class A common stock on
    December 31, 2004. All performance shares were forfeited
    upon termination of employment. The remainder of the restricted
    shares will vest in part on the terms described below under
    "Employment Arrangements."
(19)
These restricted shares consisted solely of
    performance shares granted under our Long-Term Incentive Program
    that were to have vested on the third anniversary of the grant
    date only if Charter meets certain performance criteria. At
    December 31, 2004, the value of all of the named
    officer's unvested restricted stock holdings (including
    performance shares) was $0, since all performance shares were
    previously forfeited upon the termination of employment.
(20)
Restricted shares granted in 2003 vest over four
    years in equal one-fourth installments. Restricted shares
    granted in 2004 represent 77,500 performance shares granted
    under our Long-Term Incentive Program that were to vest on the
    third anniversary of the grant date only if Charter meets
    certain performance criteria. At December 31, 2004, the
    value of all of the named officer's unvested restricted
    stock holdings (including performance shares) was $257,600 based
    on a per share market value (closing sale price) of $2.24 for
    our Class A common stock on December 31, 2004. All
    performance shares were forfeited upon termination of
    employment. The remainder of restricted shares will vest in part
    on the terms described below under "Employment
    Arrangements."
(21)
Includes 77,500 performance shares granted in
    January 2004 under our Long-Term Incentive Program that were to
    vest on the third anniversary of the grant date only if Charter
    meets certain performance criteria. Also includes restricted
    shares issued in exchange for stock options held by the named
    officer pursuant to the February 2004 option exchange program
    described below. One half of
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Table of Contents
these restricted shares constitutes performance
    shares which were to vest on the third anniversary of the grant
    date only if Charter meets certain performance criteria and the
    other half of which were to vest over three years in equal
    one-third installments. At December 31, 2004, the value of
    all of the named officer's unvested restricted stock
    holdings (including performance shares) was $417,240, based on a
    per share market value (closing sale price) of $2.24 for our
    Class A common stock on December 31, 2004. All
    performance shares were forfeited upon the termination of
    employment. The remainder of the restricted shares will vest in
    part on the terms described below under "Employment
    Arrangements."
(22)
These restricted shares consist solely of
    performance shares granted under our Long-Term Incentive Program
    that will vest on the third anniversary of the grant date only
    if Charter meets certain performance criteria. At
    December 31, 2004, the value of all of the named
    officer's unvested restricted stock holdings (including
    performance shares) was $173,600 based on a per share market
    value (closing sale price) of $2.24 for our Class A common
    stock on December 31, 2004. All performance shares were
    forfeited upon termination of employment.
(23)
These restricted shares consist solely of
    performance shares granted under our Long-Term Incentive Program
    that will vest on the third anniversary of the grant date only
    if Charter meets certain performance criteria. At
    December 31, 2004, the value of all of the named
    officer's unvested restricted stock holdings (including
    performance shares) was $197,120, based on a per share market
    value (closing sale price) of $2.24 for our Class A common
    stock on December 31, 2004.
(24)
In addition to items in note 1 above,
    includes (i) for 2004, $28,977 attributed to personal use
    of the corporate airplane, $10,000 as reimbursement for tax
    advisory services and (ii) for 2003, $10,000 as
    reimbursement for tax advisory services; and (iii) for
    2002, $10,000 as reimbursement for tax advisory services.
(25)
In addition to items in note 1 above,
    includes (i) for 2004, $183,899 for severance and accrued
    vacation at termination of employment, $10,299 for COBRA
    payments following termination, $4,650 for automobile allowance
    and $2,831 attributed to personal use of the corporate airplane,
    and (ii) for 2003, $5,000 as reimbursement for tax advisory
    services, $7,500 for legal services and $93,684 paid in relation
    to relocation expenses.
(26)
In addition to items in note 1 above,
    includes for 2003, $2,287 attributed to personal use of the
    corporate airplane.
(27)
In addition to items in note 1 above,
    includes, (i) for 2004, $7,200 for automobile allowance,
    and $597 attributed to personal use of the corporate airplane
    and (ii) for 2003, $2,400 for automobile allowance.
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Table of Contents
2004 Option Grants
The following table shows individual grants of
options made to individuals named in the Summary Compensation
Table during 2004. All such grants were made under the 2001
Stock Incentive Plan and the exercise price was based upon the
fair market value of Charter's Class A common stock on
the respective grant dates.
Number of
% of
Potential Realizable Value at
Securities
Total
Assumed Annual Rate of
Underlying
Options
Stock Price Appreciation
Options
Granted to
Exercise
For Option Term(2)
Granted
Employees
Price
Expiration
Name
(#)(1)
in 2004
($/Sh)
Date
5% ($)
10% ($)
Carl E. Vogel(3)
580,000
6.17%
$
5.17
1/27/14
1,885,803
4,778,996
Margaret A. Bellville(4)
200,000
2.13%
5.17
1/27/14
650,277
1,647,930
Derek Chang(5)
135,000
1.44%
5.17
1/27/14
438,937
1,112,353
Steven A. Schumm(6)
135,000
1.44%
5.17
1/27/14
438,937
1,112,353
Curtis S. Shaw(7)
135,000
1.44%
5.17
1/27/14
438,937
1,112,353
Michael J. Lovett
77,000
0.82%
5.17
1/27/14
251,982
638,573
12,500
0.13%
4.555
4/27/14
35,808
90,744
82,000
0.87%
2.865
10/26/14
147,746
374,418
(1)
Options are transferable under limited
    conditions, primarily to accommodate estate planning purposes.
    These options generally vest in four equal installments
    commencing on the first anniversary following the grant date.
(2)
This column shows the hypothetical gains on the
    options granted based on assumed annual compound price
    appreciation of 5% and 10% over the full ten-year term of the
    options. The assumed rates of 5% and 10% appreciation are
    mandated by the SEC and do not represent our estimate or
    projection of future prices.
(3)
Mr. Vogel's employment terminated on
    January 17, 2005. Under the terms of the separation
    agreement, his options will continue to vest until
    December 31, 2005, and all vested options are exercisable
    until sixty (60) days thereafter.
(4)
Ms. Bellville's employment terminated
    on September 30, 2004. Under the terms of the separation
    agreement, her options will continue to vest until
    December 31, 2005, and all vested options are exercisable
    until sixty (60) days thereafter.
(5)
Mr. Chang resigned effective April 15,
    2005. Mr. Chang's agreement provided that one half of
    his unvested restricted shares would immediately vest, and one
    half of his unvested options of the initial option grant would
    vest if he elected to terminate his employment due to a change
    in our Chief Executive Officer.
(6)
Mr. Schumm's employment terminated on
    January 28, 2005. Under the terms of the separation
    agreement, his options will continue to vest until
    April 28, 2006, and all vested options are exercisable
    until sixty (60) days thereafter.
(7)
Mr. Shaw resigned, effective April 15,
    2005. All of his options expired by June 15, 2005.
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Table of Contents
2004 Aggregated Option Exercises and Option
Value
The following table sets forth, for the
individuals named in the Summary Compensation Table,
(i) information concerning options exercised during 2004,
(ii) the number of shares of our Class A common stock
underlying unexercised options at year-end 2004, and
(iii) the value of unexercised "in-the-money"
options (i.e., the positive spread between the exercise
price of outstanding options and the market value of our
Class A common stock) on December 31, 2004.
Number of Securities
Underlying Unexercised
Value of Unexercised In-the
Options at December 31,
Money Options at
Shares
2004 (#)(1)
December 31, 2004 ($)(2)
Acquired on
Value
Name
Exercise (#)
Realized ($)
Exercisable
Unexercisable
Exercisable
Unexercisable
Carl E. Vogel(3)
—
—
2,499,999
3,230,001
—
—
Margaret A. Bellville(4)
—
—
385,416
314,584
254,375
75,625
Derek Chang(5)
—
—
87,500
397,500
—
—
Steven A. Schumm(6)
—
—
182,500
502,500
—
—
Curtis S. Shaw(7)
—
—
438,833
420,167
—
—
Michael J. Lovett
—
—
25,000
247,000
—
—
(1)
Options granted prior to 2001 and under the 1999
    Charter Communications Option Plan, when vested, are exercisable
    for membership units of Charter Holdco which are immediately
    exchanged on a one-for-one basis for shares of our Class A
    common stock upon exercise of the option. Options granted under
    the 2001 Stock Incentive Plan and after 2000 are exercisable for
    shares of our Class A common stock.
(2)
Based on a per share market value (closing price)
    of $2.24 as of December 31, 2004 for our Class A
    common stock.
(3)
Mr. Vogel's employment terminated on
    January 17, 2005. Under the terms of the separation
    agreement, his options will continue to vest until
    December 31, 2005, and all vested options are exercisable
    until sixty (60) days thereafter.
(4)
Ms. Bellville's employment terminated
    on September 30, 2004. Under the terms of the separation
    agreement, her options will continue to vest until
    December 31, 2005, and all vested options are exercisable
    until sixty (60) days thereafter.
(5)
Mr. Chang resigned from all of his positions
    with Charter effective April 15, 2005. One-half of the
    remainder of his options will vest on the terms described below
    under "Employment Arrangements."
(6)
Mr. Schumm's employment terminated on
    January 28, 2005. Under the terms of the separation
    agreement, his options will continue to vest until
    April 28, 2006, and all vested options are exercisable
    until sixty (60) days thereafter.
(7)
Mr. Shaw resigned from all of his positions
    with Charter effective April 15, 2005. All of his options
    expired by June 15, 2005.
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Table of Contents
Long-Term Incentive Plans —
Awards in Last Fiscal Year
Estimated Future Payouts Under
Non-Stock Price-Based Plans
Number of
Performance or
Shares, Units or
Other Period Until
Threshold
Target
Maximum
Name
Other Rights(#)
Maturation or Payout
(#)
(#)
(#)
Carl E. Vogel
340,000
3 year performance cycle
3 year vesting
238,000
340,000
680,000
Margaret A. Bellville
120,000
3 year performance cycle
3 year vesting
84,000
120,000
240,000
Derek Chang
77,500
3 year performance cycle
3 year vesting
54,250
77,500
155,000
Steven A. Schumm
77,500
3 year performance cycle
3 year vesting
54,250
77,500
155,000
Curtis S. Shaw
77,500
3 year performance cycle
3 year vesting
54,250
77,500
155,000
Michael J. Lovett
88,000
3 year performance cycle
3 year vesting
61,600
88,000
176,000
Option/ Stock Incentive Plans
The Plans.
We have
granted stock options, restricted stock and other incentive
compensation under two plans — the 1999 Charter
Communications Option Plan and the 2001 Stock Incentive Plan.
The 1999 Charter Communications Option Plan provided for the
grant of options to purchase membership units in Charter Holdco
to current and prospective employees and consultants of Charter
Holdco and its affiliates and to our current and prospective
non-employee directors. Membership units received upon exercise
of any options are immediately exchanged for shares of Charter
Class A common stock on a one-for-one basis.
The 2001 Stock Incentive Plan provides for the
grant of non-qualified stock options, stock appreciation rights,
dividend equivalent rights, performance units and performance
shares, share awards, phantom stock and/or shares of restricted
stock (not to exceed 20,000,000 shares) as each term is
defined in the 2001 Stock Incentive Plan. Employees, officers,
consultants and directors of Charter and its subsidiaries and
affiliates are eligible to receive grants under the 2001 Stock
Incentive Plan. Generally, options expire 10 years from the
grant date. Unless sooner terminated by our board of directors,
the 2001 Stock Incentive Plan will terminate on
February 12, 2011, and no option or award can be granted
thereafter.
Together, the plans allow for the issuance of up
to a total of 90,000,000 shares of our Class A common
stock (or units exchangeable for our Class A common stock).
Any shares covered by options that are terminated under the 1999
Charter Communications Option Plan will be transferred to the
2001 Stock Incentive Plan, and no new options will be granted
under the 1999 Charter Communications Option Plan. At
June 30, 2005, 1,310,020 shares had been issued under
the plans upon exercise of options, 685,476 had been issued upon
vesting of restricted stock granted under the plans, and
1,307,612 shares were subject to future vesting under
restricted stock agreements. Of the remaining
86,696,892 shares covered by the plans, as of June 30,
2005, 26,782,312 were subject to outstanding options (32% of
which were vested), and there were 11,506,410 performance shares
granted under Charter's Long-Term Incentive Program, which
will vest on the third anniversary of the date of grant
conditional upon Charter's performance against certain
financial targets approved by Charter's board of directors
at the time of the award. As of June 30, 2005,
48,408,170 shares remained available for future grants
under the plans. As of June 30, 2005, there were 5,720
participants in the plans.
The plans authorize the repricing of options,
which could include reducing the exercise price per share of any
outstanding option, permitting the cancellation, forfeiture or
tender of outstanding options in
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Table of Contents
exchange for other awards or for new options with
a lower exercise price per share, or repricing or replacing any
outstanding options by any other method.
Long-Term Incentive
Plan.
In January 2004, the
Compensation Committee of our board of directors approved our
Long-Term Incentive Program, or LTIP, which is a program
administered under the 2001 Stock Incentive Plan. Under the
LTIP, employees of Charter and its subsidiaries whose pay
classifications exceed a certain level are eligible to receive
stock options, and more senior level employees were eligible to
receive stock options and performance shares. The stock options
vest 25% on each of the first four anniversaries of the date of
grant. The performance shares vest on the third anniversary of
the date of grant shares of Class A common stock are
issued, conditional upon our performance against financial
performance measures established by our management and approved
by the board of directors or Compensation Committee as of the
time of the award. We granted 6,899,600 performance shares in
January 2004 under this program and recognized expense of
$8 million in the first three quarters of 2004. However, in
the fourth quarter of 2004, we reversed the entire
$8 million of expense based on our assessment of the
probability of achieving the financial performance measures
established by management and required to be met for the
performance shares to vest. In March and April 2005, Charter
granted 2.8 million performance shares under the LTIP.
The 2001 Stock Incentive Plan must be
administered by, and grants and awards to eligible individuals
must be approved by our board of directors or a committee
thereof consisting solely of nonemployee directors as defined in
Section 16b-3 under the Securities Exchange Act of 1934, as
amended. The board of directors or such committee determines the
terms of each stock option grant, restricted stock grant or
other award at the time of grant, including the exercise price
to be paid for the shares, the vesting schedule for each option,
the price, if any, to be paid by the grantee for the restricted
stock, the restrictions placed on the shares, and the time or
times when the restrictions will lapse. The board of directors
or such committee also has the power to accelerate the vesting
of any grant or extend the term thereof.
Upon a change of control of Charter, the board of
directors or the administering committee can shorten the
exercise period of any option, have the survivor or successor
entity assume the options with appropriate adjustments, or
cancel options and pay out in cash. If an optionee's or
grantee's employment is terminated without
"cause" or for "good reason" following a
"change in control" (as those terms are defined in the
plans), unless otherwise provided in an agreement, with respect
to such optionee's or grantee's awards under the
plans, all outstanding options will become immediately and fully
exercisable, all outstanding stock appreciation rights will
become immediately and fully exercisable, the restrictions on
the outstanding restricted stock will lapse, and all of the
outstanding performance shares will vest and the restrictions on
all of the outstanding performance shares will lapse as if all
performance objectives had been satisfied at the maximum level.
February 2004 Option
Exchange.
In January 2004, we offered
employees of Charter and its subsidiaries the right to exchange
all stock options (vested and unvested) under the 1999 Charter
Communications Option Plan and 2001 Stock Incentive Plan that
had an exercise price over $10 per share for shares of
restricted Charter Class A common stock or, in some
instances, cash. Based on a sliding exchange ratio, which varied
depending on the exercise price of an employee's
outstanding options, if an employee would have received more
than 400 shares of restricted stock in exchange for
tendered options, we issued to that employee shares of
restricted stock in the exchange. If, based on the exchange
ratios, an employee would have received 400 or fewer shares of
restricted stock in exchange for tendered options, we instead
paid to the employee cash in an amount equal to the number of
shares the employee would have received multiplied by $5.00. The
offer applied to options to purchase a total of
22,929,573 shares of Class A common stock, or
approximately 48% of our 47,882,365 total options (vested and
unvested) issued and outstanding as of December 31, 2003.
Participation by employees was voluntary. Non-employee members
of the board of directors of Charter or any of its subsidiaries
were not eligible to participate in the exchange offer.
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In the closing of the exchange offer on
February 20, 2004, we accepted for cancellation eligible
options to purchase approximately 18,137,664 shares of our
Class A common stock. In exchange, we granted approximately
1,966,686 shares of restricted stock, including 460,777
performance shares to eligible employees of the rank of senior
vice president and above, and paid a total cash amount of
approximately $4 million (which amount includes applicable
withholding taxes) to those employees who received cash rather
than shares of restricted stock. The restricted stock was
granted on February 25, 2004. Employees tendered
approximately 79% of the options eligible to be exchanged under
the program.
Carl E. Vogel received 680,000 restricted shares
in exchange for 3,400,000 options granted on October 8,
2001 with an exercise price of $13.68 per share. Steven A.
Schumm received 108,768 restricted shares in exchange for 25,000
options granted on February 12, 2001 with an exercise price
of $23.09 per share and 140,000 options granted on
September 28, 2001 with an exercise price of
$11.99 per share and 782,681 options granted on
February 9, 1999 with an exercise price of $20.00 per
share.
The cost of the stock option exchange program was
approximately $10 million, with a 2004 cash compensation
expense of approximately $4 million and a non-cash
compensation expense of approximately $6 million to be
expensed ratably over the three-year vesting period of the
restricted stock issued in the exchange.
The participation of the Named Executive Officers
in this exchange offer is reflected in the following table:
Number of
Securities
Market Price of
New
Length of Original
Underlying
Stock at Time
Exercise Price at
Exercise
Option Term
Options
of Exchange
Time of Exchange
Price
Remaining at
Name
Date
Exchanged
($)
($)
($)
Date of Exchange
Carl E. Vogel
2/25/04
3,400,000
4.37
13.68
(1
)
7 years 7 months
Former President
and Chief Executive Officer
Steven A. Schumm
2/25/04
25,000
4.37
23.09
(2
)
7 years 0 months
Former Executive
140,000
4.37
11.99
7 years 7 months
Vice President and
782,681
4.37
20.00
4 years 11 months
Chief Administrative Officer
(1)
On February 25, 2004, in exchange for
    3,400,000 options tendered, 340,000 performance shares were
    granted with a three year performance cycle and three year
    vesting were granted along with 340,000 restricted stock units
    with one-third of the Shares vesting on each of the first three
    anniversaries of the Date of Grant. On the grant date, the price
    of the Company's common stock was $4.37.
(2)
On February 25, 2004, in exchange for
    108,768 options tendered, 54,384 performance shares were granted
    with a three year performance cycle and three year vesting
    were granted along with 54,384 restricted stock units with
    one-third of the Shares vesting on each of the first three
    anniversaries of the Date of Grant. On the grant date, the price
    of the Company's common stock was $4.37.
2005 Executive Cash Award
    Plan
On June 9, 2005, Charter adopted the 2005
Executive Cash Award Plan to provide additional incentive to,
and retain the services of, certain officers of Charter and its
subsidiaries, to achieve the highest level of individual
performance and contribute to the success of Charter. Eligible
participants are employees of Charter or any of its
subsidiaries, who have been recommended by the CEO and
designated and approved as Plan participants by the Compensation
Committee of Charter's board of directors. At the time the
Plan was adopted, the interim CEO recommended and the
Compensation Committee designated and approved as Plan
participants the permanent President and Chief Executive Officer
position, Executive Vice President positions and selected Senior
Vice President positions.
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Table of Contents
The Plan provides that each participant be
granted an award which represents an opportunity to receive cash
payments in accordance with the Plan. An award will be credited
in book entry format to a participant's account in an
amount equal to 100% of a participant's base salary on the
date of Plan approval in 2005 and 20% of participant's base
salary in each year 2006 through 2009, based on that
participant's base salary as of May 1 of the
applicable year. The Plan awards will vest at the rate of 50% of
the plan award balance at the end of 2007 and 100% of the plan
award balance at the end of 2009. Participants will be entitled
to receive payment of the vested portion of the award if the
participant remains employed by Charter continuously from the
date of the participant's initial participation through the
end of the calendar year in which his or her award becomes
vested, subject to payment of pro-rated award balances to a
participant who terminates due to death or disability or in the
event Charter elects to terminate the Plan.
A participant's eligibility for, and right
to receive, any payment under the Plan (except in the case of
intervening death) is conditioned upon the participant first
executing and delivering to Charter an agreement releasing and
giving up all claims that participant may have against Charter
and related parties arising out of or based upon any facts or
conduct occurring prior to the payment date, and containing
additional restrictions on post-employment use of confidential
information, non-competition and non-solicitation and
recruitment of customers and employees.
Employment Arrangements and Related
Agreements
Charter and Neil Smit entered into an agreement
as of August 9, 2005 whereby Mr. Smit will serve as
Charter's President and Chief Executive Officer (the
"Employment Agreement") for a term expiring on
December 31, 2008, unless extended for an additional two
years at Charter's option. Under the Employment Agreement,
Mr. Smit will receive a $1,200,000 base salary per year,
through the third anniversary of the agreement, and thereafter
$1,440,000 per year for the remainder of the Employment
Agreement. Mr. Smit shall be eligible to receive a
performance-based target bonus of 125% of annualized salary,
with a maximum bonus of 200% of annualized salary, as determined
by the Compensation Committee of Charter's Board of
Directors. However, for 2005 only, he will receive a minimum
bonus of $1,200,000, provided that he is employed by Charter on
December 31, 2005. Under Charter's Long-Term Incentive
Plan he will receive options to
purchase 3,333,333 shares of Class A common
stock, exercisable for 10 years, with annual vesting of
one-third of the grant in each of the three years from the
employment date; a performance share award for a maximum of
4,123,720 shares of Class A common stock, to be earned
during a three-year performance cycle starting January 2006; and
a restricted stock award of 1,562,500 shares of
Class A common stock, with annual vesting over three years
following employment date. In addition, Mr. Smit will
receive another restricted stock award for 1,250,000 shares
of Class A common stock vesting on the first anniversary of
employment date.
Mr. Smit will receive full reimbursement for
his relocation expenses and employee benefits consistent with
those made generally available to other senior executives. In
the event that Mr. Smit is terminated by Charter without
"cause" or for "good reason termination," as
those terms are defined in the Employment Agreement, he will
receive the greater of two times base salary or salary through
the remainder to the term of the Employment Agreement; a pro
rata bonus for the year of termination; full vesting of options
and restricted shares; vesting of performance stock if targets
are achieved; and twelve months of COBRA payments. The
Employment Agreement contains non-compete provisions from six
months to two years, depending on the type of termination.
Charter will gross up federal taxes in the event that
Mr. Smit is subject to any additional tax under
Section 409A of the Internal Revenue Code.
Charter entered into an agreement with Robert P.
May, effective January 17, 2005, whereby Mr. May
served as Charter's Interim President and Chief Executive
Officer (the "May Executive Services Agreement").
Under the May Executive Services Agreement, Mr. May
received a $1,250,000 base fee per year. Mr. May continued
to receive the compensation and reimbursement of expenses to
which he was entitled in his capacity as a member of the board
of directors. Mr. May's employment agreement provided
that Charter would provide equity incentives commensurate with
his position and responsibilities, as determined by the board of
directors. Accordingly, Mr. May was granted 100,000 shares
of restricted stock
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Table of Contents
under our 2001 Stock Incentive Plan. The 100,000
restricted shares vested on the date on which
Mr. May's interim service as President and Chief
Executive Officer terminated August 22, 2005. Mr. May
served as an independent contractor and was not entitled to any
vacation or eligible to participate in any employee benefit
programs of Charter. Charter reimbursed Mr. May for
reasonable transportation costs from Mr. May's
residence in Florida or other locations to Charter's
offices and provided temporary living quarters or reimbursed
expenses related thereto.
On April 1, 2005, we entered into an
employment agreement with Mr. Lovett, pursuant to which he will
be employed as Executive Vice President and Chief Operating
Officer for a term commencing April 1, 2005 and expiring on
April 1, 2008. The contract will be reviewed every 18
months thereafter and may be extended pursuant to such reviews.
Under the agreement, Mr. Lovett will receive an annual base
salary of $575,000 and will be eligible to receive an annual
bonus targeted at 80% of his base salary under our senior
management bonus plan. We agreed to provide Mr. Lovett with
equity incentives commensurate with his position and
responsibilities, as determined by the board of directors in its
discretion. Accordingly, Mr. Lovett has been granted 75,000
shares of restricted stock under our 2001 Stock Incentive Plan.
The 75,000 restricted shares will vest one third on each of the
first three anniversaries of the date of grant (unless there is
an earlier termination event for Cause, as defined in the 2001
Stock Incentive Plan). If his employment is terminated without
cause or if he terminates his employment due to a change in
control or for good reason (as defined in the agreement), we
will pay Mr. Lovett an amount equal to the aggregate base salary
due to Mr. Lovett during the remainder of the term, within
fifteen days of termination. In addition, if we terminate his
employment without cause, Mr. Lovett will be entitled to receive
a pro rated bonus for the fiscal year in which he is terminated
based upon financial results through the month of termination.
Mr. Lovett's agreement includes a covenant not to compete
for the balance of the term and for two years thereafter. The
agreement further provides that Mr. Lovett is entitled to
receive certain relocation expenses and to participate in any
benefit plan generally afforded to, and to receive vacation and
sick pay on such terms as are offered to, our other senior
executive officers.
On September 7, 2005, Charter entered into
an employment agreement with Wayne Davis, Executive Vice
President and Chief Technical Officer. The agreement provides
that Mr. Davis shall be employed in an executive capacity
to perform such duties as are assigned or delegated by the
President and Chief Executive Officer or the designee thereof,
at a salary of $450,000. The term of this agreement is two years
from the date of the agreement. Mr. Davis shall be eligible
to participate in Charter's Long-Term Incentive Plan, Stock
Option Plan and to receive such employee benefits as are
available to other senior executives. In the event that he is
terminated by Charter without "cause" or for
"good reason termination," as those terms are defined
in the agreement, he will receive his salary for the remainder
of the term of the agreement or twelve months' salary,
whichever is greater; a pro rata bonus for the year of
termination; twelve months of COBRA payments; and the vesting of
options and restricted stock for as long as severance payments
are made. The agreement contains one-year, non-compete
provisions (or until the end of the term of the agreement, if
longer) in a Competitive Business, as such term is defined in
the agreements, and two-year non-solicitation clauses.
On September 2, 2005, Charter entered into
an employment agreement with Mr. Martin, Senior Vice
President, Interim Chief Financial Officer, Principal Accounting
Officer and Corporate Controller. The agreement provides that
Mr. Martin shall be employed in an executive capacity to
perform such duties as are assigned or delegated by the
President and Chief Executive Officer or the designee thereof,
at a salary of $240,625. The term of this agreement is two years
from the date of the agreement. Mr. Martin shall be
eligible to participate in Charter's Long-Term Incentive
Plan, Stock Option Plan and to receive such employee benefits as
are available to other senior executives. In the event that he
is terminated by Charter without "cause" or for
"good reason termination," as those terms are defined
in the agreement, he will receive his salary for the remainder
of the term of the agreement or twelve months' salary,
whichever is greater; a pro rata bonus for the year of
termination; twelve months of COBRA payments; and the vesting of
options and restricted stock for as long as severance payments
are made. The agreement contains one-year, non-compete
provisions (or until the end of the term of the agreement, if
longer) in a Competitive Business, as such term is defined in
the agreements, and two-year non-solicitation clauses.
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Table of Contents
Effective April 15, 2005, Charter also
entered into an agreement governing the terms of the service of
Mr. Paul E. Martin as Interim Chief Financial Officer.
Under the terms of the agreement, Mr. Martin will receive
approximately $13,700 each month for his service in the capacity
of Interim Chief Financial Officer until a permanent Chief
Financial Officer is employed. Under the agreement,
Mr. Martin will also be eligible to receive an additional
bonus opportunity of up to approximately $13,600 per month
served as Interim Chief Financial Officer, payable in accordance
with Charter's 2005 Executive Bonus Plan. The amounts
payable to Mr. Martin under the agreement are in addition
to all other amounts Mr. Martin receives for his services
in his capacity as Senior Vice President, Principal Accounting
Officer and Corporate Controller. In addition, Mr. Martin
received an additional special bonus of $50,000 for his service
as Interim co-Chief Financial Officer prior to April 15,
2005. This amount is in addition to the bonus agreed upon in
2004 for his service in that capacity through March 31,
2005.
Until his resignation effective April 15,
2005, Mr. Chang was employed under the terms contained in
an offer letter effective December 2, 2003 providing for an
annual base salary of $400,000 (which was increased to
$450,000 per year) and eligibility for an annual incentive
target of 100% of the base salary (based on a combination of
personal performance goals and overall company performance).
Mr. Chang was also eligible to participate in our 2001
Stock Incentive Plan. Under this plan, Mr. Chang was
granted 350,000 options to purchase Class A common stock
and 50,000 restricted shares on December 9, 2003.
Mr. Chang was also entitled to participate in our LTIP.
Mr. Chang's agreement provided that one half of his
unvested restricted shares would immediately vest, and one half
of his unvested options of the initial option grant would vest
if he was terminated without cause or if he elected to terminate
his employment due to (1) a change in our Chief Executive
Officer, (2) a change in reporting relationship to anyone
other than the Chief Executive Officer, (3) a requirement
that the employee relocate, or (4) a change of control of
Charter, if terminated without cause. In addition,
Mr. Chang was entitled to eighteen months of full severance
benefits at his current compensation rate, plus the pro rata
portion of his bonus amounts within thirty days after
termination because of any of these events. In light of
Mr. Vogel's resignation, Charter and Mr. Chang
agreed that he would have until April 15, 2005 to exercise
his right to terminate his employment and receive the foregoing
vesting, severance and other benefits. In addition, Charter
agreed that it would pay Mr. Chang a special $150,000
bonus, in addition to any other bonuses to which he would be
otherwise entitled, conditioned on Mr. Chang's
continued service as Interim co-Chief Financial Officer through
March 31, 2005, which was paid in April 2005.
Until his resignation in January 2005,
Mr. Vogel was employed as President and Chief Executive
Officer, earning a base annual salary of $1,000,000 and was
eligible to receive an annual bonus of up to $500,000, a portion
of which was based on personal performance goals and a portion
of which was based on company performance measured against
criteria established by the board of directors with
Mr. Vogel. Pursuant to his employment agreement,
Mr. Vogel was granted 3,400,000 options to purchase
Class A common stock and 50,000 shares of restricted
stock under our 2001 Stock Incentive Plan. In the February 2004
option exchange, Mr. Vogel exchanged his 3,400,000 options
for 340,000 shares of restricted stock and 340,000
performance shares. Mr. Vogel's initial 50,000
restricted shares vested 25% on the grant date, with the
remainder vesting in 36 equal monthly installments beginning
December 2002. The 340,000 shares of restricted stock were
to vest over a three-year period, with one-third of the shares
vesting on each of the first three anniversaries of the grant
date. The 340,000 performance shares were to vest at the end of
a three-year period if certain financial criteria were met.
Mr. Vogel's agreement provided that, if Mr. Vogel
is terminated without cause or if Mr. Vogel terminated the
agreement for good reason, he is entitled to his aggregate base
salary due during the remainder of the term and full prorated
benefits and bonus for the year in which termination occurs.
Mr. Vogel's agreement included a covenant not to
compete for the balance of the initial term or any renewal term,
but no more than one year in the event of termination without
cause or by Mr. Vogel with good reason.
Mr. Vogel's agreement entitled him to participate in
any disability insurance, pensions or other benefit plans
afforded to employees generally or to our executives, including
our LTIP. We agreed to reimburse Mr. Vogel annually for the
cost of term life insurance in the amount of $5 million,
although he declined this reimbursement in 2002, 2003 and 2004.
Mr. Vogel was entitled to reimbursement of fees and dues
for his membership in a country club of his choice, which he
declined in 2002, 2003 and 2004, and reimbursement for up to
$10,000 per year for tax,
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legal and financial planning services. His
agreement also provided for a car and associated expenses for
Mr. Vogel's use. Mr. Vogel's agreement
provided for automatic one-year renewals and also provided that
we would cause him to be elected to our board of directors
without any additional compensation.
In February 2005, Charter entered into an
agreement with Mr. Vogel setting forth the terms of his
resignation. Under the terms of the agreement, Mr. Vogel
received in February 2005 all accrued and unpaid base salary and
vacation pay through the date of resignation and a lump sum
payment equal to the remainder of his base salary during 2005
(totaling $953,425). In addition, he will receive a lump sum
cash payment of $500,000 at December 31, 2005, which is
subject to reduction to the extent of compensation attributable
to certain competitive activities.
Mr. Vogel will continue to receive certain
health benefits during 2005 and COBRA premiums for such health
insurance coverage for 18 months thereafter. All of his
outstanding stock options, as well as his restricted stock
granted in 2004 (excluding 340,000 shares of restricted
stock granted as "performance units", which will
automatically be forfeited), will continue to vest through
December 31, 2005. In addition, one-half of the remaining
unvested portion of his 2001 restricted stock grant vested upon
the effectiveness of the agreement, and the other half was
forfeited. Mr. Vogel had 60 days after
December 31, 2005 to exercise any outstanding vested stock
options. Under the agreement, Mr. Vogel waived any further
right to any bonus or incentive plan participation and provided
certain releases of claims against Charter and its subsidiaries
from any claims arising out of or based upon any facts occurring
prior to the date of the agreement, but Charter will continue to
provide Mr. Vogel certain indemnification rights and to
include Mr. Vogel in its director and officer liability
insurance for a period of six years. Charter and its
subsidiaries also agreed to provide releases of certain claims
against Mr. Vogel with certain exceptions reserved.
Mr. Vogel has also agreed, with limited exceptions that he
will continue to be bound by the covenant not to compete,
confidentiality and non-disparagement provisions contained in
his 2001 employment agreement.
Ms. Bellville was employed as Executive Vice
President, Chief Operating Officer. Until her resignation in
September 2004, she was employed under an employment agreement
entered into as of April 27, 2003, that would have
terminated on September 1, 2007. Her annual base salary was
$625,000 and she was eligible to receive an annual bonus in an
amount to be determined by our board of directors, with a
contractual minimum for 2003 of $203,125. Commencing in 2004,
Ms. Bellville would have been eligible to receive a target
annual bonus equal to 100% of her base salary for the applicable
year at the discretion of the board of directors, 50% to be
based on personal performance goals and 50% to be based on
overall company performance. Under a prior offer letter dated
December 3, 2002, Ms. Bellville was granted 500,000
options to purchase shares of our Class A common stock,
which vested 25% on the date of the grant (December 9,
2002), with the balance to vest in 36 equal installments
commencing January 2003. Ms. Bellville's employment
agreement provided that if she was terminated without cause or
if she terminated the agreement for good reason (including due
to a change in control or if Ms. Bellville was required to
report, directly or indirectly, to persons other than the Chief
Executive Officer), we would pay Ms. Bellville an amount
equal to the aggregate base salary due to Ms. Bellville
during the remainder of the term, or renewal term and a full
prorated bonus for the year in which the termination occurs,
within thirty days of termination. Ms. Bellville's
agreement included a covenant not to compete for the balance of
the initial term or any renewal term, but no more than one year,
in the event of termination without cause or by her with good
reason. Her agreement further provided that she was entitled to
participate in any disability insurance, pension or other
benefit plan afforded to employees generally or to executives of
Charter, including our LTIP. Ms. Bellville was entitled to
a monthly car allowance and reimbursement for all business
expenses associated with the use of such car.
Ms. Bellville's agreement provided that she was
entitled to the reimbursement of dues for her membership in a
country club of her choice, and reimbursement for up to
$5,000 per year for tax, legal and financial planning
services.
On September 16, 2004, Charter entered into
an agreement with Ms. Bellville governing the terms and
conditions of her resignation as an officer and employee of
Charter. Under the terms of this agreement, Ms. Bellville
has the right to receive 65 weeks of base pay based on an
annual base of $625,000, plus usual compensation for all accrued
vacation and other leave time. Her options to
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Table of Contents
purchase 700,000 shares of Class A
common stock will continue to vest during the salary
continuation period. Ms. Bellville will have 60 days
after the expiration of the salary continuation period to
exercise any outstanding vested options at the applicable
exercise prices established at each grant date. To date,
Ms. Bellville has exercised her options to
purchase 350,000 shares. Ms. Bellville was
entitled to and received relocation benefits under
Charter's current relocation policy with respect to a move
to a specified geographic area and was provided outplacement
assistance for 6 months following the date of her
separation from Charter. Her resignation was effective
September 30, 2004. The agreement provides that the
previously existing employment agreement would terminate, except
for certain ongoing obligations on Ms. Bellville's
part concerning confidentiality, non-solicitation and
non-disparagement. The contractual restriction on her ability to
solicit current Charter employees does not apply to persons who,
at the time of solicitation, have not worked for Charter in the
prior 6 months and are not receiving severance from
Charter. In addition, the non-competition provisions of her
employment agreement were waived. Under the agreement,
Ms. Bellville waived a right to any bonus or incentive plan
and released Charter from any claims arising out of or based
upon any facts occurring prior to the date of the agreement, but
Charter will continue to provide Ms. Bellville certain
indemnification rights for that period.
In addition to the indemnification provisions
which apply to all employees under our bylaws,
Mr. Vogel's and Ms. Bellville's agreements
provide that we will indemnify and hold harmless each employee
to the maximum extent permitted by law from and against any
claims, damages, liabilities, losses, costs or expenses in
connection with or arising out of the performance by the
applicable employee of his or her duties. Each of the above
agreements also contains confidentiality and non-solicitation
provisions.
Effective January 28, 2005, we eliminated
the position of Chief Administrative Officer, resulting in the
termination of employment of Steven A. Schumm, Executive Vice
President and Chief Administrative Officer from Charter and each
of our subsidiaries for which Mr. Schumm served as an
officer. Pursuant to a Separation Agreement executed on
February 8, 2005, we will continue to pay
Mr. Schumm's base salary for 65 weeks at an
annual rate of $450,000, and Mr. Schumm was paid a bonus of
$15,815 at the time other executives received their bonuses in
April 2005. Mr. Schumm's stock options will
continue to vest during the 65-week severance period, and he
will have 60 days thereafter to exercise any vested options.
Thomas A. Cullen resigned, effective
April 30, 2005, from his position as Executive Vice
President of Advanced Services and Business Development of
Charter and each of Charter's subsidiaries for which
Mr. Cullen served as an officer. Pursuant to a Separation
Agreement and Release executed on March 15, 2005, Charter
will continue to pay Mr. Cullen's base salary for
65 weeks following the termination of his employment at a
rate of $5,769 per week, and Mr. Cullen will be paid a one
time payment of $10,347 to cover COBRA payments.
Mr. Cullen's stock options will continue to vest
during the 65-week severance period, and he will have
60 days thereafter to exercise any vested options.
We have established separation guidelines which
generally apply to all employees in situations where management
determines that an employee is entitled to severance benefits.
Severance benefits are granted solely in management's
discretion and are not an employee entitlement or guaranteed
benefit. The guidelines provide that persons employed at the
level of Senior Vice President may be eligible to receive
between six and fifteen months of severance benefits and persons
employed at the level of Executive Vice President may be
eligible to receive between nine and eighteen months of
severance benefits in the event of separation under certain
circumstances generally including elimination of a position,
work unit or general staff reduction. Separation benefits are
contingent upon the signing of a separation agreement containing
certain provisions including a release of all claims against us.
Severance amounts paid under these guidelines are distinct and
separate from any one-time, special or enhanced severance
programs that may be approved by us from time to time.
Our senior executives are eligible to receive
bonuses according to our 2005 Executive Bonus Plan. Under this
plan, our executive officers and certain other management and
professional employees are eligible to receive an annual bonus.
Each participating employee would receive his or her target
bonus if
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Table of Contents
Charter (or such employee's division) meets
specified performance measures for revenues, operating cash
flow, free cash flow and customer satisfaction.
Limitation of Directors' Liability and
Indemnification Matters
Our certificate of incorporation limits the
liability of directors to the maximum extent permitted by
Delaware law. The Delaware General Corporation Law provides that
a corporation may eliminate or limit the personal liability of a
director for monetary damages for breach of fiduciary duty as a
director, except for liability for:
(1) any breach of the director's duty
    of loyalty to the corporation and its shareholders;
(2) acts or omissions not in good faith or
    which involve intentional misconduct or a knowing violation of
    law;
(3) unlawful payments of dividends or
    unlawful stock purchases or redemptions; or
(4) any transaction from which the director
    derived an improper personal benefit.
Our bylaws provide that we will indemnify all
persons whom we may indemnify pursuant thereto to the fullest
extent permitted by law.
Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers or persons controlling us pursuant to the foregoing
provisions, we have been informed that in the opinion of the
SEC, such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable.
We have reimbursed certain of our current and
former directors, officers and employees in connection with
their defense in certain legal actions. See "Certain
Relationships and Related Transactions — Other
Miscellaneous Relationships — Indemnification
Advances."
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Table of Contents
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain
information regarding beneficial ownership of the Company's
Class A common stock ("Class A common
stock") as of August 31, 2005 by:
•
each current director of the Company;
•
the current chief executive officer and
    individuals named in the Summary Compensation Table;
•
all persons currently serving as directors and
    officers of the Company, as a group; and
•
each person known by us to own beneficially 5% or
    more of our outstanding Class A common stock as of
    August 31, 2005.
With respect to the percentage of voting power
set forth in the following table:
•
each holder of Class A common stock is
    entitled to one vote per share; and
•
each holder of the Company's Class B
    common stock ("Class B common stock") is entitled
    to (i) ten votes per share of Class B common stock
    held by such holder and its affiliates and (ii) ten votes
    per share of Class B Common Stock for which membership
    units in Charter Holdco held by such holder and its affiliates
    are exchangeable.
The 50,000 shares of Class B common stock
owned by Mr. Allen represents 100% of the outstanding
Class B common stock.
Unvested
Class A Shares
Class B
Number of
Restricted
Receivable on
Shares
Class A
Class A
Exercise of
Issuable
% of Class A
Shares
Shares
Vested Options
Number of
upon
shares (Voting
% of
(Voting and
(Voting
or Other
Class B
Exchange or
and Investment
Voting
Name and Address of
Investment
Power
Convertible
Shares
Conversion of
Power)
Power
Beneficial Owner
Power)(1)
Only)(2)
Securities(3)
Owned
Units(4)
(4)(5)
(5)(6)
Paul G. Allen(7)
29,126,463
39,063
10,000
50,000
339,132,031
53.55
%
91.46
%
Charter Investment, Inc.(8)
222,818,858
38.99
%
*
Vulcan Cable III Inc.(9)
116,313,173
25.02
%
*
Robert P. May
119,685
*
*
John H. Tory
30,005
39,063
40,000
*
*
Marc B. Nathanson
425,705
39,063
50,000
*
*
David C. Merritt
25,705
39,063
*
*
Jo Allen Patton
10,977
40,323
*
*
W. Lance Conn
19,231
*
*
Jonathan L. Dolgen
19,685
*
*
Larry W. Wangberg
28,705
39,063
40,000
*
*
Nathaniel A. Davis
43,215
*
*
Neil Smit
2,812,500
*
*
Michael J. Lovett
7,500
75,000
93,000
*
*
All current directors and executive officers as a
    group (17 persons)
29,824,848
3,189,330
774,125
50,000
339,132,031
54.17
%
91.57
%
Carl E. Vogel(10)
208,126
226,666
1,120,000
*
*
Margaret A. Bellville(11)
179,166
*
*
Derek Chang(12)
41,250
*
*
Curtis S. Shaw(12)
5,000
*
*
Steven A. Schumm(13)
30,568
36,256
276,250
*
*
Amaranth L.L.C.(14)
21,322,312
5.76
%
*
Scott A. Bommer(15)
18,237,744
5.23
%
*
Glenview Capital Management, LLC(16)
19,903,500
5.71
%
*
Glenview Capital GP, LLC(16)
19,903,500
5.71
%
*
Lawrence M. Robbins(16)
19,903,500
5.71
%
*
Steelhead Partners(17)
24,835,077
7.12
%
*
J-K Navigator Fund, L.P.(17)
18,447,759
5.29
%
*
James Michael Johnston(17)
24,835,077
7.12
%
*
Brian Katz Klein(17)
24,835,077
7.12
%
*
FMR Corp.(18)
38,515,187
11.05
%
1.03
%%
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Table of Contents
Unvested
Class A Shares
Class B
Number of
Restricted
Receivable on
Shares
Class A
Class A
Exercise of
Issuable
% of Class A
Shares
Shares
Vested Options
Number of
upon
shares (Voting
% of
(Voting and
(Voting
or Other
Class B
Exchange or
and Investment
Voting
Name and Address of
Investment
Power
Convertible
Shares
Conversion of
Power)
Power
Beneficial Owner
Power)(1)
Only)(2)
Securities(3)
Owned
Units(4)
(4)(5)
(5)(6)
Fidelity Management & Research Company(18)
14,961,471
20,487,601
9.60
%
*
Edward C. Johnson 3d(18)
38,515,187
11.05
%
1.03
%
*
Less than 1%.
(1)
Includes shares for which the named person has
    sole voting and investment power; or shared voting and
    investment power with a spouse. Does not include shares that may
    be acquired through exercise of options.
(2)
Includes unvested shares of restricted stock
    issued under the Charter Communications, Inc. 2001 Stock
    Incentive Plan (including those issued in the February 2004
    option exchange for those eligible employees who elected to
    participate), as to which the applicable director or employee
    has sole voting power but not investment power. Excludes certain
    performance units granted under the Charter 2001 Stock Incentive
    Plan with respect to which shares will not be issued until the
    third anniversary of the grant date and then only if Charter
    meets certain performance criteria (and which consequently do
    not provide the holder with any voting rights).
(3)
Includes shares of Class A common stock
    issuable (a) upon exercise of options that have vested or
    will vest on or before October 31, 2005 under the 1999
    Charter Communications Option Plan and the 2001 Stock Incentive
    Plan or (b) upon conversion of other convertible securities.
(4)
Beneficial ownership is determined in accordance
    with Rule 13d-3 under the Exchange Act. The beneficial
    owners at August 31, 2005 of Class B common stock,
    Charter Holdco membership units and convertible senior notes of
    Charter are deemed to be beneficial owners of an equal number of
    shares of Class A common stock because such holdings are
    either convertible into Class A shares (in the case of
    Class B shares and convertible senior notes) or
    exchangeable (directly or indirectly) for Class A shares
    (in the case of the membership units) on a one-for-one basis.
    Unless otherwise noted, the named holders have sole investment
    and voting power with respect to the shares listed as
    beneficially owned. An issue has arisen as to whether the
    documentation for the Bresnan transaction was correct and
    complete with regard to the ultimate ownership of the CC VIII,
    LLC membership interests following the consummation of the
    Bresnan put transaction on June 6, 2003. See "Certain
    Relationships and Related Transactions — Transactions
    Arising Out of Our Organizational Structure and
    Mr. Allen's Investment in Charter Communications, Inc.
    and Its Subsidiaries — Equity Put Rights —
    CC VIII."
(5)
The calculation of this percentage assumes for
    each person that:
•
348,551,063 shares of Class A common
    stock are issued and outstanding as of August 31, 2005;
•
50,000 shares of Class B common stock
    held by Mr. Allen have been converted into shares of
    Class A common stock;
•
the acquisition by such person of all shares of
    Class A common stock that such person or affiliates of such
    person has the right to acquire upon exchange of membership
    units in subsidiaries or conversion of Series A Convertible
    Redeemable Preferred Stock or 5.875% or 4.75% convertible
    senior notes;
•
the acquisition by such person of all shares that
    may be acquired upon exercise of options to purchase shares or
    exchangeable membership units that have vested or will vest by
    October 31, 2005; and
•
that none of the other listed persons or entities
    has received any shares of Class A common stock that are
    issuable to any of such persons pursuant to the exercise of
    options or otherwise.
A person is deemed to have the right to acquire
    shares of Class A common stock with respect to options
    vested under the 1999 Charter Communications Option Plan. When
    vested, these options are exercisable for membership units of
    Charter Holdco, which are immediately exchanged on a one-for-one
    basis for shares of Class A common stock. A person is also
    deemed to have the right
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to acquire shares of Class A common stock
    issuable upon the exercise of vested options under the 2001
    Stock Incentive Plan.
(6)
The calculation of this percentage assumes that
    Mr. Allen's equity interests are retained in the form
    that maximizes voting power (i.e., the 50,000 shares of
    Class B common stock held by Mr. Allen have not been
    converted into shares of Class A common stock; that the
    membership units of Charter Holdco owned by each of Vulcan
    Cable III Inc. and Charter Investment, Inc. have not been
    exchanged for shares of Class A common stock).
(7)
The total listed includes:
•
222,818,858 membership units in Charter Holdco
    held by Charter Investment, Inc.; and
•
116,313,173 membership units in Charter Holdco
    held by Vulcan Cable III Inc.
The listed total excludes 24,273,943 shares
    of Class A common stock issuable upon exchange of units of
    Charter Holdco, which may be issuable to Charter Investment,
    Inc. (which is owned by Mr. Allen) as a consequence of the
    closing of his purchase of the membership interests in CC VIII,
    LLC that were put to Mr. Allen and were purchased by him on
    June 6, 2003. An issue has arisen regarding the ultimate
    ownership of such CC VIII, LLC membership interests following
    the consummation of such put transaction. See "Certain
    Relationships and Related Transactions — Transactions
    Arising Out of Our Organizational Structure and
    Mr. Allen's Investment in Charter Communications, Inc.
    and Its Subsidiaries — Equity Put Rights —
    CC VIII." The address of this person is: 505 Fifth Avenue
    South, Suite 900, Seattle, WA 98104.
(8)
Includes 222,818,858 membership units in Charter
    Holdco, which are exchangeable for shares of Class B common
    stock on a one-for-one basis, which are convertible to shares of
    Class A common stock on a one-for-one basis. The address of
    this person is: Charter Plaza, 12405 Powerscourt Drive,
    St. Louis, MO 63131.
(9)
Includes 116,313,173 membership units in Charter
    Holdco, which are exchangeable for shares of Class B common
    stock on a one-for-one basis, which are convertible to shares of
    Class A common stock on a one-for-one basis. The address of
    this person is: 505 Fifth Avenue South, Suite 900, Seattle,
    WA 98104.
(10)
Mr. Vogel terminated his employment
    effective on January 17, 2005. His stock options and
    restricted stock shown in this table continue to vest through
    December 31, 2005, and his options will be exercisable for
    another 60 days thereafter.
(11)
Ms. Bellville resigned from Charter
    effective September 30, 2004. Under the terms of her
    separation agreement, her options will continue to vest until
    December 31, 2005, and all vested options are exercisable
    until 60 days thereafter.
(12)
Mr. Chang and Mr. Shaw resigned
    effective April 15, 2005.
(13)
Includes 1,000 shares for which
    Mr. Schumm has shared investment and voting power.
    Mr. Schumm's employment was terminated effective
    January 28, 2005. His stock options and restricted stock
    shown in this table continue to vest for 65 weeks following
    his termination, and his options will be exercisable for another
    60 days thereafter.
(14)
The equity ownership reported in this table is
    based upon holder's Schedule 13G filed with the SEC
    February 2, 2005. The address of this person is:
    c/o Amaranth Advisors L.L.C., One American Lane, Greenwich,
    Connecticut, 06831.
(15)
The equity ownership reported in this table is
    based upon the holder's Schedule 13G filed with the
    SEC March 28, 2005. The address of this person is
    712 Fifth Avenue, 42nd Floor, New York, New York, 10019.
    Mr. Bommer is the managing member of SAB Capital Advisors,
    L.L.C., which serves as general partner of SAB Capital Partners,
    L.P. and SAB Capital Partners II, L.P. (which in turn
    collectively hold 10,124,695 shares of Class A common
    stock). Mr. Bommer is also the managing member of SAB
    Capital Management, L.L.C., which serves as general partner of
    SAB Overseas Capital Management, L.P. (which in turn serves as
    investment manager to and has investment discretion over the
    securities held by a holder of 8,113,049 shares of
    Class A common stock).
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(16)
The equity ownership reported in this table is
    based upon the holder's Schedule 13G filed with the
    SEC June 3, 2005. The address of the principal business
    office of the reporting person is: 399 Park Avenue,
    Floor 39, New York, New York 10022. The shares shown
    consist of: (A) 1,669,400 shares held for the account
    of Glenview Capital Partners; (B) 5,991,000 shares
    held for the account of Glenview Capital Master Fund; and
    (C) 12,243,100 shares held for the account of Glenview
    Institutional Partners. Glenview Capital Management serves as
    investment manager to each of Glenview Capital Partners,
    Glenview Institutional Partners, and Glenview Capital Master
    Fund. Glenview Capital GP is the general partner of
    Glenview Capital Partners and Glenview Institutional Partners.
    Glenview Capital GP also serves as the sponsor of the
    Glenview Capital Master Fund. Mr. Robbins is the Chief
    Executive Officer of Glenview Capital Management and Glenview
    Capital GP.
(17)
The equity ownership reported in this table is
    based upon the holder's Schedule 13G filed with the
    SEC May 23, 2005. The business address of the reporting
    person is: 1301 First Avenue, Suite 201, Seattle, WA
    98101. Steelhead Partners, LLC acts as general partner of J-K
    Navigator Fund, L.P., and J. Michael Johnston and Brian K.
    Klein act as the member-managers of Steelhead Partners, LLC.
    Accordingly, shares shown as beneficially held by Steelhead
    Partners, LLC, Mr. Johnston and Mr. Klein include
    shares beneficially held by J-K Navigator Fund, L.P.
(18)
The equity ownership reported in this table is
    based on the holder's Schedule 13G filed with the SEC
    on September 12, 2005. The address of the person is:
    82 Devonshire Street, Boston, Massachusetts 02109. Fidelity
    Management & Research Company is a wholly-owned
    subsidiary of FMR Corp. and is the beneficial owner of
    35,449,072 shares as a result of acting as investment
    adviser to various investment companies and includes:
    20,487,601 shares resulting from the assumed conversion of
    5.875% senior notes. Edward C. Johnson 3d, chairman of FMR
    Corp., and FMR Corp. each has sole power to dispose of
    38,515,187 shares.
Securities Authorized for Issuance under
Equity Compensation Plans
The following information is provided as of
December 31, 2004 with respect to equity compensation plans:
Number of securities
Number of securities
to be issued upon
Weighted average
remaining available
exercise of outstanding
exercise price of
for future issuance
options, warrants
outstanding options,
under equity
Plan Category
and rights
warrants and rights
compensation plans
Equity compensation plans approved by security
    holders
24,834,513
(1)
$
6.57
54,701,158
Equity compensation plans not approved by
    security holders
475,653
(2)
$
10.39
—
TOTAL
25,310,166
$
6.64
54,701,158
(1)
This total does not include 2,076,860 shares
    issued pursuant to restricted stock grants made under our 2001
    Stock Incentive Plan, which were subject to vesting based on
    continued employment or 6,899,600 performance shares issued
    under our LTIP plan, which are subject to vesting upon
    Charter's achievement of certain performance criteria
    during a three-year performance cycle ending on
    December 31, 2007.
(2)
Includes shares of Class A common stock to
    be issued upon exercise of options granted pursuant to an
    individual compensation agreement with a consultant. In 2003, we
    agreed to exchange 186,385 of these options for
    18,638 shares of Class A common stock, and we
    anticipate that exchange to be consummated in 2005.
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CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
The following sets forth certain transactions in
which we are involved and in which the directors, executive
officers and affiliates of Charter have or may have a material
interest. The transactions fall generally into three broad
categories:
•
Transactions in which Mr. Allen has an
    interest that arise directly out of Mr. Allen's
    investment in Charter and Charter
    Holdco.
A large number of the
    transactions described below arise out of Mr. Allen's
    direct and indirect (through Charter Investment, Inc., or the
    Vulcan entities, each of which Mr. Allen controls)
    investment in Charter and its subsidiaries, as well as
    commitments made as consideration for the investments themselves.
•
Transactions with third party providers of
    products, services and content in which Mr. Allen has or
    had a material interest.
Mr. Allen has had numerous investments in the areas of
    technology and media. We have a number of commercial
    relationships with third parties in which Mr. Allen has or
    had an interest.
•
Other Miscellaneous
    Transactions.
We have a limited number
    of transactions in which certain of the officers, directors and
    principal shareholders of Charter and its subsidiaries, other
    than Mr. Allen, have an interest.
A number of our debt instruments and those of our
subsidiaries require delivery of fairness opinions for
transactions with Mr. Allen or his affiliates involving
more than $50 million. Such fairness opinions have been
obtained whenever required. All of our transactions with
Mr. Allen or his affiliates have been considered for
approval either by the board of directors of Charter or a
committee of the board of directors. All of our transactions
with Mr. Allen or his affiliates have been deemed by the
board of directors or a committee of the board of directors to
be in our best interest. Related party transactions are approved
by our Audit Committee or another independent body of the board
of directors in compliance with the listing requirements
applicable to NASDAQ National Market listed companies. Except
where noted below, we do not believe that these transactions
present any unusual risks for us that would not be present in
any similar commercial transaction.
The chart below summarizes certain information
with respect to these transactions. Additional information
regarding these transactions is provided following the chart.
Transaction
Interested Related Party
Description of Transaction
Intercompany Management Arrangements
Paul G. Allen
Subsidiaries of Charter Holdco paid Charter
    approximately $79 million, $84 million,
    $90 million and $62 million for management services
    rendered in 2002, 2003 and 2004 and the six months ended
    June 30, 2005, respectively.
Mutual Services Agreement
Paul G. Allen
Charter paid Charter Holdco approximately
    $70 million, $73 million, $74 million and
    $42 million for services rendered in 2002, 2003 and 2004
    and the six months ended June 30, 2005, respectively.
Previous Management Agreement
Paul G. Allen
No fees were paid in 2002, 2003, 2004 or 2005,
    although total management fees accrued and payable to Charter
    Investment, Inc., exclusive of interest, were approximately
    $14 million at December 31, 2002, 2003 and 2004 and
    June 30, 2005.
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Transaction
Interested Related Party
Description of Transaction
Tax Provisions of Charter Holdco's Operating
    Agreement
Paul G. Allen
In 2002, the operating agreement of Charter
    Holdco allocated certain of our tax losses to entities
    controlled by Paul Allen.
Channel Access Agreement
Paul G. Allen
W. Lance Conn
Jo Allen Patton
At Vulcan Ventures' request, we will provide
    Vulcan Ventures with exclusive rights for carriage on eight of
    our digital cable channels as partial consideration for a 1999
    capital contribution of approximately $1.3 billion.
Equity Put Rights
Paul G. Allen
Certain sellers of cable systems that we acquired
    were granted, or previously had the right, as described below,
    to put to Paul Allen equity in us (in the case of Rifkin and
    Falcon), Charter Holdco (in the case of Rifkin) and CC VIII, LLC
    (in the case of Bresnan) and a preferred membership interest (in
    the case of Charter Helicon, LLC) issued to such sellers in
    connection with such acquisitions.
Previous Funding Commitment of Vulcan Inc.
Paul G. Allen
W. Lance Conn
Jo Allen Patton
Pursuant to a commitment letter dated
    April 14, 2003, Vulcan Inc., which is an affiliate of Paul
    Allen, agreed to lend, under certain circumstances, or cause an
    affiliate to lend to Charter Holdings or any of its subsidiaries
    a total amount of up to $300 million, which amount included
    a subfacility of up to $100 million for the issuance of
    letters of credit. In November 2003, the commitment was
    terminated. We incurred expenses to Vulcan Inc. totaling
    $5 million in connection with the commitment prior to
    termination.
Mirror Securities
To comply with the organizational documents of
    Charter and Charter Holdco, Charter Holdco issued certain mirror
    securities to Charter, redeemed certain other mirror securities,
    and paid interest and dividends on outstanding mirror notes and
    preferred units.
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Transaction
Interested Related Party
Description of Transaction
High Speed Access Corp. Asset Purchase Agreement
Paul G. Allen
W. Lance Conn
Jo Allen Patton
In February 2002, our subsidiary purchased
    certain assets of High Speed Access for $78 million, plus
    the delivery of 37,000 shares of High Speed Access
    Series D preferred stock and certain warrants. In
    connection with the transaction, High Speed Access also
    purchased 38,000 shares of its Series D preferred
    stock from Vulcan Ventures for approximately $8 million,
    and all of Vulcan Ventures' shares of High Speed Access
    common stock.
High Speed Access Corp.
Paul G. Allen
In January 2002, we granted to High Speed Access
    a royalty free right to use intellectual property purchased by
    Charter Holdco. We received approximately $4 million in
    management fees and approximately $17 million in revenues
    and paid approximately $2 million under agreements that
    have terminated.
TechTV Carriage Agreement
Paul G. Allen
W. Lance Conn
Jo Allen Patton
William D. Savoy
Larry W. Wangberg
We recorded approximately $4 million,
    $1 million, $5 million and $0.6 million from
    TechTV under the affiliation agreement in 2002, 2003, 2004 and
    the six months ended June 30, 2005, respectively, related
    to launch incentives as a reduction of programming expense. We
    paid TechTV approximately $0.2 million, $80,600,
    $2 million and $1 million in 2002, 2003, 2004 and the
    six months ended June 30, 2005, respectively.
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Transaction
Interested Related Party
Description of Transaction
Oxygen Media Corporation Carriage Agreement
Paul G. Allen
W. Lance Conn
Jo Allen Patton
We paid Oxygen Media approximately
    $6 million, $9 million, $13 million and
    $5 million under a carriage agreement in exchange for
    programming in 2002, 2003, 2004 and the six months ended
    June 30, 2005, respectively.
We recorded approximately $2 million,
    $1 million, $1 million and $0.1 million in 2002,
    2003, 2004 and the six months ended June 30, 2005,
    respectively, from Oxygen Media related to launch incentives as
    a reduction of programming expense. We received
    1 million shares of Oxygen Preferred Stock with a
    liquidation preference of $33.10 per share in March 2005. We
    recognized approximately $6 million, $9 million,
    $13 million and $2 million as a reduction of
    programming expense in 2002, 2003, 2004 and the six months ended
    June 30, 2005, respectively, in recognition of the
    guaranteed value of the investment.
Portland Trail Blazers Carriage Agreement
Paul G. Allen
We paid approximately $1 million, $135,200,
    $96,100 and $116,500 for rights to carry the cable broadcast of
    certain Trail Blazers basketball games in 2002, 2003, 2004 and
    the six months ended June 30, 2005, respectively.
Action Sports Cable Network Carriage Agreement
Paul G. Allen
We paid approximately $1 million for rights
    to carry the programming of Action Sports Cable Network in 2002.
Click2learn, Inc. Software License Agreement
Paul G. Allen
W. Lance Conn
Jo Allen Patton
We paid approximately $250,000, $57,100, $0 and
    $0 under the Software License Agreement in 2002, 2003, 2004 and
    the six months ended June 30, 2005, respectively.
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Transaction
Interested Related Party
Description of Transaction
Digeo, Inc. Broadband Carriage Agreement
Paul G. Allen
William D. Savoy
Carl E. Vogel
Jo Allen Patton
Lance Conn
We paid Digeo approximately $3 million,
    $4 million, $3 million and $1 million for
    customized development of the i-channels and the local content
    tool kit in 2002, 2003, 2004 and the six months ended
    June 30, 2005, respectively. We entered into a license
    agreement in 2004 for the Digeo software that runs DVR units
    purchased from a third party. We paid approximately
    $0.5 million and $0.2 million in license and
    maintenance fees in 2004 and the six months ended June 30,
    2005, respectively. In 2004 we executed a purchase agreement for
    the purchase of up to 70,000 DVR units and a related software
    license agreement, both subject to satisfaction of certain
    conditions. We paid approximately $0 and $2 million in
    capital purchases in 2004 and the six months ended June 30,
    2005, respectively.
Viacom Networks
Jonathan L. Dolgen
We are party to certain affiliation agreements
    with networks of Viacom, pursuant to which Viacom provides
    Charter with programming for distribution via our cable systems.
    For the years ended December 31, 2002, 2003 and 2004
    and for the six months ended June 30, 2005, Charter paid
    Viacom approximately $177 million, $188 million,
    $194 million and $99 million, respectively, for
    programming, and Charter recorded as receivables approximately
    $5 million, $5 million, $8 million and
    $15 million from Viacom for launch incentives and marketing
    support for the years ended December 31, 2002, 2003 and
    2004 and for the six months ended June 30, 2005,
    respectively.
ADC Telecommunications Inc.
Larry W. Wangberg
We paid $759,600, $60,100, $344,800 and $241,100
    to purchase certain access/network equipment in 2002, 2003, 2004
    and for the six months ended June 30, 2005, respectively.
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Transaction
Interested Related Party
Description of Transaction
HDNet and HDNet Movies Network
Mark Cuban
Charter Holdco is party to an agreement to carry
    two around-the-clock, high definition networks, HDNet and HDNet
    Movies. We paid HDNet and HDNet Movies approximately $21,900,
    $609,100 and $1 million in 2003 and 2004 and for the six
    months ended June 30, 2005.
Affiliate leases and agreements
Marc B. Nathanson
We paid approximately $76,000, $16,600, $0 and $0
    in 2002, 2003 and 2004 and for the six months ended
    June 30, 2005, respectively, to companies controlled by
    Mr. Nathanson under a warehouse lease agreement.
Carriage fees
David C. Merritt
We paid approximately $1 million,
    $1 million, $1 million and $594,900 in 2002, 2003,
    2004 and for the six months ended June 30, 2005 to carry
    The Outdoor Channel. Mr. Merritt is a director of an
    affiliate of this channel.
Payment for relatives' services
Carl E. Vogel
Since June 2003, Mr. Vogel's
    brother-in-law has been an employee of Charter Holdco and has
    received a salary commensurate with his position in the
    engineering department.
Radio advertising
Marc B. Nathanson
We believe that through a third party advertising
    agency, we have paid approximately $112,700, $67,300, $49,300
    and $20,200 in 2002, 2003 and 2004 and for the six months ended
    June 30, 2005, respectively, to Mapleton Communications, an
    affiliate of Mapleton Investments, LLC.
Enstar Limited Partnership Systems Purchase and
    Management Services
Charter officers who were appointed by a Charter
    subsidiary (as general partner) to serve as officers of Enstar
    limited partnerships
Certain of our subsidiaries purchased certain
    assets of the Enstar Limited Partnerships for approximately
    $63 million in 2002. We also earned approximately
    $1 million, $469,300, $0 and $0 in 2002, 2003, 2004 and for
    the six months ended June 30, 2005, respectively, by
    providing management services to the Enstar Limited Partnerships.
Indemnification Advances
Directors and current and former officers named
    in certain legal proceedings
Charter reimbursed certain of its current and
    former directors and executive officers a total of approximately
    $3 million, $8 million, $3 million and $13,400
    for costs incurred in connection with litigation matters in
    2002, 2003, 2004 and for the six months ended June 30,
    2005, respectively.
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The following sets forth additional information
regarding the transactions summarized above.
Transactions Arising Out of Our Organizational
Structure and Mr. Allen's Investment in Charter
Communications, Inc. and Its Subsidiaries
As noted above, a number of our related party
transactions arise out of Mr. Allen's investment in
Charter and its subsidiaries. Some of these transactions are
with Charter Investment, Inc. and Vulcan Ventures (both owned
100% by Mr. Allen), Charter (controlled by Mr. Allen)
and Charter Holdco (approximately 47% owned by us and 53% owned
by other affiliates of Mr. Allen). See
"Summary — Organizational Structure" for
more information regarding the ownership by Mr. Allen and
certain of his affiliates.
Intercompany Management
    Arrangements
Charter is a party to management arrangements
with Charter Holdco and certain of its subsidiaries. Under these
agreements, Charter provides management services for the cable
systems owned or operated by its subsidiaries. These management
agreements provide for reimbursement to Charter for all costs
and expenses incurred by it for activities relating to the
ownership and operation of the managed cable systems, including
overhead, administration and salary expense.
The total amount paid by Charter Holdco and all
of its subsidiaries is limited to the amount necessary to
reimburse Charter for all of its expenses, costs, losses,
liabilities and damages paid or incurred by it in connection
with the performance of its services under the various
management agreements and in connection with its corporate
overhead, administration, salary expense and similar items. The
expenses subject to reimbursement include fees Charter is
obligated to pay under the mutual services agreement with
Charter Investment, Inc. Payment of management fees by
Charter's operating subsidiaries is subject to certain
restrictions under the credit facilities and indentures of such
subsidiaries and the indentures governing the Charter Holdings
public debt. If any portion of the management fee due and
payable is not paid, it is deferred by Charter and accrued as a
liability of such subsidiaries. Any deferred amount of the
management fee will bear interest at the rate of 10% per
year, compounded annually, from the date it was due and payable
until the date it is paid. For the years ended December 31,
2002, 2003 and 2004 and for the six months ended June 30,
2005, the subsidiaries of Charter Holdco paid approximately
$79 million, $84 million, $90 million and
$62 million, respectively, in management fees to Charter.
Mutual Services Agreement
Charter, Charter Holdco and Charter Investment,
Inc. are parties to a mutual services agreement whereby each
party shall provide rights and services to the other parties as
may be reasonably requested for the management of the entities
involved and their subsidiaries, including the cable systems
owned by their subsidiaries all on a cost-reimbursement basis.
The officers and employees of each party are available to the
other parties to provide these rights and services, and all
expenses and costs incurred in providing these rights and
services are paid by Charter. Each of the parties will indemnify
and hold harmless the other parties and their directors,
officers and employees from and against any and all claims that
may be made against any of them in connection with the mutual
services agreement except due to its or their gross negligence
or willful misconduct. The mutual services agreement expires on
November 12, 2009, and may be terminated at any time by any
party upon thirty days' written notice to the other. For
the years ended December 31, 2002, 2003 and 2004 and for
the six months ended June 30, 2005, Charter paid
approximately $70 million, $73 million,
$74 million and $42 million, respectively, to Charter
Holdco for services rendered pursuant to the mutual services
agreement. All such amounts are reimbursable to Charter pursuant
to a management arrangement with our subsidiaries. See
"— Intercompany Management Arrangements."
The accounts and balances related to these services eliminate in
consolidation. Charter Investment, Inc. no longer provides
services pursuant to this agreement.
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Previous Management Agreement with Charter
    Investment, Inc.
Prior to November 12, 1999, Charter
Investment, Inc. provided management and consulting services to
our operating subsidiaries for a fee equal to 3.5% of the gross
revenues of the systems then owned, plus reimbursement of
expenses. The balance of management fees payable under the
previous management agreement was accrued with payment at the
discretion of Charter Investment, Inc., with interest payable on
unpaid amounts. For the years ended December 31, 2002, 2003
and 2004 and for the six months ended June 30, 2005,
Charter's subsidiaries did not pay any fees to Charter
Investment, Inc. to reduce management fees payable. As of
December 31, 2002, 2003 and 2004 and June 30, 2005,
total management fees payable by our subsidiaries to Charter
Investment, Inc. were approximately $14 million, exclusive
of any interest that may be charged and are included in deferred
management fees-related party on our consolidated balance sheets.
Charter Communications Holding Company, LLC
    Limited Liability Agreement — Taxes
The limited liability company agreement of
Charter Holdco contains special provisions regarding the
allocation of tax losses and profits among its
members — Vulcan Cable III Inc., Charter
Investment, Inc. and us. In some situations, these provisions
may cause us to pay more tax than would otherwise be due if
Charter Holdco had allocated profits and losses among its
members based generally on the number of common membership
units. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations —
Critical Accounting Policies and Estimates — Income
Taxes."
Vulcan Ventures Channel Access
    Agreement
Vulcan Ventures, an entity controlled by
Mr. Allen, Charter, Charter Investment and Charter Holdco
are parties to an agreement dated September 21, 1999
granting to Vulcan Ventures the right to use up to eight of our
digital cable channels as partial consideration for a prior
capital contribution of $1.325 billion. Specifically, at
Vulcan Ventures' request, we will provide Vulcan Ventures
with exclusive rights for carriage of up to eight digital cable
television programming services or channels on each of the
digital cable systems with local and to the extent available,
national control of the digital product owned, operated,
controlled or managed by Charter or its subsidiaries now or in
the future of 550 megahertz or more. If the system offers
digital services but has less than 550 megahertz of capacity,
then the programming services will be equitably reduced. Upon
request of Vulcan Ventures, we will attempt to reach a
comprehensive programming agreement pursuant to which it will
pay the programmer, if possible, a fee per digital video
customer. If such fee arrangement is not achieved, then we and
the programmer shall enter into a standard programming
agreement. The initial term of the channel access agreement was
10 years, and the term extends by one additional year (such
that the remaining term continues to be 10 years) on each
anniversary date of the agreement unless either party provides
the other with notice to the contrary at least 60 days
prior to such anniversary date. To date, Vulcan Ventures has not
requested to use any of these channels. However, in the future
it is possible that Vulcan Ventures could require us to carry
programming that is less profitable to us than the programming
that we would otherwise carry and our results would suffer
accordingly.
Equity Put Rights
CC VIII.
As part of
the acquisition of the cable systems owned by Bresnan
Communications Company Limited Partnership in February 2000, CC
VIII, Charter's indirect limited liability company
subsidiary, issued, after adjustments, 24,273,943 Class A
preferred membership units (collectively, the "CC VIII
interest") with a value and an initial capital account of
approximately $630 million to certain sellers affiliated
with AT&T Broadband, subsequently owned by Comcast
Corporation (the "Comcast sellers"). While held by the
Comcast sellers, the CC VIII interest was entitled to a 2%
priority return on its initial capital account and such priority
return was entitled to preferential distributions from available
cash and upon liquidation of CC VIII. While held by the Comcast
sellers, the CC VIII interest generally did not share in the
profits and losses of CC VIII. Mr. Allen granted the
Comcast sellers the right to sell to him the CC VIII interest
for approximately $630 million plus 4.5% interest annually
from February 2000 (the "Comcast put right"). In April
2002, the Comcast sellers exercised the Comcast put right in
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full, and this transaction was consummated on
June 6, 2003. Accordingly, Mr. Allen has become the
holder of the CC VIII interest, indirectly through an affiliate.
Consequently, subject to the matters referenced in the next
paragraph, Mr. Allen generally thereafter will be allocated
his pro rata share (based on number of membership interests
outstanding) of profits or losses of CC VIII. In the event of a
liquidation of CC VIII, Mr. Allen would be entitled to a
priority distribution with respect to the 2% priority return
(which will continue to accrete). Any remaining distributions in
liquidation would be distributed to CC V Holdings, LLC and
Mr. Allen in proportion to CC V Holdings, LLC's
capital account and Mr. Allen's capital account (which
will equal the initial capital account of the Comcast sellers of
approximately $630 million, increased or decreased by
Mr. Allen's pro rata share of CC VIII's profits
or losses (as computed for capital account purposes) after
June 6, 2003). The limited liability company agreement of
CC VIII does not provide for a mandatory redemption of the CC
VIII interest.
An issue has arisen as to whether the
documentation for the Bresnan transaction was correct and
complete with regard to the ultimate ownership of the CC VIII
interest following consummation of the Comcast put right.
Specifically, under the terms of the Bresnan transaction
documents that were entered into in June 1999, the Comcast
sellers originally would have received, after adjustments,
24,273,943 Charter Holdco membership units, but due to an FCC
regulatory issue raised by the Comcast sellers shortly before
closing, the Bresnan transaction was modified to provide that
the Comcast sellers instead would receive the preferred equity
interests in CC VIII represented by the CC VIII interest. As
part of the last-minute changes to the Bresnan transaction
documents, a draft amended version of the Charter Holdco limited
liability company agreement was prepared, and contract
provisions were drafted for that agreement that would have
required an automatic exchange of the CC VIII interest for
24,273,943 Charter Holdco membership units if the Comcast
sellers exercised the Comcast put right and sold the
CC VIII interest to Mr. Allen or his affiliates.
However, the provisions that would have required this automatic
exchange did not appear in the final version of the Charter
Holdco limited liability company agreement that was delivered
and executed at the closing of the Bresnan transaction. The law
firm that prepared the documents for the Bresnan transaction
brought this matter to the attention of Charter and
representatives of Mr. Allen in 2002.
Thereafter, the board of directors of Charter
formed a Special Committee (currently comprised of
Messrs. Merritt, Tory and Wangberg) to investigate the
matter and take any other appropriate action on behalf of
Charter with respect to this matter. After conducting an
investigation of the relevant facts and circumstances, the
Special Committee determined that a "scrivener's
error" had occurred in February 2000 in connection with the
preparation of the last-minute revisions to the Bresnan
transaction documents and that, as a result, Charter should seek
the reformation of the Charter Holdco limited liability company
agreement, or alternative relief, in order to restore and ensure
the obligation that the CC VIII interest be automatically
exchanged for Charter Holdco units. The Special Committee
further determined that, as part of such contract reformation or
alternative relief, Mr. Allen should be required to
contribute the CC VIII interest to Charter Holdco in
exchange for 24,273,943 Charter Holdco membership units. The
Special Committee also recommended to the board of directors of
Charter that, to the extent the contract reformation is
achieved, the board of directors should consider whether the
CC VIII interest should ultimately be held by Charter
Holdco or Charter Holdings or another entity owned directly or
indirectly by them.
Mr. Allen disagrees with the Special
Committee's determinations described above and has so
notified the Special Committee. Mr. Allen contends that the
transaction is accurately reflected in the transaction
documentation and contemporaneous and subsequent company public
disclosures.
The parties engaged in a process of non-binding
mediation to seek to resolve this matter, without success. The
Special Committee is evaluating what further actions or
processes it may undertake to resolve this dispute. To
accommodate further deliberation, each party has agreed to
refrain from initiating legal proceedings over this matter until
it has given at least ten days' prior notice to the other.
In addition, the Special Committee and Mr. Allen have
determined to utilize the Delaware Court of Chancery's
program for mediation of complex business disputes in an effort
to resolve the CC VIII interest dispute. If the Special
Committee and Mr. Allen are unable to reach a resolution
through that mediation process or to
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agree on an alternative dispute resolution
process, the Special Committee intends to seek resolution of
this dispute through judicial proceedings in an action that
would be commenced, after appropriate notice, in the Delaware
Court of Chancery against Mr. Allen and his affiliates
seeking contract reformation, declaratory relief as to the
respective rights of the parties regarding this dispute and
alternative forms of legal and equitable relief. The ultimate
resolution and financial impact of the dispute are not
determinable at this time.
Rifkin.
On
September 14, 1999, Mr. Allen and Charter Holdco
entered into a put agreement with certain sellers of the Rifkin
cable systems that received a portion of their purchase price in
the form of 3,006,202 Class A preferred membership units of
Charter Holdco. This put agreement allowed these holders to
compel Charter Holdco to redeem their Class A preferred
membership units at any time before September 14, 2004 at
$1.00 per unit, plus accretion thereon at 8% per year
from September 14, 1999. Mr. Allen had guaranteed the
redemption obligation of Charter Holdco. These units were put to
Charter Holdco for redemption, and were redeemed on
April 18, 2003 for a total price of approximately
$3.9 million.
Mr. Allen also was a party to a put
agreement with certain sellers of the Rifkin cable systems that
received a portion of their purchase price in the form of shares
of Class A common stock of Charter. Under this put
agreement, such holders have the right to sell to Mr. Allen
any or all of such shares of Charter's Class A common
stock at $19 per share (subject to adjustments for stock
splits, reorganizations and similar events), plus interest at a
rate of 4.5% per year, compounded annually from
November 12, 1999. Approximately 4.6 million shares
were put to Mr. Allen under these agreements prior to their
expiration on November 12, 2003.
Falcon.
Mr. Allen also was a party to a put agreement with certain
sellers of the Falcon cable systems (including
Mr. Nathanson, one of our directors) that received a
portion of their purchase price in the form of shares of
Class A common stock of Charter. Under the Falcon put
agreement, such holders had the right to sell to Mr. Allen
any or all shares of Class A common stock received in the
Falcon acquisition at $25.8548 per share (subject to
adjustments for stock splits, reorganizations and similar
events), plus interest at a rate of 4.5% per year,
compounded annually from November 12, 1999. Approximately
19.4 million shares were put to Mr. Allen under these
agreements prior to their expiration on November 12, 2003.
Helicon.
In 1999 we
purchased the Helicon cable systems. As part of that purchase
Mr. Allen entered into a put agreement with a certain
seller of the Helicon cable systems that received a portion of
the purchase price in the form of a preferred membership
interest in Charter Helicon LLC with a redemption price of
$25 million plus accrued interest. Under the Helicon put
agreement, such holder has the right to sell to Mr. Allen
any or all of the interest to Mr. Allen prior to its
mandatory redemption in cash on July 30, 2009. The
preferred membership interest is not convertible. On
August 31, 2005, 40% of the preferred membership interest
was put to Mr. Allen. The remaining 60% of the preferred
interest in Charter Helicon LLC remains subject to the put to
Mr. Allen. The Charter Helicon LLC operating agreement
provides for a quarterly distribution on the preferred interest
of 10% annually.
Previous Funding Commitment of Vulcan
    Inc.
Effective April 14, 2003, our subsidiary,
Charter Communications VII, LLC entered into a commitment letter
with Vulcan Inc., which is an affiliate of Paul Allen, under
which Vulcan Inc. agreed to lend, under certain circumstances,
or cause an affiliate to lend initially to Charter
Communications VII, LLC, or another subsidiary of Charter
Holdings, up to $300 million, which amount included a
subfacility of up to $100 million for the issuance of
letters of credit. No amounts were ever drawn under the
commitment letter. In November 2003, the commitment was
terminated. We incurred expenses to Vulcan Inc. totaling
$5 million in connection with the commitment (including an
extension fee) prior to termination. Ms. Jo Allen Patton is
a director and the President and Chief Executive Officer of
Vulcan Inc., and Mr. Lance Conn is Executive Vice President
of Vulcan Inc.
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Mirror Securities
Charter is a holding company and its principal
assets are its equity interest in Charter Holdco and certain
mirror notes payable by Charter Holdco to Charter, and mirror
preferred units held by Charter, which have the same principal
amount and terms as those of Charter's convertible senior
notes and Charter's outstanding preferred stock. In 2002,
2003 and 2004, Charter Holdco paid to Charter $73 million,
$68 million and $49 million, respectively, related to
interest on the mirror notes, and Charter Holdco paid an
additional $4 million related to dividends on the mirror
preferred membership units.
In connection with our 2003 repurchase of
approximately $477 million of our outstanding 4.75% senior
convertible notes due 2006 and approximately $132 million
of our outstanding 5.75% senior convertible notes due 2005,
$520 million of CCH II 10.25% senior notes were
transferred (through a series of distributions) by CCH II
to Charter Holdco, which in turn assigned those CCH II
senior notes to us in exchange for the cancellation of mirror
notes of each series having a principal amount equal to the
amount of convertible notes of that series repurchased by us. As
part of the closing of that transaction, Charter Holdco also
paid to Charter cash in the amount of $10 million, which
represented the sum of (a) all accrued and unpaid interest
on the portions of the mirror notes transferred by Charter to
Charter Holdco, to, but not including, the date of the closing,
on the basis set forth in the mirror notes, (b) an amount
equal to the total amount of cash payable by Charter in lieu of
fractional interests in the 10.25% CCH II senior notes
which would have otherwise been due to the holders as a
consequence of the exchange and (c) the costs and expenses
relating to such transactions. Further, during 2004 Charter
Holdco issued 7,252,818 common membership units to Charter
in cancellation of $30 million principal amount of mirror
notes so as to mirror the issuance by Charter of Class A
common stock in exchange for a like principal amount of its
outstanding convertible notes.
In addition, in connection with our November 2004
sale of $862.5 million principal amount of 5.875%
convertible senior notes due 2009, Charter Holdco issued to us
mirror notes in identical principal amount in exchange for the
proceeds from our offering. Charter Holdco then purchased and
pledged certain U.S. government securities to us as security for
the mirror notes (which were in turn repledged by us to the
trustee for the benefit of holders of our 5.875% convertible
senior notes and which we expect to use to fund the first six
interest payments on the notes), and agreed to lend common units
to us, the terms of which will, to the extent practicable,
mirror the terms of the shares offered hereby. Charter Holdco
also redeemed the remaining $588 million principal amount
of the mirror notes in respect of our 5.75% convertible senior
notes due 2005 concurrently with our December 23, 2004
redemption of our 5.75% convertible senior notes. In addition,
in November 2004, Charter Holdco entered into a unit
lending agreement with Charter in which it agreed to lend common
units to Charter that would mirror the anticipated loan of
Class A common shares by Charter to Citigroup Global
Markets pursuant to a share lending agreement. The members of
Charter Holdco (including the entities controlled by
Mr. Allen) also at that time entered into a letter
agreement providing, among other things, that for purposes of
the allocation provisions of the Limited Liability Company
Agreement of Charter Holdco, the mirror units be treated as
disregarded and not outstanding until such time (and except to
the extent) that, under Charter's share lending agreement,
Charter treats the loaned shares in a manner that assumes they
will neither be returned to Charter by the borrower nor
otherwise be acquired by Charter in lieu of such a return.
In March, April and May 2005, Charter Holdco
repurchased a total of $131 million in principal amount of
mirror convertible notes due 2006 concurrently with our
repurchases of equal principal amounts of our 4.75% convertible
senior notes due 2006, for purchase prices equal to the prices
we paid in our repurchases.
Allocation of Business Opportunities with
    Mr. Allen
As described under "— Third Party
Business Relationships in which Mr. Allen has or had an
Interest" in this section, Mr. Allen and a number of
his affiliates have interests in various entities that provide
services or programming to our subsidiaries. Given the diverse
nature of Mr. Allen's investment activities and
interests, and to avoid the possibility of future disputes as to
potential business, Charter and Charter Holdco, under the terms
of their respective organizational documents, may not, and may
not allow
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their subsidiaries, to engage in any business
transaction outside the cable transmission business except for
the Digeo, Inc. joint venture; a joint venture to develop a
digital video recorder set-top terminal; an existing investment
in Cable Sports Southeast, LLC, a provider of regional sports
programming; as an owner of the business of Interactive
Broadcaster Services Corporation or, Chat TV, an investment in
@Security Broadband Corp., a company developing broadband
security applications; and incidental businesses engaged in as
of the closing of Charter's initial public offering in
November 1999. This restriction will remain in effect until all
of the shares of Charter's high-vote Class B
common stock have been converted into shares of Charter
Class A common stock due to Mr. Allen's equity
ownership falling below specified thresholds.
Should Charter or Charter Holdco or any of their
subsidiaries wish to pursue, or allow their subsidiaries to
pursue, a business transaction outside of this scope, it must
first offer Mr. Allen the opportunity to pursue the
particular business transaction. If he decides not to pursue the
business transaction and consents to Charter or its subsidiaries
engaging in the business transaction, they will be able to do
so. In any such case, the restated certificate of incorporation
of Charter and the limited liability company agreement of
Charter Holdco would need to be amended accordingly to modify
the current restrictions on the ability of such entities to
engage in any business other than the cable transmission
business. The cable transmission business means the business of
transmitting video, audio, including telephone, and data over
cable systems owned, operated or managed by Charter, Charter
Holdco or any of their subsidiaries from time to time.
Under Delaware corporate law, each director of
Charter, including Mr. Allen, is generally required to
present to Charter, any opportunity he or she may have to
acquire any cable transmission business or any company whose
principal business is the ownership, operation or management of
cable transmission businesses, so that we may determine whether
we wish to pursue such opportunities. However, Mr. Allen
and the other directors generally will not have an obligation to
present other types of business opportunities to Charter and
they may exploit such opportunities for their own account.
Also, conflicts could arise with respect to the
allocation of corporate opportunities between us and
Mr. Allen and his affiliates in connection with his
investments in businesses in which we are permitted to engage
under Charter's restated certificate of incorporation.
Certain of the indentures of Charter and its subsidiaries
require the applicable issuer of notes to obtain, under certain
circumstances, approval of the board of directors of Charter
and, where a transaction or series of related transactions is
valued at or in excess of $50 million, a fairness opinion
with respect to transactions in which Mr. Allen has an
interest. Related party transactions are approved by our Audit
Committee in compliance with the listing requirements applicable
to NASDAQ National Market listed companies. We have not
instituted any other formal plan or arrangement to address
potential conflicts of interest.
The restrictive provisions of the organizational
documents described above may limit our ability to take
advantage of attractive business opportunities. Consequently,
our ability to offer new products and services outside of the
cable transmission business and enter into new businesses could
be adversely affected, resulting in an adverse effect on our
growth, financial condition and results of operations.
Third Party Business Relationships in Which
Mr. Allen has or had an Interest
As previously noted, Mr. Allen has and has
had extensive investments in the areas of media and technology.
We have a number of commercial relationships with third parties
in which Mr. Allen has an interest. Mr. Allen or his
affiliates own equity interests or warrants to purchase equity
interests in various entities with which we do business or which
provide us with products, services or programming.
Mr. Allen owns 100% of the equity of Vulcan Ventures
Incorporated and Vulcan Inc. and is the president of Vulcan
Ventures. Ms. Jo Allen Patton is a director and the
President and Chief Executive Officer of Vulcan Inc. and is a
director and Vice President of Vulcan Ventures. Mr. Lance
Conn is Executive Vice President of Vulcan Inc. and Vulcan
Ventures. The various cable, media, Internet and telephone
companies in which Mr. Allen has invested may mutually
benefit one another. We can give no assurance, nor should you
expect, that any of these business relationships will be
successful, that we will realize any benefits from
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these relationships or that we will enter into
any business relationships in the future with
Mr. Allen's affiliated companies.
Mr. Allen and his affiliates have made, and
in the future likely will make, numerous investments outside of
us and our business. We cannot assure you that, in the event
that we or any of our subsidiaries enter into transactions in
the future with any affiliate of Mr. Allen, such
transactions will be on terms as favorable to us as terms we
might have obtained from an unrelated third party.
High Speed Access
High Speed Access Corp. ("High Speed
Access") was a provider of high-speed Internet access
services over cable modems. During the period from 1997 to 2000,
certain Charter entities entered into Internet-access related
service agreements, and both Vulcan Ventures, an entity owned by
Mr. Allen, and Charter Holdco made equity investments in
High Speed Access.
On February 28, 2002, our subsidiary, CC
Systems, purchased from High Speed Access the contracts and
associated assets, and assumed related liabilities, that served
our customers, including a customer contact center, network
operations center and provisioning software. At the closing,
certain of our subsidiaries paid $78 million to High Speed
Access and delivered 37,000 shares of High Speed
Access's Series D convertible preferred stock and all
of the warrants to buy High Speed Access common stock owned by
Charter Holdco (which had been acquired pursuant to two network
services agreements which were cancelled in connection with this
transaction, as described below), and High Speed Access
purchased 38,000 shares of its Series D Preferred
Stock from Vulcan Ventures for $8 million. Additional
purchase price adjustments were made as provided in the asset
purchase agreement. Charter Holdco obtained a fairness opinion
from a qualified investment-banking firm regarding the valuation
of the assets purchased. Concurrently with the closing of the
transaction, High Speed Access also purchased all of its common
stock held by Vulcan Ventures.
In conjunction with the High Speed Access asset
purchase, on February 28, 2002, Charter Holdco granted High
Speed Access the right to use certain intellectual property sold
by High Speed Access to Charter Holdco. High Speed Access does
not pay any fees under the agreement. The domestic portion of
the license terminated on June 30, 2002, and the
international portion of the license expired on February 2,
2005. Prior to closing the asset purchase, Charter performed
certain management services formerly performed by High Speed
Access, for which it received approximately $4 million in
January and February 2002. Concurrently with the asset purchase,
all of the other agreements between Charter Holdco and High
Speed Access Corp. (other than the license agreement described
above), namely the programming content agreement, the services
agreement, the systems access agreement, the 1998 network
services agreement and the May 2000 network services
agreement, were terminated. The revenues we earned from High
Speed Access for the year ended December 31, 2002 were
approximately $17 million. In addition, for the year ended
December 31, 2002, we paid High Speed Access approximately
$2 million under the 1998 network services agreement
and the 2000 network services agreement, representing a per
customer fee to High Speed Access according to agreed pricing
terms and compensation for services exceeding certain minimum
thresholds.
Immediately prior to the asset purchase, Vulcan
Ventures beneficially owned approximately 37%, and Charter
Holdco and its subsidiaries beneficially owned approximately
13%, of the common stock of High Speed Access (including the
shares of common stock which could be acquired upon conversion
of the Series D preferred stock, and upon exercise of the
warrants owned by Charter Holdco). Following the consummation of
the asset purchase, neither Charter Holdco nor Vulcan Ventures
beneficially owned any securities of, or were otherwise
affiliated with, High Speed Access.
On May 12, 2000, Charter entered into a
five-year network services agreement with High Speed Access,
which was assigned by Charter Communications, Inc. to Charter
Holdco on August 1, 2000. With respect to each system
launched or intended to be launched, we paid a per customer fee
to High Speed Access according to agreed pricing terms. In
addition, we compensated High Speed Access for services
exceeding certain minimum thresholds.
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In 2001, Charter Holdco was a party to a systems
access and investment agreement with Vulcan Ventures and High
Speed Access and a related network services agreement with High
Speed Access. These agreements provided High Speed Access with
exclusive access to certain of our homes passed. The term of the
network services agreement was, as to a particular cable system,
five years from the date revenue billing commenced for that
cable system. The programming content agreement provided each of
Vulcan Ventures and High Speed Access with a license to use
certain content and materials of the other on a non-exclusive,
royalty-free basis.
Under the above described transactions, we also
earned certain warrants to purchase High Speed Access stock.
These warrants were cancelled in February 2002 in connection
with the asset purchase described above. As a result of the
transaction with High Speed Access described above, we neither
paid to, nor received, any amounts from High Speed Access in
2003.
TechTV, Inc.
TechTV, Inc. ("TechTV") operated a
cable television network that offered programming mostly related
to technology. Pursuant to an affiliation agreement that
originated in 1998 and that terminates in 2008, TechTV has
provided us with programming for distribution via our cable
systems. The affiliation agreement provides, among other things,
that TechTV must offer Charter Holdco certain terms and
conditions that are no less favorable in the affiliation
agreement than are given to any other distributor that serves
the same number of or fewer TechTV viewing customers.
Additionally, pursuant to the affiliation agreement, we were
entitled to incentive payments for channel launches through
December 31, 2003.
In March 2004, Charter Holdco entered into
agreements with Vulcan Programming and TechTV, which provide for
(i) Charter Holdco and TechTV to amend the affiliation
agreement which, among other things, revises the description of
the TechTV network content, provides for Charter Holdco to waive
certain claims against TechTV relating to alleged breaches of
the affiliation agreement and provides for TechTV to make
payment of outstanding launch receivables due to Charter Holdco
under the affiliation agreement, (ii) Vulcan Programming to
pay approximately $10 million and purchase over a 24-month
period, at fair market rates, $2 million of advertising
time across various cable networks on Charter cable systems in
consideration of the agreements, obligations, releases and
waivers under the agreements and in settlement of the
aforementioned claims and (iii) TechTV to be a provider of
content relating to technology and video gaming for
Charter's interactive television platforms through
December 31, 2006 (exclusive for the first year). For the
years ended December 31, 2002, 2003 and 2004 and for the
six months ended June 30, 2005 we recognized approximately
$4 million, $1 million, $5 million and
$0.6 million, respectively, of the Vulcan Programming
payment as an offset to programming expense and paid
approximately $0.2 million, $80,600, $2 million and
$1 million, respectively, to TechTV under the affiliation
agreement.
We believe that Vulcan Programming, which is 100%
owned by Mr. Allen, owned an approximate 98% equity
interest in TechTV at the time Vulcan Programming sold TechTV to
an unrelated third party in May 2004. Until September 2003,
Mr. Savoy, a former Charter director, was the president and
director of Vulcan Programming and was a director of TechTV.
Mr. Wangberg, one of Charter's directors, was the
Chairman, Chief Executive Officer and a director of TechTV.
Mr. Wangberg resigned as the Chief Executive Officer of
TechTV in July 2002. He remained a director of TechTV along with
Mr. Allen until Vulcan Programming sold TechTV.
Oxygen Media Corporation
Oxygen Media LLC ("Oxygen") provides
programming content aimed at the female audience for
distribution over cable systems and satellite. On July 22,
2002, Charter Holdco entered into a carriage agreement with
Oxygen, whereby we agreed to carry programming content from
Oxygen. Under the carriage agreement, we currently make Oxygen
programming available to approximately 5 million of our
video customers. The term of the carriage agreement was
retroactive to February 1, 2000, the date of launch of
Oxygen programming by us, and was to run for a period of five
years from that date. For the
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years ended December 31, 2002, 2003 and 2004
and for the six months ended June 30, 2005, we paid Oxygen
approximately $6 million, $9 million, $13 million
and $5 million, respectively, for programming content. In
addition, Oxygen pays us marketing support fees for customers
launched after the first year of the term of the carriage
agreement up to a total of $4 million. We recorded
approximately $2 million, $1 million, $1 million
and $0.1 million related to these launch incentives as a
reduction of programming expense for each of the years ended
December 31, 2002, 2003 and 2004 and for the six months
ended June 30, 2005, respectively.
Concurrently with the execution of the carriage
agreement, Charter Holdco entered into an equity issuance
agreement pursuant to which Oxygen's parent company, Oxygen
Media Corporation ("Oxygen Media"), granted a
subsidiary of Charter Holdco a warrant to
purchase 2.4 million shares of Oxygen Media common
stock for an exercise price of $22.00 per share. In
February 2005, this warrant expired unexercised. Charter Holdco
was also to receive unregistered shares of Oxygen Media common
stock with a guaranteed fair market value on the date of
issuance of $34 million, on or prior to February 2,
2005, with the exact date to be determined by Oxygen Media, but
this commitment was later revised as discussed below.
We recognize the guaranteed value of the
investment over the life of the carriage agreement as a
reduction of programming expense. For the years ended
December 31, 2002, 2003 and 2004 and for the six months
ended June 30, 2005, we recorded approximately
$6 million, $9 million, $13 million and
$2 million, respectively, as a reduction of programming
expense. The carrying value of our investment in Oxygen was
approximately $10 million, $19 million,
$32 million and $33 million as of December 31,
2002, 2003 and 2004 and June 30, 2005, respectively.
In August 2004, Charter Holdco and Oxygen entered
into agreements that amended and renewed the carriage agreement.
The amendment to the carriage agreement (a) revises the
number of our customers to which Oxygen programming must be
carried and for which we must pay, (b) releases Charter
Holdco from any claims related to the failure to achieve
distribution benchmarks under the carriage agreement,
(c) requires Oxygen to make payment on outstanding
receivables for marketing support fees due to us under the
carriage agreement; and (d) requires that Oxygen provide
its programming content to us on economic terms no less
favorable than Oxygen provides to any other cable or satellite
operator having fewer subscribers than us. The renewal of the
carriage agreement (a) extends the period that we will
carry Oxygen programming to our customers through
January 31, 2008, and (b) requires license fees to be
paid based on customers receiving Oxygen programming, rather
than for specific customer benchmarks.
In August 2004, Charter Holdco and Oxygen also
amended the equity issuance agreement to provide for the
issuance of 1 million shares of Oxygen Preferred Stock with
a liquidation preference of $33.10 per share plus accrued
dividends to Charter Holdco in place of the $34 million of
unregistered shares of Oxygen Media common stock. Oxygen Media
delivered these shares in March 2005. The preferred stock
is convertible into common stock after December 31, 2007 at
a conversion ratio, the numerator of which is the liquidation
preference and the denominator which is the fair market value
per share of Oxygen Media common stock on the conversion date.
As of June 30, 2005, through Vulcan
Programming, Mr. Allen owned an approximate 31% interest in
Oxygen assuming no exercises of outstanding warrants or
conversion or exchange of convertible or exchangeable
securities. Ms. Jo Allen Patton is a director and the
President of Vulcan Programming. Mr. Lance Conn is a Vice
President of Vulcan Programming.
Marc Nathanson has an indirect beneficial
interest of less than 1% in Oxygen.
Portland Trail Blazers and Action Sports
    Cable Network
On October 7, 1996, the former owner of our
Falcon cable systems entered into a letter agreement and a cable
television agreement with Trail Blazers Inc. for the cable
broadcast in the metropolitan area surrounding Portland, Oregon
of pre-season, regular season and playoff basketball games of
the Portland Trail Blazers, a National Basketball Association
basketball team. Mr. Allen is the 100% owner of the
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Portland Trail Blazers and Trail Blazers Inc.
After the acquisition of the Falcon cable systems in November
1999, we continued to operate under the terms of these
agreements until their termination on September 30, 2001.
Under the letter agreement, Trail Blazers Inc. was paid a fixed
fee for each customer in areas directly served by the Falcon
cable systems. Under the cable television agreement, we shared
subscription revenues with Trail Blazers Inc. For the years
ended December 31, 2002, 2003 and 2004 and for the six
months ended June 30, 2005, we paid approximately
$1 million, $135,200, $96,100 and $116,500, respectively,
in connection with the cable broadcast of Portland Trail Blazers
basketball games under the October 1996 cable television
agreement and subsequent local cable distribution agreements.
On July 1, 2001, Charter Holdco and Action
Sports Cable Network ("Action Sports"), which was 100%
owned by Mr. Allen, entered into a new carriage agreement
for a five-year term, which became effective on October 1,
2001 with the expiration of the previous agreement. Under the
July 2001 carriage agreement, Charter Holdco pays Action Sports
a fixed fee for each customer receiving the Action Sports
programming, which covered sporting events in the Pacific
Northwest, including the Portland Trail Blazers, the Seattle
Seahawks, a National Football League football team, and the
Portland Fire, a Women's National Basketball Association
basketball team. On November 5, 2002, Action Sports, which
was 100% owned by Mr. Allen, announced that it was
discontinuing its business following its failure to obtain an
acceptable carriage agreement with AT&T Cable, the cable
television provider in Portland, Oregon. Action Sports service
was terminated on November 5, 2002 and Charter Holdco
ceased carriage of the service. For the year ended
December 31, 2002, we paid Action Sports approximately
$1 million for rights to carry its programming.
Click2learn
Charter Holdco executed a Software License
Agreement effective September 30, 2002, with Click2learn,
Inc. ("Click2learn"), a company which provided
enterprise software for organizations seeking to capture, manage
and disseminate knowledge throughout their extended enterprise.
As of December 31, 2003, Mr. Allen owned an
approximate 21% interest in Click2learn through
616,120 shares held of record by Vulcan Ventures and
387,096 shares issuable upon exercise of a warrant issued
to Vulcan Ventures. In March 2004, Click2learn was merged with
an unrelated company, resulting in a new company, SumTotal
Systems, Inc., which is publicly traded. We have been
informed by Vulcan that, as of December 31, 2004,
Mr. Allen owned an approximate 10% interest in SumTotal
Systems, Inc. through his ownership in Vulcan Ventures.
Mr. Allen owns 100% of Vulcan Ventures. Ms. Jo Allen
Patton is a director and Vice President of Vulcan Ventures.
Mr. Lance Conn is Executive Vice President of Vulcan
Ventures. For the years ended December 31, 2002, 2003 and
2004, we paid approximately $250,000, $57,100 and $0,
respectively, to Click2learn. For the year ended
December 31, 2004 and for the six months ended
June 30, 2005, we paid approximately $0 and $0,
respectively to SumTotal Systems, Inc.
Digeo, Inc.
In March 2001, a subsidiary of Charter, Charter
Communications Ventures, LLC ("Charter Ventures") and
Vulcan Ventures Incorporated formed DBroadband Holdings, LLC for
the sole purpose of purchasing equity interests in Digeo, Inc.
("Digeo"), an entity controlled by Paul Allen. In
connection with the execution of the broadband carriage
agreement, DBroadband Holdings, LLC purchased an equity interest
in Digeo funded by contributions from Vulcan Ventures
Incorporated. The equity interest is subject to a priority
return of capital to Vulcan Ventures up to the amount
contributed by Vulcan Ventures on Charter Ventures' behalf.
After Vulcan Ventures recovers its amount contributed and any
cumulative loss allocations, Charter Ventures has a 100% profit
interest in DBroadband Holdings, LLC. Charter Ventures is not
required to make any capital contributions, including capital
calls, to Digeo. DBroadband Holdings, LLC is therefore not
included in our consolidated financial statements. Pursuant to
an amended version of this arrangement, in 2003, Vulcan Ventures
contributed a total of $29 million to Digeo,
$7 million of which was contributed on Charter
Ventures' behalf, subject to Vulcan Ventures'
aforementioned priority return. Since the formation of
DBroadband Holdings, LLC, Vulcan Ventures has contributed
approximately $56 million on Charter Ventures' behalf.
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On March 2, 2001, Charter Ventures entered
into a broadband carriage agreement with Digeo Interactive, LLC
("Digeo Interactive"), a wholly owned subsidiary of
Digeo. The carriage agreement provided that Digeo Interactive
would provide to Charter a "portal" product, which
would function as the television-based Internet portal (the
initial point of entry to the Internet) for Charter's
customers who received Internet access from Charter. The
agreement term was for 25 years and Charter agreed to use
the Digeo portal exclusively for six years. Before the portal
product was delivered to Charter, Digeo terminated development
of the portal product.
On September 27, 2001, Charter and Digeo
Interactive amended the broadband carriage agreement. According
to the amendment, Digeo Interactive would provide to Charter the
content for enhanced "Wink" interactive television
services, known as Charter Interactive Channels
("i-channels"). In order to provide the i-channels,
Digeo Interactive sublicensed certain Wink technologies to
Charter. Charter is entitled to share in the revenues generated
by the i-channels. Currently, our digital video customers who
receive i-channels receive the service at no additional charge.
On September 28, 2002, Charter entered into
a second amendment to its broadband carriage agreement with
Digeo Interactive. This amendment superseded the amendment of
September 27, 2001. It provided for the development by
Digeo Interactive of future features to be included in the Basic
i-TV service to be provided by Digeo and for Digeo's
development of an interactive "toolkit" to enable
Charter to develop interactive local content. Furthermore,
Charter could request that Digeo Interactive manage local
content for a fee. The amendment provided for Charter to pay for
development of the Basic i-TV service as well as license fees
for customers who would receive the service, and for Charter and
Digeo to split certain revenues earned from the service. In
2002, 2003 and 2004 and for the six months ended June 30,
2005, we paid Digeo Interactive approximately $3 million,
$4 million, $3 million and $1 million,
respectively, for customized development of the i-channels and
the local content tool kit. We received no revenues under the
broadband carriage agreement in 2003. This amendment expired
pursuant to its terms on December 31, 2003. Digeo
Interactive is continuing to provide the Basic i-TV service on a
month-to-month basis.
On June 30, 2003, Charter Holdco entered
into an agreement with Motorola, Inc. for the purchase of
100,000 digital video recorder ("DVR") units. The
software for these DVR units is being supplied by Digeo
Interactive under a license agreement entered into in April
2004. Under the license agreement Digeo Interactive granted to
Charter Holdco the right to use Digeo's proprietary
software for the number of DVR units that Charter deployed from
a maximum of 10 headends through year-end 2004. This maximum
number of headends restriction was expanded and eventually
eliminated through successive agreement amendments and the date
for entering into license agreements for units deployed was
extended. The license granted for each unit deployed under the
agreement is valid for five years. In addition, Charter will pay
certain other fees including a per-headend license fee and
maintenance fees. Maximum license and maintenance fees during
the term of the agreement are expected to be approximately
$7 million. The agreement includes an "MFN
clause" pursuant to which Charter is entitled to receive
contract terms, considered on the whole, and license fees,
considered apart from other contract terms, no less favorable
than those accorded to any other Digeo customer. An audit of
Digeo's third party contracts was conducted by
Ernst & Young, LLP in August 2005 and it was determined
that Charter was not due any refund under the MFN clause.
Charter paid approximately $0.5 million and
$0.2 million in license and maintenance fees for the year
ended December 31, 2004 and for the six months ended
June 30, 2005, respectively.
In April 2004, we launched DVR service (using
units containing the Digeo software) in our Rochester, Minnesota
market using a broadband media center that is an integrated
set-top terminal with a cable converter, DVR hard drive and
connectivity to other consumer electronics devices (such as
stereos, MP3 players, and digital cameras).
In May 2004, Charter Holdco entered into a
binding term sheet with Digeo Interactive for the development,
testing and purchase of 70,000 Digeo PowerKey DVR units. The
term sheet provided that the parties would proceed in good faith
to negotiate, prior to year-end 2004, definitive agreements for
the development, testing and purchase of the DVR units and that
the parties would enter into a license agreement for
Digeo's proprietary software on terms substantially similar
to the terms of the license
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agreement described above. In November 2004,
Charter Holdco and Digeo Interactive executed the license
agreement and in December 2004, the parties executed the
purchase agreement, each on terms substantially similar to the
binding term sheet. Total purchase price and license and
maintenance fees during the term of the definitive agreements
are expected to be approximately $41 million. The
definitive agreements are terminable at no penalty to Charter in
certain circumstances. Charter paid approximately $0 and
$2 million in capital purchases under this agreement for
the year ended December 31, 2004 and for the six months
ended June 30, 2005, respectively.
In late 2003, Microsoft filed suit against Digeo
for $9 million in a breach of contract action, involving an
agreement that Digeo and Microsoft had entered into in 2001.
Digeo informed Charter that it believed it had an
indemnification claim against Charter for half that amount.
Digeo settled with Microsoft agreeing to make a cash payment and
to purchase certain amounts of Microsoft software products and
consulting services through 2008. In consideration of Digeo
agreeing to release Charter from its potential claim against
Charter, after consultation with outside counsel Charter agreed,
in June 2005, to purchase a total of $2.3 million in
Microsoft consulting services through 2008, a portion of which
amounts Digeo has informed Charter will count against
Digeo's purchase obligations with Microsoft.
We believe that Vulcan Ventures, an entity
controlled by Mr. Allen, owns an approximate 60% equity
interest in Digeo, Inc., on a fully-converted non-diluted basis.
Messrs. Allen and Conn and Ms. Patton are directors of
Digeo, and Mr. Vogel was a director of Digeo in 2004. During
2004 and 2005, Mr. Vogel held options to
purchase 10,000 shares of Digeo common stock.
Other Miscellaneous Relationships
Viacom Networks
Pursuant to certain affiliation agreements with
networks of Viacom, Inc. ("Viacom"), including
MTV, MTV2, Nickelodeon, VH1, TVLand, CMT, Spike TV, Comedy
Central, Viacom Digital Suite, CBS-owned and operated broadcast
stations, Showtime, The Movie Channel, and Flix, Viacom provides
Charter with programming for distribution via our cable systems.
The affiliation agreements provide for, among other things,
rates and terms of carriage, advertising on the Viacom networks,
which Charter can sell to local advertisers and marketing
support. For the years ended December 31, 2002, 2003 and
2004 and for the six months ended June 30, 2005, Charter
paid Viacom approximately $177 million, $188 million,
$194 million and $99 million, respectively, for
programming. Charter recorded approximately $5 million,
$5 million, $8 million and $15 million as
receivables from Viacom networks related to launch incentives
for certain channels and marketing support, respectively, for
the years ended December 31, 2002, 2003 and 2004 and for
the six months ended June 30, 2005. From April 1994 to
July 2004, Mr. Dolgen served as Chairman and Chief
Executive Officer of the Viacom Entertainment Group.
ADC Telecommunications Inc.
Charter and Charter Holdco purchase certain
equipment for use in our business from ADC Telecommunications,
which provides broadband access and network equipment.
Mr. Wangberg serves as a director for ADC
Telecommunications. For the years ended December 31, 2002,
2003 and 2004 and for the six months ended June 30, 2005,
we paid $759,600, $60,100, $344,800 and $241,100, respectively,
to ADC Telecommunications under this arrangement.
HDNet and HDNet Movies
    Network
On January 10, 2003 we signed an agreement
to carry two around-the-clock, high-definition networks, HDNet
and HDNet Movies. HDNet Movies delivers a commercial-free
schedule of full-length feature films converted from 35mm to
high-definition, including titles from an extensive library of
Warner Bros. films. HDNet Movies will feature a mix of
theatrical releases, made-for-TV movies, independent films and
shorts. The HDNet channel features a variety of HDTV
programming, including live sports, sitcoms, dramas, action
series, documentaries, travel programs, music concerts and
shows, special events, and news features including the popular
HDNet World Report. HDNet also offers a selection of classic and
recent television series. We
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paid HDNet and HDNet Movies approximately
$21,900, $609,100 and $1 million in 2003 and 2004 and for
the six months ended June 30, 2005, respectively. We
believe that entities controlled by Mr. Cuban owned
approximately 81% of HDNet as of December 31, 2003 and 2004
and for the six months ended June 30, 2005. On May 21,
2003, Mark Cuban filed a Schedule 13G with the SEC stating
that he owned approximately 19,000,000 shares, or 6.5% of
the total common equity in Charter. However, a
Schedule 13G/A filed on April 25, 2005, reported that
Mr. Cuban owned no shares of Charter.
Affiliate Leases and
    Agreements
Companies controlled by Mr. Nathanson, a
director of Charter, leased certain warehouse space in
Riverside, California, to our subsidiaries. For the years ended
December 31, 2002 and 2003, total rent paid for the
Riverside warehouse space was approximately $76,000 and $16,600,
respectively, under a lease agreement which expired
March 15, 2003.
Carriage Fees
We have carried The Outdoor Channel on a
month-to-month basis since the expiration of an affiliation
agreement in July 2002. We paid approximately
$1 million, $1 million, $1 million and $594,900
to The Outdoor Channel during 2002, 2003 and 2004 and for the
six months ended June 30, 2005, respectively. In
December 2003, Mr. Merritt became director of Outdoor
Channel Holdings, Inc., an affiliate of The Outdoor Channel, Inc.
Payments for Relatives'
    Services
Since June 2003, Charter Holdco has employed the
brother-in-law of Carl E. Vogel, Charter's former
President, Chief Executive Officer and a director.
Mr. Vogel's brother-in-law receives a salary
commensurate with his position in the engineering department.
Radio Advertising
We believe that, through a third party
advertising agency, we have paid approximately $112,700,
$67,300, $49,300 and $20,200, in 2002, 2003 and 2004, and for
the six months ended June 30, 2005, respectively, to
Mapleton Communications, an affiliate of Mapleton Investments,
LLC that owns radio stations in Oregon and California. Mr.
Nathanson is the Chairman and owner of Mapleton Investments, LLC.
Purchase of Certain Enstar Limited
    Partnership Systems; Management Fees
In April 2002, Interlink Communications Partners,
LLC, Rifkin Acquisition Partners, LLC and Charter Communications
Entertainment I, LLC, each an indirect, wholly owned
subsidiary of Charter Holdings, completed the cash purchase of
certain assets of Enstar Income Program II-2, L.P., Enstar
Income/ Growth Program Six-A, L.P., Enstar Income Program IV-1,
L.P., Enstar Income Program IV-2, L.P., and Enstar Income
Program IV-3, L.P., serving approximately 21,600 customers, for
a total cash sale price of approximately $48 million. In
September 2002, Charter Communications Entertainment I, LLC
purchased all of Enstar Income Program II-1, L.P.'s
Illinois cable television systems, serving approximately 6,400
customers, for a cash sale price of $15 million. Enstar
Communications Corporation, a direct subsidiary of Charter
Holdco is a general partner of the Enstar limited partnerships
but does not exercise control over them. The purchase prices
were allocated to assets acquired based on fair values,
including approximately $41 million assigned to franchises
and $4 million assigned to other intangible assets
amortized over a useful life of three years.
In addition, Enstar Cable Corporation, the
manager of the Enstar limited partnerships through a management
agreement, engaged Charter Holdco to manage the Enstar limited
partnerships. Pursuant to the management agreement, Charter
Holdco provides management services to the Enstar limited
partnerships in exchange for management fees. The Enstar limited
partnerships also purchase basic and premium programming for
their systems at cost from Charter Holdco. For the years ended
December 31, 2002, 2003 and 2004 and for the six months
ended June 30, 2005, Charter Holdco earned approximately
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$1 million, $469,300, $0 and $0,
respectively, by providing management services to the Enstar
limited partnerships. In September 2003 the Enstar limited
partnerships completed sales of all their remaining assets, and
as a result no further management fees were paid in 2004. In
November 2004, the Enstar limited partnerships were dissolved.
All of the executive officers of Charter (with
the exception of Mr. Allen), Charter Holdco and Charter
Holdings act as officers of Enstar Communications Corporation.
Indemnification Advances
Pursuant to Charter's bylaws (and the
employment agreements of certain of our current and former
officers), Charter is obligated (subject to certain limitations)
to indemnify and hold harmless, to the fullest extent permitted
by law, any officer, director or employee against all expense,
liability and loss (including, among other things,
attorneys' fees) reasonably incurred or suffered by such
officer, director or employee as a result of the fact that he or
she is a party or is threatened to be made a party or is
otherwise involved in any action, suit or proceeding by reason
of the fact that he or she is or was a director, officer or
employee of Charter. In addition, Charter is obligated to pay,
as an advancement of its indemnification obligation, the
expenses (including attorneys' fees) incurred by any
officer, director or employee in defending any such action, suit
or proceeding in advance of its final disposition, subject to an
obligation to repay those amounts under certain circumstances.
Pursuant to these indemnification arrangements and as an
advancement of costs, Charter has reimbursed certain of its
current and former directors and executive officers a total of
approximately $3 million, $8 million, $3 million
and $13,400 in respect of invoices received in 2002, 2003
and 2004 and for the six months ended June 30, 2005,
respectively, in connection with their defense of certain legal
actions described herein. See "Business — Legal
Proceedings." Those current and former directors and
officers include: Paul G. Allen, David C. Andersen, David G.
Barford, Mary Pat Blake, J. Christian Fenger, Kent D. Kalkwarf,
Ralph G. Kelly, Jerald L. Kent, Paul E. Martin, David L. McCall,
Ronald L. Nelson, Nancy B. Peretsman, John C. Pietri, William D.
Savoy, Steven A. Schumm, Curtis S. Shaw, William J. Shreffler,
Stephen E. Silva, James Trey Smith and Carl E. Vogel. These
amounts were submitted to Charter's director and officer
insurance carrier and have been reimbursed consistent with the
terms of the Securities Class Action and Derivative Action
Settlements described in "Business — Legal
Proceedings." On or about February 22, 2005, Charter filed
lawsuits against the four former officers who were indicted and
pled guilty as part of the government investigation conducted by
the United States Attorney's Office. These suits seek to
recover fees and related expenses that Charter advanced these
former officers under the indemnification provisions described
above. One of these former officers, has counterclaimed against
Charter alleging, among other things, that Charter owes him
additional indemnification for legal fees that Charter did not
pay and another of these former officers, has counterclaimed
against Charter for accrued sick leave.
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DESCRIPTION OF CERTAIN INDEBTEDNESS
As of June 30, 2005, our actual total debt
was approximately $19.2 billion and on the pro forma basis
described in "Unaudited Pro Forma Consolidated Financial
Statements," our total debt would have been approximately
$19.0 billion as summarized below (in millions):
Actual
Pro forma
Start date for
June 30, 2005
June 30, 2005
cash interest
Interest
payment on
Face
Accreted
Face
Accreted
payment
discount
Maturity
value
value(a)
value
value(a)
dates
notes
date(b)
Charter Communications, Inc.:
4.750% convertible senior notes due 2006(c)
$
25
$
25
$
25
$
25
12/1 & 6/1
6/1/06
5.875% convertible senior notes due 2009(c)
863
838
863
838
5/16 & 11/16
11/16/09
Charter Holdings:
8.250% senior notes due 2007
105
105
105
105
4/1 & 10/1
4/1/07
8.625% senior notes due 2009
1,244
1,243
293
293
4/1 & 10/1
4/1/09
9.920% senior discount notes due 2011
1,108
1,108
198
198
4/1 & 10/1
10/1/04
4/1/11
10.000% senior notes due 2009
640
640
154
154
4/1 & 10/1
4/1/09
10.250% senior notes due 2010
318
318
49
49
1/15 & 7/15
1/15/10
11.750% senior discount notes due 2010
450
450
43
43
1/15 & 7/15
7/15/05
1/15/10
10.750% senior notes due 2009
874
874
131
131
4/1 & 10/1
10/1/09
11.125% senior notes due 2011
500
500
217
217
1/15 & 7/15
1/15/11
13.500% senior discount notes due 2011
675
629
94
88
1/15 & 7/15
7/15/06
1/15/11
9.625% senior notes due 2009
640
638
107
107
5/15 & 11/15
11/15/09
10.000% senior notes due 2011
710
708
136
136
5/15 & 11/15
5/15/11
11.750% senior discount notes due 2011
939
851
125
113
5/15 & 11/15
11/15/06
5/15/11
12.125% senior discount notes due 2012
330
275
113
94
1/15 & 7/15
7/15/07
1/15/12
CIH(d):
11.125% senior notes due 2014
—
—
151
151
1/15 & 7/15
1/15/14
9.920% senior discount notes due 2014
—
—
471
471
4/1 & 10/1
4/1/14
10.000% senior notes due 2014
—
—
299
299
5/15 & 11/15
5/15/14
11.750% senior discount notes due 2014
—
—
815
737
5/15 &  11/15
11/15/06
5/15/14
13.500% senior discount notes due 2014
—
—
581
541
1/15 & 7/15
7/15/06
1/15/14
12.125% senior discount notes due 2015
—
—
217
181
1/15 & 7/15
7/15/07
1/15/15
CCH I(d):
11.00% senior notes due 2015
—
—
3,525
3,686
4/1 & 10/1
10/1/15
CCH II:
10.250% senior notes due 2010
1,601
1,601
1,601
1,601
3/15 & 9/15
9/15/10
CCO Holdings:
8 3/4% senior notes due 2013
500
500
800
794
5/15 & 11/15
11/15/13
Senior floating rate notes due 2010
550
550
550
550
3/15, 6/15,
12/15/10
9/15 & 12/15
Charter Operating:
8% senior second lien notes due 2012
1,100
1,100
1,100
1,100
4/30 & 10/30
4/30/12
8 3/8% senior second lien notes due 2014
733
733
733
733
4/30 & 10/30
4/30/14
Renaissance:
10.000% senior discount notes due 2008
114
116
114
116
4/15 & 10/15
10/15/03
4/15/08
Credit Facilities
Charter Operating
5,445
5,445
5,445
5,445
$
19,464
$
19,247
$
19,055
$
18,996
(a)
The accreted value presented above represents the
    face value of the notes less the original issue discount at the
    time of sale plus the accretion to the balance sheet date.
(b)
In general, the obligors have the right to redeem
    all of the notes set forth in the above table (except with
    respect to the 5.875% convertible senior notes due 2009 and the
    Charter Holdings notes with terms of eight years) in whole or
    part at their option, beginning at various times prior to their
    stated maturity dates, subject to certain conditions, upon the
    payment of the outstanding principal amount (plus a specified
    redemption premium) and all accrued and unpaid interest. The
    5.875% convertible senior notes are redeemable if the closing
    price of our Class A common stock exceeds the conversion
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price by certain percentages as described below.
    For additional information, see Note 9 to our consolidated
    financial statements included elsewhere in this prospectus.
(c)
The 4.75% convertible senior notes and the 5.875%
    convertible senior notes are convertible at the option of the
    holders into shares of Class A common stock at a conversion
    rate, subject to certain adjustments, of 38.0952 and 413.2231
    shares, respectively, per $1,000 principal amount of notes,
    which is equivalent to a price of $26.25 and $2.42 per share,
    respectively. Certain anti-dilutive provisions cause adjustments
    to occur automatically upon the occurrence of specified events.
    Additionally, the conversion ratio may be adjusted by us when
    deemed appropriate.
(d)
The pro forma balance sheet amounts of CIH and
    CCH I notes issued in exchange for Charter Holdings
    notes are presented in accordance with GAAP. GAAP requires that
    the CIH notes issued in exchange for Charter Holdings notes and
    the CCH I notes issued in exchange for the
    8.625% Charter Holdings senior notes due 2009 be
    recorded at the current accreted values of the old Charter
    Holdings notes as opposed to the current accreted values of the
    new CIH or CCH I notes.
As of June 30, 2005 and December 31,
2004, our long-term debt totaled approximately
$19.2 billion and $19.5 billion, respectively. This
debt was comprised of approximately $5.4 billion and
$5.5 billion of credit facility debt, $12.9 billion
and $13.0 billion accreted value of high-yield notes and
$863 million and $990 million accreted value of
convertible senior notes at June 30, 2005 and
December 31, 2004, respectively.
As of June 30, 2005 and December 31,
2004, the weighted average interest rate on the credit facility
debt was approximately 7.2% and 6.8%, respectively, the weighted
average interest rate on our high-yield notes was approximately
9.9% and 9.9%, and the weighted average interest rate on the
convertible senior notes was approximately 5.8% and 5.7%,
respectively, resulting in a blended weighted average interest
rate of 9.0% and 8.8%, respectively. The interest rate on
approximately 81% and 83% of the total principal amount of our
debt was effectively fixed, including the effects of our
interest rate hedge agreements as of June 30, 2005 and
December 31, 2004, respectively. The fair value of our
high-yield notes was $10.9 billion and $12.2 billion
at June 30, 2005 and December 31, 2004, respectively.
The fair value of our convertible senior notes was
$562 million and $1.1 billion at June 30, 2005
and December 31, 2004, respectively. The fair value of our
credit facilities was approximately $5.4 billion and
$5.5 billion at June 31, 2005 and December 31,
2004, respectively. The fair value of high-yield and convertible
notes is based on quoted market prices, and the fair value of
the credit facilities is based on dealer quotations.
The following description is a summary of certain
material provisions of the amended and restated Charter
Operating credit facilities and the public notes of our
subsidiaries (collectively, the "Debt Agreements").
The summary does not restate the terms of the Debt Agreements in
their entirety, nor does it describe all terms of the Debt
Agreements. The agreements and instruments governing each of the
Debt Agreements are complicated and you should consult such
agreements and instruments for more detailed information
regarding the Debt Agreements.
Charter Operating Credit
Facilities — General
The Charter Operating credit facilities were
amended and restated concurrently with the sale of
$1.5 billion senior second-lien notes in April 2004, among
other things, to defer maturities and increase availability
under these facilities and to enable Charter Operating to
acquire the interests of the lenders under the CC VI Operating,
CC VIII Operating and Falcon credit facilities, thereby
consolidating all credit facilities under one amended and
restated Charter Operating credit agreement.
The Charter Operating credit facilities:
•
provide borrowing availability of up to
    $6.5 billion;
•
provide for two term facilities:
(i) a Term A facility with a total principal
    amount of $2.0 billion, of which 12.5% matures in 2007, 30%
    matures in 2008, 37.5% matures in 2009 and 20% matures in 2010;
    and
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(ii) a Term B facility with a total
    principal amount of $3.0 billion, which shall be repayable
    in 27 equal quarterly installments aggregating in each loan year
    to 1% of the original amount of the Term B facility, with the
    remaining balance due at final maturity in 2011; and
•
provide for a revolving credit facility, in a
    total amount of $1.5 billion, with a maturity date in 2010.
Amounts outstanding under the Charter Operating
credit facilities bear interest, at Charter Operating's
election, at a base rate or the Eurodollar rate, as defined,
plus a margin for Eurodollar loans of up to 3.00% for the Term A
facility and revolving credit facility, and up to 3.25% for the
Term B facility, and for base rate loans of up to 2.00% for the
Term A facility and revolving credit facility, and up to 2.25%
for the Term B facility. A quarterly commitment fee of up to
..75% is payable on the average daily unborrowed balance of the
revolving credit facilities.
The obligations of our subsidiaries under the
Charter Operating credit facilities (the
"Obligations") are guaranteed by Charter
Operating's immediate parent company, CCO Holdings, and the
subsidiaries of Charter Operating, except for immaterial
subsidiaries and subsidiaries precluded from guaranteeing by
reason of the provisions of other indebtedness to which they are
subject (the "non-guarantor subsidiaries," primarily
Renaissance and its subsidiaries). The Obligations are also
secured by (i) a lien on all of the assets of Charter
Operating and its subsidiaries (other than assets of the
non-guarantor subsidiaries), to the extent such lien can be
perfected under the Uniform Commercial Code by the filing of a
financing statement, and (ii) by a pledge by CCO Holdings
of the equity interests owned by it in Charter Operating or any
of Charter Operating's subsidiaries, as well as
intercompany obligations owing to it by any of such entities.
Upon the Charter Holdings Leverage Ratio (as defined in the
indenture governing the Charter Holdings senior notes and senior
discount notes) being under 8.75 to 1.0, the Charter Operating
credit facilities require that the 11.875% notes due 2008
issued by CC V Holdings, LLC be redeemed. Because such Leverage
Ratio was determined to be under 8.75 to 1.0, CC V Holdings, LLC
redeemed such notes in March 2005, and CC V Holdings, LLC and
its subsidiaries (other than non-guarantor subsidiaries) became
guarantors of the Obligations and have granted a lien on all of
their assets as to which a lien can be perfected under the
Uniform Commercial Code by the filing of a financing statement.
Charter Operating Credit
Facilities — Restrictive Covenants
The Charter Operating credit facilities contain
representations and warranties, and affirmative and negative
covenants customary for financings of this type. The financial
covenants measure performance against standards set for
leverage, debt service coverage, and interest coverage, tested
as of the end of each quarter. The maximum allowable leverage
ratio is 4.25 to 1.0 until maturity, tested as of the end of
each quarter beginning September 30, 2004. Additionally,
the Charter Operating credit facilities contain provisions
requiring mandatory loan prepayments under specific
circumstances, including when significant amounts of assets are
sold and the proceeds are not reinvested in assets useful in the
business of the borrower within a specified period, and upon the
incurrence of certain indebtedness when the ratio of senior
first lien debt to operating cash flow is greater than 2.0 to
1.0.
The Charter Operating credit facilities permit
Charter Operating and its subsidiaries to make distributions to
pay interest on the Charter Operating senior second-lien notes,
the CCH II senior notes, the CCO Holdings senior notes, the
Charter convertible senior notes and the Charter Holdings senior
notes, provided that, among other things, no default has
occurred and is continuing under the Charter Operating credit
facilities. Conditions to future borrowings include absence of a
default or an event of default under the Charter Operating
credit facilities and the continued accuracy in all material
respects of the representations and warranties, including the
absence since December 31, 2003 of any event, development
or circumstance that has had or could reasonably be expected to
have a material adverse effect on our business.
The events of default under the Charter Operating
credit facilities include, among other things:
(i) the failure to make payments when due or
    within the applicable grace period,
(ii) the failure to comply with specified
    covenants, including but not limited to a covenant to deliver
    audited financial statements with an unqualified opinion from
    our independent auditors,
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(iii) the failure to pay or the occurrence
    of events that cause or permit the acceleration of other
    indebtedness owing by CCO Holdings, Charter Operating or Charter
    Operating's subsidiaries in amounts in excess of
    $50 million in aggregate principal amount,
(iv) the failure to pay or the occurrence of
    events that result in the acceleration of other indebtedness
    owing by certain of CCO Holdings' direct and indirect
    parent companies in amounts in excess of $200 million in
    aggregate principal amount,
(v) Paul Allen and/or certain of his family
    members and/or their exclusively owned entities (collectively,
    the "Paul Allen Group") ceasing to have the power,
    directly or indirectly, to vote at least 35% of the ordinary
    voting power of Charter Operating,
(vi) the consummation of any transaction
    resulting in any person or group (other than the Paul Allen
    Group) having power, directly or indirectly, to vote more than
    35% of the ordinary voting power of Charter Operating, unless
    the Paul Allen Group holds a greater share of ordinary voting
    power of Charter Operating,
(vii) certain of Charter Operating's
    indirect or direct parent companies having indebtedness in
    excess of $500 million aggregate principal amount which
    remains undefeased three months prior to the final maturity of
    such indebtedness, and
(viii) Charter Operating ceasing to be a
    wholly-owned direct subsidiary of CCO Holdings, except in
    certain very limited circumstances.
Outstanding Notes
Charter Communications, Inc.
    Notes
Charter 4.75% Convertible Senior Notes due
    2006
In May 2001, Charter issued
4.75% convertible senior notes with a total principal
amount at maturity of $633 million. As of June 30,
2005, there was $25 million in total principal amount of
these notes outstanding. The 4.75% convertible notes rank
equally with any of our future unsubordinated and unsecured
indebtedness, but are structurally subordinated to all existing
and future indebtedness and other liabilities of our
subsidiaries.
The 4.75% convertible notes are convertible at
the option of the holder into shares of Class A common
stock at a conversion rate of 38.0952 shares per $1,000
principal amount of notes, which is equivalent to a price of
$26.25 per share, subject to certain adjustments.
Specifically, the adjustments include anti-dilutive provisions,
which automatically occur based on the occurrence of specified
events to provide protection rights to holders of the notes.
Additionally, Charter may adjust the conversion ratio under
certain circumstances when deemed appropriate. These notes are
redeemable at our option at amounts decreasing from 101.9% to
100% of the principal amount, plus accrued and unpaid interest
beginning on June 4, 2004, to the date of redemption.
Interest is payable semiannually on December 1 and
June 1, beginning December 1, 2001, until maturity on
June 1, 2006.
Upon a change of control, subject to certain
conditions and restrictions, Charter may be required to
repurchase the notes, in whole or in part, at 100% of their
principal amount plus accrued interest at the repurchase date.
Charter 5.875% Convertible Senior Notes due
    2009
In November 2004, Charter issued 5.875%
convertible senior notes due 2009 with a total original
principal amount of $862.5 million. The 5.875% convertible
senior notes are unsecured (except with respect to the
collateral as described below) and rank equally with our
existing and future unsubordinated and unsecured indebtedness
(except with respect to the collateral described below), but are
structurally subordinated to all existing and future
indebtedness and other liabilities of our subsidiaries. Interest
is payable semi-annually in arrears.
The 5.875% convertible senior notes are
convertible at any time at the option of the holder into shares
of Class A common stock at an initial conversion rate of
413.2231 shares per $1,000 principal amount of notes, which is
equivalent to a conversion price of approximately $2.42 per
share, subject to certain
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adjustments. Specifically, the adjustments
include anti-dilutive provisions, which cause adjustments to
occur automatically based on the occurrence of specified events
to provide protection rights to holders of the notes. The
conversion rate may also be increased (but not to exceed 462
shares per $1,000 principal amount of notes) upon a specified
change of control transaction. Additionally, Charter may elect
to increase the conversion rate under certain circumstances when
deemed appropriate and subject to applicable limitations of the
NASDAQ stock market. Holders who convert their notes prior to
November 16, 2007 will receive an early conversion make
whole amount in respect of their notes based on a proportional
share of the portfolio of pledged securities described below,
with specified adjustments.
No holder of notes will be entitled to receive
shares of our Class A common stock on conversion to the
extent that receipt of the shares would cause the converting
holder to become, directly or indirectly, a "beneficial
holder" (within the meaning of Section 13(d) of the
Exchange Act and the rules and regulations promulgated
thereunder) of more than 4.9% of the outstanding shares of our
Class A common stock if such conversion would take place
prior to November 16, 2008, or more than 9.9% thereafter.
If a holder tenders a note for conversion, we may
direct that holder (unless we have called those notes for
redemption) to a financial institution designated by us to
conduct a transaction with that institution, on substantially
the same terms that the holder would have received on
conversion. But if any such financial institution does not
accept such notes or does not deliver the required conversion
consideration, we remain obligated to convert the notes.
Charter Holdco used a portion of the proceeds
from the sale of the notes to purchase a portfolio of
U.S. government securities in an amount which we believe
will be sufficient to make the first six interest payments on
the notes. These government securities were pledged to us as
security for a mirror note issued by Charter Holdco to Charter
and pledged to the trustee under the indenture governing the
notes as security for our obligations thereunder. We expect to
use such securities to fund the first six interest payments
under the notes. The pledged securities were valued at
$122 million at June 30, 2005. Any holder that
converts its notes prior to the third anniversary of the issue
date will be entitled to receive, in addition to the requisite
number of shares upon conversion, an interest make whole payment
equal to the cash proceeds from the sale by the trustee of that
portion of the remaining pledged U.S. government securities
which secure interest payments on the notes so converted,
subject to certain limitations with respect to notes that have
not been sold pursuant to an effective registration statement
under the Securities Act of 1933.
Upon a change of control and certain other
fundamental changes, subject to certain conditions and
restrictions, Charter may be required to repurchase the notes,
in whole or in part, at 100% of their principal amount plus
accrued interest at the repurchase date.
We were required to have effective a registration
statement by April 1, 2005. Such registration was not
declared effective by that date, and we incurred liquidated
damages from April 2, 2005 through July 17, 2005, the
day before the effective date of the registration statement.
These liquidated damages accrued at a rate of 0.25% per month of
the accreted principal amount of the convertible notes for the
first 60 days after April 1, 2005 and 0.50% per month
of the accreted principal amount of the convertible notes
thereafter. In April, May, June, July and August 2005, the
liquidated damage payments were made in cash.
We were required to use our reasonable best
efforts to cause a shelf registration statement for resale of
its 5.875% convertible senior notes and shares issued on
conversion of the notes by the holders of the notes to be
declared effective on or before April 21, 2005. Such
registration statement was not declared effective by that date
and we incurred liquidated damages at a rate from 0.25% per
annum of the accreted principal amount of the notes through
July 14, 2005, the day before to the effective date of the
registration statement. The liquidated damages were or will be
paid by Charter in cash.
Following the earlier of the sale of the notes
pursuant to an effective registration statement or the date two
years following the issue date, we may redeem the notes in whole
or in part for cash at any time at a redemption price equal to
100% of the aggregate principal amount plus accrued and unpaid
interest, deferred interest and liquidated damages, if any, but
only if for any 20 trading days in any 30 consecutive trading
day period the closing price has exceeded 180% of the conversion
price, if such 30 trading day
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period begins prior to November 16, 2007 or
150% of the conversion price, if such 30 trading period begins
thereafter. Holders who convert notes that we have called for
redemption shall receive, in addition to the early conversion
make whole amount, if applicable, the present value of the
interest on the notes converted that would have been payable for
the period from the later of November 17, 2007 and the
redemption date through the scheduled maturity date for the
notes, plus any accrued deferred interest.
Charter Communications Holdings, LLC
    Notes
March 1999 Charter Holdings Notes
The March 1999 Charter Holdings notes were issued
under three separate indentures, each dated as of March 17,
1999, among Charter Holdings and Charter Capital, as the
issuers, and BNY Midwest Trust Company, as trustee. Charter
Holdings and Charter Capital exchanged these notes for new notes
with substantially similar terms, except that the new notes are
registered under the Securities Act.
The March 1999 Charter Holdings notes are general
unsecured obligations of Charter Holdings and Charter Capital.
Cash interest on the March 1999 9.920% Charter Holdings notes
began to accrue on April 1, 2004.
The March 1999 Charter Holdings notes are senior
debt obligations of Charter Holdings and Charter Capital. They
rank equally with all other current and future unsubordinated
obligations of Charter Holdings and Charter Capital. They are
structurally subordinated to the obligations of Charter
Holdings' subsidiaries, including the CCH II notes,
the CCO Holdings notes, the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes.
Charter Holdings and Charter Capital will not
have the right to redeem the March 1999 8.250% Charter Holdings
notes prior to their maturity on April 1, 2007. Charter
Holdings and Charter Capital may redeem some or all of the March
1999 8.625% Charter Holdings notes and the March 1999 9.920%
Charter Holdings notes at any time, in each case, at a premium.
The optional redemption price declines to 100% of the principal
amount of March 1999 Charter Holdings notes redeemed, plus
accrued and unpaid interest, if any, for redemption on or after
April 1, 2007.
In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding March 1999 Charter Holdings
notes at 101% of their principal amount or accreted value, as
applicable, plus accrued and unpaid interest, if any.
The indentures governing the March 1999 Charter
Holdings notes contain restrictive covenants that limit certain
transactions or activities by Charter Holdings and its
restricted subsidiaries. See "— Summary of
Restrictive Covenants Under the Charter Holdings High-Yield
Notes." Substantially all of Charter Holdings' direct
and indirect subsidiaries are currently restricted subsidiaries.
January 2000 Charter Holdings Notes
The January 2000 Charter Holdings notes were
issued under three separate indentures, each dated as of
January 12, 2000, among Charter Holdings and Charter
Capital, as the issuers, and BNY Midwest Trust Company, as
trustee. In June 2000, Charter Holdings and Charter Capital
exchanged these notes for new notes with substantially similar
terms, except that the new notes are registered under the
Securities Act.
The January 2000 Charter Holdings notes are
general unsecured obligations of Charter Holdings and Charter
Capital. Cash interest on the January 2000 11.75% Charter
Holdings notes began to accrue on January 15, 2005.
The January 2000 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with all other current and future
unsubordinated obligations of Charter Holdings and Charter
Capital. They are structurally subordinated to the obligations
of Charter Holdings' subsidiaries, including the
CCH II notes, the CCO Holdings notes, the Renaissance
notes, the Charter Operating credit facilities and the Charter
Operating notes.
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Charter Holdings and Charter Capital will not
have the right to redeem the January 2000 10.00% Charter
Holdings notes prior to their maturity on April 1, 2009.
Charter Holdings and Charter Capital may redeem some or all of
the January 2000 10.25% Charter Holdings notes and the January
2000 11.75% Charter Holdings notes at any time, in each case, at
a premium. The optional redemption price declines to 100% of the
principal amount of the January 2000 Charter Holdings notes
redeemed, plus accrued and unpaid interest, if any, for
redemption on or after January 15, 2008.
In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2000 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
The indentures governing the January 2000 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 Charter
Holdings notes. See "— Summary of Restrictive
Covenants Under the Charter Holdings High-Yield Notes."
January 2001 Charter Holdings Notes
The January 2001 Charter Holdings notes were
issued under three separate indentures, each dated as of
January 10, 2001, each among Charter Holdings and Charter
Capital, as the issuers, and BNY Midwest Trust Company, as
trustee. In March 2001, Charter Holdings and Charter Capital
exchanged these notes for new notes, with substantially similar
terms, except that the new notes are registered under the
Securities Act.
The January 2001 Charter Holdings notes are
general unsecured obligations of Charter Holdings and Charter
Capital. Cash interest on the January 2001 13.500% Charter
Holdings notes will not accrue prior to January 15, 2006.
The January 2001 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with all other current and future
unsubordinated obligations of Charter Holdings and Charter
Capital. They are structurally subordinated to the obligations
of Charter Holdings' subsidiaries, including the
CCH II notes, the CCO Holdings notes, the Renaissance
notes, the Charter Operating credit facilities and the Charter
Operating notes.
Charter Holdings and Charter Capital will not
have the right to redeem the January 2001 10.750% Charter
Holdings notes prior to their maturity on October 1, 2009.
On or after January 15, 2006, Charter Holdings and Charter
Capital may redeem some or all of the January 2001 11.125%
Charter Holdings notes and the January 2001 13.500% Charter
Holdings notes at any time, in each case, at a premium. The
optional redemption price declines to 100% of the principal
amount of the January 2001 Charter Holdings notes redeemed, plus
accrued and unpaid interest, if any, for redemption on or after
January 15, 2009.
In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2001 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
The indentures governing the January 2001 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 Charter
Holdings notes. See "— Summary of Restrictive
Covenants Under the Charter Holdings High-Yield Notes."
May 2001 Charter Holdings Notes
The May 2001 Charter Holdings notes were issued
under three separate indentures, each among Charter Holdings and
Charter Capital, as the issuers, and BNY Midwest Trust Company,
as trustee. In September 2001, Charter Holdings and Charter
Capital exchanged substantially all of these notes for new notes
with substantially similar terms, except that the new notes are
registered under the Securities Act.
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The May 2001 Charter Holdings notes are general
unsecured obligations of Charter Holdings and Charter Capital.
Cash interest on the May 2001 11.750% Charter Holdings notes
will not accrue prior to May 15, 2006.
The May 2001 Charter Holdings notes are senior
debt obligations of Charter Holdings and Charter Capital. They
rank equally with all other current and future unsubordinated
obligations of Charter Holdings and Charter Capital. They are
structurally subordinated to the obligations of Charter
Holdings' subsidiaries, including the CCH II notes,
the CCO Holdings notes, the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes.
Charter Holdings and Charter Capital will not
have the right to redeem the May 2001 9.625% Charter Holdings
notes prior to their maturity on November 15, 2009. On or
after May 15, 2006, Charter Holdings and Charter Capital
may redeem some or all of the May 2001 10.000% Charter Holdings
notes and the May 2001 11.750% Charter Holdings notes at any
time, in each case, at a premium. The optional redemption price
declines to 100% of the principal amount of the May 2001 Charter
Holdings notes redeemed, plus accrued and unpaid interest, if
any, for redemption on or after May 15, 2009.
In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding May 2001 Charter Holdings notes
at 101% of their total principal amount or accreted value, as
applicable, plus accrued and unpaid interest, if any.
The indentures governing the May 2001 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 Charter
Holdings notes. See "— Summary of Restrictive
Covenants Under the Charter Holdings High-Yield Notes."
January 2002 Charter Holdings Notes
The January 2002 Charter Holdings notes were
issued under three separate indentures, each among Charter
Holdings and Charter Capital, as the issuers, and BNY Midwest
Trust Company, as trustee, two of which were supplements to the
indentures for the May 2001 Charter Holdings notes. In July
2002, Charter Holdings and Charter Capital exchanged
substantially all of these notes for new notes, with
substantially similar terms, except that the new notes are
registered under the Securities Act.
The January 2002 Charter Holdings notes are
general unsecured obligations of Charter Holdings and Charter
Capital. Cash interest on the January 2002 12.125% Charter
Holdings notes will not accrue prior to January 15, 2007.
The January 2002 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with the current and future unsecured and
unsubordinated debt of Charter Holdings and Charter Capital.
They are structurally subordinated to the obligations of Charter
Holdings' subsidiaries, including the CCH II notes,
the CCO Holdings notes, the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes.
The Charter Holdings 12.125% senior discount
notes are redeemable at the option of the issuers at amounts
decreasing from 106.063% to 100% of accreted value beginning
January 15, 2007.
In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2002 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
The indentures governing the January 2002 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 Charter
Holdings notes. See "— Summary of Restrictive
Covenants Under the Charter Holdings High-Yield Notes."
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Summary of Restrictive Covenants Under the
    Charter Holdings High-Yield Notes
The limitations on incurrence of debt and
issuance of preferred stock contained in Charter Holdings'
indentures permit Charter Holdings and its subsidiaries to incur
additional debt or issue preferred stock, so long as there is no
default under the Charter Holdings indentures. These limitations
restrict the incurrence of debt unless, after giving pro forma
effect to the incurrence, the Charter Holdings Leverage Ratio
would be below 8.75 to 1.0. In addition, regardless of whether
the leverage ratio could be met, so long as no default exists or
would result from the incurrence or issuance, Charter Holdings
and its restricted subsidiaries are permitted to issue:
•
up to $3.5 billion of debt under credit
    facilities,
•
up to $75 million of debt incurred to
    finance the purchase or capital lease of new assets,
•
up to $300 million of additional debt for
    any purpose,
•
additional debt in an amount equal to 200% of new
    cash equity proceeds received by Charter Holdings and its
    restricted subsidiaries since March 1999, the date of our first
    indenture, and not allocated for restricted payments or
    permitted investments, and
•
other items of indebtedness for specific purposes
    such as intercompany debt, refinancing of existing debt, and
    interest rate swaps to provide protection against fluctuation in
    interest rates.
Indebtedness under a single facility or agreement
may be incurred in part under one of the categories listed above
and in part under another. Accordingly, indebtedness under our
credit facilities is incurred under a combination of the
categories of permitted indebtedness listed above.
The restricted subsidiaries of Charter Holdings
are generally not permitted to issue debt securities
contractually subordinated in right of payment to other debt of
the issuing subsidiary or preferred stock, in either case in any
public or Rule 144A offering.
The Charter Holdings indentures permit Charter
Holdings and its restricted subsidiaries to incur debt under one
category, and later reclassify that debt into another category.
The Charter Operating credit facilities generally impose more
restrictive limitations on incurring new debt than Charter
Holdings' indentures, so our subsidiaries that are subject
to the Charter Operating credit facilities may not be permitted
to utilize the full debt incurrence that would otherwise be
available under the Charter Holdings indenture covenants.
Generally, under Charter Holdings'
high-yield indentures:
•
Charter Holdings and its restricted subsidiaries
    are generally permitted to pay dividends on equity interests,
    repurchase interests, or make other specified restricted
    payments only if, after giving pro forma effect to the
    transaction, the Charter Holdings Leverage Ratio would be below
    8.75 to 1.0 and if no default exists or would exist as a
    consequence of such incurrence. If those conditions are met,
    restricted payments in a total amount of up to 100% of Charter
    Holdings' consolidated EBITDA, as defined, minus 1.2 times
    its consolidated interest expense, plus 100% of new cash and
    non-cash equity proceeds received by Charter Holdings and not
    allocated to the debt incurrence covenant or to permitted
    investments, all cumulatively from March 1999, the date of the
    first Charter Holdings indenture, plus $100 million.
In addition, Charter Holdings may make
distributions or restricted payments, so long as no default
exists or would be caused by transactions:
•
to repurchase management equity interests in
    amounts not to exceed $10 million per fiscal year,
•
regardless of the existence of any default, to
    pay pass-through tax liabilities in respect of ownership of
    equity interests in Charter Holdings or its restricted
    subsidiaries, or
•
to make other specified restricted payments
    including merger fees up to 1.25% of the transaction value,
    repurchases using concurrent new issuances, and certain
    dividends on existing subsidiary preferred equity interests.
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Charter Holdings and its restricted subsidiaries
may not make investments except permitted investments if there
is a default under the indentures or if, after giving effect to
the transaction, the Charter Holdings Leverage Ratio would be
above 8.75 to 1.0.
Permitted investments include:
•
investments by Charter Holdings in restricted
    subsidiaries or by restricted subsidiaries in Charter Holdings,
•
investments in productive assets (including
    through equity investments) aggregating up to $150 million
    since March 1999,
•
investments aggregating up to 100% of new cash
    equity proceeds received by Charter Holdings since March 1999
    and not allocated to the debt incurrence or restricted payments
    covenant, and
•
other investments aggregating up to
    $50 million since March 1999.
Charter Holdings is not permitted to grant liens
on its assets other than specified permitted liens. Permitted
liens include liens securing debt and other obligations incurred
under our subsidiaries' credit facilities, liens securing
the purchase price of new assets, liens securing indebtedness of
up to $50 million and other specified liens incurred in the
ordinary course of business. The lien covenant does not restrict
liens on assets of subsidiaries of Charter Holdings.
Charter Holdings and Charter Capital, its
co-issuer, are generally not permitted to sell all or
substantially all of their assets or merge with or into other
companies unless their leverage ratio after any such transaction
would be no greater than their leverage ratio immediately prior
to the transaction, or unless after giving effect to the
transaction, the Charter Holdings Leverage Ratio would be below
8.75 to 1.0, no default exists, and the surviving entity is a
U.S. entity that assumes the Charter Holdings notes.
Charter Holdings and its restricted subsidiaries
may generally not otherwise sell assets or, in the case of
restricted subsidiaries, issue equity interests, unless they
receive consideration at least equal to the fair market value of
the assets or equity interests, consisting of at least 75% in
cash, assumption of liabilities, securities converted into cash
within 60 days or productive assets. Charter Holdings and
its restricted subsidiaries are then required within
365 days after any asset sale either to commit to use the
net cash proceeds over a specified threshold to acquire assets,
including current assets, used or useful in their businesses or
use the net cash proceeds to repay debt, or to offer to
repurchase the Charter Holdings notes with any remaining
proceeds.
Charter Holdings and its restricted subsidiaries
may generally not engage in sale and leaseback transactions
unless, at the time of the transaction, Charter Holdings could
have incurred secured indebtedness in an amount equal to the
present value of the net rental payments to be made under the
lease, and the sale of the assets and application of proceeds is
permitted by the covenant restricting asset sales.
Charter Holdings' restricted subsidiaries
may generally not enter into restrictions on their ability to
make dividends or distributions or transfer assets to Charter
Holdings on terms that are materially more restrictive than
those governing their debt, lien, asset sale, lease and similar
agreements existing when they entered into the indentures,
unless those restrictions are on customary terms that will not
materially impair Charter Holdings' ability to repay the
high-yield notes.
The restricted subsidiaries of Charter Holdings
are generally not permitted to guarantee or pledge assets to
secure debt of Charter Holdings, unless the guaranteeing
subsidiary issues a guarantee of the notes of comparable
priority and tenor, and waives any rights of reimbursement,
indemnity or subrogation arising from the guarantee transaction
for at least one year.
The indentures also restrict the ability of
Charter Holdings and its restricted subsidiaries to enter into
certain transactions with affiliates involving consideration in
excess of $15 million without a determination by the board
of directors of Charter Holdings that the transaction is on
terms no less favorable than arms length, or transactions with
affiliates involving over $50 million without receiving an
independent opinion as to the fairness of the transaction
addressed to the holders of the Charter Holdings notes.
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CCH I Holdings, LLC
    Notes
In September 2005, CIH and CCH I Holdings
Capital Corp. jointly issued $2.5 billion total principal
amount of 9.92% to 13.50% senior accreting notes due 2014 and
2015 in exchange for an aggregate amount of $2.4 billion of
Charter Holdings notes due 2011 and 2012, spread over six series
of notes and with varying interest rates as set forth in the
table under "Description of Certain Indebtedness." The
notes are guaranteed by Charter Holdings.
The CIH notes are senior debt obligations of
CIH and CCH I Holdings Capital Corp. They rank equally with
all other current and future unsecured, unsubordinated
obligations of CIH and CCH I Holdings Capital Corp. The
CIH notes are structurally subordinated to all obligations
of subsidiaries of CIH, including
the CCH I notes, the CCH II notes,
the CCO Holdings notes, the Renaissance notes and the
Charter Operating notes.
The CIH notes may not be redeemed at the
option of the issuers until September 30, 2007. On or after
such date, the CIH notes may be redeemed in accordance with the
following table.
Note Series
Redemption Dates
Percentage of Principal
11.125%
September 30, 2007 - January 14, 2008
103.708
%
January 15, 2008 - January 14, 2009
101.854
%
Thereafter
100.0%
9.92%
September 30, 2007 - Thereafter
100.0%
10.0%
September 30, 2007 - May 14, 2008
103.333
%
May 15, 2008 - May 14, 2009
101.667
%
Thereafter
100.0%
11.75%
September 30, 2007 - May 14, 2008
103.917
%
May 15, 2008 - May 14, 2009
101.958
%
Thereafter
100.0%
13.5%
September 30, 2007 - January 14, 2008
104.5%
January 15, 2008 - January 14, 2009
102.25%
Thereafter
100.0%
12.125%
September 30, 2007 - January 14, 2008
106.063
%
January 15, 2008 - January 14, 2009
104.042
%
January 15, 2009 - January 14, 2010
102.021
%
Thereafter
100.0%
In the event that a specified change of control
event happens, CIH and CCH I Holdings Capital Corp. must
offer to repurchase any outstanding notes at a price equal to
the sum of the accreted value of the notes plus accrued and
unpaid interest plus a premium that varies over time.
The indenture governing the CIH notes
contains restrictive covenants similar to those contained in the
indenture governing the Charter Holdings notes with the
following exceptions:
•
The debt incurrence covenant permits up to
    9.75 billion (rather than 3.5 billion) of debt under
    credit facilities (less the amount of net proceeds of asset
    sales applied to repay such debt as required by the asset sale
    covenant).
•
CIH and its restricted subsidiaries are generally
    permitted to pay dividends on equity interests, repurchase
    interests, or make other specified restricted payments only if,
    after giving pro forma effect to the transaction, the CIH
    Leverage Ratio would be below 8.75 to 1.0 and if no default
    exists or would exist as a consequence of such transaction. If
    those conditions are met, restricted payments in a total amount
    of up to the sum of (1) the greater of
    (a) $500 million or (b) 100% of CIH's
    consolidated EBITDA, as defined, minus 1.2 times its
    consolidated interest expense each for the period from
    September 28, 2005 to the end of CIH's most recently
    ended full fiscal quarter for which internal financial
    statements are available, plus (2) 100% of new cash and
    non-cash equity proceeds received by CIH and not allocated to
    the debt incurrence covenant or to permitted investments, all
    cumulatively from March 1999, the date of the first Charter
    Holdings indenture.
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•
Instead of the $150 million and
    $50 million permitted investment baskets described above,
    there is a $750 million permitted investment basket.
CCH I, LLC Notes
In September 2005, CCH I and CCH I
Capital Corp. jointly issued $3.5 billion total principal
amount of 11% senior secured notes due October 2015 in exchange
for an aggregate amount of $4.2 billion of certain Charter
Holdings notes. The notes are guaranteed by Charter Holdings and
are secured by a pledge of 100% of the equity interest of
CCH I's wholly owned direct subsidiary, CCH II.
Such pledge is subject to significant limitations as described
in the related pledge agreement. Interest on the
CCH I notes accrues at 11% per annum and is
payable semi-annually in arrears on each April 1 and
October 1, commencing on April 1, 2006.
The CCH I notes are senior debt obligations
of CCH I and CCH I Capital Corp. To the extent of the
value of the collateral, they rank senior to all of
CCH I's future unsecured senior indebtedness. The
CCH I notes are structurally subordinated to all
obligations of subsidiaries of CCH I, including
the CCH II notes, CCO Holdings notes, the
Renaissance notes and the Charter Operating notes.
CCH I and CCH I Capital Corp. may,
prior to October 1, 2008 in the event of a qualified equity
offering providing sufficient proceeds, redeem up to 35% of the
aggregate principal amount of the CCH I notes at a
redemption price of 111% of the principal amount plus accrued
and unpaid interest. Aside from this provision, CCH I and
CCH I Capital Corp. may not redeem at their option any of
the notes prior to October 1, 2010. On or after
October 1, 2010, CCH I and CCH I Capital Corp.
may redeem, in whole or in part, CCH I notes at the
applicable prices (expressed as percentages of principal amount)
listed below, plus accrued and unpaid interest if redeemed
during the twelve month period beginning on October 1 of
the years listed below.
Year
Percentage
2010
105.5%
2011
102.75%
2012
101.375%
2013 and thereafter
100.0%
If a change of control occurs, each holder of
the CCH I notes will have the right to require
the repurchase of all or any part of that holder's
CCH I notes at 101% of the principal amount plus accrued
and unpaid interest.
The indenture governing the CCH I notes
contains restrictive covenants that limit certain transactions
or activities by CCH I and its restricted subsidiaries,
including the covenants summarized below. Substantially all of
CCH I's direct and indirect subsidiaries are currently
restricted subsidiaries.
The covenant in the indenture governing the
CCH I notes that restricts incurrence of debt and issuance
of preferred stock permits CCH I and its subsidiaries to
incur or issue specified amounts of debt or preferred stock, if,
after giving pro forma effect to the incurrence or issuance,
CCH I could meet a leverage ratio (ratio of consolidated
debt to four times EBITDA, as defined, from the most recent
fiscal quarter for which internal financial reports are
available) of 7.5 to 1.0.
In addition, regardless of whether the leverage
ratio could be met, so long as no default exists or would result
from the incurrence or issuance, CCH I and its restricted
subsidiaries are permitted to incur or issue:
•
up to $9.75 billion of debt under credit
    facilities (less the amount of net proceeds of asset sales
    applied to repay such debt as required by the asset sale
    covenant);
•
up to $75 million of debt incurred to
    finance the purchase or capital lease of new assets;
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•
up to $300 million of additional debt for
    any purpose; and
•
other items of indebtedness for specific purposes
    such as intercompany debt, refinancing of existing debt, and
    interest rate swaps to provide protection against fluctuation in
    interest rates.
The restricted subsidiaries of CCH I are
generally not permitted to issue debt securities contractually
subordinated to other debt of the issuing subsidiary or
preferred stock, in either case in any public offering or
private placement.
The CCH I indenture generally permits
CCH I and its restricted subsidiaries to incur debt under
one category, and later reclassify that debt into another
category. The Charter Operating credit facilities generally
impose more restrictive limitations on incurring new debt than
those in the CCH I indenture, so our subsidiaries that are
subject to credit facilities are not permitted to utilize the
full debt incurrence that would otherwise be available under the
CCH I indenture covenants.
Generally, under the CCH I indenture:
•
CCH I and its restricted subsidiaries are
    permitted to pay dividends on equity interests, repurchase
    interests, or make other specified restricted payments only if
    CCH I can incur $1.00 of new debt under the leverage ratio
    test, which requires that CCH I meet a 7.5 to 1.0 leverage
    ratio after giving effect to the transaction, and if no default
    exists or would exist as a consequence of such incurrence. If
    those conditions are met, restricted payments are permitted in a
    total amount of up to 100% of CCH I's consolidated
    EBITDA, as defined, for the period from September 28, 2005
    to the end of CCH I's most recently ended full fiscal
    quarter for which financial statements are available minus 1.3
    times its consolidated interest expense for such period, plus
    100% of new cash and appraised non-cash equity proceeds received
    by CCH I and not allocated to certain investments, from and
    after September 28, 2005, plus $100 million.
In addition, CCH I and its restricted
subsidiaries may make distributions or restricted payments, so
long as no default exists or would be caused by the transaction:
•
to repurchase management equity interests in
    amounts not to exceed $10 million per fiscal year;
•
to pay, regardless of the existence of any
    default, pass-through tax liabilities in respect of ownership of
    equity interests in CCH I or its restricted subsidiaries;
•
to enable certain of its parents to pay interest
    on certain of their indebtedness;
•
to enable certain of its parents to purchase,
    redeem or refinance certain indebtedness, so long as CCH I
    could incur $1.00 of indebtedness under the 7.5 to 1.0 leverage
    ratio test referred to above; or
•
to make other specified restricted payments
    including merger fees up to 1.25% of the transaction value,
    repurchases using concurrent new issuances, and certain
    dividends on existing subsidiary preferred equity interests.
The indenture governing the CCH I notes
restricts CCH I and its restricted subsidiaries from making
investments, except specified permitted investments, or creating
new unrestricted subsidiaries, if there is a default under the
indenture or if CCH I could not incur $1.00 of new debt
under the 7.5 to 1.0 leverage ratio test described above after
giving effect to the transaction.
Permitted investments include:
•
investments by CCH I and its restricted
    subsidiaries in CCH I and in other restricted subsidiaries,
    or entities that become restricted subsidiaries as a result of
    the investment,
•
investments aggregating up to 100% of new cash
    equity proceeds received by CCH I since September 28,
    2005 to the extent the proceeds have not been allocated to the
    restricted payments covenant described above,
•
other investments up to $750 million
    outstanding at any time, and
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•
certain specified additional investments, such as
    investments in customers and suppliers in the ordinary course of
    business and investments received in connection with permitted
    asset sales.
CCH I is not permitted to grant liens on its
assets other than specified permitted liens. Permitted liens
include liens securing the purchase price of new assets, liens
securing obligations up to $50 million and other specified
liens. The lien covenant does not restrict liens on assets of
subsidiaries of CCH I.
CCH I and CCH I Capital Corp., its
co-issuer, are generally not permitted to sell all or
substantially all of their assets or merge with or into other
companies unless their leverage ratio after any such transaction
would be no greater than their leverage ratio immediately prior
to the transaction, or unless CCH I and its subsidiaries
could incur $1.00 of new debt under the 7.50 to 1.0 leverage
ratio test described above after giving effect to the
transaction, no default exists, and the surviving entity is a
U.S. entity that assumes the CCH I notes.
CCH I and its restricted subsidiaries may
generally not otherwise sell assets or, in the case of
restricted subsidiaries, issue equity interests, unless they
receive consideration at least equal to the fair market value of
the assets or equity interests, consisting of at least 75% in
cash, assumption of liabilities, securities converted into cash
within 60 days or productive assets. CCH I and its
restricted subsidiaries are then required within 365 days
after any asset sale either to commit to use the net cash
proceeds over a specified threshold to acquire assets, including
current assets, used or useful in their businesses or use the
net cash proceeds to repay certain debt, or to offer to
repurchase the CCH I notes with any remaining proceeds.
CCH I and its restricted subsidiaries may
generally not engage in sale and leaseback transactions unless,
at the time of the transaction, CCH I could have incurred
secured indebtedness in an amount equal to the present value of
the net rental payments to be made under the lease, and the sale
of the assets and application of proceeds is permitted by the
covenant restricting asset sales.
With certain exceptions, CCH I's
restricted subsidiaries may generally not enter into
restrictions on their ability to make dividends or distributions
or transfer assets to CCH I.
The restricted subsidiaries of CCH I are
generally not permitted to guarantee or pledge assets to secure
other debt of CCH I, except in respect of credit facilities
unless the guarantying subsidiary issues a guarantee of the
CCH I notes and waives any rights of reimbursement,
indemnity or subrogation arising from the guarantee transaction
for at least one year.
The indenture also restricts the ability of
CCH I and its restricted subsidiaries to enter into certain
transactions with affiliates involving consideration in excess
of $15 million without a determination by the board of
directors that the transaction is on terms no less favorable
than arms-length, or transactions with affiliates involving over
$50 million without receiving an independent opinion as to
the fairness of the transaction to the holders of the
CCH I notes.
CCH II, LLC Notes
In September 2003, CCH II and CCH II
Capital Corp. jointly issued approximately $1.6 billion
total principal amount of 10.25% senior notes due 2010. The
CCH II notes are general unsecured obligations of
CCH II and CCH II Capital Corp. They rank equally with
all other current or future unsubordinated obligations of
CCH II and CCH II Capital Corp. The CCH II notes
are structurally subordinated to all obligations of subsidiaries
of CCH II, including the CCO Holdings notes, the
Renaissance notes, the Charter Operating credit facilities and
the Charter Operating notes.
Interest on the CCH II notes accrues at
10.25% per annum and is payable semi-annually in arrears on
each March 15 and September 15, commencing on
March 15, 2004.
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At any time prior to September 15, 2006, the
issuers of the CCH II notes may redeem up to 35% of the
total principal amount of the CCH II notes on a pro rata
basis at a redemption price equal to 110.25% of the principal
amount of CCH II notes redeemed, plus any accrued and
unpaid interest.
On or after September 15, 2008, the issuers
of the CCH II notes may redeem all or a part of the notes
at a redemption price that declines ratably from the initial
redemption price of 105.125% to a redemption price on or after
September 15, 2009 of 100.0% of the principal amount of the
CCH II notes redeemed, plus, in each case, any accrued and
unpaid interest.
In the event of specified change of control
events, CCH II must offer to purchase the outstanding
CCH II notes from the holders at a purchase price equal to
101% of the total principal amount of the notes, plus any
accrued and unpaid interest.
The indenture governing the CCH II notes
contains restrictive covenants that limit certain transactions
or activities by CCH II and its restricted subsidiaries,
including the covenants summarized below. Substantially all of
CCH II's direct and indirect subsidiaries are
currently restricted subsidiaries.
The covenant in the indenture governing the
CCH II notes that restricts incurrence of debt and issuance
of preferred stock permits CCH II and its subsidiaries to
incur or issue specified amounts of debt or preferred stock, if,
after giving effect to the incurrence, CCH II could meet a
leverage ratio (ratio of consolidated debt to four times EBITDA
from the most recent fiscal quarter for which internal financial
reports are available) of 5.5 to 1.0.
In addition, regardless of whether the leverage
ratio could be met, so long as no default exists or would result
from the incurrence or issuance, CCH II and its restricted
subsidiaries are permitted to incur or issue:
•
up to $9.75 billion of debt under credit
    facilities, including debt under credit facilities outstanding
    on the issue date of the CCH II notes,
•
up to $75 million of debt incurred to
    finance the purchase or capital lease of new assets,
•
up to $300 million of additional debt for
    any purpose, and
•
other items of indebtedness for specific purposes
    such as intercompany debt, refinancing of existing debt, and
    interest rate swaps to provide protection against fluctuation in
    interest rates.
The restricted subsidiaries of CCH II are
generally not permitted to issue debt securities contractually
subordinated to other debt of the issuing subsidiary or
preferred stock, in either case in any public or Rule 144A
offering.
The CCH II indenture permits CCH II and
its restricted subsidiaries to incur debt under one category,
and later reclassify that debt into another category. Our and
our subsidiaries' credit agreements generally impose more
restrictive limitations on incurring new debt than the
CCH II indenture, so we and our subsidiaries that are
subject to credit agreements are not permitted to utilize the
full debt incurrence that would otherwise be available under the
CCH II indenture covenants.
Generally, under the CCH II indenture,
CCH II and its restricted subsidiaries are permitted to pay
dividends on equity interests, repurchase interests, or make
other specified restricted payments only if CCH II can
incur $1.00 of new debt under the leverage ratio test, which
requires that CCH II meet a 5.5 to 1.0 leverage ratio after
giving effect to the transaction, and if no default exists or
would exist as a consequence of such incurrence. If those
conditions are met, restricted payments in a total amount of up
to 100% of CCH II's consolidated EBITDA, as defined, minus
1.3 times its consolidated interest expense, plus 100% of new
cash and non-cash equity proceeds received by CCH II and
not allocated to the debt incurrence covenant, all cumulatively
from the fiscal quarter commenced July 1, 2003, plus
$100 million.
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In addition, CCH II may make distributions
or restricted payments, so long as no default exists or would be
caused by transactions:
•
to repurchase management equity interests in
    amounts not to exceed $10 million per fiscal year;
•
regardless of the existence of any default, to
    pay pass-through tax liabilities in respect of ownership of
    equity interests in CCH II or its restricted subsidiaries;
•
regardless of the existence of any default, to
    pay interest when due on Charter Holdings notes, to pay, so long
    as there is no default, interest on the convertible senior notes
    (including the notes) of Charter, to purchase, redeem or
    refinance, so long as CCH II could incur $1.00 of
    indebtedness under the 5.5 to 1.0 leverage ratio test referred
    to above and there is no default, Charter Holdings notes,
    Charter notes, and other direct or indirect parent company notes
    (including the CCH II notes);
•
to make distributions in connection with the
    private exchanges pursuant to which the CCH II notes were
    issued; and
•
other specified restricted payments including
    merger fees up to 1.25% of the transaction value, repurchases
    using concurrent new issuances, and certain dividends on
    existing subsidiary preferred equity interests.
The indenture governing the CCH II notes
restricts CCH II and its restricted subsidiaries from
making investments, except specified permitted investments, or
creating new unrestricted subsidiaries, if there is a default
under the indenture or if CCH II could not incur $1.00 of
new debt under the 5.5 to 1.0 leverage ratio test
described above after giving effect to the transaction.
Permitted investments include:
•
investments by CCH II and its restricted
    subsidiaries in CCH II and in other restricted
    subsidiaries, or entities that become restricted subsidiaries as
    a result of the investment;
•
investments aggregating up to 100% of new cash
    equity proceeds received by CCH II since September 23,
    2003 to the extent the proceeds have not been allocated to the
    restricted payments covenant described above;
•
investments resulting from the private exchanges
    pursuant to which the CCH II notes were issued;
•
other investments up to $750 million
    outstanding at any time; and
•
certain specified additional investments, such as
    investments in customers and suppliers in the ordinary course of
    business and investments received in connection with permitted
    asset sales.
CCH II is not permitted to grant liens on
its assets other than specified permitted liens. Permitted liens
include liens securing debt and other obligations incurred under
our subsidiaries' credit facilities, liens securing the
purchase price of new assets, liens securing indebtedness up to
$50 million and other specified liens incurred in the
ordinary course of business. The lien covenant does not restrict
liens on assets of subsidiaries of CCH II.
CCO Holdings, LLC Notes
8
3
/
4
%
    Senior Notes due 2013
In November 2003, CCO Holdings and CCO
Holdings Capital Corp. jointly issued $500 million total
principal amount of
8
3
/
4
%
senior notes due 2013. The CCO Holdings notes are general
unsecured obligations of CCO Holdings and CCO Holdings Capital
Corp. They rank equally with all other current or future
unsubordinated obligations of CCO Holdings and CCO Holdings
Capital Corp. The CCO Holdings notes are structurally
subordinated to all obligations of CCO Holdings'
subsidiaries, including the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes.
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Interest on the CCO Holdings senior notes accrues
at
8
3
/
4
%
per year and is payable semi-annually in arrears on each
May 15 and November 15.
At any time prior to November 15, 2006, the
issuers of the CCO Holdings senior notes may redeem up to 35% of
the total principal amount of the CCO Holdings senior notes to
the extent of public equity proceeds they have received on a pro
rata basis at a redemption price equal to 108.75% of the
principal amount of CCO Holdings senior notes redeemed, plus any
accrued and unpaid interest.
On or after November 15, 2008, the issuers
of the CCO Holdings senior notes may redeem all or a part of the
notes at a redemption price that declines ratably from the
initial redemption price of 104.375% to a redemption price on or
after November 15, 2011 of 100.0% of the principal amount
of the CCO Holdings senior notes redeemed, plus, in each case,
any accrued and unpaid interest.
Senior Floating Rate Notes Due 2010
In December 2004, CCO Holdings and CCO
Holdings Capital Corp. jointly issued $550 million total
principal amount of senior floating rate notes due 2010. These
notes are general unsecured obligations of CCO Holdings and CCO
Holdings Capital Corp. They rank equally with all other current
or future unsubordinated obligations of CCO Holdings and CCO
Holdings Capital Corp. The CCO Holdings notes are structurally
subordinated to all obligations of CCO Holdings'
subsidiaries, including the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes. In
August 2005, CCO Holdings and CCO Holdings Capital Corp.
exchanged these notes for new notes with substantially similar
terms, except the new senior floating rate notes are registered
under the Securities Act.
The CCO Holdings senior floating rate notes have
an annual interest rate of LIBOR plus 4.125%, reset and payable
quarterly.
At any time prior to December 15, 2006, the
issuers of the senior floating rate notes may redeem up to 35%
of the notes in an amount not to exceed the amount of proceeds
of one or more public equity offerings at a redemption price
equal to 100% of the principal amount, plus a premium equal to
the interest rate per annum applicable to the notes on the date
notice of redemption is given, plus accrued and unpaid interest,
if any, to the redemption date, provided that at least 65% of
the original aggregate principal amount of the notes issued
remains outstanding after the redemption.
The issuers of the senior floating rate notes may
redeem the notes in whole or in part at the issuers' option
from December 15, 2006 until December 14, 2007 for
102% of the principal amount, from December 15, 2007 until
December 14, 2008 for 101% of the principal amount and from
and after December 15, 2008, at par, in each case, plus
accrued and unpaid interest.
8 3/4% Senior Notes due 2013
In August 2005, CCO Holdings and CCO Holdings
Capital Corp. jointly issued $300 million total principal
amount of 8 3/4% senior notes due 2013. The CCO Holdings
notes are general unsecured obligations of CCO Holdings and CCO
Holdings Capital Corp. They rank equally with all other current
or future unsubordinated obligations of CCO Holdings and CCO
Holdings Capital Corp. The CCO Holdings notes are structurally
subordinated to all obligations of CCO Holdings'
subsidiaries, including the Renaissance notes, the Charter
Operating credit facilities and the Charter Operating notes.
Interest on the CCO Holdings senior notes accrues
at 8 3/4% per year and is payable semi-annually in arrears
on each May 15 and November 15.
At any time prior to November 15, 2006, the
issuers of the CCO Holdings senior notes may redeem up to 35% of
the total principal amount of the CCO Holdings senior notes to
the extent of public equity proceeds they have received on a pro
rata basis at a redemption price equal to 108.75% of the
principal amount of CCO Holdings senior notes redeemed, plus any
accrued and unpaid interest.
On or after November 15, 2008, the issuers
of the CCO Holdings senior notes may redeem all or a part of the
notes at a redemption price that declines ratably from the
initial redemption price of 104.375%
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to a redemption price on or after
November 15, 2011 of 100.0% of the principal amount of the
CCO Holdings senior notes redeemed, plus, in each case, any
accrued and unpaid interest.
Additional terms of the CCO Holdings Senior
    Notes and Senior Floating Rate Notes
The CCO Holdings notes described above are
general unsecured obligations of CCO Holdings and CCO Holdings
Capital Corp. They rank equally with all other current or future
unsubordinated obligations of CCO Holdings and CCO Holdings
Capital Corp. The CCO Holdings notes are structurally
subordinated to all obligations of subsidiaries of CCO Holdings,
including the Renaissance notes, the Charter Operating notes and
the Charter Operating credit facilities.
In the event of specified change of control
events, CCO Holdings must offer to purchase the outstanding CCO
Holdings senior notes from the holders at a purchase price equal
to 101% of the total principal amount of the notes, plus any
accrued and unpaid interest.
The indenture governing the CCO Holdings senior
notes contains restrictive covenants that limit certain
transactions or activities by CCO Holdings and its restricted
subsidiaries, including the covenants summarized below.
Substantially all of CCO Holdings' direct and indirect
subsidiaries are currently restricted subsidiaries.
The covenant in the indenture governing the CCO
Holdings senior notes that restricts incurrence of debt and
issuance of preferred stock permits CCO Holdings and its
subsidiaries to incur or issue specified amounts of debt or
preferred stock, if, after giving pro forma effect to the
incurrence or issuance, CCO Holdings could meet a leverage ratio
(ratio of consolidated debt to four times EBITDA, as defined,
from the most recent fiscal quarter for which internal financial
reports are available) of 4.5 to 1.0.
In addition, regardless of whether the leverage
ratio could be met, so long as no default exists or would result
from the incurrence or issuance, CCO Holdings and its restricted
subsidiaries are permitted to incur or issue:
•
up to $9.75 billion of debt under credit
    facilities, including debt under credit facilities outstanding
    on the issue date of the CCO Holdings senior notes;
•
up to $75 million of debt incurred to
    finance the purchase or capital lease of new assets;
•
up to $300 million of additional debt for
    any purpose; and
•
other items of indebtedness for specific purposes
    such as intercompany debt, refinancing of existing debt, and
    interest rate swaps to provide protection against fluctuation in
    interest rates.
The restricted subsidiaries of CCO Holdings are
generally not permitted to issue debt securities contractually
subordinated to other debt of the issuing subsidiary or
preferred stock, in either case in any public or Rule 144A
offering.
The CCO Holdings indenture permits CCO Holdings
and its restricted subsidiaries to incur debt under one
category, and later reclassify that debt into another category.
The Charter Operating credit facilities generally impose more
restrictive limitations on incurring new debt than CCO
Holdings' indenture, so our subsidiaries that are subject
to credit facilities are not permitted to utilize the full debt
incurrence that would otherwise be available under the CCO
Holdings indenture covenants.
Generally, under CCO Holdings' indenture:
•
CCO Holdings and its restricted subsidiaries are
    permitted to pay dividends on equity interests, repurchase
    interests, or make other specified restricted payments only if
    CCO Holdings can incur $1.00 of new debt under the leverage
    ratio test, which requires that CCO Holdings meet a 4.5 to 1.0
    leverage ratio after giving effect to the transaction, and if no
    default exists or would exist as a consequence of such
    incurrence. If those conditions are met, restricted payments are
    permitted in a total amount of up to 100% of CCO Holdings'
    consolidated EBITDA, as defined, minus 1.3 times its
    consolidated interest expense, plus 100% of new cash and
    appraised non-cash equity proceeds
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received by CCO Holdings and not allocated to the
    debt incurrence covenant, all cumulatively from the fiscal
    quarter commenced on October 1, 2003, plus
    $100 million.
In addition, CCO Holdings may make distributions
or restricted payments, so long as no default exists or would be
caused by the transaction:
•
to repurchase management equity interests in
    amounts not to exceed $10 million per fiscal year;
•
to pay, regardless of the existence of any
    default, pass-through tax liabilities in respect of ownership of
    equity interests in Charter Holdings or its restricted
    subsidiaries;
•
to pay, regardless of the existence of any
    default, interest when due on Charter Holdings notes and our
    notes;
•
to pay, so long as there is no default, interest
    on the Charter convertible notes;
•
to purchase, redeem or refinance Charter Holdings
    notes, CCH II notes, Charter notes, and other direct or
    indirect parent company notes, so long as CCO Holdings could
    incur $1.00 of indebtedness under the 4.5 to 1.0 leverage ratio
    test referred to above and there is no default; or
•
to make other specified restricted payments
    including merger fees up to 1.25% of the transaction value,
    repurchases using concurrent new issuances, and certain
    dividends on existing subsidiary preferred equity interests.
The indenture governing the CCO Holdings senior
notes restricts CCO Holdings and its restricted subsidiaries
from making investments, except specified permitted investments,
or creating new unrestricted subsidiaries, if there is a default
under the indenture or if CCO Holdings could not incur $1.00 of
new debt under the 4.5 to 1.0 leverage ratio test described
above after giving effect to the transaction.
Permitted investments include:
•
investments by CCO Holdings and its restricted
    subsidiaries in CCO Holdings and in other restricted
    subsidiaries, or entities that become restricted subsidiaries as
    a result of the investment,
•
investments aggregating up to 100% of new cash
    equity proceeds received by CCO Holdings since November 10,
    2003 to the extent the proceeds have not been allocated to the
    restricted payments covenant described above,
•
other investments up to $750 million
    outstanding at any time, and
•
certain specified additional investments, such as
    investments in customers and suppliers in the ordinary course of
    business and investments received in connection with permitted
    asset sales.
CCO Holdings is not permitted to grant liens on
its assets other than specified permitted liens. Permitted liens
include liens securing debt and other obligations incurred under
our subsidiaries' credit facilities, liens securing the
purchase price of new assets, liens securing indebtedness up to
$50 million and other specified liens incurred in the
ordinary course of business. The lien covenant does not restrict
liens on assets of subsidiaries of CCO Holdings.
CCO Holdings and CCO Holdings Capital, its
co-issuer, are generally not permitted to sell all or
substantially all of their assets or merge with or into other
companies unless their leverage ratio after any such transaction
would be no greater than their leverage ratio immediately prior
to the transaction, or unless CCO Holdings and its subsidiaries
could incur $1.00 of new debt under the 4.50 to 1.0 leverage
ratio test described above after giving effect to the
transaction, no default exists, and the surviving entity is a
U.S. entity that assumes the CCO Holdings senior notes.
CCO Holdings and its restricted subsidiaries may
generally not otherwise sell assets or, in the case of
restricted subsidiaries, issue equity interests, unless they
receive consideration at least equal to the fair market value of
the assets or equity interests, consisting of at least 75% in
cash, assumption of liabilities, securities converted into cash
within 60 days or productive assets. CCO Holdings and its
restricted subsidiaries are then required within 365 days
after any asset sale either to commit to use the net cash
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proceeds over a specified threshold to acquire
assets, including current assets, used or useful in their
businesses or use the net cash proceeds to repay debt, or to
offer to repurchase the CCO Holdings senior notes with any
remaining proceeds.
CCO Holdings and its restricted subsidiaries may
generally not engage in sale and leaseback transactions unless,
at the time of the transaction, CCO Holdings could have incurred
secured indebtedness in an amount equal to the present value of
the net rental payments to be made under the lease, and the sale
of the assets and application of proceeds is permitted by the
covenant restricting asset sales.
CCO Holdings' restricted subsidiaries may
generally not enter into restrictions on their ability to make
dividends or distributions or transfer assets to CCO Holdings on
terms that are materially more restrictive than those governing
their debt, lien, asset sale, lease and similar agreements
existing when they entered into the indenture, unless those
restrictions are on customary terms that will not materially
impair CCO Holdings' ability to repay its notes.
The restricted subsidiaries of CCO Holdings are
generally not permitted to guarantee or pledge assets to secure
debt of CCO Holdings, unless the guarantying subsidiary issues a
guarantee of the notes of comparable priority and tenor, and
waives any rights of reimbursement, indemnity or subrogation
arising from the guarantee transaction for at least one year.
The indenture also restricts the ability of CCO
Holdings and its restricted subsidiaries to enter into certain
transactions with affiliates involving consideration in excess
of $15 million without a determination by the board of
directors that the transaction is on terms no less favorable
than arms-length, or transactions with affiliates involving over
$50 million without receiving an independent opinion as to
the fairness of the transaction to the holders of the CCO
Holdings notes.
Charter Communications Operating, LLC
    Notes
On April 27, 2004, Charter Operating and
Charter Communications Operating Capital Corp. jointly issued
$1.1 billion of 8% senior second lien notes due 2012
and $400 million of
8
3
/
8
% senior
second lien notes due 2014, for total gross proceeds of
$1.5 billion.
The Charter Operating notes were sold in a
private transaction that was not subject to the registration
requirements of the Securities Act of 1933. The Charter
Operating notes are not expected to have the benefit of any
exchange or other registration rights, except in specified
limited circumstances.
In the first quarter of 2005, as a result of the
occurrence of the guarantee and pledge date (generally, upon the
Charter Holdings leverage ratio being below 8.75 to 1.0), CCO
Holdings and those subsidiaries of Charter Operating that are
currently guarantors of, or otherwise obligors with respect to,
indebtedness under the Charter Operating credit facilities and
related obligations provided guarantees of the Charter Operating
notes. The note guarantee of each such existing guarantor is,
and the note guarantee of any additional future subsidiary
guarantor will be:
•
a senior obligation of such guarantor;
•
structurally senior to the outstanding senior
    notes of CCO Holdings and CCO Holdings Capital Corp. (except in
    the case of CCO Holdings' note guarantee, which is
    structurally
pari passu
with such senior notes), the
    outstanding senior notes of CCH II and CCH II Capital
    Corp., the outstanding senior notes and senior discount notes of
    Charter Holdings, the outstanding convertible senior notes of
    Charter and any future indebtedness of parent companies of CCO
    Holdings (but subject to provisions in the Charter Operating
    indenture that permit interest and, subject to meeting the 4.25
    to 1.0 leverage ratio test, principal payments to be made
    thereon); and
•
senior in right of payment to any future
    subordinated indebtedness of such guarantor.
All the subsidiaries of Charter Operating (except
CCO NR Sub, LLC, and certain other subsidiaries that are not
deemed material and are designated as nonrecourse subsidiaries
under the Charter Operating credit
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facilities) are restricted subsidiaries of
Charter Operating under the Charter Operating notes.
Unrestricted subsidiaries generally will not be subject to the
restrictive covenants in the Charter Operating indenture.
In the event of specified change of control
events, Charter Operating must offer to purchase the Charter
Operating notes at a purchase price equal to 101% of the total
principal amount of the Charter Operating notes repurchased plus
any accrued and unpaid interest thereon.
The limitations on incurrence of debt contained
in the indenture governing the Charter Operating notes permit
Charter Operating and its restricted subsidiaries that are
guarantors of the Charter Operating notes to incur additional
debt or issue shares of preferred stock if, after giving pro
forma effect to the incurrence, Charter Operating could meet a
leverage ratio test (ratio of consolidated debt to four times
EBITDA, as defined, from the most recent fiscal quarter for
which internal financial reports are available) of
4.25 to 1.0.
In addition, regardless of whether the leverage
ratio test could be met, so long as no default exists or would
result from the incurrence or issuance, Charter Operating and
its restricted subsidiaries are permitted to incur or issue:
•
up to $6.5 billion of debt under credit
    facilities (but such incurrence is permitted only by Charter
    Operating and its restricted subsidiaries that are guarantors of
    the Charter Operating notes, so long as there are such
    guarantors), including debt under credit facilities outstanding
    on the issue date of the Charter Operating notes;
•
up to $75 million of debt incurred to
    finance the purchase or capital lease of assets;
•
up to $300 million of additional debt for
    any purpose, and
•
other items of indebtedness for specific purposes
    such as refinancing of existing debt and interest rate swaps to
    provide protection against fluctuation in interest rates and,
    subject to meeting the leverage ratio test, debt existing at the
    time of acquisition of a restricted subsidiary.
The indenture governing the Charter Operating
notes permits Charter Operating to incur debt under one of the
categories above, and later reclassify the debt into a different
category. The Charter Operating credit facilities generally
impose more restrictive limitations on incurring new debt than
the Charter Operating indenture, so our subsidiaries that are
subject to the Charter Operating credit facilities are not
permitted to utilize the full debt incurrence that would
otherwise be available under the Charter Operating indenture
covenants.
Generally, under Charter Operating's
indenture, Charter Operating and its restricted subsidiaries are
permitted to pay dividends on equity interests, repurchase
interests, or make other specified restricted payments only if
Charter Operating could incur $1.00 of new debt under the
leverage ratio test, which requires that Charter Operating meet
a 4.25 to 1.0 leverage ratio after giving effect to the
transaction, and if no default exists or would exist as a
consequence of such incurrence. If those conditions are met,
restricted payments are permitted in a total amount of up to
100% of Charter Operating's consolidated EBITDA, as
defined, minus 1.3 times its consolidated interest expense, plus
100% of new cash and appraised non-cash equity proceeds received
by Charter Operating and not allocated to the debt incurrence
covenant, all cumulatively from the fiscal quarter commenced
April 1, 2004, plus $100 million.
In addition, Charter Operating may make
distributions or restricted payments, so long as no default
exists or would be caused by the transaction:
•
to repurchase management equity interests in
    amounts not to exceed $10 million per fiscal year;
•
regardless of the existence of any default, to
    pay pass-through tax liabilities in respect of ownership of
    equity interests in Charter Operating or its restricted
    subsidiaries;
•
to pay, regardless of the existence of any
    default, interest when due on the Charter Holdings notes, the
    CCH II notes, CCO Holdings notes, and our notes;
•
to pay, so long as there is no default, interest
    on the Charter convertible notes;
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•
to purchase, redeem or refinance the Charter
    Holdings notes, CCH II notes, the CCO Holdings notes, the
    Charter notes, and other direct or indirect parent company
    notes, so long as Charter Operating could incur $1.00 of
    indebtedness under the 4.25 to 1.0 leverage ratio test referred
    to above and there is no default, or
•
to make other specified restricted payments
    including merger fees up to 1.25% of the transaction value,
    repurchases using concurrent new issuances, and certain
    dividends on existing subsidiary preferred equity interests.
The indenture governing the Charter Operating
notes restricts Charter Operating and its restricted
subsidiaries from making investments, except specified permitted
investments, or creating new unrestricted subsidiaries, if there
is a default under the indenture or if Charter Operating could
not incur $1.00 of new debt under the 4.25 to 1.0 leverage ratio
test described above after giving effect to the transaction.
Permitted investments include:
•
investments by Charter Operating and its
    restricted subsidiaries in Charter Operating and in other
    restricted subsidiaries, or entities that become restricted
    subsidiaries as a result of the investment,
•
investments aggregating up to 100% of new cash
    equity proceeds received by Charter Operating since
    April 27, 2004 to the extent the proceeds have not been
    allocated to the restricted payments covenant described above,
•
other investments up to $750 million
    outstanding at any time, and
•
certain specified additional investments, such as
    investments in customers and suppliers in the ordinary course of
    business and investments received in connection with permitted
    asset sales.
Charter Operating and its restricted subsidiaries
are not permitted to grant liens senior to the liens securing
the Charter Operating notes, other than permitted liens, on
their assets to secure indebtedness or other obligations, if,
after giving effect to such incurrence, the senior secured
leverage ratio (generally, the ratio of obligations secured by
first priority liens to four times EBITDA, as defined, from the
most recent fiscal quarter for which internal financial reports
are available) would exceed 3.75 to 1.0. Permitted liens include
liens securing indebtedness and other obligations under
permitted credit facilities, liens securing the purchase price
of new assets, liens securing indebtedness of up to
$50 million and other specified liens incurred in the
ordinary course of business.
Charter Operating and Charter Communications
Operating Capital Corp., its co-issuer, are generally not
permitted to sell all or substantially all of their assets or
merge with or into other companies unless their leverage ratio
after any such transaction would be no greater than their
leverage ratio immediately prior to the transaction, or unless
Charter Operating and its subsidiaries could incur $1.00 of new
debt under the 4.25 to 1.0 leverage ratio test described above
after giving effect to the transaction, no default exists, and
the surviving entity is a U.S. entity that assumes the
Charter Operating notes.
Charter Operating and its restricted subsidiaries
generally may not otherwise sell assets or, in the case of
restricted subsidiaries, issue equity interests, unless they
receive consideration at least equal to the fair market value of
the assets or equity interests, consisting of at least 75% in
cash, assumption of liabilities, securities converted into cash
within 60 days or productive assets. Charter Operating and
its restricted subsidiaries are then required within
365 days after any asset sale either to commit to use the
net cash proceeds over a specified threshold to acquire assets,
including current assets, used or useful in their businesses or
use the net cash proceeds to repay debt, or to offer to
repurchase the Charter Operating notes with any remaining
proceeds.
Charter Operating and its restricted subsidiaries
may generally not engage in sale and leaseback transactions
unless, at the time of the transaction, Charter Operating could
have incurred secured indebtedness in an amount equal to the
present value of the net rental payments to be made under the
lease, and the sale of the assets and application of proceeds is
permitted by the covenant restricting asset sales.
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Charter Operating's restricted subsidiaries
may generally not enter into restrictions on their ability to
make dividends or distributions or transfer assets to Charter
Operating on terms that are materially more restrictive than
those governing their debt, lien, asset sale, lease and similar
agreements existing when Charter Operating entered into the
indenture governing the Charter Operating senior second lien
notes unless those restrictions are on customary terms that will
not materially impair Charter Operating's ability to repay
the Charter Operating notes.
The restricted subsidiaries of Charter Operating
are generally not permitted to guarantee or pledge assets to
secure debt of Charter Operating, unless the guarantying
subsidiary issues a guarantee of the notes of comparable
priority and tenor, and waives any rights of reimbursement,
indemnity or subrogation arising from the guarantee transaction
for at least one year.
The indenture also restricts the ability of
Charter Operating and its restricted subsidiaries to enter into
certain transactions with affiliates involving consideration in
excess of $15 million without a determination by the board
of directors that the transaction is on terms no less favorable
than arms-length, or transactions with affiliates involving over
$50 million without receiving an independent opinion as to
the fairness of the transaction to the holders of the Charter
Operating notes.
Charter Operating and its restricted subsidiaries
are generally not permitted to transfer equity interests in
restricted subsidiaries unless the transfer is of all of the
equity interests in the restricted subsidiary or the restricted
subsidiary remains a restricted subsidiary and net proceeds of
the equity sale are applied in accordance with the asset sales
covenant.
Since the occurrence of the guarantee and pledge
date, the collateral for the Charter Operating notes consists of
all of Charter Operating's and its subsidiaries'
assets that secure the obligations of Charter Operating or any
subsidiary of Charter Operating with respect to the Charter
Operating credit facilities and the related obligations. The
collateral currently consists of the capital stock of Charter
Operating held by CCO Holdings, all of the intercompany
obligations owing to CCO Holdings by Charter Operating or any
subsidiary of Charter Operating, and substantially all of
Charter Operating's and the guarantors' assets (other
than the assets of CCO Holdings) in which security
interests may be perfected under the Uniform Commercial Code by
filing a financing statement (including capital stock and
intercompany obligations), including, but not limited to:
•
with certain exceptions, all capital stock
    (limited in the case of capital stock of foreign subsidiaries,
    if any, to 66% of the capital stock of first tier foreign
    Subsidiaries) held by Charter Operating or any
    guarantor; and
•
with certain exceptions, all intercompany
    obligations owing to Charter Operating or any guarantor.
In March 2005, CC V Holdings, LLC redeemed
in full the notes outstanding under the CC V indenture.
Following that redemption CC V Holdings, LLC and its
subsidiaries guaranteed the Charter Operating credit facilities
and the related obligations and secured those guarantees with
first-priority liens, and guaranteed the notes and secured the
Charter Operating senior second lien notes with second-priority
liens, on substantially all of their assets in which security
interests may be perfected under the Uniform Commercial Code by
filing a financing statement (including capital stock and
intercompany obligations).
In addition, if Charter Operating or its
subsidiaries exercise any option to redeem in full the notes
outstanding under the Renaissance indenture, then, provided that
the Leverage Condition remains satisfied, the Renaissance
entities will be required to provide corresponding guarantees of
the Charter Operating credit facilities and related obligations
and note guarantees and to secure the Charter Operating notes
and the Charter Operating credit facilities and related
obligations with corresponding liens.
In the event that additional liens are granted by
Charter Operating or its subsidiaries to secure obligations
under the Charter Operating credit facilities or the related
obligations, second priority liens on the same assets will be
granted to secure the Charter Operating notes, which liens will
be subject to the provisions of an intercreditor agreement (to
which none of Charter Operating or its affiliates are parties).
Notwithstanding the foregoing sentence, no such second priority
liens need be provided if the time such
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lien would otherwise be granted is not during a
guarantee and pledge availability period (when the Leverage
Condition is satisfied), but such second priority liens will be
required to be provided in accordance with the foregoing
sentence on or prior to the fifth business day of the
commencement of the next succeeding guarantee and pledge
availability period.
CC V Holdings, LLC
Notes
These notes were redeemed on March 14, 2005 and
are therefore no longer outstanding.
Renaissance Media Notes
The 10% senior discount notes due 2008 were
issued by Renaissance Media (Louisiana) LLC, Renaissance Media
(Tennessee) LLC and Renaissance Media Holdings Capital
Corporation, with Renaissance Media Group LLC as guarantor and
the United States Trust Company of New York as trustee.
Renaissance Media Group LLC, which is the direct or indirect
parent company of these issuers, is now a subsidiary of Charter
Operating. The Renaissance 10% notes and the Renaissance
guarantee are unsecured, unsubordinated debt of the issuers and
the guarantor, respectively. In October 1998, the issuers of the
Renaissance notes exchanged $163 million of the original
issued and outstanding Renaissance notes for an equivalent value
of new Renaissance notes. The form and terms of the new
Renaissance notes are the same in all material respects as the
form and terms of the original Renaissance notes except that the
issuance of the new Renaissance notes was registered under the
Securities Act.
There was no payment of any interest in respect
of the Renaissance notes prior to October 15, 2003. Since
October 15, 2003, interest on the Renaissance notes is
payable semi-annually in arrears in cash at a rate of
10% per year. On April 15, 2003, the Renaissance notes
became redeemable at the option of the issuers thereof, in whole
or in part, initially at 105% of their principal amount at
maturity, plus accrued interest, declining to 100% of the
principal amount at maturity, plus accrued interest, on or after
April 15, 2006.
Our acquisition of Renaissance triggered change
of control provisions of the Renaissance notes that required us
to offer to purchase the Renaissance notes at a purchase price
equal to 101% of their accreted value on the date of the
purchase, plus accrued interest, if any. In May 1999, we made an
offer to repurchase the Renaissance notes, and holders of
Renaissance notes representing 30% of the total principal amount
outstanding at maturity tendered their Renaissance notes for
repurchase.
The limitations on incurrence of debt contained
in the indenture governing the Renaissance notes permit
Renaissance Media Group and its restricted subsidiaries to incur
additional debt, so long as they are not in default under the
indenture:
•
if, after giving effect to the incurrence,
    Renaissance Media Group could meet a leverage ratio (ratio of
    consolidated debt to four times consolidated EBITDA, as defined,
    from the most recent quarter) of 6.75 to 1.0, and, regardless of
    whether the leverage ratio could be met,
•
up to the greater of $200 million or 4.5
    times Renaissance Media Group's consolidated annualized
    EBITDA, as defined,
•
up to an amount equal to 5% of Renaissance Media
    Group's consolidated total assets to finance the purchase
    of new assets,
•
up to two times the sum of (a) the net cash
    proceeds of new equity issuances and capital contributions, and
    (b) 80% of the fair market value of property received by
    Renaissance Media Group or an issuer as a capital contribution,
    in each case received after the issue date of the Renaissance
    notes and not allocated to make restricted payments, and
•
other items of indebtedness for specific purposes
    such as intercompany debt, refinancing of existing debt and
    interest rate swaps to provide protection against fluctuation in
    interest rates.
The indenture governing the Renaissance notes
permits us to incur debt under one of the categories above, and
reclassify the debt into a different category.
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Under the indenture governing the Renaissance
notes, Renaissance Media Group and its restricted subsidiaries
are permitted to pay dividends on equity interests, repurchase
interests, make restricted investments, or make other specified
restricted payments only if Renaissance Media Group could incur
$1.00 of additional debt under the debt incurrence test, which
requires that Renaissance Media Group meet the 6.75 to 1.0
leverage ratio after giving effect to the transaction of the
indebtedness covenant and that no default exists or would occur
as a consequence thereof. If those conditions are met,
Renaissance Media Group and its restricted subsidiaries are
permitted to make restricted payments in a total amount not to
exceed the result of 100% of Renaissance Media Group's
consolidated EBITDA, as defined, minus 130% of its consolidated
interest expense, plus 100% of new cash equity proceeds received
by Renaissance Media Group and not allocated to the indebtedness
covenant, plus returns on certain investments, all cumulatively
from June 1998. Renaissance Media Group and its restricted
subsidiaries may make permitted investments up to
$2 million in related businesses and other specified
permitted investments, restricted payments up to
$10 million, dividends up to 6% each year of the net cash
proceeds of public equity offerings, and other specified
restricted payments without meeting the foregoing test.
Renaissance Media Group and its restricted
subsidiaries are not permitted to grant liens on their assets
other than specified permitted liens, unless corresponding liens
are granted to secure the Renaissance notes. Permitted liens
include liens securing debt permitted to be incurred under
credit facilities, liens securing debt incurred under the
incurrence of indebtedness test, in amounts up to the greater of
$200 million or 4.5 times Renaissance Media Group's
consolidated EBITDA, as defined, liens as deposits for
acquisitions up to 10% of the estimated purchase price, liens
securing permitted financings of new assets, liens securing debt
permitted to be incurred by restricted subsidiaries, and
specified liens incurred in the ordinary course of business.
Renaissance Media Group and the issuers of the
Renaissance notes are generally not permitted to sell or
otherwise dispose of all or substantially all of their assets or
merge with or into other companies unless their consolidated net
worth after any such transaction would be equal to or greater
than their consolidated net worth immediately prior to the
transaction, or unless Renaissance Media Group could incur $1.00
of additional debt under the debt incurrence test, which would
require them to meet a leverage ratio of 6.75 to 1.00 after
giving effect to the transaction.
Renaissance Media Group and its subsidiaries may
generally not otherwise sell assets or, in the case of
subsidiaries, equity interests, unless they receive
consideration at least equal to the fair market value of the
assets, consisting of at least 75% cash, temporary cash
investments or assumption of debt. Charter Holdings and its
restricted subsidiaries are then required within 12 months
after any asset sale either to commit to use the net cash
proceeds over a specified threshold either to acquire assets
used in their own or related businesses or use the net cash
proceeds to repay debt, or to offer to repurchase the
Renaissance notes with any remaining proceeds.
Renaissance Media Group and its restricted
subsidiaries may generally not engage in sale and leaseback
transactions unless the lease term does not exceed three years
or the proceeds are applied in accordance with the covenant
limiting asset sales.
Renaissance Media Group's restricted
subsidiaries may generally not enter into restrictions on their
abilities to make dividends or distributions or transfer assets
to Renaissance Media Group except those not more restrictive
than is customary in comparable financings.
The restricted subsidiaries of Renaissance Media
Group are not permitted to guarantee or pledge assets to secure
debt of the Renaissance Media Group or its restricted
subsidiaries, unless the guarantying subsidiary issues a
guarantee of the Renaissance notes of comparable priority and
tenor, and waives any rights of reimbursement, indemnity or
subrogation arising from the guarantee transaction.
Renaissance Media Group and its restricted
subsidiaries are generally not permitted to issue or sell equity
interests in restricted subsidiaries, except sales of common
stock of restricted subsidiaries so long as the proceeds of the
sale are applied in accordance with the asset sale covenant, and
issuances as a result of
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which the restricted subsidiary is no longer a
restricted subsidiary and any remaining investment in that
subsidiary is permitted by the covenant limiting restricted
payments.
The indenture governing the Renaissance notes
also restricts the ability of Renaissance Media Group and its
restricted subsidiaries to enter into certain transactions with
affiliates involving consideration in excess of $2 million
without a determination by the disinterested members of the
board of directors that the transaction is on terms no less
favorable than arms length, or transactions with affiliates
involving over $4 million with affiliates without receiving
an independent opinion as to the fairness of the transaction to
Renaissance Media Group.
All of these covenants are subject to additional
specified exceptions. In general, the covenants of the Charter
Operating credit facilities are more restrictive than those of
our indentures.
Cross-Defaults
Our indentures and those of certain of our
subsidiaries include various events of default, including
cross-default provisions. Under these provisions, a failure by
any of the issuers or any of their restricted subsidiaries to
pay at the final maturity thereof the principal amount of other
indebtedness having a principal amount of $100 million or
more (or any other default under any such indebtedness resulting
in its acceleration) would result in an event of default under
the indenture governing the applicable notes. The Renaissance
indenture contains a similar cross-default provision with a
$10 million threshold that applies to the issuers of the
Renaissance notes and their restricted subsidiaries. As a
result, an event of default related to the failure to repay
principal at maturity or the acceleration of the indebtedness
under the Charter Holdings notes, CCH II notes, CCO
Holdings notes, Charter Operating notes, the Charter Operating
credit facilities or the Renaissance notes could cause
cross-defaults under our subsidiaries' indentures.
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DESCRIPTION OF CAPITAL STOCK AND MEMBERSHIP
UNITS
General
Our capital stock and the provisions of our
restated certificate of incorporation and bylaws are as
described below. These summaries are qualified by reference to
the restated certificate of incorporation and the bylaws, copies
of which have been filed with the Securities and Exchange
Commission.
Our authorized capital stock consists of
1.750 billion shares of Class A common stock, par
value $.001 per share, 750 million shares of
Class B common stock, par value $.001 per share, and
250 million shares of preferred stock, par value
$.001 per share.
Our restated certificate of incorporation and
Charter Communications Holding Company, LLC's amended and
restated limited liability company agreement contain provisions
that are designed to cause the number of shares of our common
stock that are outstanding to equal the number of common
membership units of Charter Communications Holding Company, LLC
owned by Charter and to cause the value of a share of common
stock to be equal to the value of a common membership unit.
These provisions are meant to allow a holder of our common stock
to easily understand the economic interest that such
holder's common shares represent of Charter Communications
Holding Company, LLC's business.
In particular, provisions in our restated
certificate of incorporation provide that:
(1) at all times the number of shares of our
    common stock outstanding will be equal to the number of Charter
    Communications Holding Company, LLC common membership units
    owned by Charter.
(2) Charter will not hold any assets other
    than, among other allowable assets:
•
working capital and cash held for the payment of
    current obligations and receivables from Charter Communications
    Holding Company, LLC;
•
common membership units of Charter Communications
    Holding Company, LLC; and
•
obligations and equity interests of Charter
    Communications Holding Company, LLC that correspond to
    obligations and equity interests issued by Charter;
(3) Charter will not borrow any money or
    enter into any capital lease unless Charter Communications
    Holding Company, LLC enters into the same arrangements with
    Charter so that Charter's liability flows through to
    Charter Communications Holding Company, LLC.
Provisions in Charter Communications Holding
Company, LLC's amended and restated limited liability
company agreement provide that, upon the contribution by Charter
of assets acquired through the issuance of common stock by
Charter, Charter Communications Holding Company, LLC will issue
to Charter that number of common membership units as equals the
number of shares of common stock issued by Charter. In the event
of the contribution by Charter of assets acquired through the
issuance of indebtedness or preferred interests of Charter,
Charter Communications Holding Company, LLC will issue to
Charter a corresponding obligation or interest, respectively to
allow Charter to pass through to Charter Communications Holding
Company, LLC these liabilities or preferred interests. Such
liabilities or preferred interest of Charter Communication
Holding Company, LLC will be assets of Charter, in addition to
the Class B common units of Charter Communications Holding
Company, LLC that are held by Charter.
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Common Stock
As of June 30, 2005, there were
304,941,082 shares of Class A common stock issued and
outstanding and 50,000 shares of Class B common stock
issued and outstanding. In July 2005, 13,400,000 shares
were issued in connection with a litigation settlement and
27,170,000 shares were issued pursuant to the share lending
agreement. If, as described below, all shares of Class B
common stock convert to shares of Class A common stock as a
result of dispositions by Mr. Allen and his affiliates, the
holders of Class A common stock will be entitled to elect
all members of the board of directors, other than any members
elected separately by the holders of any preferred shares with
the right to vote, of which there are currently none outstanding.
Voting
Rights.
The holders of
Class A common stock and Class B common stock
generally have identical rights, except:
•
each Class A common shareholder is entitled
    to one vote per share; and
•
each Class B common shareholder is entitled
    to a number of votes based on the number of outstanding
    Class B common stock and Charter Communications Holding
    Company, LLC membership units exchangeable for Class B
    common stock. For example, Mr. Allen is entitled to ten
    votes for each share of Class B common stock held by him or
    his affiliates and ten votes for each membership unit held by
    him or his affiliates; and
•
the Class B common shareholders have the
    sole power to vote to amend or repeal the provisions of our
    restated certificate of incorporation relating to:
(1) the activities in which Charter may
    engage;
(2) the required ratio of outstanding shares
    of common stock to outstanding membership units owned by
    Charter; and
(3) the restrictions on the assets and
    liabilities that Charter may hold.
The effect of the provisions described in the
final bullet point is that holders of Class A common stock
have no right to vote on these matters. These provisions allow
Mr. Allen, for example, to amend the restated certificate
of incorporation to permit Charter to engage in currently
prohibited business activities without having to seek the
approval of holders of Class A common stock.
The voting rights relating to the election of
Charter's board of directors are as follows:
•
The Class B common shareholders, voting
    separately as a class, are entitled to elect all but one member
    of our board of directors.
•
Class A and Class B common
    shareholders, voting together as one class, are entitled to
    elect the remaining member of our board of directors who is not
    elected by the Class B common shareholders.
•
Class A common shareholders and Class B
    common shareholders are not entitled to cumulate their votes in
    the election of directors.
•
In addition, Charter may issue one or more series
    of preferred stock that entitle the holders of such preferred
    stock to elect directors.
Other than the election of directors and any
matters where Delaware law or Charter's restated
certificate of incorporation or bylaws requires otherwise, all
matters to be voted on by shareholders must be approved by a
majority of the votes cast by the holders of shares of
Class A common stock and Class B common stock present
in person or represented by proxy, voting together as a single
class, subject to any voting rights granted to holders of any
preferred stock.
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Amendments to Charter's restated certificate
of incorporation that would adversely alter or change the
powers, preferences or special rights of the Class A common
stock or the Class B common stock must be approved by a
majority of the votes entitled to be cast by the holders of the
outstanding shares of the affected class, voting as a separate
class. In addition, the following actions by Charter must be
approved by the affirmative vote of the holders of at least a
majority of the voting power of the outstanding Class B
common stock, voting as a separate class:
•
the issuance of any Class B common stock
    other than to Mr. Allen and his affiliates and other than
    pursuant to specified stock splits and dividends;
•
the issuance of any stock other than Class A
    common stock (and other than Class B common stock as
    described above); and
•
the amendment, modification or repeal of any
    provision of its restated certificate of incorporation relating
    to capital stock or the removal of directors.
Charter will lose its rights to manage the
business of Charter Communications Holding Company, LLC and
Charter Investment, Inc. will become the sole manager of Charter
Communications Holding Company, LLC if at any time a court holds
that the holders of the Class B common stock no longer:
•
have the number of votes per share of
    Class B common stock described above;
•
have the right to elect, voting separately as a
    class, all but one member of Charter's board of directors,
    except for any directors elected separately by the holders of
    preferred stock; or
•
have the right to vote as a separate class on
    matters that adversely affect the Class B common stock with
    respect to:
(1) the issuance of equity securities of
    Charter other than the Class A common stock; or
(2) the voting power of the Class B
    common stock.
These provisions are contained in the amended and
restated limited liability company agreement of Charter
Communications Holding Company, LLC. The Class B common
stock could lose these rights if a holder of Class A common
stock successfully challenges in a court proceeding the voting
rights of the Class B common stock. In any of these
circumstances, Charter would also lose its 100% voting control
of Charter Communications Holding Company, LLC as provided in
Charter Communications Holding Company, LLC's amended and
restated limited liability company agreement. These provisions
exist to assure Mr. Allen that he will be able to control
Charter Communications Holding Company, LLC in the event he was
no longer able to control Charter through his ownership of
Class B common stock. These events could have a material
adverse impact on our business and the market price of the
Class A common stock and the notes. See "Risk
Factors — Risks Related to Our Business."
Dividends.
Holders of Class A common stock and Class B common
stock will share ratably (based on the number of shares of
common stock held) in any dividend declared by our board of
directors, subject to any preferential rights of any outstanding
preferred stock. Dividends consisting of shares of Class A
common stock and Class B common stock may be paid only as
follows:
•
shares of Class A common stock may be paid
    only to holders of Class A common stock;
•
shares of Class B common stock may be paid
    only to holders of Class B common stock; and
•
the number of shares of each class of common
    stock payable per share of such class of common stock shall be
    equal in number.
Our restated certificate of incorporation
provides that we may not pay a stock dividend unless the number
of outstanding Charter Communications Holding Company, LLC
common membership units are
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adjusted accordingly. This provision is designed
to maintain the equal value between shares of common stock and
membership units and the one-to-one exchange ratio.
Conversion of Class B Common
Stock.
Each share of outstanding
Class B common stock will automatically convert into one
share of Class A common stock if, at any time,
Mr. Allen or any of his affiliates sells any shares of
common stock of Charter or membership units of Charter
Communications Holding Company, LLC and as a result of such
sale, Mr. Allen and his affiliates no longer own directly
and indirectly common stock and other equity interests in
Charter and membership units in Charter Communications Holding
Company, LLC that in total represent at least:
•
20% of the sum of the values, calculated as of
    November 12, 1999, of the shares of Class B common
    stock directly or indirectly owned by Mr. Allen and his
    affiliates and the shares of Class B common stock for which
    outstanding Charter Communications Holding Company, LLC
    membership units directly or indirectly owned by Mr. Allen
    and his affiliates were exchangeable on that date, and
•
5% of the sum of the values, calculated as of the
    measuring date, of shares of outstanding common stock and other
    equity interests in Charter and the shares of Charter common
    stock for which outstanding Charter Communications Holding
    Company, LLC membership units are exchangeable on such date.
These provisions exist to assure that
Mr. Allen will no longer be able to control Charter if
after sales of his equity interests he owns an insignificant
economic interest in our business. The conversion of all
Class B common stock in accordance with these provisions
would not trigger Charter Communications Holding Company,
LLC's limited liability company agreement provisions
described above whereby Charter would lose its management rights
and special voting rights relating to Charter Communications
Holding Company, LLC in the event of an adverse determination of
a court affecting the rights of the Class B common stock.
Each holder of a share of Class B common
stock has the right to convert such share into one share of
Class A common stock at any time on a one-for-one basis. If
a Class B common shareholder transfers any shares of
Class B common stock to a person other than an authorized
Class B common shareholder, these shares of Class B
common stock will automatically convert into shares of
Class A common stock. Authorized Class B common
shareholders are Paul G. Allen entities controlled by
Mr. Allen, Mr. Allen's estate, any organization
qualified under Section 501(c)(3) of the Internal Revenue
Code that is Mr. Allen's beneficiary upon his death
and certain trusts established by or for the benefit of
Mr. Allen. In this context "controlled" means the
ownership of more than 50% of the voting power and economic
interest of an entity and "transfer" means the
transfer of record or beneficial ownership of any such share of
Class B common stock.
Other Rights.
Shares of Class A common stock will be treated equally in
the event of any merger or consolidation of Charter so that:
•
each class of common shareholders will receive
    per share the same kind and amount of capital stock, securities,
    cash and/or other property received by any other class of common
    shareholders, provided that any shares of capital stock so
    received may differ in a manner similar to the manner in which
    the shares of Class A common stock and Class B common
    stock differ; or
•
each class of common shareholders, to the extent
    they receive a different kind (other than as described above) or
    different amount of capital stock, securities, cash and/or other
    property than that received by any other class of common
    shareholders, will receive for each share of common stock they
    hold, stock, securities, cash and/or either property having a
    value substantially equivalent to that received by such other
    class of common shareholders.
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Upon Charter's liquidation, dissolution or
winding up, after payment in full of the amounts required to be
paid to preferred shareholders, if any, all common shareholders,
regardless of class, are entitled to share ratably in any assets
and funds available for distribution to common shareholders.
No shares of any class of common stock are
subject to redemption or have preemptive right to purchase
additional shares of common stock.
Preferred Stock
Charter's board of directors is authorized,
subject to the approval of the holders of the Class B
common stock, to issue from time to time up to a total of
250 million shares of preferred stock in one or more series
and to fix the numbers, powers, designations, preferences, and
any special rights of the shares of each such series thereof,
including:
•
dividend rights and rates;
•
conversion rights;
•
voting rights;
•
terms of redemption (including any sinking fund
    provisions) and redemption price or prices;
•
liquidation preferences; and
•
the number of shares constituting and the
    designation of such series.
Pursuant to their authority the board of
directors has designated 1 million of the above-described
250 million shares as Series A Convertible Redeemable
Preferred Stock ("Series A Preferred Stock").
Holders of the Series A Preferred Stock have no voting
rights but are entitled to receive cumulative cash dividends at
an annual rate of 5.75%, payable quarterly. If for any reason
Charter fails to pay the dividends on the Series A
Preferred Stock on a timely basis, the dividend rate on each
share increases to an annual rate of 7.75% until the payment is
made. The Series A Preferred Stock is redeemable by Charter
at its option on or after August 31, 2004 and must be
redeemed by Charter at any time upon a change of control, or if
not previously redeemed or converted, on August 31, 2008.
The Series A Preferred Stock is convertible, in whole or in
part, at the option of the holders on or before August 31,
2008, into shares of common stock at an initial conversion rate
equal to a conversion price of $24.71 per share of common
stock, subject to certain customary adjustments. The redemption
price per share of Series A Preferred Stock is the
liquidation preference of $100, subject to certain customary
adjustments. At June 30, 2005, there were
545,259 shares of Series A Preferred Stock
outstanding, with an aggregate liquidation preference of
approximately $55 million. These shares are convertible
into approximately 2.2 million shares of Class A
common stock.
Charter has no present plans to issue any other
shares of preferred stock.
Options
As of June 30, 2005, options to purchase a
total of 1,275,168 membership units in Charter Communications
Holding Company, LLC were outstanding pursuant to the 1999
Charter Communications Option Plan, and options to purchase a
total of 25,507,144 shares of Class A common stock
were outstanding pursuant to Charter's 2001 Stock Incentive
Plan. Of these options, 8,684,691 have vested. The membership
units received upon exercise of any of the options under the
1999 Charter Communications Option Plan are automatically
exchanged for shares of our Class A common stock on a
one-for-one basis. In addition, a portion of the unvested
options will vest each month. There are also additional options
outstanding to purchase an aggregate of 475,653 shares of
Class A common stock, which were issued to a consultant
outside of the plan. We have agreed to exchange 186,385 of these
options for 18,638 shares of Class A common stock, and
we anticipate that exchange to be consummated in 2005.
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Convertible Notes
At June 30, 2005, we had outstanding
$862.5 million principal amount of our 5.875% convertible
senior notes due 2009, which are convertible (at approximately
$2.42 per share) into a total of approximately 356 million
shares of our Class A common stock. At June 30, 2005,
we also had outstanding approximately $25 million principal
amount of our 4.75% senior convertible notes due 2006, which are
convertible into Class A common stock at approximately
$26.25 per share.
Anti-takeover Effects of Provisions of
Charter's Restated Certificate of Incorporation and
Bylaws
Provisions of Charter's restated certificate
of incorporation and bylaws may be deemed to have an
anti-takeover effect and may delay, defer or prevent a tender
offer or takeover attempt that a shareholder might consider in
its best interest, including those attempts that might result in
a premium over the market price for the shares held by
shareholders.
Special Meeting of
Shareholders.
Our bylaws provide
that, subject to the rights of holders of any series of
preferred stock, special meetings of our shareholders may be
called only by the chairman of our board of directors, our chief
executive officer or a majority of our board of directors.
Advance Notice Requirements For Shareholder
Proposals And Director
Nominations.
Our bylaws provide
that shareholders seeking to bring business before an annual
meeting of shareholders, or to nominate candidates for election
as directors at an annual meeting of shareholders, must provide
timely prior written notice of their proposals. To be timely, a
shareholder's notice must be received at our principal
executive offices not less than 45 days nor more than
70 days prior to the first anniversary of the date on which
we first mailed our proxy statement for the prior year's
annual meeting. If, however, the date of the annual meeting is
more than 30 days before or after the anniversary date of
the prior year's annual meeting, notice by the shareholder
must be received not less than 90 days prior to the annual
meeting or by the 10th day following the public announcement of
the date of the meeting, whichever occurs later, and not more
than 120 days prior to the annual meeting. Our bylaws
specify requirements as to the form and content of a
shareholder's notice. These provisions may limit
shareholders in bringing matters before an annual meeting of
shareholders or in making nominations for directors at an annual
meeting of shareholders.
Authorized But Unissued
Shares.
The authorized but
unissued shares of Class A common stock are available for
future issuance without shareholder approval and, subject to
approval by the holders of the Class B common stock, the
authorized but unissued shares of Class B common stock and
preferred stock are available for future issuance. These
additional shares may be utilized for a variety of corporate
purposes, including future public offerings to raise additional
capital, corporate acquisitions and employee benefit plans. The
existence of authorized but unissued shares of common stock and
preferred stock could render more difficult or discourage an
attempt to obtain control of us by means of a proxy contest,
tender offer, merger or otherwise.
Membership Units of Charter Communications
Holding Company
The Charter Communications Holding Company, LLC
limited liability company agreement provides for three separate
classes of common membership units designed Class A,
Class B and Class C and one class of preferred
membership units designated Class A. As of June 30,
2005, there were 644,123,113 Charter Communications Holding
Company, LLC common membership units issued and outstanding,
304,991,082 of which were held by Charter.
Class A Common Membership
Units.
As of June 30, 2005,
there were a total of 324,300,479 issued and outstanding
Class A common membership units, consisting of
217,585,246 units owned by Charter Investment, Inc. and
106,715,233 units owned by Vulcan Cable III Inc.
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Class B Common Membership
Units.
As of June 30, 2005,
there were a total of 304,991,082 issued and outstanding
Class B common membership units, all of which are owned by
Charter.
Class C Common Membership
Units.
As of June 30, 2005,
there were a total of 14,831,552 issued and outstanding
Class C common membership units, consisting of 5,233,612
units owned by Charter Investment, Inc. and 9,597,940 units
owned by Vulcan Cable III Inc.
In addition, Charter Investment, Inc., an
affiliate of Mr. Allen owns 24,273,943 units of
CC VIII, LLC membership units. An issue has arisen
regarding the ultimate ownership of such CC VIII, LLC
membership interests following Mr. Allen's acquisition
of those interests on June 6, 2003. See "Certain
Relationships and Related Transactions — Transactions
Arising out of Our Organizational Structure and
Mr. Allen's Investment in Charter Communications, Inc.
and Its Subsidiaries — Equity Put Rights —
CC VIII."
Convertible Preferred Membership
Units.
As of June 30, 2005,
there were a total of 545,259 issued and outstanding convertible
preferred membership units. These units are owned by Charter and
mirror the terms of Charter's Series A Preferred Stock.
Any matter requiring a vote of the members of
Charter Communications Holding Company, LLC requires the
affirmative vote of a majority of the Class B common
membership units. Charter owns all Class B common
membership units and therefore controls Charter Communications
Holding Company, LLC. Because Mr. Allen owns high
vote Class B common stock of Charter that entitles him
to approximately 93% of the voting power of the outstanding
common stock of Charter prior to completion of this offering,
Mr. Allen controls us and through us has voting control of
Charter Communications Holding Company, LLC.
The net cash proceeds that Charter receives from
any issuance of shares of common stock will be immediately
transferred to Charter Communications Holding Company, LLC in
exchange for membership units equal in number to the number of
shares of common stock issued by Charter.
Exchange Agreement
Charter is a party to an agreement permitting
Vulcan Cable III Inc., Charter Investment, Inc. and any
other affiliate of Mr. Allen to exchange at any time on a
one-for-one basis any or all of their Charter Holdco common
membership units for shares of Class B common stock. This
exchange may occur directly or, at the election of the
exchanging holder, indirectly through a tax-free reorganization
such as a share exchange or a statutory merger of any
Allen-controlled entity with and into Charter or a wholly owned
subsidiary of Charter. In the case of an exchange in connection
with a tax-free share exchange or a statutory merger, shares of
Class A common stock held by Mr. Allen or the
Allen-controlled entity will also be exchanged for Class B
common stock. Mr. Allen currently owns shares of
Class A common stock as a result of the exercise of put
rights granted to sellers in the Falcon acquisition and the
Rifkin acquisition.
Charter Holdco common membership units held by
Mr. Allen and his affiliates are exchangeable at any time
for shares of our Class B common stock, which is then
convertible into shares of Class A common stock. The
exchange agreement and the 1999 Charter Communications Option
Plan state that common membership units are exchangeable for
shares of common stock at a value equal to the fair market value
of the common membership units. The exchange ratio of common
membership units to shares of Class A common stock will be
one to one because Charter and Charter Holdco have been
structured so that the fair market value of a share of the
Class A common stock equals the fair market value of a
common membership unit owned by Charter.
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Our organizational documents achieve this result
by:
•
limiting the assets and liabilities that Charter
    may hold; and
•
requiring the number of shares of our common
    stock outstanding at any time to equal the number of common
    membership units owned by Charter.
If we fail to comply with these provisions or
they are changed, the exchange ratio may vary from one to one
and will then be based on a pre-determined formula contained in
the exchange agreements and the 1999 Charter Communications
Option Plan. This formula will be based on the then current
relative fair market values of common membership units and
common stock.
Special Tax Allocation Provisions.
Charter Communications Holding Company,
LLC's limited liability company agreement contains a number
of provisions affecting allocation of net tax losses and net tax
profits to its members. In some situations, these provisions
could result in Charter having to pay income taxes in an amount
that is more or less than it would have had to pay if these
provisions did not exist. For additional information see
"Management's Discussion and Analysis of Financial
Condition and Results of Operations — Critical
Accounting Policies and Estimates — Income Taxes."
Other Material Terms of the Amended and
Restated Limited Company Agreement of Charter Communications
Holding Company, LLC
General.
Charter Communications Holding Company, LLC's amended and
restated limited liability company agreement contains provisions
that permit each member (and its officers, directors, agents,
shareholders, members, partners or affiliates) to engage in
businesses that may compete with the businesses of Charter
Communications Holding Company, LLC or any subsidiary. However,
the directors of Charter, including Mr. Allen, are subject
to fiduciary duties under Delaware corporate law that generally
require them to present business opportunities in the cable
transmission business to Charter.
The amended and restated limited liability
company agreement restricts the business activities that Charter
Communications Holding Company, LLC may engage in.
Transfer
Restrictions.
The amended and
restated limited liability company agreement restricts the
ability of each member to transfer its membership interest
unless specified conditions have been met. These conditions
include:
•
the transfer will not result in the loss of any
    license or regulatory approval or exemption that has been
    obtained by Charter Communications Holding Company, LLC and is
    materially useful in its business as then conducted or proposed
    to be conducted;
•
the transfer will not result in a material and
    adverse limitation or restriction on the operations of Charter
    Communications Holding Company, LLC and its subsidiaries taken
    as a whole;
•
the proposed transferee agrees in writing to be
    bound by the limited liability company agreement; and
•
except for a limited number of permitted
    transfers under the limited liability company agreement, the
    transfer has been approved by the manager in its sole discretion.
Amendments to the Limited Liability Company
Agreement.
Any amendment to the
limited liability company agreement generally may be adopted
only upon the approval of a majority of the Class B common
membership units. The agreement may not be amended in a manner
that adversely affects the rights of any class of common
membership units without the consent of holders holding a
majority of the membership units of that class.
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Registration Rights
Holders of Class B Common
Stock.
Charter, Mr. Allen,
Charter Investment, Inc. and Vulcan Cable III Inc., are
parties to a registration rights agreement. The agreement gives
Mr. Allen and his affiliates the right to cause us to
register the shares of Class A common stock issued to them
upon conversion of any shares of Class B common stock that
they may hold.
This registration rights agreement provides that
each eligible holder is entitled to unlimited
"piggyback" registration rights permitting them to
include their shares of Class A common stock in
registration statements filed by us. These holders may also
exercise their demand rights causing us, subject to specified
limitations, to register their Class A shares, provided
that the amount of shares subject to each demand has a market
value at least equal to $50 million or, if the market value
is less than $50 million, all of the Class A shares of
the holders participating in the offering are included in such
registration. We are obligated to pay the costs associated with
all such registrations.
Holders may elect to have their shares registered
pursuant to a shelf registration statement if at the time of the
election, Charter is eligible to file a registration statement
on Form S-3 and the amount of shares to be registered has a
market value equal to at least $100 million on the date of
the election.
All shares of Class A common stock issuable
to the registration rights holders in exchange for Charter
Communications Holding Company, LLC membership units and upon
conversion of outstanding Class B common stock and
conversion of Class B common stock issuable to the
registration rights holders upon exchange of Charter
Communications Holding Company, LLC membership units are subject
to the registration rights described above.
Transfer Agent and Registrar
The transfer agent and registrar for our
Class A common stock is Mellon Investor Services, LLC.
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SHARES ELIGIBLE FOR FUTURE SALE
In addition to the 122.8 million shares of
Class A common stock offered hereby and the
27.2 million shares issued in July 2005, as of
June 30, 2005, we had 304.9 million shares of
Class A common stock issued and outstanding, all of which
are eligible for immediate resale (subject to limitations of
Rule 144 in the case of shares held by affiliates).
As of June 30, 2005, the following
additional shares of Class A common stock are or will be
issuable after giving effect to this offering:
•
339,132,031 shares of Class A common
    stock will be issuable upon conversion of Class B common
    stock issuable upon exchange of Charter Communications Holding
    Company, LLC membership units held by Vulcan Cable III Inc.
    and Charter Investment, Inc. These membership units are
    exchangeable for shares of Class B common stock on a
    one-for-one basis. Shares of Class B common stock are
    convertible into shares of Class A common stock on a
    one-for-one basis.
•
24,273,943 shares of Class A common
    stock may be issuable upon the exchange of Charter
    Communications Holding Company, LLC membership units potentially
    issuable in exchange for CC VIII, LLC membership units held by
    an affiliate of Mr. Allen. An issue has arisen regarding
    the ultimate ownership of such CC VIII, LLC membership interests
    following Mr. Allen's acquisition of those interests
    on June 6, 2003. See"Certain Relationships and Related
    Transactions — Transactions Arising Out of Our
    Organizational Structure and Mr. Allen's Investment in
    Charter Communications, Inc. and Its Subsidiaries —
    Equity Put Rights — CC VIII."
•
50,000 shares of Class A common stock
    will be issuable upon conversion of outstanding Class B
    common stock on a one-for-one basis.
•
Up to 90,000,000 shares of Class A
    common stock (or units exchangeable for Class A common
    stock) are authorized for issuance pursuant to Charter's
    2001 Stock Incentive Plan and 1999 Charter Communications Option
    Plan. At June 30, 2005, 1,310,020 shares had been
    issued under the plans upon exercise of options,
    685,476 shares had been issued upon vesting of restricted
    stock grants, and 1,307,612 shares are subject to future
    vesting under restricted stock agreements. Of the remaining
    86,696,892 shares covered by the plans, as of June 30,
    2005, 26,782,312 were subject to outstanding options (32% of
    which were vested), and there were 11,506,410 performance units
    granted under Charter's long-term incentive program, which
    will vest on the third anniversary of the date of grant
    conditional upon Charter's performance against financial
    targets approved by the board of directors at the time of the
    awards. As of June 30, 2005, 48,408,170 shares
    remained available for future grant under the plans.
•
356,404,924 shares of Class A common
    stock are issuable upon conversion of our 5.875% convertible
    senior notes due 2009.
•
An aggregate of 3,156,081 shares of
    Class A common stock would be issuable upon conversion of
    our 4.75% convertible senior notes due 2006 and our
    Series A convertible redeemable preferred stock.
•
As more fully described in
    "Business — Legal Proceedings", 13,400,000
    shares of Class A common stock issued on July 8, 2005
    in settlement of certain legal proceedings.
All of the shares of Class A common stock
issuable upon exchange of Charter Communications Holding
Company, LLC membership units and upon conversion of shares of
our Class B common stock are subject to demand and
piggyback registration rights.
All of the shares of Class A common stock
issuable upon conversion of outstanding convertible senior notes
due 2006 and convertible preferred stock would be eligible for
immediate resale. Shares issuable upon conversion of the 5.875%
convertible senior notes due 2009 are expected to be eligible
for resale pursuant to a resale shelf registration statement
which was declared effective on July 15, 2005. All of the
shares issuable to claimants pursuant to the settlements will be
eligible for immediate resale. The
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additional shares that may be issued under the
share lending agreement are expected, if and when issued, to be
available for immediate resale pursuant to a registration
statement to be filed prior to the issuance of those shares.
A registration statement on Form S-8
covering the Class A common stock issuable pursuant to the
exercise of options under the 1999 Charter Communications Option
Plan was filed with the Securities and Exchange Commission in
May 2000 and registration statements on Form S-8 covering
shares issuable under the 2001 Stock Incentive Plan were filed
in May 2001 and November 2003. The shares of Class A common
stock covered by the Form S-8 registration statements
generally may be resold in the public market without restriction
or limitation, except in the case of our affiliates who
generally may only resell such shares in accordance with the
provisions of Rule 144 of the Securities Act of 1933.
The sale of a substantial number of shares of
Class A common stock, or the perception that such sales
could occur, could adversely affect prevailing market prices for
the Class A common stock. In addition, any such sale or
perception could make it more difficult for us to sell equity
securities or equity related securities in the future at a time
and price that we deem appropriate.
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CERTAIN UNITED STATES TAX CONSIDERATIONS FOR
NON-UNITED STATES HOLDERS
The following is a general discussion of certain
U.S. federal income and estate tax consequences of the ownership
and disposition of our Class A common stock by a person
that is not a "United States person" for U.S. federal
income tax purposes (a "non-U.S. holder"). For this
purpose, a "United States person" is a citizen or
resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the
United States or any political subdivision thereof, an estate,
the income of which is subject to U.S. federal income taxation
regardless of its source, or a trust the administration of which
is subject to the primary supervision of a U.S. court and which
has one or more United States persons who have the authority to
control all substantial decisions of the trust or that was in
existence on, August 20, 1996, was treated as a United
States person under the Internal Revenue Code of 1986, as
amended (the "Code"), on that date and has made a
valid election to be treated as a United States person under the
Code. The discussion does not consider specific facts and
circumstances that may be relevant to a particular non-U.S.
holder's tax position. Special rules may apply to certain
non-U.S. holders, such as dealers in securities, banks,
insurance companies, tax-exempt organizations, persons holding
their shares as part of a "straddle,"
"hedge," or "conversion transaction,"
persons who acquire shares as compensation, "controlled
foreign corporations," "passive foreign investment
companies," "foreign personal holding companies,"
and corporations that accumulate earnings to avoid U.S. federal
income tax, that are subject to special treatment under the
Code. This discussion is limited to beneficial owners of the
Class A common stock who hold the Class A common stock
as capital assets. It does not address any aspect of state,
local, or foreign law, persons who hold Class A common
stock through a partnership or other pass-through entity, or
persons who are former citizens or long-term residents of the
United States.
Accordingly, each non-U.S. holder is urged to
consult its own tax advisor with respect to the United States
tax consequences of the ownership and disposition of
Class A common stock, as well as any tax consequences that
may arise under the laws of any state, municipality, foreign
country or other taxing jurisdiction.
Dividends
In general, distributions paid to a Non-U.S.
Holder of Class A common stock will constitute a dividend
for U.S. federal income tax purposes to the extent of our
current or accumulated earnings and profits determined under
U.S. federal income tax principles. We do not anticipate paying
cash dividends on our capital stock in the foreseeable future.
See "Dividend Policy."
Dividends paid to a non-U.S. holder of our
Class A common stock ordinarily will be subject to
withholding of U.S. federal income tax at a 30 percent
rate, or at a lower rate under an applicable income tax treaty
that provides for a reduced rate of withholding. To claim the
benefit of a lower treaty rate, a non-U.S. holder must properly
file with the payor an IRS Form W-8BEN, or successor form,
or, in the case of payments made outside the United States with
respect to an offshore account, comply with certain documentary
evidence procedures, directly, or under certain circumstances,
through an intermediary. If, however, the dividends are
effectively connected with the conduct by the non-U.S. holder of
a trade or business within the United States and, where a tax
treaty applies, are attributable to a United States permanent
establishment of the non-U.S. holder, then the dividends will be
exempt from the withholding tax described above, provided that
an IRS Form W-8ECI, or successor form, is furnished to the
payor. Such dividends will instead be taxed on a net basis at
applicable graduated individual or corporate rates. If, however,
the dividends are effectively connected with the conduct by the
non-U.S. holder of a trade or business within the United States,
but are not attributable to a United States permanent
establishment of the non-U.S. holder, a recipient will be
required to file a U.S. tax return and should file an IRS
Form 8833 claiming benefits of the tax treaty with respect
to dividends not attributable to a United States permanent
establishment.
Effectively connected dividends received by a
foreign corporation may, under certain circumstances, be subject
as well to a "branch profits" tax at a rate of 30% or
a lower applicable treaty rate. A non-United States Holder who
furnished the payor with an IRS Form W-8ECI or successor
form must also provide a United States tax identification number.
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A non-U.S. holder of our Class A common
stock that is eligible for a reduced rate of U.S. withholding
tax pursuant to an income tax treaty may obtain a refund of any
amounts withheld in excess of the tax treaty rate by filing an
appropriate claim for a refund with the Internal Revenue
Services (the "IRS").
Gain on Disposition of Class A Common
Stock
A non-U.S. holder generally will not be subject
to United States federal income tax in respect of a gain
realized on a disposition of our Class A common stock,
provided that (a) the gain is not effectively connected
with a trade or business conducted by the non-U.S. holder in the
United States, (b) in the case of a non-U.S. holder who is
an individual, such holder is present in the United States for
less than 183 days in the taxable year of the sale and
other conditions are met, and (c) we are not nor have been
a "United States real property holding corporation"
for United States federal income tax purposes (a
"USRPHC"). We believe that we were not, are not
currently, and are not likely to become a USRPHC. If we were to
become a USRPHC, gain recognized on the sale or other
disposition of Class A common stock by a non-United States
holder generally would be subject to United States federal
income tax (and withholding) unless (i) our Class A
common stock continues to be "regularly traded on an
established securities market" at any time during the
calendar year of disposition within the meaning of the Code and
(ii) such non-United States holder does not actually or
constructively own more than 5% of the Class A common stock at
any time during the shorter of the five-year period preceding
the disposition or such non-United States holder's holding
period.
If a non-U.S. holder is engaged in the conduct of
a trade or business in the United States, gain on the
disposition of our Class A common stock that is effectively
connected with the conduct of such trade or business and, where
an income tax treaty applies, is attributable to a United States
permanent establishment, will be taxed on a net basis at
applicable graduated individual or corporate rates. Effectively
connected gain of a foreign corporation may, under certain
circumstances, be subject as well to a "branch
profits" tax at a rate of 30 percent or a lower
applicable treaty rate.
U.S. Information Reporting Requirements and
Backup Withholding Tax
U.S. information reporting on IRS Form 1099
and backup withholding tax will not apply to dividends paid on
our Class A common stock to a non-U.S. holder, provided
that non-U.S. holder provides an IRS Form W-8BEN (or
satisfies certain certification documentary evidence
requirements for establishing that it is a non-United States
person under U.S. Treasury regulations) or otherwise establishes
an exemption. Distributions on our Class A common stock
will, however, be reported to the IRS and to the non-U.S. holder
on IRS Form 1042-S.
Information reporting and backup withholding also
generally will not apply to a payment of the proceeds of a sale
of our Class A common stock affected outside the United
States by a foreign office of a foreign broker. However,
information reporting requirements (but not backup withholding)
will apply to a payment of the proceeds of a sale of our
Class A common stock effected outside the United States by
a foreign office of a broker if the broker (i) is a United
States person, (ii) derives 50 percent or more of its
gross income for certain periods from the conduct of a trade or
business in the United States, (iii) is a "controlled
foreign corporation" as to the United States, or
(iv) is a foreign partnership that, at any time during its
taxable year, is 50 percent or more (by income or capital
interest) owned by United States persons or is engaged in the
conduct of a U.S. trade or business, unless in any such case the
broker has documentary evidence in its records that the holder
is a non-U.S. holder and certain conditions are met, or the
holder otherwise establishes an exemption. Payment by a United
States office of a broker of the proceeds of a sale of our
Class A common stock will be subject to both backup
withholding and information reporting unless the holder
certifies its non-U.S. status under penalties of perjury or
otherwise establishes an exemption.
Any amounts withheld under the backup withholding
rules may be allowed as a refund or a credit against that
holder's U.S. federal income tax liability provided the
required information is furnished to the IRS.
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SHARE LENDING AGREEMENT
Prior to this offering of our Class A common
stock, we sold $862.5 million in aggregate principal amount
of 5.875% convertible senior notes due 2009 in a private
placement pursuant to Rule 144A under the Securities Act.
We understand that, when we sold the 5.875%
convertible notes, and for some time thereafter, it was
difficult for investors in the notes to borrow shares of our
Class A common stock for the purpose of shorting such stock
to hedge their investment in the notes. We also understand that
many investors in convertible securities seek to hedge their
exposure to the issuer's common stock by selling the stock
short to establish an initial hedge position that partially
offsets the long position represented by the convertible
securities. Such investors then dynamically adjust their hedge
position over time as the market price of the underlying stock
and the time to maturity of the convertible securities changes.
As the stock price increases, investors will generally increase
their hedge position by borrowing and shorting more shares, and
as the stock price decreases, investors will generally decrease
their hedge position by buying shares in the market and closing
out their stock loans.
Because we believed there were not sufficient
shares of our Class A common stock available for investors
to borrow when we offered our 5.875% convertible notes, and
because we understood that the shares that were available were
relatively expensive to borrow, we were concerned that, in order
to sell the notes, we would be forced to offer terms that would
have been unfavorable to us. To address this concern, and to
make it possible or less expensive for prospective investors in
our 5.875% convertible notes to hedge their investment, we
entered into a share lending agreement, dated November 22,
2004, with Citigroup Global Markets Inc.
("Citigroup"), as agent for Citigroup Global Markets
Limited ("CGML"), as borrower. Under this agreement,
we agreed to loan to CGML up to 150,000,000 shares of our
Class A common stock on one or more occasions prior to
November 16, 2006 or, if earlier, the date as of which all
of the 5.875% convertible notes cease to be outstanding as the
result of conversion, repurchase, redemption or otherwise. We
will receive a loan fee of $.001 per share for each share
that we loan to CGML, payable at the time such share is
borrowed. Citigroup Global Markets Holdings Inc. guaranteed the
obligations of CGML under the share lending agreement.
Notwithstanding the difficulties that we believe
holders faced in establishing hedge positions at time we
initially sold the 5.875% convertible senior notes and for some
time thereafter, we now understand that many investors in the
notes have since been able to borrow shares of our Class A
common stock for the purpose of shorting such stock to hedge
their investment in the notes in addition to the borrow provided
by the prior share borrow transaction. However, we are
nonetheless required under the registration rights agreement
described below to register the shares offered hereby. As noted
below, we have been advised by CGML that it or its affiliates
intend to use the short sales of our Class A common stock
pursuant to this prospectus to facilitate, through the
transactions discussed below, the establishment by the holders
of our 5.875% convertible senior notes of hedged positions with
respect to the 5.875% convertible senior notes. These holders
may include holders who have not yet established hedge positions
and may also include other holders who have already established
hedge positions but wish to establish new hedge positions
through CGML because these new hedge positions will be less
expensive to maintain than their pre-existing hedge positions.
We understand that such holders who are already hedged will
likely seek to close out their existing hedge positions by
obtaining shares in the open market.
Under the agreement, CGML agreed that it will not
transfer or dispose of the borrowed shares except for the
purpose of directly or indirectly facilitating the hedging of
the 5.875% convertible notes by holders. Any shares of our
Class A common stock that Citigroup returns to us to reduce
its stock loan after such shares have been sold into the public
market pursuant to a registration statement cannot be reborrowed.
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Share loans under the agreement will terminate
and the borrowed shares must be returned to us:
•
if and when CGML in its discretion terminates all
    or any portion of a loan at any time;
•
if and when we terminate any or all of the
    outstanding loans upon a default by CGML under the share lending
    agreement, including a breach by CGML of any of its
    representations and warranties, covenants or agreements under
    such agreement or the bankruptcy of CGML; or
•
on November 16, 2009, the termination date
    for the share lending agreement or, sooner, if and when all of
    the 5.875% convertible senior notes have been converted, repaid,
    redeemed or are otherwise no longer outstanding.
We will not otherwise have the right to terminate
any loan of borrowed shares.
Any shares that we loan to CGML will be issued
and outstanding for corporate law purposes, and accordingly, the
purchasers of the borrowed shares and their transferees will
have all of the rights of a holder of our outstanding shares of
Class A common stock, including the right to vote the
shares on all matters submitted to a vote of our stockholders
and the right to receive any dividends or other distributions
that we may pay or make on our outstanding shares of
Class A common stock. However, under the share lending
agreement, CGML has agreed:
•
to pay to us an amount equal to any cash
    dividends that we pay on the borrowed shares, and
•
to pay or deliver to us any other distribution,
    in liquidation or otherwise, that we make on the borrowed shares.
CGML has also agreed under the share lending
agreement that it will not vote any borrowed shares of which it
is the record owner, and it will not transfer or dispose of any
borrowed shares except pursuant to a registration statement that
is effective under the Securities Act of 1933, as amended.
However, investors that purchase the shares from CGML (and any
subsequent transferees of such purchasers) will be entitled to
the same voting rights with respect to those shares as any other
holder of our Class A common stock.
If the credit ratings of Citigroup Global Markets
Holdings Inc., the guarantor of CGML's obligations under
the share lending agreement, decline below a specified level,
CGML has agreed under the share lending agreement to post and
maintain with Citigroup, as collateral agent on our behalf,
collateral in the form of cash, government securities,
certificates of deposit, high grade commercial paper of
U.S. issuers or money market shares with a market value at
least equal to 100% of the market value of the borrowed shares
as security for the obligation of CGML to return the borrowed
shares to us when required.
In view of the contractual undertakings of CGML
in the share lending agreement, which have the effect of
substantially eliminating the economic dilution that would
otherwise result from the issuance of the borrowed shares, we
believe that under U.S. generally accepted accounting
principles currently in effect, the borrowed shares will not be
considered outstanding for the purpose of computing and
reporting our earnings per share.
CGML, through Citigroup as principal or agent, is
offering for sale pursuant to this prospectus all 122,830,000 of
the remaining shares it is entitled to borrow under the share
lending agreement. Due to the fact that many investors in the
notes have been able to borrow shares of our Class A common
stock for the purpose of shorting such stock to hedge their
investment in the notes, and in light of prohibitions on the
purchase of shares in this offering by such persons,
substantially less than all of the 122,830,000 shares
remaining under the share lending agreement are expected to be
sold in this offering. Subject to certain conditions, the share
lending agreement will entitle Citigroup to borrow the remaining
shares in the future. Accordingly, pursuant to a registration
rights agreement, Charter will be obligated to file, at
Citigroup's request, up to three additional registration
statements with respect to these unsold shares until
November 16, 2006.
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We have been advised by CGML that it or its
affiliates intend to use the short sales of our Class A
common stock pursuant to this prospectus to facilitate the
establishment by investors in our 5.875% convertible senior
notes of short positions with respect to those convertible
senior notes. Concurrently with the offering of shares of
Class A common stock offered hereby, CGML or its affiliates
will offer investors in our 5.875% convertible senior notes
the opportunity to establish short positions in one of two ways:
•
First, CGML or its affiliates may enter into a
    swap transaction with an investor under which the investor is
    economically short to CGML or such affiliate. As described under
    "Underwriting" below, the initial reference price of
    these swap transactions (and effectively the price at which the
    investor has established its short position) will be the
    offering price at which Citigroup sells shares to investors in
    our Class A common stock pursuant to this prospectus. We
    refer to this first alternative as "Alternative One."
    In this case, CGML would ultimately use the proceeds from the
    sale of shares in this offering to acquire shares in the market
    when it must return shares to Charter under the Share Lending
    Agreement (and, if applicable, to fund its obligations to the
    swap counter-parties if the price of the Class A common
    stock when the swap is terminated is below the price in this
    offering).
•
Second, CGML or its affiliates may borrow shares
    of our Class A common stock from persons who did not
    purchase shares in the offering (an "unrelated share
    lender"), in turn lend those same shares to an investor in
    our convertible senior notes, then use the proceeds it receives
    in this offering to repurchase those shares from the convertible
    senior notes investor. As described under
    "Underwriting" below, the purchase price that CGML or
    its affiliate will pay to a convertible senior notes investor
    that has borrowed shares from CGML or its affiliate and sold
    them back to CGML or its affiliate will be the offering price at
    which Citigroup sells shares to investors in our Class A
    common stock pursuant to this prospectus. Once CGML or its
    affiliate purchases those borrowed shares from such convertible
    senior notes investor, it will either lend those shares to
    another investor who wishes to establish a short position
    through this second alternative or return them to the unrelated
    share lender. We refer to this second alternative as
    "Alternative Two."
Citigroup expects to enter into the transactions
described under "Alternative One" or "Alternative
Two" concurrently with the sale of the shares of our
Class A common stock offered hereby.
As described under "Underwriting"
below, the number of shares sold in this offering, and the price
at which those shares will be sold, has been determined by
(i) the level of demand by investors willing to purchase
shares of our Class A common stock pursuant to this
offering and (ii) the level of demand by investors in our
convertible senior notes willing to establish short positions
under Alternative One or Alternative Two. Because, as described
above, the price at which convertible senior notes investors
establish their short positions through CGML or its affiliates
(whether by means of Alternative One or Alternative Two) will be
the offering price of the shares of our Class A common
stock offered hereby, Citigroup will establish a "clearing
price" for a number of shares at which both purchasers of
our Class A common stock are willing to purchase shares
offered hereby and investors in our convertible senior notes are
willing to establish short positions.
The offering of shares of our Class A common
stock pursuant to this prospectus, as well as the facilitation
of short positions as described above, may have a significant
impact on the market price of our common stock:
•
As described above, this offering of shares of
    our Class A common stock will increase the number of shares
    issued and outstanding, and such shares will be eligible for
    trading in the Nasdaq National Market. Accordingly, the increase
    in supply of shares may have an adverse impact on the trading
    price of our Class A common stock. As described under
    "Underwriting" below, the offering price of the shares
    offered hereby may be at a significant discount to the market
    price of our Class A common stock.
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•
As described above, holders of our convertible
    senior notes that have established their hedge positions prior
    to this offering, but wish to establish new hedge positions
    through CGML or its affiliates under Alternative One or
    Alternative Two, will likely seek to close out their existing
    hedge positions. In order to close out those existing hedge
    positions, it is likely those holders will purchase shares in
    the open market prior to, or after, the determination of the
    offering price for the Class A common stock offered hereby.
    While the effect of those transactions cannot be ascertained at
    this time, the purchase activity by such holders may temporarily
    increase the market price of our common stock, which may
    significantly increase the volatility of our stock price.
•
A Holder of convertible senior notes that has
    established a short position through Citigroup under either
    Alternative One or Alternative Two may from time to time wish to
    decrease its short position for a variety of reasons, including
    any conversion of their notes or a decline in the price of our
    Class A common stock. If a holder wishes to decrease its
    hedged position, it may either terminate all or part of its swap
    transaction with CGML's affiliate (in the case of
    Alternative One) or return all or part of the borrowed shares
    (in the case of Alternative Two). CGML's affiliate may
    concurrently enter into a similar hedge facilitation transaction
    with other holders of the convertible notes to replace the
    terminated swap transaction or the repaid stock loan. If the
    affiliate does not enter into a replacement transaction, it will
    either purchase shares in the market to unwind its swap
    transaction and use those shares to repay a portion of
    CGML's stock loan (in the case of Alternative One) or it
    will use the shares returned to it upon repayment of the stock
    loan it made to the investor to repay a portion of CGML's
    stock loan (in the case of Alternative Two). The effect of any
    of these transactions on the market price of our Class A
    common stock cannot be ascertained at this time, but they may
    significantly increase the volatility of our stock price.
Our issuance of loaned shares of our Class A
common stock offered pursuant to the share lending agreement
will be essentially analogous to a sale of shares coupled with a
forward contract for the reacquisition of the shares at a future
date. An instrument that requires physical settlement by
repurchase of a fixed number of shares in exchange for cash is
considered a forward purchase instrument. While the share
lending agreement does not require a cash payment upon return of
the shares, physical settlement is required (i.e., the loaned
shares must be returned at the end of the arrangement). The fair
value of the common stock to be lent in this transaction and
that was lent in the prior share borrow transaction is
approximately $225 million. However, the net effect on
shareholders' deficit of the share lending agreement
(exclusive of the adjustment for the fair value of the stock
borrow facility discussed below) which includes our requirement
to lend the shares and the counterparties' requirement to
return the shares, is to increase equity by $150,000, which
represents the cash received upon lending of the shares and is
equal to the par value of the common stock to be issued.
The shares to be issued are required to be
returned, in accordance with the contractual arrangement, and
will be treated in basic and diluted earnings per share as if
they were already returned and retired. Consequently, there will
be no impact of the 150 million shares of common stock
subject to the share lending agreement (including the shares
offered hereby) in the earnings per share calculation. However,
the shares will nonetheless be issued and outstanding and will
be eligible for trading in the Nasdaq National Market.
Accordingly, the increase in supply of shares may have an
adverse impact on the trading price of our Class A common
stock. See "Risk Factors — Additional Risks
Related to This Offering — The effect of the issuance
of our shares of Class A common stock pursuant to the share
lending agreement and upon conversion of our 5.875% convertible
notes, including sales of our Class A common stock in short
sale transactions by the holders of the 5.875% convertible
notes, may have a negative effect on the market price of our
Class A common stock." Accordingly, the existence of
the share lending agreement and the short positions established
in connection with facilitating the hedging of the 5.875%
convertible senior notes could have the effect of causing the
market price of our Class A common stock to be lower over
the term of the share lending agreement than it would have been
had we not entered into the agreement, but we believe that
entering into the share lending agreement was in our best
interests and the
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best interests of our shareholders as it
facilitated the sale of the convertible notes on terms more
favorable to us than we could have otherwise obtained.
The share lending agreement was entered into to
facilitate the ability of the purchasers of the
5.875% convertible senior notes to improve or enhance their
yield on the notes and as such was a cost of the
5.875% notes issuance transaction. We determined that the
fair value of the stock borrow facility was approximately
$13 million on the date of issuance of these notes.
Therefore, we recorded such value at issuance as an increase to
deferred financing fees and additional paid in capital in our
consolidated financial statements. We are amortizing the value
of the stock borrow facility to interest expense over the 5-year
term of these notes.
We agreed to use our reasonable best efforts to
cause a registration statement covering the
150 million shares of Class A common stock to be
lent pursuant to the share lending agreement to become effective
on or before April 1, 2005. Such registration statement was
not declared effective by that date, and we therefore have
incurred liquidated damages as defined in the related indenture
from April 2, 2005 and incurred such damages through
July 17, 2005, the day prior to the effective date of the
registration statement. These liquidated damages were or will be
paid in cash at a rate of 0.25% per month of the accreted
principal amount of the convertible notes for the first
60 days of the default, and 0.50% per month of the accreted
principal amount of the convertible notes thereafter.
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UNDERWRITING
The shares of our Class A common stock
offered by this prospectus are shares that we have agreed to
loan to CGML, an affiliate of Citigroup, pursuant to a share
lending agreement described in "Share Lending
Agreement." Citigroup also acted as an initial purchaser
for the private placement pursuant to Rule 144A under the
Securities Act of $862.5 million in principal amount of our
5.875% convertible senior notes due 2009 issued on
November 22, 2004. See "Share Lending Agreement."
CGML, through Citigroup as principal or agent, is offering for
sale pursuant to this prospectus all of the remaining
122,830,000 shares CGML is entitled to borrow under the
share lending agreement. We have been advised by CGML that it or
its affiliates intends to use the short sales of our
Class A common stock pursuant to this prospectus to
facilitate transactions by which investors in our 5.875%
convertible senior notes will hedge their investments in such
convertible notes. See "Share Lending Agreement." In
connection with facilitating those transactions, CGML or its
affiliates expect to receive customary, negotiated fees, not to
exceed approximately 3.0% per share (based on the offering
price), from investors in our 5.875% convertible senior notes.
The National Association of Securities Dealers views these fees
as underwriting compensation in connection with the offering of
shares of our Class A common stock. We will not receive any
proceeds from the sale of shares of our Class A common
stock pursuant to this prospectus, but will receive a loan fee
of $0.001 per share for each share loaned under the share
lending agreement.
The shares of our Class A common stock are
being offered on a "best efforts" basis. "Best
efforts" means that CGML is not under any obligation under
the share lending agreement or otherwise to borrow and sell any
of the shares offered hereby.
Citigroup will determine the offering price of
the shares of Class A common stock by initially soliciting
indications of interest from potential purchasers of our common
stock and conducting customary negotiations with those potential
purchasers during the offering period. As described under
"Share Lending Agreement" above, the price at which
investors in our 5.875% convertible senior notes establish
their short positions through CGML or its affiliates (whether by
means of Alternative One or Alternative Two described above)
will be the offering price of the shares of our Class A
common stock offered hereby. As a result, during the offering
period, while Citigroup is negotiating a purchase price with
potential purchasers of our Class A common stock, Citigroup
will also be soliciting indications of interest, based on the
purchase price being negotiated with those potential purchasers,
from such convertible senior notes investors seeking to
establish a short position. Citigroup will establish a
"clearing price" for a number of shares at which both
purchasers of our Class A common stock are willing to
purchase shares offered hereby and investors in our convertible
senior notes are willing to establish short positions. This
clearing price is the offering price hereunder, and may be at a
discount to the market price of our Class A common stock at
the time the offering is commenced.
The offering will be at a fixed price and will
not be conducted on a delayed or continuous basis. The offering
will terminate on or
before                     ,
2005.
The Class A common stock is quoted on the
Nasdaq National Market under the symbol "CHTR."
The following table summarizes the compensation
that we are to pay to the underwriter in connection with this
offering.
Per Share
Total
Underwriting Discounts and Commissions paid by us
$
0
$
0
Expenses payable by us
$
0
$
0
We estimate that our portion of the total
expenses of this offering will
be                       .
The underwriter has performed investment banking
and advisory services for us from time to time for which it has
received customary fees and expenses. The underwriter may, from
time to time, engage in transactions with and perform services
for us in the ordinary course of its business. The underwriter
also was an initial purchaser of the convertible notes.
188
Table of Contents
We have agreed to indemnify the underwriter
against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the
underwriter may be required to make because of any of those
liabilities.
The shares offered hereby are not being offered
to, and may not be purchased by, any person who has an open
short position in Charter's Class A common stock at
the time of the sale, any person who is purchasing the shares on
behalf of or for the account of such a person or any person who
has an arrangement or understanding to resell, lend or otherwise
transfer (directly or indirectly) the shares to such a person.
Each purchaser of Charter's Class A
common stock in this offering must execute and deliver the
Investor Acknowledgement set forth on Annex A hereto to
Citigroup by facsimile to (646) 843-3922.
LEGAL MATTERS
The validity of the securities offered by this
prospectus has been passed upon for Charter Communications, Inc.
by Gibson, Dunn & Crutcher LLP. Weil,
Gotshal & Manges LLP represented the underwriter in
this offering.
EXPERTS
The consolidated financial statements of Charter
Communications, Inc. and subsidiaries as of December 31,
2004 and 2003 and for the three year periods ended
December 31, 2004, which are included in this prospectus,
have been audited by KPMG LLP, an independent registered
public accounting firm, as stated in their report included in
this prospectus, which includes explanatory paragraphs regarding
the adoption, effective January 1, 2002, of Statement of
Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets," effective September 30, 2004
of EITF Topic D-108, "Use of the Residual Method to
Value Acquired Assets Other than Goodwill," and, effective
January 1, 2003, of Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based
Compensation," as amended by Statement of Financial
Accounting Standards No. 148, "Accounting for
Stock-Based Compensation — Transition and
Disclosure — an amendment to FASB Statement
No. 123." The consolidated financial statements
referred to above have been included in this prospectus in
reliance upon the authority of KPMG LLP as experts in giving
said report.
189
Table of Contents
INDEX TO FINANCIAL STATEMENTS
Page
Condensed Consolidated Balance Sheets as of
    June 30, 2005 and December 31, 2004
F-2
Condensed Consolidated Statements of Operations
    for the Three and Six Months Ended June 30, 2005 and 2004
F-3
Condensed Consolidated Statements of Cash Flows
    for the Six Months Ended June 30, 2005 and 2004
F-4
Notes to Condensed Consolidated Financial
    Statements
F-5
Report of Independent Registered Public
    Accounting Firm
F-28
Consolidated Balance Sheets as of
    December 31, 2004 and 2003
F-29
Consolidated Statements of Operations for the
    Years Ended December 31, 2004, 2003 and 2002
F-30
Consolidated Statements of Changes in
    Shareholders' Equity (Deficit) for the Years Ended
    December 31, 2004, 2003 and 2002
F-31
Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2004, 2003 and 2002
F-32
Notes to Consolidated Financial Statements
F-33
F-1
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars in millions, except share
data)
June 30,
December 31,
2005
2004
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
40
$
650
Accounts receivable, less allowance for doubtful
    accounts of $14 and $15, respectively
183
190
Prepaid expenses and other current assets
82
82
Total current assets
305
922
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net of accumulated
    depreciation of $6,061 and $5,311, respectively
6,075
6,289
Franchises
9,839
9,878
Total investment in cable properties, net
15,914
16,167
OTHER NONCURRENT ASSETS
560
584
Total assets
$
16,779
$
17,673
LIABILITIES AND SHAREHOLDERS'
    DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses
$
1,224
$
1,217
Total current liabilities
1,224
1,217
LONG-TERM DEBT
19,247
19,464
DEFERRED MANAGEMENT FEES — RELATED PARTY
14
14
OTHER LONG-TERM LIABILITIES
682
681
MINORITY INTEREST
659
648
PREFERRED STOCK — REDEEMABLE;
    $.001 par value; 1 million shares authorized;
    545,259 shares issued and outstanding
55
55
SHAREHOLDERS' DEFICIT:
Class A Common stock; $.001 par value;
    1.75 billion shares authorized; 304,941,082 and
    305,203,770 shares issued and outstanding, respectively
—
—
Class B Common stock; $.001 par value;
    750 million shares authorized; 50,000 shares issued
    and outstanding
—
—
Preferred stock; $.001 par value;
    250 million shares authorized; no non-redeemable shares
    issued and outstanding
—
—
Additional paid-in capital
4,802
4,794
Accumulated deficit
(9,905
)
(9,196
)
Accumulated other comprehensive loss
1
(4
)
Total shareholders' deficit
(5,102
)
(4,406
)
Total liabilities and shareholders' deficit
$
16,779
$
17,673
The accompanying notes are an integral part of
these condensed consolidated financial statements.
F-2
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in millions, except share and per
share data)
Unaudited
Three Months Ended June 30,
Six Months Ended June 30,
2005
2004
2005
2004
REVENUES
$
1,323
$
1,239
$
2,594
$
2,453
COSTS AND EXPENSES:
Operating (excluding depreciation and
    amortization)
569
515
1,128
1,027
Selling, general and administrative
256
244
493
483
Depreciation and amortization
378
364
759
734
Asset impairment charges
8
—
39
—
(Gain) loss on sale of assets, net
—
2
4
(104
)
Option compensation expense, net
4
12
8
26
Special charges, net
(2
)
87
2
97
1,213
1,224
2,433
2,263
Income from operations
110
15
161
190
OTHER INCOME AND EXPENSES:
Interest expense, net
(451
)
(410
)
(871
)
(803
)
Gain (loss) on derivative instruments and hedging
    activities, net
(1
)
63
26
56
Loss on debt to equity conversions
—
(15
)
—
(23
)
Gain (loss) on extinguishment of debt
1
(21
)
8
(21
)
Gain on investments
20
2
21
—
(431
)
(381
)
(816
)
(791
)
Loss before minority interest and income taxes
(321
)
(366
)
(655
)
(601
)
MINORITY INTEREST
(3
)
(6
)
(6
)
(10
)
Loss before income taxes
(324
)
(372
)
(661
)
(611
)
INCOME TAX EXPENSE
(31
)
(43
)
(46
)
(97
)
Net loss
(355
)
(415
)
(707
)
(708
)
Dividends on preferred stock —
    redeemable
(1
)
(1
)
(2
)
(2
)
Net loss applicable to common stock
$
(356
)
$
(416
)
$
(709
)
$
(710
)
LOSS PER COMMON SHARE, basic and diluted
$
(1.18
)
$
(1.39
)
$
(2.34
)
$
(2.39
)
Weighted average common shares outstanding, basic
    and diluted
303,620,347
300,522,815
303,465,474
297,814,091
The accompanying notes are an integral part of
these condensed consolidated financial statements.
F-3
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Dollars in millions)
Unaudited
Six Months
Ended June 30,
2005
2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(707
)
$
(708
)
Adjustments to reconcile net loss to net cash
    flows from operating activities:
Minority interest
6
10
Depreciation and amortization
759
734
Asset impairment charges
39
—
Option compensation expense, net
8
22
Special charges, net
(2
)
85
Noncash interest expense
114
163
Gain on derivative instruments and hedging
    activities, net
(26
)
(56
)
(Gain) loss on sale of assets, net
4
(104
)
Loss on debt to equity conversions
—
23
(Gain) loss on extinguishment of debt
(14
)
18
Gain on investments
(21
)
—
Deferred income taxes
43
95
Changes in operating assets and liabilities, net
    of effects from dispositions:
Accounts receivable
1
1
Prepaid expenses and other assets
—
3
Accounts payable, accrued expenses and other
(23
)
(118
)
Net cash flows from operating activities
181
168
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment
(542
)
(390
)
Change in accrued expenses related to capital
    expenditures
45
(52
)
Proceeds from sale of assets
8
729
Purchases of investments
(3
)
(12
)
Proceeds from investments
17
—
Other, net
(2
)
(2
)
Net cash flows from investing activities
(477
)
273
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt
635
2,813
Repayments of long-term debt
(946
)
(3,160
)
Payments for debt issuance costs
(3
)
(97
)
Net cash flows from financing activities
(314
)
(444
)
NET DECREASE IN CASH AND CASH EQUIVALENTS
(610
)
(3
)
CASH AND CASH EQUIVALENTS, beginning of period
650
127
CASH AND CASH EQUIVALENTS, end of period
$
40
$
124
CASH PAID FOR INTEREST
$
744
$
609
NONCASH TRANSACTIONS:
Issuance of debt by Charter Communications
    Operating, LLC
$
333
$
—
Retirement of Charter Communications Holdings,
    LLC debt
$
(346
)
$
—
Debt exchanged for Charter Class A common
    stock
$
—
$
30
The accompanying notes are an integral part of
these condensed consolidated financial statements.
F-4
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
1.
Organization and Basis of
    Presentation
Charter Communications, Inc.
("Charter") is a holding company whose principal
assets at June 30, 2005 are the 47% controlling common
equity interest in Charter Communications Holding Company, LLC
("Charter Holdco") and "mirror" notes which
are payable by Charter Holdco to Charter and have the same
principal amount and terms as those of Charter's
convertible senior notes. Charter Holdco is the sole owner of
Charter Communications Holdings, LLC ("Charter
Holdings"). The condensed consolidated financial statements
include the accounts of Charter, Charter Holdco, Charter
Holdings and all of their subsidiaries where the underlying
operations reside, collectively referred to herein as the
"Company." Charter consolidates Charter Holdco on the
basis of voting control. Charter Holdco's limited liability
company agreement provides that so long as Charter's
Class B common stock retains its special voting rights,
Charter will maintain a 100% voting interest in Charter Holdco.
Voting control gives Charter full authority and control over the
operations of Charter Holdco. All significant intercompany
accounts and transactions among consolidated entities have been
eliminated. The Company is a broadband communications company
operating in the United States. The Company offers its customers
traditional cable video programming (analog and digital video)
as well as high-speed Internet services and, in some areas,
advanced broadband services such as high definition television,
video on demand and telephone. The Company sells its cable video
programming, high-speed Internet and advanced broadband services
on a subscription basis. The Company also sells local
advertising on satellite-delivered networks.
The accompanying condensed consolidated financial
statements of the Company have been prepared in accordance with
accounting principles generally accepted in the United States
for interim financial information and the rules and regulations
of the Securities and Exchange Commission ("SEC").
Accordingly, certain information and footnote disclosures
typically included in Charter's Annual Report on
Form 10-K have been condensed or omitted for this quarterly
report. The accompanying condensed consolidated financial
statements are unaudited and are subject to review by regulatory
authorities. However, in the opinion of management, such
financial statements include all adjustments, which consist of
only normal recurring adjustments, necessary for a fair
presentation of the results for the periods presented. Interim
results are not necessarily indicative of results for a full
year.
The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Areas
involving significant judgments and estimates include
capitalization of labor and overhead costs; depreciation and
amortization costs; impairments of property, plant and
equipment, franchises and goodwill; income taxes; and
contingencies. Actual results could differ from those estimates.
Reclassifications
Certain 2004 amounts have been reclassified to
conform with the 2005 presentation.
2.
Liquidity and Capital Resources
The Company incurred net loss applicable to
common stock of $356 million and $416 million for the
three months ended June 30, 2005 and 2004, respectively,
and $709 million and $710 million for the six months
ended June 30, 2005 and 2004, respectively. The
Company's net cash flows from operating activities were
$181 million and $168 million for the six months ended
June 30, 2005 and 2004, respectively.
F-5
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
The Company has a significant level of debt. The
Company's long-term financing as of June 30, 2005
consists of $5.4 billion of credit facility debt,
$12.9 billion accreted value of high-yield notes and
$863 million accreted value of convertible senior notes.
For the remainder of 2005, $15 million of the
Company's debt matures, and in 2006, an additional
$55 million of the Company's debt matures. In 2007 and
beyond, significant additional amounts will become due under the
Company's remaining long-term debt obligations.
The Company has historically required significant
cash to fund debt service costs, capital expenditures and
ongoing operations. Historically, the Company has funded these
requirements through cash flows from operating activities,
borrowings under its credit facilities, sales of assets,
issuances of debt and equity securities and from cash on hand.
However, the mix of funding sources changes from period to
period. For the six months ended June 30, 2005, the Company
generated $181 million of net cash flows from operating
activities, after paying cash interest of $744 million. In
addition, the Company used approximately $542 million for
purchases of property, plant and equipment. Finally, the Company
had net cash flows used in financing activities of
$314 million, which included, among other things,
approximately $705 million in repayment of borrowings under
the Company's revolving credit facility. This repayment was
the primary reason cash on hand decreased by $610 million
to $40 million at June 30, 2005.
The Company expects that cash on hand, cash flows
from operating activities and the amounts available under its
credit facilities will be adequate to meet its cash needs for
the remainder of 2005. Cash flows from operating activities and
amounts available under the Company's credit facilities may
not be sufficient to fund the Company's operations and
satisfy its principal repayment obligations that come due in
2006 and, the Company believes, will not be sufficient to fund
its operations and satisfy such repayment obligations thereafter.
It is likely that the Company will require
additional funding to repay debt maturing after 2006. The
Company is working with its financial advisors to address such
funding requirements. However, there can be no assurance that
such funding will be available to the Company. Although
Mr. Allen and his affiliates have purchased equity from the
Company in the past, Mr. Allen and his affiliates are not
obligated to purchase equity from, contribute to or loan funds
to the Company in the future.
Credit Facilities and
    Covenants
The Company's ability to operate depends
upon, among other things, its continued access to capital,
including credit under the Charter Communications Operating, LLC
("Charter Operating") credit facilities. These credit
facilities, along with the Company's indentures, contain
certain restrictive covenants, some of which require the Company
to maintain specified financial ratios and meet financial tests
and to provide audited financial statements with an unqualified
opinion from the Company's independent auditors. As of
June 30, 2005, the Company was in compliance with the
covenants under its indentures and credit facilities and the
Company expects to remain in compliance with those covenants for
the next twelve months. As of June 30, 2005, the Company
had borrowing availability under the credit facilities of
$870 million, none of which was restricted due to
covenants. Continued access to the Company's credit
facilities is subject to the Company remaining in compliance
with the covenants of these credit facilities, including
covenants tied to the Company's operating performance. If
the Company's operating performance results in
non-compliance with these covenants, or if any of certain other
events of non-compliance under these credit facilities or
indentures governing the Company's debt occurs, funding
under the credit facilities may not be available and defaults on
some or potentially all of the Company's debt obligations
could occur. An event of default under the covenants governing
any of the Company's debt instruments could result in the
acceleration of its payment obligations under that debt and,
under certain circumstances, in cross-defaults under its other
debt obligations, which could have a material adverse effect on
the Company's consolidated financial condition or results
of operations.
F-6
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
The Charter Operating credit facilities required
the Company to redeem the CC V Holdings, LLC notes as
a result of the Charter Holdings leverage ratio becoming less
than 8.75 to 1.0. In satisfaction of this requirement, in March
2005, CC V Holdings, LLC redeemed all of its
outstanding notes, at 103.958% of principal amount, plus accrued
and unpaid interest to the date of redemption. The total cost of
the redemption including accrued and unpaid interest was
approximately $122 million. The Company funded the
redemption with borrowings under the Charter Operating credit
facilities.
Specific Limitations
Charter's ability to make interest payments
on its convertible senior notes, and, in 2006 and 2009, to repay
the outstanding principal of its convertible senior notes of
$25 million and $863 million, respectively, will
depend on its ability to raise additional capital and/or on
receipt of payments or distributions from Charter Holdco or its
subsidiaries, including CCH II, LLC
("CCH II"), CCO Holdings, LLC ("CCO
Holdings") and Charter Operating. Distributions by
Charter's subsidiaries to a parent company (including
Charter and Charter Holdco) for payment of principal on
Charter's convertible senior notes, however, are restricted
by the indentures governing the CCH II notes, CCO Holdings
notes, and Charter Operating notes, unless under their
respective indentures there is no default and a specified
leverage ratio test is met at the time of such event. During the
six months ended June 30, 2005, Charter Holdings
distributed $60 million to Charter Holdco. As of
June 30, 2005, Charter Holdco was owed $62 million in
intercompany loans from its subsidiaries, which amount was
available to pay interest and principal on Charter's
convertible senior notes. In addition, Charter has
$122 million of governmental securities pledged as security
for the next five semi-annual interest payments on
Charter's 5.875% convertible senior notes.
The indentures governing the Charter Holdings
notes permit Charter Holdings to make distributions to Charter
Holdco for payment of interest or principal on the convertible
senior notes, only if, after giving effect to the distribution,
Charter Holdings can incur additional debt under the leverage
ratio of 8.75 to 1.0, there is no default under Charter
Holdings' indentures and other specified tests are met. For
the quarter ended June 30, 2005, there was no default under
Charter Holdings' indentures and other specified tests were
met. However, Charter Holdings did not meet the leverage ratio
of 8.75 to 1.0 based on June 30, 2005 financial results. As
a result, distributions from Charter Holdings to Charter or
Charter Holdco are currently restricted and will continue to be
restricted until that test is met. During this restriction
period, the indentures governing the Charter Holdings notes
permit Charter Holdings and its subsidiaries to make specified
investments in Charter Holdco or Charter, up to an amount
determined by a formula, as long as there is no default under
the indentures.
In accordance with the registration rights
agreement entered into with their initial sale, the Company was
required to register for resale by April 21, 2005 its
5.875% convertible senior notes due 2009, issued in
November 2004. Since these convertible notes were not registered
by that date, the Company paid or will pay liquidated damages
totaling $0.5 million through July 14, 2005, the day
prior to the effective date of the registration statement. In
addition, in accordance with the share lending agreement entered
into in connection with the initial sale of its 5.875%
convertible senior notes due 2009, Charter was required to
register by April 1, 2005 150 million shares of its
Class A common stock that Charter was obligated to lend to
Citigroup Global Markets Limited ("CGML") at
CGML's request. Because this registration statement was not
declared effective by such date, the Company paid or will pay
liquidated damages totaling $11 million from April 2,
2005 through July 17, 2005, the day before the effective
date of the registration statement. The liquidated damages were
recorded as interest expense in the accompanying condensed
consolidated statements of operations.
F-7
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
3.
Sale of Assets
As of June 30, 2005, the Company has
concluded it is probable that three pending cable asset sales,
representing approximately 33,000 customers, will close within
the next twelve months thus meeting the criteria for assets held
for sale under Statement of Financial Accounting Standards
("SFAS") No. 144,
Accounting for the
Impairment or Disposal of Long-Lived Assets
. As such the
assets were written down to fair value less estimated costs to
sell resulting in asset impairment charges during the three and
six months ended June 30, 2005 of approximately
$8 million and $39 million, respectively. At
June 30, 2005 assets held for sale, included in investment
in cable properties, are approximately $40 million.
In March 2004, the Company closed the sale of
certain cable systems in Florida, Pennsylvania, Maryland,
Delaware and West Virginia to Atlantic Broadband Finance, LLC.
The Company closed the sale of an additional cable system in New
York to Atlantic Broadband Finance, LLC in April 2004. These
transactions resulted in a $106 million pretax gain
recorded as a gain on sale of assets in the Company's
consolidated statements of operations. The total net proceeds
from the sale of all of these systems were approximately
$735 million. The proceeds were used to repay a portion of
amounts outstanding under the Company's revolving credit
facility.
Gain on investments for the three and six months
ended June 30, 2005 primarily represents a gain realized on
an exchange of the Company's interest in an equity investee
for an investment in a larger enterprise.
4.
Franchises and Goodwill
Franchise rights represent the value attributed
to agreements with local authorities that allow access to homes
in cable service areas acquired through the purchase of cable
systems. Management estimates the fair value of franchise rights
at the date of acquisition and determines if the franchise has a
finite life or an indefinite-life as defined by
SFAS No. 142,
Goodwill and Other Intangible
Assets
. Franchises that qualify for indefinite-life
treatment under SFAS No. 142 are tested for impairment
annually based on valuations, or more frequently as warranted by
events or changes in circumstances. Such test resulted in a
total franchise impairment of approximately $3.3 billion
during the third quarter of 2004. Franchises are aggregated into
essentially inseparable asset groups to conduct the valuations.
The asset groups generally represent geographic clustering of
the Company's cable systems into groups by which such
systems are managed. Management believes such grouping
represents the highest and best use of those assets.
The Company's valuations, which are based on
the present value of projected after tax cash flows, result in a
value of property, plant and equipment, franchises, customer
relationships and its total entity value. The value of goodwill
is the difference between the total entity value and amounts
assigned to the other assets.
Franchises, for valuation purposes, are defined
as the future economic benefits of the right to solicit and
service potential customers (customer marketing rights), and the
right to deploy and market new services such as interactivity
and telephone to the potential customers (service marketing
rights). Fair value is determined based on estimated discounted
future cash flows using assumptions consistent with internal
forecasts. The franchise after-tax cash flow is calculated as
the after-tax cash flow generated by the potential customers
obtained and the new services added to those customers in future
periods. The sum of the present value of the franchises'
after-tax cash flow in years 1 through 10 and the continuing
value of the after-tax cash flow beyond year 10 yields the fair
value of the franchise.
The Company follows the guidance of EITF
Issue 02-17,
Recognition of Customer Relationship
Intangible Assets Acquired in a Business Combination
, in
valuing customer relationships. Customer
F-8
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
relationships, for valuation purposes, represent
the value of the business relationship with existing customers
and are calculated by projecting future after-tax cash flows
from these customers including the right to deploy and market
additional services such as interactivity and telephone to these
customers. The present value of these after-tax cash flows
yields the fair value of the customer relationships.
Substantially all acquisitions occurred prior to January 1,
2002. The Company did not record any value associated with the
customer relationship intangibles related to those acquisitions.
For acquisitions subsequent to January 1, 2002 the Company
did assign a value to the customer relationship intangible,
which is amortized over its estimated useful life.
As of June 30, 2005 and December 31,
2004, indefinite-lived and finite-lived intangible assets are
presented in the following table:
June 30, 2005
December 31, 2004
Gross
Net
Gross
Net
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Amount
Amortization
Amount
Amount
Amortization
Amount
Indefinite-lived intangible assets:
Franchises with indefinite lives
$
9,806
$
—
$
9,806
$
9,845
$
—
$
9,845
Goodwill
52
—
52
52
—
52
$
9,858
$
—
$
9,858
$
9,897
$
—
$
9,897
Finite-lived intangible assets:
Franchises with finite lives
$
39
$
6
$
33
$
37
$
4
$
33
Franchises with indefinite lives decreased
$39 million as a result of the asset impairment charges
recorded related to three pending cable asset sales (see
Note 3). Franchise amortization expense for the three and
six months ended June 30, 2005 and 2004 was $1 million
and $2 million, respectively, which represents the
amortization relating to franchises that did not qualify for
indefinite-life treatment under SFAS No. 142,
including costs associated with franchise renewals. The Company
expects that amortization expense on franchise assets will be
approximately $3 million annually for each of the next five
years. Actual amortization expense in future periods could
differ from these estimates as a result of new intangible asset
acquisitions or divestitures, changes in useful lives and other
relevant factors.
5.
Accounts Payable and Accrued
    Expenses
Accounts payable and accrued expenses consist of
the following as of June 30, 2005 and December 31,
2004:
June 30,
December 31,
2005
2004
Accounts payable — trade
$
86
$
148
Accrued capital expenditures
110
65
Accrued expenses:
Interest
342
324
Programming costs
285
278
Franchise-related fees
54
67
Compensation
94
66
Other
253
269
$
1,224
$
1,217
F-9
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
6.
Long-Term Debt
Long-term debt consists of the following as of
June 30, 2005 and December 31, 2004:
June 30, 2005
December 31, 2004
Face
Accreted
Face
Accreted
Value
Value
Value
Value
Long-Term Debt
Charter Communications, Inc.:
4.75% convertible senior notes due 2006
$
25
$
25
$
156
$
156
5.875% convertible senior notes due 2009
863
838
863
834
Charter Holdings:
8.250% senior notes due 2007
105
105
451
451
8.625% senior notes due 2009
1,244
1,243
1,244
1,243
9.920% senior discount notes due 2011
1,108
1,108
1,108
1,108
10.000% senior notes due 2009
640
640
640
640
10.250% senior notes due 2010
318
318
318
318
11.750% senior discount notes due 2010
450
450
450
448
10.750% senior notes due 2009
874
874
874
874
11.125% senior notes due 2011
500
500
500
500
13.500% senior discount notes due 2011
675
629
675
589
9.625% senior notes due 2009
640
638
640
638
10.000% senior notes due 2011
710
708
710
708
11.750% senior discount notes due 2011
939
851
939
803
12.125% senior discount notes due 2012
330
275
330
259
CCH II, LLC:
10.250% senior notes due 2010
1,601
1,601
1,601
1,601
CCO Holdings, LLC:
8 3/4% senior notes due 2013
500
500
500
500
Senior floating rate notes due 2010
550
550
550
550
Charter Operating:
8% senior second lien notes due 2012
1,100
1,100
1,100
1,100
8 3/8% senior second lien notes due 2014
733
733
400
400
Renaissance Media Group LLC:
10.000% senior discount notes due 2008
114
116
114
116
CC V Holdings:
11.875% senior discount notes due 2008
—
—
113
113
Credit Facilities
Charter Operating
5,445
5,445
5,515
5,515
$
19,464
$
19,247
$
19,791
$
19,464
The accreted values presented above represent the
face value of the notes less the original issue discount at the
time of sale plus the accretion to the balance sheet date.
F-10
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
Gain (loss) on extinguishment of
    debt
In March and June 2005, Charter Operating
consummated exchange transactions with a small number of
institutional holders of Charter Holdings 8.25% senior notes due
2007 pursuant to which Charter Operating issued, in private
placements, approximately $333 million principal amount of
new notes with terms identical to Charter Operating's
8.375% senior second lien notes due 2014 in exchange for
approximately $346 million of the Charter Holdings 8.25%
senior notes due 2007. The exchanges resulted in a loss on
extinguishment of debt of approximately $1 million for the
three months ended June 30, 2005 and a gain on
extinguishment of debt of approximately $10 million for the
six months ended June 30, 2005. The Charter Holdings notes
received in the exchange were thereafter distributed to Charter
Holdings and cancelled.
During the three and six months ended
June 30, 2005, the Company repurchased, in private
transactions, from a small number of institutional holders, a
total of $97 million and $131 million, respectively,
principal amount of its 4.75% convertible senior notes due 2006.
These transactions resulted in a net gain on extinguishment of
debt of approximately $3 million and $4 million for
the three and six months ended June 30, 2005, respectively.
In March 2005, Charter's subsidiary, CC V
Holdings, LLC, redeemed all of its 11.875% notes due 2008, at
103.958% of principal amount, plus accrued and unpaid interest
to the date of redemption. The total cost of redemption was
approximately $122 million and was funded through
borrowings under the Charter Operating credit facilities. The
redemption resulted in a loss on extinguishment of debt for the
six months ended June 30, 2005 of approximately
$5 million. Following such redemption, CC V Holdings, LLC
and its subsidiaries (other than non-guarantor subsidiaries)
guaranteed the Charter Operating credit facilities and granted a
lien on all of their assets as to which a lien can be perfected
under the Uniform Commercial Code by the filing of a financing
statement.
7.
Minority Interest and Equity Interest of
    Charter Holdco
Charter is a holding company whose primary asset
is a controlling equity interest in Charter Holdco, the indirect
owner of the Company's cable systems, and $863 million
and $990 million at June 30, 2005 and
December 31, 2004, respectively, of mirror notes which are
payable by Charter Holdco to Charter and have the same principal
amount and terms as those of Charter's convertible senior
notes. Minority interest on the Company's consolidated
balance sheets represents the ownership percentage of Charter
Holdco not owned by Charter, or approximately 53% of total
members' equity of Charter Holdco, plus $662 million
and $656 million of preferred membership interests in
CC VIII, LLC ("CC VIII"), an indirect
subsidiary of Charter Holdco, as of June 30, 2005 and
December 31, 2004, respectively. As more fully described in
Note 17, this preferred interest arises from the
approximately $630 million of preferred membership units
issued by CC VIII in connection with an acquisition in
February 2000 and continues to be the subject of a dispute
between Charter and Mr. Paul G. Allen, Charter's
Chairman and controlling shareholder. Generally, operating
earnings or losses are allocated to the minority owners based on
their ownership percentage, thereby increasing or decreasing the
Company's net loss, respectively. To the extent they relate
to CC VIII, the allocations of earnings or losses are
subject to adjustment based on the ultimate resolution of this
disputed ownership. Due to the uncertainties related to the
ultimate resolution, effective January 1, 2005, the Company
ceased recognizing minority interest in earnings or losses of
CC VIII for financial reporting purposes until such time as
the resolution of the matter is determinable or other events
occur. For the three and six months ended June 30, 2005,
the Company's results include income of $8 million and
$17 million, respectively, attributable to CC VIII.
F-11
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
Members' deficit of Charter Holdco was
$5.1 billion and $4.4 billion as of June 30, 2005
and December 31, 2004, respectively. Gains and losses
arising from the issuance by Charter Holdco of its membership
units are recorded as capital transactions, thereby increasing
or decreasing shareholders' equity and decreasing or
increasing minority interest on the accompanying condensed
consolidated balance sheets. Minority interest was approximately
53% as of June 30, 2005 and December 31, 2004.
Minority interest includes the proportionate share of changes in
fair value of interest rate derivative agreements. Such amounts
are temporary as they are contractually scheduled to reverse
over the life of the underlying instrument. Additionally,
reported losses allocated to minority interest on the
consolidated statement of operations are limited to the extent
of any remaining minority interest on the balance sheet related
to Charter Holdco. Because minority interest in Charter Holdco
is substantially eliminated, Charter absorbs substantially all
losses before income taxes that otherwise would be allocated to
minority interest. Subject to any changes in Charter
Holdco's capital structure, future losses will continue to
be substantially absorbed by Charter.
Changes to minority interest consist of the
following:
Minority
Interest
Balance, December 31, 2004
$
648
CC VIII 2% Priority Return (see Note 17)
6
Changes in fair value of interest rate agreements
5
Balance, June 30, 2005
$
659
8.
Comprehensive Loss
Certain marketable equity securities are
classified as available-for-sale and reported at market value
with unrealized gains and losses recorded as accumulated other
comprehensive loss on the accompanying condensed consolidated
balance sheets. Additionally, the Company reports changes in the
fair value of interest rate agreements designated as hedging the
variability of cash flows associated with floating-rate debt
obligations, that meet the effectiveness criteria of
SFAS No. 133,
Accounting for Derivative Instruments
and Hedging Activities
, in accumulated other comprehensive
loss, after giving effect to the minority interest share of such
gains and losses. Comprehensive loss for the three months ended
June 30, 2005 and 2004 was $355 million and
$404 million, respectively, and $704 million and
$697 million for the six months ended June 30, 2005
and 2004, respectively.
9.
Accounting for Derivative Instruments and
    Hedging Activities
The Company uses interest rate risk management
derivative instruments, such as interest rate swap agreements
and interest rate collar agreements (collectively referred to
herein as interest rate agreements) to manage its interest
costs. The Company's policy is to manage interest costs
using a mix of fixed and variable rate debt. Using interest rate
swap agreements, the Company has agreed to exchange, at
specified intervals through 2007, the difference between fixed
and variable interest amounts calculated by reference to an
agreed-upon notional principal amount. Interest rate collar
agreements are used to limit the Company's exposure to and
benefits from interest rate fluctuations on variable rate debt
to within a certain range of rates.
The Company does not hold or issue derivative
instruments for trading purposes. The Company does, however,
have certain interest rate derivative instruments that have been
designated as cash flow hedging instruments. Such instruments
effectively convert variable interest payments on certain debt
instruments
F-12
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
into fixed payments. For qualifying hedges,
SFAS No. 133 allows derivative gains and losses to
offset related results on hedged items in the consolidated
statement of operations. The Company has formally documented,
designated and assessed the effectiveness of transactions that
receive hedge accounting. For the three months ended
June 30, 2005 and 2004, net gain (loss) on derivative
instruments and hedging activities includes gains of $0 and
$3 million, respectively, and for the six months ended
June 30, 2005 and 2004, net gain (loss) on derivative
instruments and hedging activities includes gains of
$1 million and $2 million, respectively, which
represent cash flow hedge ineffectiveness on interest rate hedge
agreements arising from differences between the critical terms
of the agreements and the related hedged obligations. Changes in
the fair value of interest rate agreements designated as hedging
instruments of the variability of cash flows associated with
floating-rate debt obligations that meet the effectiveness
criteria of SFAS No. 133 are reported in accumulated
other comprehensive loss. For the three months ended
June 30, 2005 and 2004, a gain of $0 and $27 million,
respectively, and for the six months ended June 30, 2005
and 2004, a gain of $9 million and $29 million,
respectively, related to derivative instruments designated as
cash flow hedges, was recorded in accumulated other
comprehensive loss and minority interest. The amounts are
subsequently reclassified into interest expense as a yield
adjustment in the same period in which the related interest on
the floating-rate debt obligations affects earnings (losses).
Certain interest rate derivative instruments are
not designated as hedges as they do not meet the effectiveness
criteria specified by SFAS No. 133. However,
management believes such instruments are closely correlated with
the respective debt, thus managing associated risk. Interest
rate derivative instruments not designated as hedges are marked
to fair value, with the impact recorded as gain (loss) on
derivative instruments and hedging activities in the
Company's condensed consolidated statements of operations.
For the three months ended June 30, 2005 and 2004, net gain
(loss) on derivative instruments and hedging activities includes
losses of $1 million and gains of $60 million,
respectively, and for the six months ended June 30, 2005
and 2004, net gain (loss) on derivative instruments and hedging
activities includes gains of $25 million and
$54 million, respectively, for interest rate derivative
instruments not designated as hedges.
As of June 30, 2005 and December 31,
2004, the Company had outstanding $2.2 billion and
$2.7 billion and $20 million and $20 million,
respectively, in notional amounts of interest rate swaps and
collars, respectively. The notional amounts of interest rate
instruments do not represent amounts exchanged by the parties
and, thus, are not a measure of exposure to credit loss. The
amounts exchanged are determined by reference to the notional
amount and the other terms of the contracts.
Certain provisions of the Company's
5.875% convertible senior notes issued in November 2004
were considered embedded derivatives for accounting purposes and
were required to be accounted for separately from the
convertible senior notes. In accordance with
SFAS No. 133, these derivatives are marked to market
with gains or losses recorded in interest expense on the
Company's condensed consolidated statement of operations.
For the three and six months ended June 30, 2005, the
Company recognized $8 million and $27 million,
respectively, as a reduction in interest expense related to
these derivatives. At June 30, 2005 and December 31,
2004, $1 million and $10 million, respectively, is
recorded in accounts payable and accrued expenses relating to
the short-term portion of these derivatives and $3 million
and $21 million, respectively, is recorded in other
long-term liabilities related to the long-term portion.
F-13
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
10.
Revenues
Revenues consist of the following for the three
and six months ended June 30, 2005 and 2004:
Three Months
Six Months
Ended June 30,
Ended June 30,
2005
2004
2005
2004
Video
$
861
$
846
$
1,703
$
1,695
High-speed Internet
226
181
441
349
Advertising sales
76
73
140
132
Commercial
69
58
134
114
Other
91
81
176
163
$
1,323
$
1,239
$
2,594
$
2,453
11.
Operating Expenses
Operating expenses consist of the following for
the three and six months ended June 30, 2005 and 2004:
Three Months
Six Months
Ended June 30,
Ended June 30,
2005
2004
2005
2004
Programming
$
351
$
329
$
709
$
663
Advertising sales
25
25
50
48
Service
193
161
369
316
$
569
$
515
$
1,128
$
1,027
12.
Selling, General and Administrative
    Expenses
Selling, general and administrative expenses
consist of the following for the three and six months ended
June 30, 2005 and 2004:
Three Months
Six Months
Ended June 30,
Ended June 30,
2005
2004
2005
2004
General and administrative
$
225
$
208
$
427
$
416
Marketing
31
36
66
67
$
256
$
244
$
493
$
483
Components of selling expense are included in
general and administrative and marketing expense.
F-14
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
13.
Special Charges
The Company has recorded special charges as a
result of reducing its workforce, consolidating administrative
offices and management realignment in 2004 and 2005. The
activity associated with this initiative is summarized in the
table below.
Three Months
Six Months
Ended June 30,
Ended June 30,
2005
2004
2005
2004
Beginning Balance
$
6
$
7
$
6
$
14
Special Charges
—
2
4
3
Payments
(2
)
(3
)
(6
)
(11
)
Balance at June 30,
$
4
$
6
$
4
$
6
For the three and six months ended June 30,
2005, special charges were offset by approximately
$2 million related to an agreed upon discount in respect of
the portion of the settlement consideration payable under the
Stipulations of Settlement of the consolidated Federal Class
Action and the Federal Derivative Action allocable to
plaintiff's attorney fees and Charter's insurance
carrier as a result of the election to pay such fees in cash
(see Note 15).
For the three and six months ended June 30,
2004, special charges also includes approximately
$85 million, which represents the aggregate value of the
Charter Class A common stock and warrants to purchase
Charter Class A common stock contemplated to be issued as
part of the terms set forth in memoranda of understanding
regarding settlement of the consolidated Federal Class Action
and Federal Derivative Action. For the six months ended
June 30, 2004, special charges includes approximately
$9 million of litigation costs related to the tentative
settlement of the South Carolina national class action suit,
subject to final documentation and court approval (see
Note 15).
14.
Income Taxes
All operations are held through Charter Holdco
and its direct and indirect subsidiaries. Charter Holdco and the
majority of its subsidiaries are not subject to income tax.
However, certain of these subsidiaries are corporations and are
subject to income tax. All of the taxable income, gains, losses,
deductions and credits of Charter Holdco are passed through to
its members: Charter, Charter Investment, Inc. ("Charter
Investment") and Vulcan Cable III Inc. ("Vulcan
Cable"). Charter is responsible for its share of taxable
income or loss of Charter Holdco allocated to Charter in
accordance with the Charter Holdco limited liability company
agreement ("LLC Agreement") and partnership tax rules
and regulations.
As of June 30, 2005 and December 31,
2004, the Company had net deferred income tax liabilities of
approximately $259 million and $216 million,
respectively. Approximately $214 million and
$208 million of the deferred tax liabilities recorded in
the condensed consolidated financial statements at June 30,
2005 and December 31, 2004, respectively, relate to certain
indirect subsidiaries of Charter Holdco, which file separate
income tax returns.
During the three and six months ended
June 30, 2005, the Company recorded $31 million and
$46 million of income tax expense, respectively, and during
the three and six months ended June 30, 2004, the Company
recorded $43 million and $97 million of income tax
expense, respectively. The sale of systems to Atlantic
Broadband, LLC in March and April 2004 resulted in income tax
expense of $1 million and $15 million for the three
and six months ended June 30, 2004, respectively.
F-15
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
Income tax expense is recognized through
increases in the deferred tax liabilities related to
Charter's investment in Charter Holdco, as well as current
federal and state income tax expense and increases to the
deferred tax liabilities of certain of Charter's indirect
corporate subsidiaries. The Company recorded an additional
deferred tax asset of approximately $130 million and
$265 million during the three and six months ended
June 30, 2005, respectively, relating to net operating loss
carryforwards, but recorded a valuation allowance with respect
to these amounts because of the uncertainty of the ability to
realize a benefit from these carryforwards in the future.
The Company has deferred tax assets of
approximately $3.8 billion and $3.5 billion as of
June 30, 2005 and December 31, 2004, respectively,
which primarily relate to financial and tax losses allocated to
Charter from Charter Holdco. The deferred tax assets include
approximately $2.3 billion and $2.1 billion of tax net
operating loss carryforwards as of June 30, 2005 and
December 31, 2004, respectively (generally expiring in
years 2005 through 2025), of Charter and its indirect corporate
subsidiaries. Valuation allowances of $3.4 billion and
$3.2 billion as of June 30, 2005 and December 31,
2004 exist with respect to these deferred tax assets,
respectively.
Realization of any benefit from the
Company's tax net operating losses is dependent on:
(1) Charter and its indirect corporate subsidiaries'
ability to generate future taxable income and (2) the
absence of certain future "ownership changes" of
Charter's common stock. An "ownership change" as
defined in the applicable federal income tax rules, would place
significant limitations, on an annual basis, on the use of such
net operating losses to offset any future taxable income the
Company may generate. Such limitations, in conjunction with the
net operating loss expiration provisions, could effectively
eliminate the Company's ability to use a substantial
portion of its net operating losses to offset any future taxable
income. Future transactions and the timing of such transactions
could cause an ownership change. Such transactions include
additional issuances of common stock by the Company (including
but not limited to the issuance of up to a total of
150 million shares of common stock (of which
27.2 million were issued in July 2005) under the share
lending agreement, the issuance of shares of common stock upon
future conversion of Charter's convertible senior notes and
the issuance of common stock in the class action settlement
discussed in Note 15, reacquisition of the borrowed shares
by Charter, or acquisitions or sales of shares by certain
holders of Charter's shares, including persons who have
held, currently hold, or accumulate in the future five percent
or more of Charter's outstanding stock (including upon an
exchange by Paul Allen or his affiliates, directly or
indirectly, of membership units of Charter Holdco into CCI
common stock)). Many of the foregoing transactions are beyond
management's control.
In assessing the realizability of deferred tax
assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will be
realized. Because of the uncertainties in projecting future
taxable income of Charter Holdco, valuation allowances have been
established except for deferred benefits available to offset
certain deferred tax liabilities.
Charter Holdco is currently under examination by
the Internal Revenue Service for the tax years ending
December 31, 2000, 2002 and 2003. The results of the
Company (excluding Charter and the indirect corporate
subsidiaries) for these years are subject to this examination.
Management does not expect the results of this examination to
have a material adverse effect on the Company's financial
condition or results of operations.
15.
Contingencies
Securities
Class Actions and Derivative Suits
Fourteen putative federal class action lawsuits
(the "Federal Class Actions") were filed against
Charter and certain of its former and present officers and
directors in various jurisdictions allegedly on
F-16
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
behalf of all purchasers of Charter's
securities during the period from either November 8 or
November 9, 1999 through July 17 or July 18,
2002. Unspecified damages were sought by the plaintiffs. In
general, the lawsuits alleged that Charter utilized misleading
accounting practices and failed to disclose these accounting
practices and/or issued false and misleading financial
statements and press releases concerning Charter's
operations and prospects. The Federal Class Actions were
specifically and individually identified in public filings made
by Charter prior to the date of this quarterly report. On
March 12, 2003, the Panel transferred the six Federal Class
Actions not filed in the Eastern District of Missouri to that
district for coordinated or consolidated pretrial proceedings
with the eight Federal Class Actions already pending there. The
Court subsequently consolidated the Federal Class Actions into a
single action (the "Consolidated Federal Class
Action") for pretrial purposes. On August 5, 2004, the
plaintiff's representatives, Charter and the individual
defendants who were the subject of the suit entered into a
Memorandum of Understanding setting forth agreements in
principle to settle the Consolidated Federal Class Action. These
parties subsequently entered into Stipulations of Settlement
dated as of January 24, 2005 (described more fully below)
which incorporate the terms of the August 5, 2004
Memorandum of Understanding.
On September 12, 2002, a shareholders
derivative suit (the "State Derivative Action") was
filed in the Circuit Court of the City of St. Louis, State
of Missouri (the "Missouri State Court"), against
Charter and its then current directors, as well as its former
auditors. The plaintiffs alleged that the individual defendants
breached their fiduciary duties by failing to establish and
maintain adequate internal controls and procedures. On
March 12, 2004, an action substantively identical to the
State Derivative Action was filed in Missouri State Court
against Charter and certain of its current and former directors,
as well as its former auditors. On July 14, 2004, the Court
consolidated this case with the State Derivative Action.
Separately, on February 12, 2003, a
shareholders derivative suit (the "Federal Derivative
Action"), was filed against Charter and its then current
directors in the United States District Court for the Eastern
District of Missouri. The plaintiff in that suit alleged that
the individual defendants breached their fiduciary duties and
grossly mismanaged Charter by failing to establish and maintain
adequate internal controls and procedures.
As noted above, Charter and the individual
defendants entered into a Memorandum of Understanding on
August 5, 2004 setting forth agreements in principle
regarding settlement of the Consolidated Federal Class Action,
the State Derivative Action(s) and the Federal Derivative Action
(the "Actions"). Charter and various other defendants
in those actions subsequently entered into Stipulations of
Settlement dated as of January 24, 2005, setting forth a
settlement of the Actions in a manner consistent with the terms
of the Memorandum of Understanding. The Stipulations of
Settlement, along with various supporting documentation, were
filed with the Court on February 2, 2005. On May 23,
2005 the United States District Court for the Eastern District
of Missouri conducted the final fairness hearing for the
Actions, and on June 30, 2005, the Court issued its final
approval of the settlements. Members of the class had
30 days from the issuance of the June 30 order
approving the settlement to file an appeal challenging the
approval. Two notices of appeal were filed relating to the
settlement, but Charter does not yet know the specific issues
presented by such appeals, nor have briefing schedules been set.
As amended, the Stipulations of Settlement
provide that, in exchange for a release of all claims by
plaintiffs against Charter and its former and present officers
and directors named in the Actions, Charter would pay to the
plaintiffs a combination of cash and equity collectively valued
at $144 million, which will include the fees and expenses
of plaintiffs' counsel. Of this amount, $64 million
would be paid in cash (by Charter's insurance carriers) and
the $80 million balance was to be paid (subject to
Charter's right to substitute cash therefor described
below) in shares of Charter Class A common stock having an
aggregate
F-17
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
value of $40 million and ten-year warrants
to purchase shares of Charter Class A common stock having
an aggregate warrant value of $40 million, with such values
in each case being determined pursuant to formulas set forth in
the Stipulations of Settlement. However, Charter had the right,
in its sole discretion, to substitute cash for some or all of
the aforementioned securities on a dollar for dollar basis.
Pursuant to that right, Charter elected to fund the
$80 million obligation with 13.4 million shares of
Charter Class A common stock (having an aggregate value of
approximately $15 million pursuant to the formula set forth
in the Stipulations of Settlement) with the remaining balance
(less an agreed upon $2 million discount in respect of that
portion allocable to plaintiffs' attorneys' fees) to
be paid in cash. In addition, Charter had agreed to issue
additional shares of its Class A common stock to its
insurance carrier having an aggregate value of $5 million;
however, by agreement with its carrier Charter has paid
$4.5 million in cash in lieu of issuing such shares.
Charter delivered the settlement consideration to the claims
administrator on July 8, 2005, and it will be held in
escrow pending any appeals of the approval. On July 14,
2005, the Circuit Court for the City of St Louis dismissed with
prejudice the State Derivative Actions.
As part of the settlements, Charter has committed
to a variety of corporate governance changes, internal practices
and public disclosures, some of which have already been
undertaken and none of which are inconsistent with measures
Charter is taking in connection with the recent conclusion of
the SEC investigation.
Government Investigations
In August 2002, Charter became aware of a grand
jury investigation being conducted by the U.S. Attorney's
Office for the Eastern District of Missouri into certain of its
accounting and reporting practices, focusing on how Charter
reported customer numbers, and its reporting of amounts received
from digital set-top terminal suppliers for advertising. The
U.S. Attorney's Office publicly stated that Charter was not
a target of the investigation. Charter was also advised by the
U.S. Attorney's Office that no current officer or member of
its board of directors was a target of the investigation. On
July 24, 2003, a federal grand jury charged four former
officers of Charter with conspiracy and mail and wire fraud,
alleging improper accounting and reporting practices focusing on
revenue from digital set-top terminal suppliers and inflated
customer account numbers. Each of the indicted former officers
pled guilty to single conspiracy counts related to the original
mail and wire fraud charges and were sentenced April 22,
2005. Charter fully cooperated with the investigation, and
following the sentencings, the U.S. Attorney's Office for
the Eastern District of Missouri announced that its
investigation was concluded and that no further indictments
would issue.
Indemnification
Charter was generally required to indemnify,
under certain conditions, each of the named individual
defendants in connection with the matters described above
pursuant to the terms of its bylaws and (where applicable) such
individual defendants' employment agreements. In accordance
with these documents, in connection with the grand jury
investigation, a now-settled SEC investigation and the
above-described lawsuits, some of Charter's current and
former directors and current and former officers have been
advanced certain costs and expenses incurred in connection with
their defense. On February 22, 2005, Charter filed suit
against four of its former officers who were indicted in the
course of the grand jury investigation. These suits seek to
recover the legal fees and other related expenses advanced to
these individuals. One of these former officers has
counterclaimed against Charter alleging, among other things,
that Charter owes him additional indemnification for legal fees
that Charter did not pay and another of these former officers
has counterclaimed against Charter for accrued sick leave.
F-18
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
Other Litigation
In addition to the matters set forth above,
Charter is also party to other lawsuits and claims that arose in
the ordinary course of conducting its business. In the opinion
of management, after taking into account recorded liabilities,
the outcome of these other lawsuits and claims are not expected
to have a material adverse effect on the Company's
consolidated financial condition, results of operations or its
liquidity.
16.
Stock Compensation Plans
Prior to January 1, 2003, the Company
accounted for stock-based compensation in accordance with
Accounting Principles Board ("APB") Opinion
No. 25,
Accounting for Stock Issued to Employees
,
and related interpretations, as permitted by
SFAS No. 123,
Accounting for Stock-Based
Compensation.
On January 1, 2003, the Company adopted
the fair value measurement provisions of SFAS No. 123
using the prospective method, under which the Company recognizes
compensation expense of a stock-based award to an employee over
the vesting period based on the fair value of the award on the
grant date consistent with the method described in Financial
Accounting Standards Board Interpretation No. 28,
Accounting for Stock Appreciation Rights and Other Variable
Stock Option or Award Plans
. Adoption of these provisions
resulted in utilizing a preferable accounting method as the
condensed consolidated financial statements will present the
estimated fair value of stock-based compensation in expense
consistently with other forms of compensation and other expense
associated with goods and services received for equity
instruments. In accordance with SFAS No. 148,
Accounting for Stock-Based Compensation —
Transition and Disclosure
, the fair value method is being
applied only to awards granted or modified after January 1,
2003, whereas awards granted prior to such date will continue to
be accounted for under APB No. 25, unless they are modified
or settled in cash. The ongoing effect on consolidated results
of operations or financial condition will depend on future
stock-based compensation awards granted by the Company.
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
SFAS No. 123 requires pro forma
disclosure of the impact on earnings as if the compensation
expense for these plans had been determined using the fair value
method. The following table presents the Company's net loss
and loss per share as reported and the pro forma amounts that
would have been reported using the fair value method under
SFAS No. 123 for the periods presented:
Three Months Ended
Six Months Ended
June 30,
June 30,
2005
2004
2005
2004
Net loss applicable to common stock
$
(356
)
$
(416
)
$
(709
)
$
(710
)
Add back stock-based compensation expense related
    to stock options included in reported net loss
4
12
8
26
Less employee stock-based compensation expense
    determined under fair value based method for all employee stock
    option awards
(4
)
(10
)
(8
)
(31
)
Effects of unvested options in stock option
    exchange
—
—
—
48
Pro forma
$
(356
)
$
(414
)
$
(709
)
$
(667
)
Loss per common shares, basic and diluted
As reported
$
(1.18
)
$
(1.39
)
$
(2.34
)
$
(2.39
)
Add back stock-based compensation expense related
    to stock options included in reported net loss
0.01
0.04
0.03
0.09
Less employee stock-based compensation expense
    determined under fair value based method for all employee stock
    option awards
(0.01
)
(0.03
)
(0.03
)
(0.10
)
Effects of unvested options in stock option
    exchange
—
—
—
0.16
Pro forma
$
(1.18
)
$
(1.38
)
$
(2.34
)
$
(2.24
)
In January 2004, Charter began an option exchange
program in which the Company offered its employees the right to
exchange all stock options (vested and unvested) under the 1999
Charter Communications Option Plan and 2001 Stock Incentive Plan
that had an exercise price over $10 per share for shares of
restricted Charter Class A common stock or, in some
instances, cash. Based on a sliding exchange ratio, which varied
depending on the exercise price of an employee's
outstanding options, if an employee would have received more
than 400 shares of restricted stock in exchange for
tendered options, Charter issued to that employee shares of
restricted stock in the exchange. If, based on the exchange
ratios, an employee would have received 400 or fewer shares of
restricted stock in exchange for tendered options, Charter
instead paid the employee cash in an amount equal to the number
of shares the employee would have received multiplied by $5.00.
The offer applied to options (vested and unvested) to purchase a
total of 22,929,573 shares of Charter Class A common
stock, or approximately 48% of the Company's 47,882,365
total options (vested and unvested) issued and outstanding as of
December 31, 2003. Participation by employees was
voluntary. Those members of Charter's board of directors
who were not also employees of the Company were not eligible to
participate in the exchange offer.
In the closing of the exchange offer on
February 20, 2004, the Company accepted for cancellation
eligible options to purchase approximately
18,137,664 shares of Charter Class A common stock. In
exchange, the Company granted 1,966,686 shares of
restricted stock, including 460,777 performance shares to
eligible employees of the rank of senior vice president and
above, and paid a total cash amount of approximately
$4 million (which amount includes applicable withholding
taxes) to those employees who
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
received cash rather than shares of restricted
stock. The restricted stock was granted on February 25,
2004. Employees tendered approximately 79% of the options
exchangeable under the program.
The cost to the Company of the stock option
exchange program was approximately $10 million, with a 2004
cash compensation expense of approximately $4 million and a
non-cash compensation expense of approximately $6 million
to be expensed ratably over the three-year vesting period of the
restricted stock issued in the exchange.
In January 2004, the Compensation Committee of
the board of directors of Charter approved Charter's
Long-Term Incentive Program ("LTIP"), which is a
program administered under the 2001 Stock Incentive Plan. Under
the LTIP, employees of Charter and its subsidiaries whose pay
classifications exceed a certain level are eligible to receive
stock options, and more senior level employees are eligible to
receive stock options and performance shares. The stock options
vest 25% on each of the first four anniversaries of the date of
grant. The performance units vest on the third anniversary of
the grant date and shares of Charter Class A common stock
are issued, conditional upon Charter's performance against
financial performance targets established by Charter's
management and approved by its board of directors. Charter
granted 6.9 million performance shares in January 2004
under this program and recognized expense of $3 million and
$6 million during the three and six months ended
June 30, 2004, respectively. However, in the fourth quarter
of 2004, the Company reversed the $8 million of expense
recorded in the first three quarters of 2004 based on the
Company's assessment of the probability of achieving the
financial performance measures established by Charter and
required to be met for the performance shares to vest. In March
and April 2005, Charter granted 2.8 million
performance shares under the LTIP. The impact of such grants
were de minimis to the Company's results of operations for
the three and six months ended June 30, 2005.
17.
Related Party Transactions
The following sets forth certain transactions in
which the Company and the directors, executive officers and
affiliates of the Company are involved. Unless otherwise
disclosed, management believes that each of the transactions
described below was on terms no less favorable to the Company
than could have been obtained from independent third parties.
CC VIII.
As part of
the acquisition of the cable systems owned by Bresnan
Communications Company Limited Partnership in February 2000, CC
VIII, Charter's indirect limited liability company
subsidiary, issued, after adjustments, 24,273,943 Class A
preferred membership units (collectively, the "CC VIII
interest") with a value and an initial capital account of
approximately $630 million to certain sellers affiliated
with AT&T Broadband, subsequently owned by Comcast
Corporation (the "Comcast sellers"). While held by the
Comcast sellers, the CC VIII interest was entitled to a 2%
priority return on its initial capital account and such priority
return was entitled to preferential distributions from available
cash and upon liquidation of CC VIII. While held by the Comcast
sellers, the CC VIII interest generally did not share in the
profits and losses of CC VIII. Mr. Allen granted the
Comcast sellers the right to sell to him the CC VIII interest
for approximately $630 million plus 4.5% interest annually
from February 2000 (the "Comcast put right"). In April
2002, the Comcast sellers exercised the Comcast put right in
full, and this transaction was consummated on June 6, 2003.
Accordingly, Mr. Allen has become the holder of the CC VIII
interest, indirectly through an affiliate. Consequently, subject
to the matters referenced in the next paragraph, Mr. Allen
generally thereafter will be allocated his pro rata share (based
on number of membership interests outstanding) of profits or
losses of CC VIII. In the event of a liquidation of CC VIII,
Mr. Allen would be entitled to a priority distribution with
respect to the 2% priority return (which will continue to
accrete). Any remaining distributions in liquidation would be
distributed to CC V Holdings, LLC and Mr. Allen in
proportion to CC V Holdings, LLC's capital
F-21
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
account and Mr. Allen's capital account
(which will equal the initial capital account of the Comcast
sellers of approximately $630 million, increased or
decreased by Mr. Allen's pro rata share of
CC VIII's profits or losses (as computed for capital
account purposes) after June 6, 2003). The limited
liability company agreement of CC VIII does not provide for a
mandatory redemption of the CC VIII interest.
An issue has arisen as to whether the
documentation for the Bresnan transaction was correct and
complete with regard to the ultimate ownership of the CC VIII
interest following consummation of the Comcast put right.
Specifically, under the terms of the Bresnan transaction
documents that were entered into in June 1999, the Comcast
sellers originally would have received, after adjustments,
24,273,943 Charter Holdco membership units, but due to an FCC
regulatory issue raised by the Comcast sellers shortly before
closing, the Bresnan transaction was modified to provide that
the Comcast sellers instead would receive the preferred equity
interests in CC VIII represented by the CC VIII interest. As
part of the last-minute changes to the Bresnan transaction
documents, a draft amended version of the Charter Holdco limited
liability company agreement was prepared, and contract
provisions were drafted for that agreement that would have
required an automatic exchange of the CC VIII interest for
24,273,943 Charter Holdco membership units if the Comcast
sellers exercised the Comcast put right and sold the
CC VIII interest to Mr. Allen or his affiliates.
However, the provisions that would have required this automatic
exchange did not appear in the final version of the Charter
Holdco limited liability company agreement that was delivered
and executed at the closing of the Bresnan transaction. The law
firm that prepared the documents for the Bresnan transaction
brought this matter to the attention of Charter and
representatives of Mr. Allen in 2002.
Thereafter, the board of directors of Charter
formed a Special Committee (currently comprised of
Messrs. Merritt, Tory and Wangberg) to investigate the
matter and take any other appropriate action on behalf of
Charter with respect to this matter. After conducting an
investigation of the relevant facts and circumstances, the
Special Committee determined that a "scrivener's
error" had occurred in February 2000 in connection with the
preparation of the last-minute revisions to the Bresnan
transaction documents and that, as a result, Charter should seek
the reformation of the Charter Holdco limited liability company
agreement, or alternative relief, in order to restore and ensure
the obligation that the CC VIII interest be automatically
exchanged for Charter Holdco units. The Special Committee
further determined that, as part of such contract reformation or
alternative relief, Mr. Allen should be required to
contribute the CC VIII interest to Charter Holdco in
exchange for 24,273,943 Charter Holdco membership units. The
Special Committee also recommended to the board of directors of
Charter that, to the extent the contract reformation is
achieved, the board of directors should consider whether the CC
VIII interest should ultimately be held by Charter Holdco or
Charter Holdings or another entity owned directly or indirectly
by them.
Mr. Allen disagrees with the Special
Committee's determinations described above and has so
notified the Special Committee. Mr. Allen contends that the
transaction is accurately reflected in the transaction
documentation and contemporaneous and subsequent company public
disclosures.
The parties engaged in a process of non-binding
mediation to seek to resolve this matter, without success. The
Special Committee is evaluating what further actions or
processes it may undertake to resolve this dispute. To
accommodate further deliberation, each party has agreed to
refrain from initiating legal proceedings over this matter until
it has given at least ten days' prior notice to the other.
In addition, the Special Committee and Mr. Allen have
determined to utilize the Delaware Court of Chancery's
program for mediation of complex business disputes in an effort
to resolve the CC VIII interest dispute. If the Special
Committee and Mr. Allen are unable to reach a resolution
through that mediation process or to agree on an alternative
dispute resolution process, the Special Committee intends to
seek resolution of this dispute through judicial proceedings in
an action that would be commenced, after appropriate notice, in
F-22
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
the Delaware Court of Chancery against
Mr. Allen and his affiliates seeking contract reformation,
declaratory relief as to the respective rights of the parties
regarding this dispute and alternative forms of legal and
equitable relief. The ultimate resolution and financial impact
of the dispute are not determinable at this time.
TechTV, Inc.
TechTV,
Inc. ("TechTV") operated a cable television network
that offered programming mostly related to technology. Pursuant
to an affiliation agreement that originated in 1998 and that
terminates in 2008, TechTV has provided the Company with
programming for distribution via Charter's cable systems.
The affiliation agreement provides, among other things, that
TechTV must offer Charter certain terms and conditions that are
no less favorable in the affiliation agreement than are given to
any other distributor that serves the same number of or fewer
TechTV viewing customers. Additionally, pursuant to the
affiliation agreement, the Company was entitled to incentive
payments for channel launches through December 31, 2003.
In March 2004, Charter Holdco entered into
agreements with Vulcan Programming and TechTV, which provide for
(i) Charter Holdco and TechTV to amend the affiliation
agreement which, among other things, revises the description of
the TechTV network content, provides for Charter Holdco to waive
certain claims against TechTV relating to alleged breaches of
the affiliation agreement and provides for TechTV to make
payment of outstanding launch receivables due to Charter Holdco
under the affiliation agreement, (ii) Vulcan Programming to
pay approximately $10 million and purchase over a 24-month
period, at fair market rates, $2 million of advertising
time across various cable networks on Charter cable systems in
consideration of the agreements, obligations, releases and
waivers under the agreements and in settlement of the
aforementioned claims and (iii) TechTV to be a provider of
content relating to technology and video gaming for
Charter's interactive television platforms through
December 31, 2006 (exclusive for the first year). For each
of the three and six months ended June 30, 2005 and 2004,
the Company recognized approximately $0.3 million and
$0.6 million, respectively, of the Vulcan Programming
payment as an offset to programming expense. For the three and
six months ended June 30, 2005, the Company paid
approximately $0.5 million and $1 million,
respectively, and for the three and six months ended
June 30, 2004, the Company paid approximately
$0.4 million and $0.6 million, respectively, under the
affiliation agreement.
The Company believes that Vulcan Programming,
which is 100% owned by Mr. Allen, owned an approximate 98%
equity interest in TechTV at the time Vulcan Programming sold
TechTV to an unrelated third party in May 2004. Until September
2003, Mr. Savoy, a former Charter director, was the
president and director of Vulcan Programming and was a director
of TechTV. Mr. Wangberg, one of Charter's directors,
was the chairman, chief executive officer and a director of
TechTV. Mr. Wangberg resigned as the chief executive
officer of TechTV in July 2002. He remained a director of TechTV
along with Mr. Allen until Vulcan Programming sold TechTV.
Digeo, Inc.
In March
2001, a subsidiary of Charter, Charter Communications Ventures,
LLC ("Charter Ventures"), and Vulcan Ventures
Incorporated formed DBroadband Holdings, LLC for the sole
purpose of purchasing equity interests in Digeo, Inc.
("Digeo"), an entity controlled by Paul Allen. In
connection with the execution of the broadband carriage
agreement, DBroadband Holdings, LLC purchased an equity interest
in Digeo funded by contributions from Vulcan Ventures
Incorporated. The equity interest is subject to a priority
return of capital to Vulcan Ventures up to the amount
contributed by Vulcan Ventures on Charter Ventures' behalf.
After Vulcan Ventures recovers its amount contributed and any
cumulative loss allocations, Charter Ventures has a 100% profit
interest in DBroadband Holdings, LLC. Charter Ventures is not
required to make any capital contributions, including capital
calls, to Digeo. DBroadband Holdings, LLC is therefore not
included in the Company's consolidated financial
statements. Pursuant to an amended version of this arrangement,
in 2003, Vulcan Ventures contributed a total of
F-23
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
$29 million to Digeo, $7 million of
which was contributed on Charter Ventures' behalf, subject
to Vulcan Ventures' aforementioned priority return. Since
the formation of DBroadband Holdings, LLC, Vulcan Ventures has
contributed approximately $56 million on Charter
Ventures' behalf.
On March 2, 2001, Charter Ventures entered
into a broadband carriage agreement with Digeo Interactive, LLC
("Digeo Interactive"), a wholly owned subsidiary of
Digeo. The carriage agreement provided that Digeo Interactive
would provide to Charter a "portal" product, which
would function as the television-based Internet portal (the
initial point of entry to the Internet) for Charter's
customers who received Internet access from Charter. The
agreement term was for 25 years and Charter agreed to use
the Digeo portal exclusively for six years. Before the portal
product was delivered to Charter, Digeo terminated development
of the portal product.
On September 27, 2001, Charter and Digeo
Interactive amended the broadband carriage agreement. According
to the amendment, Digeo Interactive would provide to Charter the
content for enhanced "Wink" interactive television
services, known as Charter Interactive Channels
("i-channels"). In order to provide the i-channels,
Digeo Interactive sublicensed certain Wink technologies to
Charter. Charter is entitled to share in the revenues generated
by the i-channels. Currently, the Company's digital video
customers who receive i-channels receive the service at no
additional charge.
On September 28, 2002, Charter entered into
a second amendment to its broadband carriage agreement with
Digeo Interactive. This amendment superseded the amendment of
September 27, 2001. It provided for the development by
Digeo Interactive of future features to be included in the Basic
i-TV service to be provided by Digeo and for Digeo's
development of an interactive "toolkit" to enable
Charter to develop interactive local content. Furthermore,
Charter could request that Digeo Interactive manage local
content for a fee. The amendment provided for Charter to pay for
development of the Basic i-TV service as well as license fees
for customers who would receive the service, and for Charter and
Digeo to split certain revenues earned from the service. The
Company paid Digeo Interactive approximately $1 million and
$1 million for the three and six months ended June 30,
2005, respectively, and $1 million and $1 million for
the three and six months ended June 30, 2004, respectively,
for customized development of the i-channels and the local
content tool kit. This amendment expired pursuant to its terms
on December 31, 2003. Digeo Interactive is continuing to
provide the Basic i-TV service on a month-to-month basis.
On June 30, 2003, Charter Holdco entered
into an agreement with Motorola, Inc. for the purchase of
100,000 digital video recorder ("DVR") units. The
software for these DVR units is being supplied by Digeo
Interactive, LLC under a license agreement entered into in April
2004. Under the license agreement Digeo Interactive granted to
Charter Holdco the right to use Digeo's proprietary
software for the number of DVR units that Charter deployed from
a maximum of 10 headends through year-end 2004. This maximum
number of headends was increased from 10 to 15 pursuant to a
letter agreement executed on June 11, 2004 and the date for
entering into license agreements for units deployed was extended
to June 30, 2005. The number of headends was increased from
15 to 20 pursuant to a letter agreement dated August 4,
2004, from 20 to 30 pursuant to a letter agreement dated
September 28, 2004 and from 30 to 50 headends by a letter
agreement in February 2005. The license granted for each unit
deployed under the agreement is valid for five years. In
addition, Charter will pay certain other fees including a
per-headend license fee and maintenance fees. Maximum license
and maintenance fees during the term of the agreement are
expected to be approximately $7 million. The agreement
provides that Charter is entitled to receive contract terms,
considered on the whole, and license fees, considered apart from
other contract terms, no less favorable than those accorded to
any other Digeo customer. Charter paid approximately
$0.1 million and $0.2 million in license and
maintenance fees for the three and six months ended
June 30, 2005, respectively.
F-24
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
In April 2004, the Company launched DVR service
using units containing the Digeo software in Charter's
Rochester, Minnesota market using a broadband media center that
is an integrated set-top terminal with a cable converter, DVR
hard drive and connectivity to other consumer electronics
devices (such as stereos, MP3 players, and digital cameras).
In May 2004, Charter Holdco entered into a
binding term sheet with Digeo Interactive for the development,
testing and purchase of 70,000 Digeo PowerKey DVR units. The
term sheet provided that the parties would proceed in good faith
to negotiate, prior to year-end 2004, definitive agreements for
the development, testing and purchase of the DVR units and that
the parties would enter into a license agreement for
Digeo's proprietary software on terms substantially similar
to the terms of the license agreement described above. In
November 2004, Charter Holdco and Digeo Interactive executed the
license agreement and in December 2004, the parties executed the
purchase agreement, each on terms substantially similar to the
binding term sheet. Product development and testing has been
completed. Total purchase price and license and maintenance fees
during the term of the definitive agreements are expected to be
approximately $41 million. The definitive agreements are
terminable at no penalty to Charter in certain circumstances.
Charter paid approximately $1 million and $2 million
in capital purchases under this agreement for the three and six
months ended June 30, 2005, respectively.
In late 2003, Microsoft filed suit against Digeo
for $9 million in a breach of contract action, involving an
agreement that Digeo and Microsoft had entered into in 2001.
Digeo informed us that it believed it had an indemnification
claim against us for half that amount. Digeo settled with
Microsoft agreeing to make a cash payment and to purchase
certain amounts of Microsoft software products and consulting
services through 2008. In consideration of Digeo agreeing to
release us from its potential claim against us, after
consultation with outside counsel we agreed, in June 2005, to
purchase a total of $2.3 million in Microsoft consulting
services through 2008, a portion of which amounts Digeo has
informed us will count against Digeo's purchase obligations
with Microsoft.
The Company believes that Vulcan Ventures, an
entity controlled by Mr. Allen, owns an approximate 60% equity
interest in Digeo, Inc., on a fully-converted non-diluted basis.
Mr. Allen, Lance Conn and Jo Allen Patton, directors of Charter,
are directors of Digeo, and Mr. Vogel was a director of Digeo in
2004. During 2004 and 2005, Mr. Vogel held options to purchase
10,000 shares of Digeo common stock.
Oxygen Media LLC.
Oxygen Media LLC ("Oxygen") provides programming
content aimed at the female audience for distribution over cable
systems and satellite. On July 22, 2002, Charter Holdco
entered into a carriage agreement with Oxygen, whereby the
Company agreed to carry programming content from Oxygen. Under
the carriage agreement, the Company currently makes Oxygen
programming available to approximately 5 million of its
video customers. The term of the carriage agreement was
retroactive to February 1, 2000, the date of launch of
Oxygen programming by the Company, and runs for a period of five
years from that date. For the three and six months ended
June 30, 2005, the Company paid Oxygen approximately
$2 million and $5 million, respectively, and for the
three and six months ended June 30, 2004, the Company paid
Oxygen approximately $3 million and $7 million,
respectively, for programming content. In addition, Oxygen pays
the Company marketing support fees for customers launched after
the first year of the term of the carriage agreement up to a
total of $4 million. The Company recorded approximately
$0.1 million related to these launch incentives as a
reduction of programming expense for the six months ended
June 30, 2005, and $0.4 million and $0.7 million
for the three and six months ended June 30, 2004,
respectively.
Concurrently with the execution of the carriage
agreement, Charter Holdco entered into an equity issuance
agreement pursuant to which Oxygen's parent company, Oxygen
Media Corporation ("Oxygen Media"), granted a
subsidiary of Charter Holdco a warrant to
purchase 2.4 million shares of Oxygen
F-25
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
Media common stock for an exercise price of
$22.00 per share. In February 2005, this warrant expired
unexercised. Charter Holdco was also to receive unregistered
shares of Oxygen Media common stock with a guaranteed fair
market value on the date of issuance of $34 million, on or
prior to February 2, 2005, with the exact date to be
determined by Oxygen Media, but this commitment was later
revised as discussed below.
The Company recognized the guaranteed value of
the investment over the life of the carriage agreement as a
reduction of programming expense. For the six months ended
June 30, 2005, the Company recorded approximately
$2 million, as a reduction of programming expense and for
the three and six months ended June 30, 2004, the Company
recorded approximately $3 million and $7 million,
respectively. The carrying value of the Company's
investment in Oxygen was approximately $33 million and
$32 million as of June 30, 2005 and December 31,
2004, respectively.
In August 2004, Charter Holdco and Oxygen entered
into agreements that amended and renewed the carriage agreement.
The amendment to the carriage agreement (a) revises the
number of the Company's customers to which Oxygen
programming must be carried and for which the Company must pay,
(b) releases Charter Holdco from any claims related to the
failure to achieve distribution benchmarks under the carriage
agreement, (c) requires Oxygen to make payment on
outstanding receivables for marketing support fees due to the
Company under the carriage agreement; and (d) requires that
Oxygen provide its programming content to the Company on
economic terms no less favorable than Oxygen provides to any
other cable or satellite operator having fewer subscribers than
the Company. The renewal of the carriage agreement
(a) extends the period that the Company will carry Oxygen
programming to the Company's customers through
January 31, 2008, and (b) requires license fees to be
paid based on customers receiving Oxygen programming, rather
than for specific customer benchmarks.
In August 2004, Charter Holdco and Oxygen also
amended the equity issuance agreement to provide for the
issuance of 1 million shares of Oxygen Preferred Stock with
a liquidation preference of $33.10 per share plus accrued
dividends to Charter Holdco on February 1, 2005 in place of
the $34 million of unregistered shares of Oxygen Media
common stock. Oxygen Media delivered these shares in March 2005.
The preferred stock is convertible into common stock after
December 31, 2007 at a conversion ratio per share of
preferred stock, the numerator of which is the liquidation
preference and the denominator of which is the fair market value
per share of Oxygen Media common stock on the conversion date.
As of June 30, 2005, through Vulcan
Programming, Mr. Allen owned an approximate 31% interest in
Oxygen assuming no exercises of outstanding warrants or
conversion or exchange of convertible or exchangeable
securities. Ms. Jo Allen Patton is a director and the
President of Vulcan Programming. Mr. Lance Conn is a Vice
President of Vulcan Programming. Marc Nathanson has an indirect
beneficial interest of less than 1% in Oxygen.
18.
Recently Issued Accounting Standards
In November 2004, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 153,
Exchanges of Non-monetary Assets — An Amendment of
APB No. 29
. This statement eliminates the exception to
fair value for exchanges of similar productive assets and
replaces it with a general exception for exchange transactions
that do not have commercial substance — that is,
transactions that are not expected to result in significant
changes in the cash flows of the reporting entity. The Company
adopted this pronouncement effective April 1, 2005. The
exchange transaction discussed in Note 3 was accounted for
under this standard.
In December 2004, the Financial Accounting
Standards Board issued the revised SFAS No. 123,
Share-Based Payment
, which addresses the accounting for
share-based payment transactions in which a
F-26
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Dollars in millions, except per share amounts
and where indicated)
(Unaudited)
company receives employee services in exchange
for (a) equity instruments of that company or
(b) liabilities that are based on the fair value of the
company's equity instruments or that may be settled by the
issuance of such equity instruments. This statement will be
effective for the Company beginning January 1, 2006.
Because the Company adopted the fair value recognition
provisions of SFAS No. 123 on January 1, 2003, the
Company does not expect this revised standard to have a material
impact on its financial statements.
Charter does not believe that any other recently
issued, but not yet effective accounting pronouncements, if
adopted, would have a material effect on the Company's
accompanying financial statements.
19.
Subsequent Events
On July 29, 2005, we issued
27.2 million shares of Class A common stock in a
public offering, which was effected pursuant to an effective
registration statement that initially covered the issuance and
sale of up to 150 million shares of Class A common
stock. The shares were issued pursuant to a share lending
agreement, pursuant to which Charter had previously agreed to
loan up to 150 million shares to CGML. Because less than
the full 150 million shares covered by the share lending
agreement were sold in the offering, we remain obligated to
issue, at CGML's request, up to an additional
122.8 million additional loaned shares in subsequent
registered public offerings pursuant to the share lending
agreement.
This offering of Charter's Class A
common stock was conducted to facilitate transactions by which
investors in Charter's 5.875% convertible senior notes due
2009 issued on November 22, 2004 hedged their investments
in the convertible senior notes. Charter did not receive any of
the proceeds from the sale of this Class A common stock.
However, under the share lending agreement, Charter received a
loan fee of $.001 for each share that it lends to CGML.
On September 28, 2005, Charter Holdings and
its wholly owned subsidiaries, CCH I, LLC
("CCH I") and CCH I Holdings, LLC
("CIH"), completed the exchange of approximately
$6.8 billion total principal amount of outstanding debt
securities of Charter Holdings in a private placement for new
debt securities. Holders of Charter Holdings notes due in
2009-2010 tendered $3.4 billion principal amount of notes
for $2.9 billion principal amount of new
11% CCH I notes due 2015. Holders of Charter Holdings
notes due 2011-2012 tendered $845 million principal amount
of notes for $662 million principal amount of
11% CCH I notes due 2015. In addition, holders of
Charter Holdings notes due 2011-2012 tendered $2.5 billion
principal amount of notes for $2.5 billion principal amount
of new CIH notes. Each series of new CIH notes have the same
coupon and provisions for payment of cash interest as the series
of old Charter Holdings notes for which such CIH notes were
exchanged. In addition, the maturities for each series were
extended three years. On August 17, 2005, CCO Holdings
issued $300 million in debt securities, the proceeds of
which will be used for general corporate purposes, including the
potential payment of dividends or distributions to its parent
companies, including Charter Holdings, to pay interest expense.
F-27
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors
Charter Communications, Inc.:
We have audited the accompanying consolidated
balance sheets of Charter Communications, Inc. and subsidiaries
(the Company) as of December 31, 2004 and 2003, and the
related consolidated statements of operations, changes in
shareholders' equity (deficit), and cash flows for each of
the years in the three-year period ended December 31, 2004.
These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements
based on our audits.
We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in all material
respects, the financial position of Charter Communications, Inc.
and subsidiaries as of December 31, 2004 and 2003, and the
results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 2004, in
conformity with U.S. generally accepted accounting
principles.
We also have audited, in accordance with the
standards of the Public Company Accounting Oversight Board
(United States), the effectiveness of the Company's
internal control over financial reporting as of
December 31, 2004, based on criteria established in
Internal Control — Integrated Framework
issued
by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO), and our report dated March 1, 2005
expressed an unqualified opinion on management's assessment
of, and the effective operation of, internal control over
financial reporting.
As discussed in note 3 to the consolidated
financial statements, effective January 1, 2002, the
Company adopted Statement of Financial Accounting Standards
No. 142,
Goodwill and Other Intangible Assets.
As discussed in note 7 to the consolidated
financial statements, effective September 30, 2004, the
Company adopted EITF Topic D-108,
Use of the Residual Method
to Value Acquired Assets Other than Goodwill.
As discussed in note 19 to the consolidated
financial statements, effective January 1, 2003, the
Company adopted Statement of Financial Accounting Standards
No. 123,
Accounting for Stock-Based Compensation,
as
amended by Statement of Financial Accounting Standards
No. 148,
Accounting for Stock-Based
Compensation — Transition and Disclosure —
an amendment of FASB Statement No. 123.
/s/ KPMG LLP
St. Louis, Missouri
March 1, 2005
F-28
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except share
data)
December 31,
2004
2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
650
$
127
Accounts receivable, less allowance for doubtful
    accounts of $15 and $17, respectively
190
189
Prepaid expenses and other current assets
82
34
Total current assets
922
350
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net of accumulated
    depreciation of $5,311 and $3,950, respectively
6,289
7,014
Franchises
9,878
13,680
Total investment in cable properties, net
16,167
20,694
OTHER NONCURRENT ASSETS
584
320
Total assets
$
17,673
$
21,364
LIABILITIES AND SHAREHOLDERS'
    DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses
$
1,217
$
1,286
Total current liabilities
1,217
1,286
LONG-TERM DEBT
19,464
18,647
DEFERRED MANAGEMENT FEES — RELATED PARTY
14
14
OTHER LONG-TERM LIABILITIES
681
848
MINORITY INTEREST
648
689
PREFERRED STOCK — REDEEMABLE;
    $.001 par value; 1 million shares authorized;
    545,259 shares issued and outstanding
55
55
SHAREHOLDERS' DEFICIT:
Class A Common stock; $.001 par value;
    1.75 billion shares authorized; 305,203,770 and
    295,038,606 shares issued and outstanding, respectively
—
—
Class B Common stock; $.001 par value;
    750 million shares authorized; 50,000 shares issued
    and outstanding
—
—
Preferred stock; $.001 par value;
    250 million shares authorized; no non-redeemable shares
    issued and outstanding
—
—
Additional paid-in capital
4,794
4,700
Accumulated deficit
(9,196
)
(4,851
)
Accumulated other comprehensive loss
(4
)
(24
)
Total shareholders' deficit
(4,406
)
(175
)
Total liabilities and shareholders' deficit
$
17,673
$
21,364
The accompanying notes are an integral part of
these consolidated financial statements.
F-29
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in millions, except per share and
share data)
Year Ended December 31,
2004
2003
2002
REVENUES
$
4,977
$
4,819
$
4,566
COSTS AND EXPENSES:
Operating (excluding depreciation and
    amortization)
2,080
1,952
1,807
Selling, general and administrative
971
940
963
Depreciation and amortization
1,495
1,453
1,436
Impairment of franchises
2,433
—
4,638
(Gain) loss on sale of fixed assets
(86
)
5
3
Option compensation expense, net
31
4
5
Special charges, net
104
21
36
Unfavorable contracts and other settlements
(5
)
(72
)
—
7,023
4,303
8,888
Income (loss) from operations
(2,046
)
516
(4,322
)
OTHER INCOME AND EXPENSES:
Interest expense, net
(1,670
)
(1,557
)
(1,503
)
Gain (loss) on derivative instruments and hedging
    activities, net
69
65
(115
)
Loss on debt to equity conversions
(23
)
—
—
Gain (loss) on extinguishment of debt
(31
)
267
—
Other, net
3
(16
)
(4
)
(1,652
)
(1,241
)
(1,622
)
Loss before minority interest, income taxes and
    cumulative effect of accounting change
(3,698
)
(725
)
(5,944
)
MINORITY INTEREST
19
377
3,176
Loss before income taxes and cumulative effect of
    accounting change
(3,679
)
(348
)
(2,768
)
INCOME TAX BENEFIT
103
110
460
Loss before cumulative effect of accounting change
(3,576
)
(238
)
(2,308
)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX
(765
)
—
(206
)
Net loss
(4,341
)
(238
)
(2,514
)
Dividends on preferred stock —
    redeemable
(4
)
(4
)
(3
)
Net loss applicable to common stock
$
(4,345
)
$
(242
)
$
(2,517
)
LOSS PER COMMON SHARE, basic and diluted
$
(14.47
)
$
(0.82
)
$
(8.55
)
Weighted average common shares outstanding, basic
    and diluted
300,291,877
294,597,519
294,440,261
The accompanying notes are an integral part of
these consolidated financial statements.
F-30
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY (DEFICIT)
(Dollars in millions)
Accumulated
Total
Class A
Class B
Additional
Other
Shareholders'
Common
Common
Paid-In
Accumulated
Comprehensive
Equity
Stock
Stock
Capital
Deficit
Income (Loss)
(Deficit)
BALANCE, December 31, 2001
$
—
$
—
$
4,694
$
(2,092
)
$
(17
)
$
2,585
Issuance of common stock related to acquisitions
—
—
2
—
—
2
Changes in fair value of interest rate agreements
—
—
—
—
(30
)
(30
)
Option compensation expense, net
—
—
2
—
—
2
Loss on issuance of equity by subsidiary
—
—
(1
)
—
—
(1
)
Dividends on preferred stock —
    redeemable
—
—
—
(3
)
—
(3
)
Net loss
—
—
—
(2,514
)
—
(2,514
)
BALANCE, December 31, 2002
—
—
4,697
(4,609
)
(47
)
41
Changes in fair value of interest rate agreements
—
—
—
—
23
23
Option compensation expense, net
—
—
2
—
—
2
Issuance of common stock related to acquisitions
—
—
2
—
—
2
Loss on issuance of equity by subsidiary
—
—
(1
)
—
—
(1
)
Dividends on preferred stock —
    redeemable
—
—
—
(4
)
—
(4
)
Net loss
—
—
—
(238
)
—
(238
)
BALANCE, December 31, 2003
—
—
4,700
(4,851
)
(24
)
(175
)
Changes in fair value of interest rate agreements
—
—
—
—
20
20
Option compensation expense, net
—
—
27
—
27
Issuance of common stock in exchange for
    convertible notes
—
—
67
—
—
67
Dividends on preferred stock —
    redeemable
—
—
—
(4
)
—
(4
)
Net loss
—
—
—
(4,341
)
—
(4,341
)
BALANCE, December 31, 2004
$
—
$
—
$
4,794
$
(9,196
)
$
(4
)
$
(4,406
)
The accompanying notes are an integral part of
these consolidated financial statements.
F-31
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Dollars in millions)
Year Ended December 31,
2004
2003
2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(4,341
)
$
(238
)
$
(2,514
)
Adjustments to reconcile net loss to net cash
    flows from operating activities:
Minority interest
(19
)
(377
)
(3,176
)
Depreciation and amortization
1,495
1,453
1,436
Impairment of franchises
2,433
—
4,638
Option compensation expense, net
27
4
5
Special charges, net
85
—
—
Noncash interest expense
324
414
395
Gain on derivative instruments and hedging
    activities, net
(69
)
(65
)
115
(Gain) loss on sale of assets
(86
)
5
3
Loss on debt to equity conversions
23
—
3
(Gain) loss on extinguishment of debt
20
(267
)
—
Deferred income taxes
(109
)
(110
)
(460
)
Cumulative effect of accounting change, net
765
—
206
Unfavorable contracts and other settlements
(5
)
(72
)
—
Other, net
(3
)
3
—
Changes in operating assets and liabilities, net
    of effects from acquisitions and dispositions:
Accounts receivable
(7
)
70
27
Prepaid expenses and other assets
(2
)
5
26
Accounts payable, accrued expenses and other
(59
)
(69
)
47
Receivables from and payables to related party,
    including deferred management fees
—
9
(3
)
Net cash flows from operating activities
472
765
748
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment
(924
)
(854
)
(2,167
)
Change in accrued expenses related to capital
    expenditures
(43
)
(33
)
(55
)
Proceeds from sale of systems
744
91
—
Payments for acquisitions, net of cash acquired
—
—
(139
)
Purchases of investments
(17
)
(11
)
(12
)
Other, net
(3
)
(10
)
10
Net cash flows from investing activities
(243
)
(817
)
(2,363
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock
—
—
2
Borrowings of long-term debt
3,148
738
4,106
Repayments of long-term debt
(5,448
)
(1,368
)
(2,134
)
Proceeds from issuance of long-term debt
2,882
529
—
Payments for debt issuance costs
(145
)
(41
)
(40
)
Purchase of pledge securities
(143
)
—
—
Net cash flows from financing activities
294
(142
)
1,934
NET INCREASE (DECREASE) IN CASH AND CASH
    EQUIVALENTS
523
(194
)
319
CASH AND CASH EQUIVALENTS, beginning of period
127
321
2
CASH AND CASH EQUIVALENTS, end of period
$
650
$
127
$
321
CASH PAID FOR INTEREST
$
1,302
$
1,111
$
1,103
NONCASH TRANSACTIONS:
Debt exchanged for Charter Class A common
    stock
$
30
$
—
$
—
Issuance of debt by CCH II, LLC
—
1,572
—
Retirement of debt
—
1,866
—
Issuances of preferred stock —
    redeemable, as payment for acquisitions
—
4
—
Issuance of equity as partial payments for
    acquisitions
—
2
—
The accompanying notes are an integral part of
these consolidated financial statements.
F-32
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
1.
Organization and Basis of
    Presentation
Charter Communications, Inc.
("Charter") is a holding company whose principal
assets at December 31, 2004 are the 47% controlling common
equity interest in Charter Communications Holding Company, LLC
("Charter Holdco") and "mirror" notes which
are payable by Charter Holdco to Charter and have the same
principal amount and terms as those of Charter's
convertible senior notes. Charter Holdco is the sole owner of
Charter Communications Holdings, LLC ("Charter
Holdings"). The consolidated financial statements include
the accounts of Charter, Charter Holdco, Charter Holdings and
all of their wholly owned subsidiaries where the underlying
operations reside, collectively referred to herein as the
"Company." Charter consolidates Charter Holdco on the
basis of voting control. Charter Holdco's limited liability
company agreement provides that so long as Charter's
Class B common stock retains its special voting rights,
Charter will maintain a 100% voting interest in Charter Holdco.
Voting control gives Charter full authority and control over the
operations of Charter Holdco. All significant intercompany
accounts and transactions among consolidated entities have been
eliminated. The Company is a broadband communications company
operating in the United States. The Company offers its customers
traditional cable video programming (analog and digital video)
as well as high-speed data services and, in some areas, advanced
broadband services such as high definition television, video on
demand and telephony. The Company sells its cable video
programming, high-speed data and advanced broadband services on
a subscription basis. The Company also sells local advertising
on satellite-delivered networks.
The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Areas
involving significant judgments and estimates include
capitalization of labor and overhead costs; depreciation and
amortization costs; impairments of property, plant and
equipment, franchises and goodwill; income taxes; and
contingencies. Actual results could differ from those estimates.
Reclassifications.
Certain prior year amounts have been reclassified to conform
with the 2004 presentation.
2.
Liquidity and Capital Resources
The Company incurred net loss applicable to
common stock of $4.3 billion, $242 million and
$2.5 billion in 2004, 2003 and 2002, respectively. The
Company's net cash flows from operating activities were
$472 million, $765 million and $748 million for
the years ending December 31, 2004, 2003 and 2002,
respectively.
The Company has a significant level of debt. The
Company's long-term financing as of December 31, 2004
consists of $5.5 billion of credit facility debt,
$13.3 billion principal amount of high-yield notes and
$1.0 billion principal amount of convertible senior notes.
In 2005, $30 million of the Company's debt will mature
and in 2006, an additional $186 million of the
Company's debt will mature. In 2007 and beyond, significant
additional amounts will become due under the Company's
remaining long-term debt obligations.
The Company has historically required significant
cash to fund capital expenditures and debt service costs.
Historically, the Company has funded these requirements through
cash flows from operating activities, borrowings under its
credit facilities, sales of assets, issuances of debt and equity
securities and cash on hand. However, the mix of funding sources
changes from period to period. For the year ended
December 31, 2004, the Company, generated $472 million
of net cash flows from operating activities, after paying cash
interest of $1.3 billion. In addition, the Company
generated approximately $744 million from the sale of
assets, substantially all of which was used to fund operations,
including capital expenditures.
F-33
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Finally, the Company had net cash flows from
financing activities of $294 million, which included, among
other things, the proceeds from the issuance in December of
$550 million of CCO Holdings, LLC ("CCO
Holdings") Notes. This debt issuance was the primary reason
cash on hand increased by $523 million to $650 million
at December 31, 2004. Approximately $622 million was
used to repay outstanding borrowings under the Company's
revolving credit facility, through a series of transactions
executed in February 2005.
The Company expects that cash on hand, cash flows
from operating activities and the amounts available under its
credit facilities will be adequate to meet its cash needs in
2005. Cash flows from operating activities and amounts available
under the Company's credit facilities may not be sufficient
to fund the Company's operations and satisfy its principal
repayment obligations that come due in 2006 and, the Company
believes, will not be sufficient to fund its operations and
satisfy such repayment obligations thereafter.
It is likely that the Company will require
additional funding to repay debt maturing after 2006. The
Company is working with its financial advisors to address such
funding requirements. However, there can be no assurance that
such funding will be available to the Company. Although
Mr. Allen and his affiliates have purchased equity from the
Company in the past, Mr. Allen and his affiliates are not
obligated to purchase equity from, contribute to or loan funds
to the Company in the future.
Credit Facilities and
    Covenants
The Company's ability to operate depends
upon, among other things, its continued access to capital,
including credit under the Charter Communications Operating, LLC
("Charter Operating") credit facilities. These credit
facilities, along with the Company's indentures, are
subject to certain restrictive covenants, some of which require
the Company to maintain specified financial ratios and meet
financial tests and to provide audited financial statements with
an unqualified opinion from the Company's independent
auditors. As of December 31, 2004, the Company was in
compliance with the covenants under the Company's
indentures and under its credit facilities and the Company
expects to remain in compliance with those covenants for the
next twelve months. As of December 31, 2004, the Company
had borrowing availability under the credit facilities of
$804 million, none of which was restricted due to
covenants. Continued access to the Company's credit
facilities is subject to the Company remaining in compliance
with the applicable covenants of these credit facilities,
including covenants tied to the Company's operating
performance. If the Company's operating performance results
in non-compliance with these covenants, or if any of certain
other events of non-compliance under these credit facilities or
indentures governing the Company's debt occurs, funding
under the credit facilities may not be available and defaults on
some or potentially all of the Company's debt obligations
could occur. An event of default under the covenants governing
any of the Company's debt instruments could result in the
acceleration of its payment obligations under that debt and,
under certain circumstances, in cross-defaults under its other
debt obligations, which could have a material adverse effect on
the Company's consolidated financial condition or results
of operations.
The Charter Operating credit facilities require
the Company to redeem the CC V Holdings notes within
45 days after the first date that the Charter Holdings
leverage ratio is less than 8.75 to 1.0. In satisfaction of this
requirement, CC V Holdings, LLC has called for redemption all of
its outstanding notes, at 103.958% of principal amount, plus
accrued and unpaid interest to the date of redemption, which is
expected to be March 14, 2005. The total cost of the
redemption including accrued and unpaid interest is expected to
be $122 million. The Company intends to fund the redemption
with borrowings under its credit facilities.
F-34
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Specific Limitations
Charter's ability to make interest payments
on its convertible senior notes, and, in 2006 and 2009, to repay
the outstanding principal of its convertible senior notes, will
depend on its ability to raise additional capital and/or on
receipt of payments or distributions from Charter Holdco or its
subsidiaries, including CCH II, LLC
("CCH II"), CCO Holdings, LLC ("CCO
Holdings") and Charter Operating. The indentures governing
the CCH II notes, CCO Holdings notes, and Charter Operating
notes, however, restrict these entities and their subsidiaries
from making distributions to their parent companies (including
Charter and Charter Holdco) for payment of principal on
Charter's convertible senior notes, in each case unless
there is no default under the applicable indenture and a
specified leverage ratio test is met at the time of such event.
CCH II, CCO Holdings and Charter Operating meet the
applicable leverage ratio test under each of their respective
indentures, and as a result are not prohibited from making any
such distributions to their respective direct parent.
The indentures governing the Charter Holdings
notes permit Charter Holdings to make distributions to Charter
Holdco for payment of interest or principal on the convertible
senior notes, only if, after giving effect to the distribution,
Charter Holdings can incur additional debt under the leverage
ratio of 8.75 to 1.0, there is no default under Charter
Holdings' indentures and other specified tests are met. For
the quarter ended December 31, 2004, there was no default
under Charter Holdings' indentures and other specified
tests were met. In addition, Charter Holdings met the leverage
ratio of 8.75 to 1.0 based on December 31, 2004 financial
results. As a result, distributions from Charter Holdings to
Charter or Charter Holdco are not currently restricted. Such
distributions will again be restricted, however, if Charter
Holdings fails to meet its leverage ratio test. In the past,
Charter Holdings has from time to time failed to meet this
leverage ratio test and there can be no assurance that Charter
Holdings will satisfy this test in the future.
During periods when such distributions are
restricted, the indentures governing the Charter Holdings notes
permit Charter Holdings and its subsidiaries to make specified
investments in Charter Holdco or Charter, up to an amount
determined by a formula, as long as there is no default under
the indentures. As of December 31, 2004, Charter Holdco had
$106 million in cash on hand and was owed $29 million
in intercompany loans from its subsidiaries, which were
available to pay interest on Charter's
4.75% convertible senior notes, which is expected to be
approximately $7 million in 2005. In addition, Charter has
$144 million of governmental securities pledged as security
for the six interest payments on Charter's
5.875% convertible senior notes.
Sale of Assets
In March 2004, the Company closed the sale of
certain cable systems in Florida, Pennsylvania, Maryland,
Delaware and West Virginia to Atlantic Broadband Finance, LLC.
The Company closed the sale of an additional cable system in New
York to Atlantic Broadband Finance, LLC in April 2004. These
transactions resulted in a $104 million pretax gain
recorded as a gain on sale of assets in the Company's
consolidated statements of operations. Subject to post-closing
contractual adjustments, the total net proceeds from the sale of
all of these systems were approximately $733 million. The
proceeds were used to repay a portion of amounts outstanding
under the Company's credit facilities.
3.
Summary of Significant Accounting
    Policies
Cash Equivalents
The Company considers all highly liquid
investments with original maturities of three months or less to
be cash equivalents. These investments are carried at cost,
which approximates market value.
F-35
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Property, Plant and Equipment
Property, plant and equipment are recorded at
cost, including all material, labor and certain indirect costs
associated with the construction of cable transmission and
distribution facilities. Costs associated with initial customer
installations and the additions of network equipment necessary
to enable advanced services are capitalized. Costs capitalized
as part of initial customer installations include materials,
labor, and certain indirect costs. Indirect costs are associated
with the activities of the Company's personnel who assist
in connecting and activating the new service and consist of
compensation and indirect costs associated with these support
functions. Indirect costs primarily include employee benefits
and payroll taxes, direct variable costs associated with
capitalizable activities, consisting primarily of installation
and construction vehicle costs, the cost of dispatch personnel
and indirect costs directly attributable to capitalizable
activities. The costs of disconnecting service at a
customer's dwelling or reconnecting service to a previously
installed dwelling are charged to operating expense in the
period incurred. Costs for repairs and maintenance are charged
to operating expense as incurred, while plant and equipment
replacement and betterments, including replacement of cable
drops from the pole to the dwelling, are capitalized.
Depreciation is recorded using the straight-line
composite method over management's estimate of the useful
lives of the related assets as follows:
Cable distribution systems
7-20 years
Customer equipment and installations
3-5 years
Vehicles and equipment
1-5 years
Buildings and leasehold improvements
5-15 years
Furniture and fixtures
5 years
Franchises
Franchise rights represent the value attributed
to agreements with local authorities that allow access to homes
in cable service areas acquired through the purchase of cable
systems. Management estimates the fair value of franchise rights
at the date of acquisition and determines if the franchise has a
finite life or an indefinite-life as defined by Statement of
Financial Accounting Standards ("SFAS") No. 142,
Goodwill and Other Intangible Assets
. All franchises that
qualify for indefinite-life treatment under
SFAS No. 142 are no longer amortized against earnings
but instead are tested for impairment annually as of
October 1, or more frequently as warranted by events or
changes in circumstances (see Note 7). The Company
concluded that 99% of its franchises qualify for indefinite-life
treatment; however, certain franchises did not qualify for
indefinite-life treatment due to technological or operational
factors that limit their lives. These franchise costs are
amortized on a straight-line basis over 10 years. Costs
incurred in renewing cable franchises are deferred and amortized
over 10 years.
Other Noncurrent Assets
Other noncurrent assets primarily include
goodwill, deferred financing costs, governmental securities and
investments in equity securities. Costs related to borrowings
are deferred and amortized to interest expense over the terms of
the related borrowings.
Investments in equity securities are accounted
for at cost, under the equity method of accounting or in
accordance with SFAS No. 115,
Accounting for
Certain Investments in Debt and Equity Securities
. Charter
recognizes losses for any decline in value considered to be
other than temporary. Certain marketable equity securities are
classified as available-for-sale and reported at market value
with unrealized gains and losses recorded as accumulated other
comprehensive income or loss.
F-36
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
The following summarizes investment information
as of and for the years ended December 31, 2004 and 2003:
Carrying
Gain (loss) for the
Value at
Years Ended
December 31,
December 31,
2004
2003
2004
2003
2002
Equity investments, under the cost method
$
39
$
30
$
(3
)
$
(2
)
$
—
Equity investments, under the equity method
25
11
7
(1
)
(5
)
Marketable securities, at market value
—
—
—
—
2
$
64
$
41
$
4
$
(3
)
$
(3
)
As required by the indentures to the
Company's 5.875% convertible senior notes issued in
November 2004, the Company purchased U.S. government
securities valued at approximately $144 million with
maturities corresponding to the interest payment dates for the
convertible senior notes. These securities were pledged and are
held in escrow to provide payment in full for the first six
interest payments of the convertible senior notes (see
Note 9). These securities are accounted for as
held-to-maturity securities. At December 31, 2004, the
carrying value and fair value of the securities was
approximately $144 million with approximately
$48 million recorded in prepaid and other assets and
approximately $96 million recorded in other assets in the
Company's consolidated balance sheet.
Valuation of Property, Plant and
    Equipment
The Company evaluates the recoverability of
property, plant and equipment for impairment when events or
changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. Such events or changes in
circumstances could include such factors as impairment of the
Company's indefinite life franchise under
SFAS No. 142, changes in technological advances,
fluctuations in the fair value of such assets, adverse changes
in relationships with local franchise authorities, adverse
changes in market conditions or poor operating results. If a
review indicates that the carrying value of such asset is not
recoverable from estimated undiscounted cash flows, the carrying
value of such asset is reduced to its estimated fair value.
While the Company believes that its estimates of future cash
flows are reasonable, different assumptions regarding such cash
flows could materially affect its evaluations of asset
recoverability. No impairment of property, plant and equipment
occurred in 2004, 2003 and 2002.
Derivative Financial
    Instruments
The Company accounts for derivative financial
instruments in accordance with SFAS No. 133,
Accounting for Derivative Instruments and Hedging
Activities
, as amended. For those instruments which qualify
as hedging activities, related gains or losses are recorded in
accumulated other comprehensive income. For all other derivative
instruments, the related gains or losses are recorded in the
income statement. The Company uses interest rate risk management
derivative instruments, such as interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements
(collectively referred to herein as interest rate agreements) as
required under the terms of the credit facilities of the
Company's subsidiaries. The Company's policy is to
manage interest costs using a mix of fixed and variable rate
debt. Using interest rate swap agreements, the Company agrees to
exchange, at specified intervals, the difference between fixed
and variable interest amounts calculated by reference to an
agreed-upon notional principal amount. Interest rate cap
agreements are used to lock in a maximum interest rate should
variable rates rise, but enable the Company to otherwise pay
lower market rates. Interest rate collar agreements are used to
limit exposure to
F-37
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
and benefits from interest rate fluctuations on
variable rate debt to within a certain range of rates. The
Company does not hold or issue any derivative financial
instruments for trading purposes.
Certain provisions of the Company's
5.875% convertible senior notes issued in November 2004
were considered embedded derivatives for accounting purposes and
were required to be separately accounted for from the
convertible senior notes. In accordance with
SFAS No. 133, these derivatives are marked to market
with gains or losses recorded in interest expense on the
Company's consolidated statement of operations. For the
year ended December 31, 2004, the Company recognized
$1 million in losses related to these derivatives. At
December 31, 2004, $10 million is recorded in accounts
payable and accrued expenses relating to the short-term portion
of these derivatives and $21 million is recorded in other
long-term liabilities related to the long-term portion.
Revenue Recognition
Revenues from residential and commercial video
and high-speed data services are recognized when the related
services are provided. Advertising sales are recognized at
estimated realizable values in the period that the
advertisements are broadcast. Local governmental authorities
impose franchise fees on the Company ranging up to a federally
mandated maximum of 5% of gross revenues as defined in the
franchise agreement. Such fees are collected on a monthly basis
from the Company's customers and are periodically remitted
to local franchise authorities. Franchise fees are reported as
revenues on a gross basis with a corresponding operating
expense
.
Programming Costs
The Company has various contracts to obtain
analog, digital and premium video programming from program
suppliers whose compensation is typically based on a flat fee
per customer. The cost of the right to exhibit network
programming under such arrangements is recorded in operating
expenses in the month the programming is available for
exhibition. Programming costs are paid each month based on
calculations performed by the Company and are subject to
adjustment based on periodic audits performed by the
programmers. Certain programming contracts contain launch
incentives to be paid by the programmers. The Company receives
these payments related to the activation of the
programmer's cable television channel and recognizes the
launch incentives on a straight-line basis over the life of the
programming agreement as a reduction of programming expense.
This offset to programming expense was $59 million,
$62 million and $57 million for the years ended
December 31, 2004, 2003 and 2002, respectively. Programming
costs included in the accompanying statement of operations were
$1.3 billion, $1.2 billion and $1.2 billion for
the years ended December 31, 2004, 2003 and 2002,
respectively. As of December 31, 2004 and 2003, the
deferred amount of launch incentives, included in other
long-term liabilities, totaled $106 million and
$170 million, respectively.
Advertising Costs
Advertising costs associated with marketing the
Company's products and services are generally expensed as
costs are incurred. Such advertising expense was
$72 million, $62 million and $60 million for the
years ended December 31, 2004, 2003 and 2002, respectively.
Stock-Based Compensation
The Company has historically accounted for
stock-based compensation in accordance with Accounting
Principles Board ("APB") Opinion No. 25,
Accounting for Stock Issued to Employees
, and related
interpretations, as permitted by SFAS No. 123,
Accounting for Stock-Based Compensation
. On
January 1,
F-38
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
2003, the Company adopted the fair value
measurement provisions of SFAS No. 123 using the
prospective method under which the Company will recognize
compensation expense of a stock-based award to an employee over
the vesting period based on the fair value of the award on the
grant date consistent with the method described in Financial
Accounting Standards Board Interpretation ("FIN")
No. 28,
Accounting for Stock Appreciation Rights and
Other Variable Stock Option or Award Plans
. Adoption of
these provisions resulted in utilizing a preferable accounting
method as the consolidated financial statements will present the
estimated fair value of stock-based compensation in expense
consistently with other forms of compensation and other expense
associated with goods and services received for equity
instruments. In accordance with SFAS No. 148,
Accounting for Stock-Based Compensation —
Transition and Disclosure
, the fair value method was applied
only to awards granted or modified after January 1, 2003,
whereas awards granted prior to such date were accounted for
under APB No. 25, unless they were modified or settled in
cash.
SFAS No. 123 requires pro forma
disclosure of the impact on earnings as if the compensation
expense for these plans had been determined using the fair value
method. The following table presents the Company's net loss
and loss per share as reported and the pro forma amounts that
would have been reported using the fair value method under
SFAS No. 123 for the years presented:
Year Ended December 31,
2004
2003
2002
Net loss applicable to common stock
$
(4,345
)
$
(242
)
$
(2,517
)
Add back stock-based compensation expense related
    to stock options included in reported net loss (net of minority
    interest)
31
2
2
Less employee stock-based compensation expense
    determined under fair value based method for all employee stock
    option awards (net of minority interest)
(33
)
(14
)
(56
)
Effects of unvested options in stock option
    exchange (see Note 19)
48
—
—
Pro forma
$
(4,299
)
$
(254
)
$
(2,571
)
Loss per common shares, basic and diluted:
As reported
$
(14.47
)
$
(0.82
)
$
(8.55
)
Pro forma
$
(14.32
)
$
(0.86
)
$
(8.73
)
The fair value of each option granted is
estimated on the date of grant using the Black-Scholes
option-pricing model. The following weighted average assumptions
were used for grants during the years ended December 31,
2004, 2003 and 2002, respectively: risk-free interest rates of
3.3%, 3.0%, and 3.6%; expected volatility of 92.4%, 93.6% and
64.2%; and expected lives of 4.6 years, 4.5 years and
4.3 years, respectively. The valuations assume no dividends
are paid.
Unfavorable Contracts and Other
    Settlements
The Company recognized $5 million of benefit
for the year ended December 31, 2004 related to changes in
estimated legal reserves established as part of previous
business combinations, which, based on an evaluation of current
facts and circumstances, are no longer required.
The Company recognized $72 million of
benefit for the year ended December 31, 2003 as a result of
the settlement of estimated liabilities recorded in connection
with prior business combinations. The majority of this benefit
(approximately $52 million) is due to the renegotiation of
a major programming
F-39
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
contract, for which a liability had been recorded
for the above market portion of the agreement in conjunction
with the Falcon acquisition in 1999 and the Bresnan acquisition
in 2000. The remaining benefit relates to the reversal of
previously recorded liabilities, which are no longer required.
Income Taxes
The Company recognizes deferred tax assets and
liabilities for temporary differences between the financial
reporting basis and the tax basis of the Company's assets
and liabilities and expected benefits of utilizing net operating
loss carryforwards. The impact on deferred taxes of changes in
tax rates and tax law, if any, applied to the years during which
temporary differences are expected to be settled, are reflected
in the consolidated financial statements in the period of
enactment (see Note 21).
Minority Interest
Minority interest on the consolidated balance
sheets represents the portion of members' equity of Charter
Holdco not owned by Charter, plus preferred membership interests
in an indirect subsidiary of Charter held by Mr. Paul G.
Allen. Minority interest totaled $648 million and
$689 million as of December 31, 2004 and 2003,
respectively, on the accompanying consolidated balance sheets.
Gains or losses arising from issuances by Charter Holdco of its
membership units are recorded as capital transactions thereby
increasing or decreasing shareholders' equity and
decreasing or increasing minority interest on the consolidated
balance sheets. These losses totaled $0, $1 million and
$1 million for the years ended December 31, 2004, 2003
and 2002, respectively, on the accompanying consolidated
statements of changes in shareholders' equity. Operating
losses are allocated to the minority owners based on their
ownership percentage, thereby reducing the Company's net
loss.
Reported losses allocated to minority interest on
the statement of operations are limited to the extent of any
remaining minority interest on the balance sheet related to
Charter Holdco. Because minority interest in Charter Holdco was
substantially eliminated at December 31, 2003, beginning in
2004, Charter began to absorb substantially all future losses
before income taxes that otherwise would have been allocated to
minority interest.
Loss per Common Share
Basic loss per common share is computed by
dividing the net loss applicable to common stock by
300,291,877 shares, 294,597,519 shares and
294,440,261 shares for the years ended December 31,
2004, 2003 and 2002, representing the weighted-average common
shares outstanding during the respective periods. Diluted loss
per common share equals basic loss per common share for the
periods presented, as the effect of stock options is
antidilutive because the Company incurred net losses. All
membership units of Charter Holdco are exchangeable on a
one-for-one basis into common stock of Charter at the option of
the holders. As of December 31, 2004, Charter Holdco has
644,385,801 membership units outstanding. Should the holders
exchange units for shares, the effect would not be dilutive
because the Company incurred net losses.
Segments
SFAS No. 131,
Disclosure about
Segments of an Enterprise and Related Information
,
established standards for reporting information about operating
segments in annual financial statements and in interim financial
reports issued to shareholders. Operating segments are defined
as components of an enterprise about which separate financial
information is available that is evaluated on a regular basis by
the chief
F-40
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
operating decision maker, or decision making
group, in deciding how to allocate resources to an individual
segment and in assessing performance of the segment.
The Company's operations are managed on the
basis of geographic divisional operating segments. The Company
has evaluated the criteria for aggregation of the geographic
operating segments under paragraph 17 of
SFAS No. 131 and believes it meets each of the
respective criteria set forth. The Company delivers similar
products and services within each of its geographic divisional
operations. Each geographic and divisional service area utilizes
similar means for delivering the programming of the
Company's services; have similarity in the type or class of
customer receiving the products and services; distributes the
Company's services over a unified network; and operates
within a consistent regulatory environment. In addition, each of
the geographic divisional operating segments has similar
economic characteristics. In light of the Company's similar
services, means for delivery, similarity in type of customers,
the use of a unified network and other considerations across its
geographic divisional operating structure, management has
determined that the Company has one reportable segment,
broadband services.
4.
Acquisitions
On February 28, 2002, CC Systems, LLC, a
subsidiary of the Company, and High Speed Access Corp.
("HSA") closed the Company's acquisition from HSA
of the contracts and associated assets, and assumed related
liabilities, that served certain of the Company's
high-speed data customers. At closing, the Company paid
approximately $78 million in cash and delivered
37,000 shares of HSA's Series D convertible
preferred stock and all the warrants to buy HSA common stock
owned by the Company. The purchase price has been allocated to
assets acquired and liabilities assumed based on fair values,
including approximately $8 million assigned to intangible
assets and amortized over an average useful life of three years
and approximately $52 million assigned to goodwill. During
the period from 1997 to 2000, certain subsidiaries of the
Company entered into Internet-access related service agreements
with HSA, and both Vulcan Ventures and certain of the
Company's subsidiaries made equity investments in HSA. (see
Note 22 for additional information).
In April 2002, Interlink Communications Partners,
LLC, Rifkin Acquisition Partners, LLC and Charter Communications
Entertainment I, LLC, each an indirect, wholly-owned
subsidiary of Charter Holdings, completed the purchase of
certain assets of Enstar Income Program II-2, L.P., Enstar
Income Program IV-3, L.P., Enstar Income/ Growth Program
Six-A, L.P., Enstar Cable of Macoupin County and Enstar IV/
PBD Systems Venture, serving approximately 21,600 (unaudited)
customers, for a total cash purchase price of $48 million.
In September 2002, Charter Communications Entertainment I,
LLC purchased all of Enstar Income Program II-1,
L.P.'s Illinois cable systems, serving approximately 6,400
(unaudited) customers, for a cash purchase price of
$15 million. Enstar Communications Corporation, a direct
subsidiary of Charter Holdco, is a general partner of the Enstar
limited partnerships but does not exercise control over them.
The purchase prices were allocated to assets acquired based on
fair values, including $41 million assigned to franchises
and $4 million assigned to other intangible assets
amortized over a useful life of three years.
The 2002 acquisitions were funded primarily from
borrowings under the credit facilities of the Company's
subsidiaries.
F-41
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
5.
Allowance for Doubtful Accounts
Activity in the allowance for doubtful accounts
is summarized as follows for the years presented:
Year Ended December 31,
2004
2003
2002
Balance, beginning of year
$
17
$
19
$
33
Charged to expense
92
79
108
Uncollected balances written off, net of
    recoveries
(94
)
(81
)
(122
)
Balance, end of year
$
15
$
17
$
19
6.
Property, Plant and Equipment
Property, plant and equipment consists of the
following as of December 31, 2004 and 2003:
2004
2003
Cable distribution systems
$
6,596
$
6,347
Customer equipment and installations
3,500
3,160
Vehicles and equipment
433
430
Buildings and leasehold improvements
578
583
Furniture and fixtures
493
444
11,600
10,964
Less: accumulated depreciation
(5,311
)
(3,950
)
$
6,289
$
7,014
The Company periodically evaluates the estimated
useful lives used to depreciate its assets and the estimated
amount of assets that will be abandoned or have minimal use in
the future. A significant change in assumptions about the extent
or timing of future asset retirements, or in the Company's
use of new technology and upgrade programs, could materially
affect future depreciation expense.
Depreciation expense for the years ended
December 31, 2004, 2003 and 2002 was $1.5 billion,
$1.5 billion and $1.4 billion respectively.
7.
Franchises and Goodwill
On January 1, 2002, the Company adopted
Statement of Financial Accounting Standards ("SFAS")
No. 142, which eliminates the amortization of
indefinite-lived intangible assets. Accordingly, beginning
January 1, 2002, all franchises that qualify for
indefinite-life treatment under SFAS No. 142 are no
longer amortized against earnings but instead are tested for
impairment annually based on valuations, or more frequently as
warranted by events or changes in circumstances. Based on the
guidance prescribed in Emerging Issues Task Force
("EITF") Issue No. 02-7,
Unit of Accounting
for Testing of Impairment of Indefinite-Lived Intangible
Assets
, franchises are aggregated into essentially
inseparable asset groups to conduct the valuations. The asset
groups generally represent geographic clustering of the
Company's cable systems into groups by which such systems
are managed. Management believes such grouping represents the
highest and best use of those assets.
The Company's valuations, which are based on
the present value of projected after tax cash flows, result in a
value of property, plant and equipment, franchises, customer
relationships and its total entity
F-42
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
value. The value of goodwill is the difference
between the total entity value and amounts assigned to the other
assets.
Franchises, for valuation purposes, are defined
as the future economic benefits of the right to solicit and
service potential customers (customer marketing rights), and the
right to deploy and market new services such as interactivity
and telephony to the potential customers (service marketing
rights). Fair value is determined based on estimated discounted
future cash flows using assumptions consistent with internal
forecasts. The franchise after-tax cash flow is calculated as
the after-tax cash flow generated by the potential customers
obtained and the new services added to those customers in future
periods. The sum of the present value of the franchises'
after-tax cash flow in years 1 through 10 and the continuing
value of the after-tax cash flow beyond year 10 yields the fair
value of the franchise. Prior to the adoption of EITF Topic
D-108,
Use of the Residual Method to Value Acquired Assets
Other than Goodwill,
discussed below, the Company followed a
residual method of valuing its franchise assets, which had the
effect of including goodwill with the franchise assets.
The Company follows the guidance of EITF
Issue 02-17,
Recognition of Customer Relationship
Intangible Assets Acquired in a Business Combination,
in
valuing customer relationships. Customer relationships, for
valuation purposes, represent the value of the business
relationship with existing customers and are calculated by
projecting future after-tax cash flows from these customers
including the right to deploy and market additional services
such as interactivity and telephony to these customers. The
present value of these after-tax cash flows yield the fair value
of the customer relationships. Substantially all acquisitions
occurred prior to January 1, 2002. The Company did not
record any value associated with the customer relationship
intangibles related to those acquisitions. For acquisitions
subsequent to January 1, 2002 the Company did assign a
value to the customer relationship intangible, which is
amortized over its estimated useful life.
In September 2004, the SEC staff issued Topic
D-108 which requires the direct method of separately valuing all
intangible assets and does not permit goodwill to be included in
franchise assets. The Company performed an impairment assessment
as of September 30, 2004, and adopted Topic D-108 in that
assessment resulting in a total franchise impairment of
approximately $3.3 billion. The Company recorded a
cumulative effect of accounting change of $765 million
(approximately $875 million before tax effects of
$91 million and minority interest effects of
$19 million) for the year ended December 31, 2004
representing the portion of the Company's total franchise
impairment attributable to no longer including goodwill with
franchise assets. The effect of the adoption was to increase net
loss and loss per share by $765 million and $2.55 for the
year ended December 31, 2004. The remaining
$2.4 billion of the total franchise impairment was
attributable to the use of lower projected growth rates and the
resulting revised estimates of future cash flows in the
Company's valuation, and was recorded as impairment of
franchises in the Company's accompanying consolidated
statements of operations for the year ended December 31,
2004. Sustained analog video customer losses by the Company in
the third quarter of 2004 primarily as a result of increased
competition from direct broadcast satellite providers and
decreased growth rates in the Company's high-speed data
customers in the third quarter of 2004, in part, as a result of
increased competition from digital subscriber line service
providers led to the lower projected growth rates and the
revised estimates of future cash flows from those used at
October 1, 2003.
The valuation completed at October 1, 2003
showed franchise values in excess of book value and thus
resulted in no impairment. The Company's annual impairment
assessment as of October 1, 2002, based on revised
estimates from January 1, 2002 of future cash flows and
projected long-term growth rates in the Company's
valuation, led to the recognition of a $4.6 billion
impairment charge in the fourth quarter of 2002.
F-43
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
As of December 31, 2004 and 2003,
indefinite-lived and finite-lived intangible assets are
presented in the following table:
December 31,
2004
2003
Gross
Net
Gross
Net
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Amount
Amortization
Amount
Amount
Amortization
Amount
Indefinite-lived intangible assets:
Franchises with indefinite lives
$
9,845
$
—
$
9,845
$
13,606
$
—
$
13,606
Goodwill
52
—
52
52
—
52
$
9,897
$
—
$
9,897
$
13,658
$
—
$
13,658
Finite-lived intangible assets:
Franchises with finite lives
$
37
$
4
$
33
$
107
$
33
$
74
For the year ended December 31, 2004, the
net carrying amount of indefinite-lived intangible assets was
reduced by $490 million as a result of the sale of cable
systems, primarily the sale to Atlantic Broadband Finance, LLC,
discussed in Note 2. Additionally, in the first and fourth
quarters of 2004, approximately $29 million and
$8 million, respectively, of franchises that were
previously classified as finite-lived were reclassified to
indefinite-lived, based on the Company's renewal of these
franchise assets in 2003 and 2004. Franchise amortization
expense for the years ended December 31, 2004, 2003 and
2002 was $4 million, $9 million and $9 million,
respectively, which represents the amortization relating to
franchises that did not qualify for indefinite-life treatment
under SFAS No. 142, including costs associated with
franchise renewals. The Company expects that amortization
expense on franchise assets will be approximately
$3 million annually for each of the next five years. Actual
amortization expense in future periods could differ from these
estimates as a result of new intangible asset acquisitions or
divestitures, changes in useful lives and other relevant factors.
8.
Accounts Payable and Accrued
    Expenses
Accounts payable and accrued expenses consist of
the following as of December 31, 2004 and 2003:
2004
2003
Accounts payable — trade
$
148
$
163
Accrued capital expenditures
65
108
Accrued expenses:
Interest
324
277
Programming costs
278
319
Franchise related fees
67
70
State sales tax
47
61
Other
288
288
$
1,217
$
1,286
F-44
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
9.
Long-Term Debt
Long-term debt consists of the following as of
December 31, 2004 and 2003:
2004
2003
Face
Accreted
Face
Accreted
Value
Value
Value
Value
Long-Term Debt
Charter Communications, Inc.:
5.75% convertible senior notes due 2005
$
—
$
—
$
618
$
618
4.750% convertible senior notes due 2006
156
156
156
156
5.875% convertible senior notes due 2009
863
834
—
—
Charter Holdings:
8.250% senior notes due 2007
451
451
451
450
8.625% senior notes due 2009
1,244
1,243
1,244
1,242
9.920% senior discount notes due 2011
1,108
1,108
1,108
1,082
10.000% senior notes due 2009
640
640
640
640
10.250% senior notes due 2010
318
318
318
318
11.750% senior discount notes due 2010
450
448
450
400
10.750% senior notes due 2009
874
874
874
873
11.125% senior notes due 2011
500
500
500
500
13.500% senior discount notes due 2011
675
589
675
517
9.625% senior notes due 2009
640
638
640
638
10.000% senior notes due 2011
710
708
710
708
11.750% senior discount notes due 2011
939
803
939
717
12.125% senior discount notes due 2012
330
259
330
231
CCH II, LLC:
10.250% senior notes due 2010
1,601
1,601
1,601
1,601
CCO Holdings, LLC:
8 3/4% senior notes due 2013
500
500
500
500
Senior floating notes due 2010
550
550
—
—
Charter Operating:
8% senior second-lien notes due 2012
1,100
1,100
—
—
8 3/8% senior second-lien notes due 2014
400
400
—
—
Renaissance Media Group LLC:
10.000% senior discount notes due 2008
114
116
114
116
CC V Holdings, LLC:
11.875% senior discount notes due 2008
113
113
113
113
Credit Facilities
Charter Operating
5,515
5,515
4,459
4,459
CC VI Operating
—
—
868
868
Falcon Cable
—
—
856
856
CC VIII Operating
—
—
1,044
1,044
$
19,791
$
19,464
$
19,208
$
18,647
F-45
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
The accreted values presented above represents
the face value of the notes less the original issue discount at
the time of sale plus the accretion to the balance sheet date.
On November 22, 2004, the Company issued
$862.5 million original principal amount of
5.875% convertible senior notes due 2009, which are
convertible into shares of Charter's Class A common
stock, par value $.001 per share, at a rate of
413.2231 shares per $1,000 principal amount of notes (or
approximately $2.42 per share), subject to adjustment in
certain circumstances. On December 23, 2004, the Company
used a portion of the proceeds from the sale of the notes to
redeem all of its outstanding 5.75% convertible senior
notes due 2005 (total principal amount of $588 million).
The redemption resulted in a loss on extinguishment of debt of
$10 million.
In April 2004, Charter's indirect
subsidiaries, Charter Operating and Charter Communications
Operating Capital Corp., sold $1.5 billion of senior
second-lien notes in a private transaction. Additionally,
Charter Operating amended and restated its $5.1 billion
credit facilities, among other things, to defer maturities and
increase availability under those facilities to approximately
$6.5 billion, consisting of a $1.5 billion six-year
revolving credit facility, a $2.0 billion six-year term
loan facility and a $3.0 billion seven-year term loan
facility. Charter Operating used the additional borrowings under
the amended and restated credit facilities, together with
proceeds from the sale of the Charter Operating senior
second-lien notes to refinance the credit facilities of its
subsidiaries, CC VI Operating Company, LLC ("CC VI
Operating"), Falcon Cable Communications, LLC ("Falcon
Cable"), and CC VIII Operating, LLC ("CC VIII
Operating"), all in concurrent transactions. In addition,
Charter Operating was substituted as the lender in place of the
banks under those subsidiaries' credit facilities. These
transactions resulted in losses on extinguishment of debt of
$21 million.
The Company recognized a loss of approximately
$23 million recorded as loss on debt to equity conversion
on the accompanying consolidated statement of operations for the
year ended December 31, 2004 from privately negotiated
exchanges of a total of $30 million principal amount of
Charter's 5.75% convertible senior notes for shares of
Charter Class A common stock. The exchanges resulted in the
issuance of more shares in the exchange transaction than would
have been issuable under the original terms of the convertible
senior notes.
In September 2003, Charter, Charter Holdings and
their indirect subsidiary, CCH II purchased, in a non-monetary
transaction, a total of approximately $609 million
principal amount of Charter's outstanding convertible
senior notes and approximately $1.3 billion principal
amount of the senior notes and senior discount notes issued by
Charter Holdings from institutional investors in a small number
of privately negotiated transactions. As consideration for these
securities, CCH II issued approximately $1.6 billion
principal amount of 10.25% notes due 2010, and realized
approximately $294 million of debt discount. CCH II also
issued an additional $30 million principal amount of
10.25% notes for an equivalent amount of cash and used the
proceeds for transaction costs and for general corporate
purposes. This transaction resulted in a gain on extinguishment
of debt of $267 million for the year ended
December 31, 2003. See discussion of the CCH II notes
below for more details.
5.75% Charter Convertible Notes.
In October and November 2000, Charter
issued 5.75% convertible senior notes with a total
principal amount at maturity of $750 million. The 5.75%
Charter convertible notes were convertible at the option of the
holder into shares of Class A common stock at a conversion
rate of 46.3822 shares per $1,000 principal amount of
notes, which was equivalent to a price of $21.56 per share,
subject to certain adjustments. The remaining $588 million
of these notes was redeemed on December 23, 2004 at a price
of 101.15% of the outstanding principal amount plus accrued and
unpaid interest through the redemption date.
F-46
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
4.75% Charter Convertible
Notes.
In May 2001, Charter issued
4.75% convertible senior notes with a total principal
amount at maturity of $633 million. As of December 31,
2004, there was $156 million in total principal amount of
these notes outstanding. The 4.75% Charter convertible notes
rank equally with any of Charter's future unsubordinated
and unsecured indebtedness, but are structurally subordinated to
all existing and future indebtedness and other liabilities of
Charter's subsidiaries.
The 4.75% Charter convertible notes are
convertible at the option of the holder into shares of
Class A common stock at a conversion rate of
38.0952 shares per $1,000 principal amount of notes, which
is equivalent to a price of $26.25 per share, subject to
certain adjustments. Specifically, the adjustments include
anti-dilutive provisions, which automatically occur based on the
occurrence of specified events to provide protection rights to
holders of the notes. Additionally, Charter may adjust the
conversion ratio under certain circumstances when deemed
appropriate. These notes are redeemable at Charter's option
at amounts decreasing from 101.9% to 100% of the principal
amount, plus accrued and unpaid interest beginning on
June 4, 2004, to the date of redemption. Interest is
payable semiannually on December 1 and June 1,
beginning December 1, 2001, until maturity on June 1,
2006.
Upon a change of control, subject to certain
conditions and restrictions, Charter may be required to
repurchase the notes, in whole or in part, at 100% of their
principal amount plus accrued interest at the repurchase date.
5.875% Charter Convertible Notes.
In November 2004, Charter issued
5.875% convertible senior notes due 2009 with a total
original principal amount of $862.5 million. The 5.875%
Charter convertible notes are convertible at any time at the
option of the holder into shares of Class A common stock at
an initial conversion rate of 413.2231 shares per $1,000
principal amount of notes, which is equivalent to a conversion
price of approximately $2.42 per share, subject to certain
adjustments. Specifically, the adjustments include anti-dilutive
provisions, which cause adjustments to occur automatically based
on the occurrence of specified events to provide protection
rights to holders of the notes. The conversion rate may also be
increased (but not to exceed 462 shares per $1,000
principal amount of notes) upon a specified change of control
transaction. Additionally, Charter may elect to increase the
conversion rate under certain circumstances when deemed
appropriate and subject to applicable limitations of the NASDAQ
stock market. Holders who convert their notes prior to
November 16, 2007 will receive an early conversion make
whole amount in respect of their notes based on a proportional
share of the portfolio of pledged securities described below,
with specified adjustments.
The 5.875% Charter convertible notes are
unsecured (except with respect to the collateral as described
below) and rank equally with existing and future unsubordinated
and unsecured indebtedness (except with respect to the
collateral described below), but are structurally subordinated
to all existing and future indebtedness and other liabilities of
Charter's subsidiaries. Upon a change of control and
certain other fundamental changes, subject to certain conditions
and restrictions, Charter may be required to repurchase the
notes, in whole or in part, at 100% of their principal amount
plus accrued interest at the repurchase date.
Interest is payable semi-annually in arrears.
Charter Holdco used a portion of the proceeds from the sale of
the notes to purchase a portfolio of U.S. government
securities in an amount which the Company believes will be
sufficient to make the first six interest payments on the notes.
These government securities were pledged to the Company as
security for a mirror note issued by Charter Holdco to Charter
(as discussed below) and pledged to the trustee under the
indenture governing the notes as security for the Company's
obligations thereunder. The Company expects to use such
securities to fund the first six interest payments under the
notes. The pledged securities totaled $144 million at
December 31, 2004. Any holder that converts its notes prior
to the third anniversary of the issue date will be entitled to
receive, in
F-47
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
addition to the requisite number of shares upon
conversion, an interest make whole payment equal to the cash
proceeds from the sale by the trustee of that portion of the
remaining pledged U.S. government securities which secure
interest payments on the notes so converted, subject to certain
limitations with respect to notes that have not been sold prior
to being registered under the Securities Act of 1933.
Following the earlier of the sale of the notes
pursuant to an effective registration statement or the date two
years following the issue date, the notes in whole or in part
may be redeemed for cash at any time at a redemption price equal
to 100% of the aggregate principal amount plus accrued and
unpaid interest, deferred interest and liquidated damages, if
any, but only if for any 20 trading days in any 30 consecutive
trading day period the closing price has exceeded 180% of the
conversion price, if such 30 trading day period begins prior to
November 16, 2007 or 150% of the conversion price, if such
30 trading period begins thereafter. Holders who convert notes
that the Company has called for redemption shall receive, in
addition to the early conversion make whole amount, if
applicable, the present value of the interest on the notes
converted that would have been payable for the period from the
later of November 17, 2007 and the redemption date through
the scheduled maturity date for the notes, plus any accrued
deferred interest.
The Company is required to register the 5.875%
Charter convertible notes by April 21, 2005. If the 5.875%
Charter convertible notes are not registered by such date, the
Company will incur liquidating damages as defined in the related
indenture. In conjunction with issuing the 5.875% Charter
convertible notes, the Company filed a registration statement to
sell up to 150 million shares of the Company's
Class A common stock pursuant to a share lending agreement.
The share lending agreement is required to be registered by
April 1, 2005. If the share lending agreement is not
registered by such date, the Company will incur liquidating
damages as defined in the related indenture.
In connection with our November 2004 sale of the
$862.5 million principal amount of 5.875% convertible
senior notes due 2009, Charter Holdco issued to Charter mirror
notes in identical principal amount in exchange for the proceeds
from its offering. Charter Holdco then purchased and pledged
certain U.S. government securities to Charter as security
for the mirror notes (which were in turn repledged by Charter to
the trustee for the benefit of holders of Charter's
5.875% convertible senior notes and which Charter expects
to use to fund the first six interest payments on the notes),
and agreed to lend common units to Charter, the terms of which
will, to the extent practicable, mirror the terms of the shares.
Charter Holdco also redeemed the remaining $588 million
principal amount of the mirror notes in respect of our
5.75% convertible senior notes due 2005 concurrently with
its December 23, 2004 redemption of its
5.75% convertible senior notes.
In addition, in December 2004, Charter Holdco
entered into a unit lending agreement with Charter in which it
agreed to lend common units to Charter that would mirror the
anticipated loan of Class A common shares by Charter to
Citigroup Global Markets pursuant to a share lending agreement.
The members of Charter Holdco (including the entities controlled
by Mr. Allen) also at that time entered into a letter
agreement providing, among other things, that for purposes of
the allocation provisions of the Limited Liability Company
Agreement of Charter Holdco, the mirror units be treated as
disregarded and not outstanding until such time (and except to
the extent) that, under Charter's share lending agreement,
Charter treats the loaned shares in a manner that assumes they
will neither be returned by Charter by the borrower nor
otherwise be acquired by Charter in lieu of such a return.
March 1999 Charter Holdings
Notes.
The March 1999 Charter Holdings
notes are general unsecured obligations of Charter Holdings and
Charter Communications Capital Corporation ("Charter
Capital"). The March 1999 8.250% Charter Holdings notes
mature on April 1, 2007, and as of December 31, 2004,
there was $451 million in total principal amount
outstanding. The March 1999 8.625% Charter Holdings notes mature
on April 1, 2009 and as of December 31, 2004, there
was $1.2 billion in total principal
F-48
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
amount outstanding. The March 1999 9.920% Charter
Holdings notes mature on April 1, 2011 and as of
December 31, 2004, the total principal amount outstanding
and accreted value was $1.1 billion. Cash interest on the
March 1999 9.920% Charter Holdings notes began to accrue on
April 1, 2004.
The March 1999 Charter Holdings notes are senior
debt obligations of Charter Holdings and Charter Capital. They
rank equally with all other current and future unsubordinated
obligations of Charter Holdings and Charter Capital. They are
structurally subordinated to the obligations of Charter
Holdings' subsidiaries, including the CCH II notes,
the CCO Holdings notes, the Renaissance notes, the CC V Holdings
notes, the Charter Operating credit facilities and the Charter
Operating notes.
Charter Holdings and Charter Capital will not
have the right to redeem the March 1999 8.250% Charter Holdings
notes prior to their maturity on April 1, 2007. On or after
April 1, 2004, Charter Holdings and Charter Capital may
redeem some or all of the March 1999 8.625% Charter Holdings
notes and the March 1999 9.920% Charter Holdings notes at any
time, in each case, at a premium. The optional redemption price
declines to 100% of the principal amount of March 1999 Charter
Holdings notes redeemed, plus accrued and unpaid interest, if
any, for redemption on or after April 1, 2007.
In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding March 1999 Charter Holdings
notes at 101% of their principal amount or accreted value, as
applicable, plus accrued and unpaid interest, if any.
The indentures governing the March 1999 Charter
Holdings notes contain restrictive covenants that limit certain
transactions or activities by Charter Holdings and its
restricted subsidiaries. Substantially all of Charter
Holdings' direct and indirect subsidiaries are currently
restricted subsidiaries.
January 2000 Charter Holdings
Notes.
The January 2000 Charter
Holdings notes are general unsecured obligations of Charter
Holdings and Charter Capital. The January 2000 10.00% Charter
Holdings notes mature on April 1, 2009, and as of
December 31, 2004, there was $640 million in total
principal amount of these notes outstanding. The January 2000
10.25% Charter Holdings notes mature on January 15, 2010
and as of December 31, 2004, there was $318 million in
total principal amount of these notes outstanding. The January
2000 11.75% Charter Holdings notes mature on January 15,
2010 and as of December 31, 2004, the total principal
amount outstanding was $450 million and the total accreted
value of these notes was approximately $448 million. Cash
interest on the January 2000 11.75% Charter Holdings notes began
to accrue on January 15, 2005.
The January 2000 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with all other current and future
unsubordinated obligations of Charter Holdings and Charter
Capital. They are structurally subordinated to the obligations
of Charter Holdings' subsidiaries, including the
CCH II notes, the CCO Holdings notes, the Renaissance
notes, the CC V Holdings notes, the Charter Operating credit
facilities and the Charter Operating notes.
Charter Holdings and Charter Capital will not
have the right to redeem the January 2000 10.00% Charter
Holdings notes prior to their maturity on April 1, 2009.
Charter Holdings and Charter Capital may redeem some or all of
the January 2000 10.25% Charter Holdings notes and the January
2000 11.75% Charter Holdings notes at any time, in each case, at
a premium. The optional redemption price declines to 100% of the
principal amount of the January 2000 Charter Holdings notes
redeemed, plus accrued and unpaid interest, if any, for
redemption on or after January 15, 2008.
In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2000 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
F-49
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
The indentures governing the January 2000 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 Charter
Holdings notes.
January 2001 Charter Holdings
Notes.
The January 2001 Charter
Holdings notes are general unsecured obligations of Charter
Holdings and Charter Capital. The January 2001 10.750% Charter
Holdings notes mature on October 1, 2009, and as of
December 31, 2004, there was $874 million in total
principal amount of these notes outstanding. The January 2001
11.125% Charter Holdings notes mature on January 15, 2011
and as of December 31, 2004, there was $500 million in
total principal amount outstanding. The January 2001 13.500%
Charter Holdings notes mature on January 15, 2011 with a
total principal amount at maturity of $675 million. As of
December 31, 2004, the total accreted value of these
13.500% notes was approximately $589 million. Cash
interest on the January 2001 13.500% Charter Holdings notes will
not accrue prior to January 15, 2006.
The January 2001 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with all other current and future
unsubordinated obligations of Charter Holdings and Charter
Capital. They are structurally subordinated to the obligations
of Charter Holdings' subsidiaries, including the
CCH II notes, the CCO Holdings notes, the Renaissance
notes, the CC V Holdings notes, the Charter Operating credit
facilities and the Charter Operating notes.
Charter Holdings and Charter Capital will not
have the right to redeem the January 2001 10.750% Charter
Holdings notes prior to their maturity date on October 1,
2009. On or after January 15, 2006, Charter Holdings and
Charter Capital may redeem some or all of the January 2001
11.125% Charter Holdings notes and the January 2001 13.500%
Charter Holdings notes at any time, in each case, at a premium.
The optional redemption price declines to 100% of the principal
amount of the January 2001 Charter Holdings notes redeemed, plus
accrued and unpaid interest, if any, for redemption on or after
January 15, 2009.
In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2001 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
The indentures governing the January 2001 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999 and January
2000 Charter Holdings notes.
May 2001 Charter Holdings
Notes.
The May 2001 Charter Holdings
notes are general unsecured obligations of Charter Holdings and
Charter Capital. The May 2001 9.625% Charter Holdings notes
mature on November 15, 2009, and as of December 31,
2004, combined with the January 2002 additional bond issue,
there was $640 million in total principal amount
outstanding. The May 2001 10.000% Charter Holdings notes mature
on May 15, 2011 and as of December 31, 2004, combined
with the January 2002 additional bond issue, there was
$710 million in total principal amount outstanding. The May
2001 11.750% Charter Holdings notes mature on May 15, 2011
and as of December 31, 2004, the total principal amount
outstanding was $939 million and the total accreted value
of the 11.750% notes was approximately $803 million.
Cash interest on the May 2001 11.750% Charter Holdings notes
will not accrue prior to May 15, 2006.
The May 2001 Charter Holdings notes are senior
debt obligations of Charter Holdings and Charter Capital. They
rank equally with all other current and future unsubordinated
obligations of Charter Holdings and Charter Capital. They are
structurally subordinated to the obligations of Charter
Holdings'
F-50
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
subsidiaries, including the CCH II notes,
the CCO Holdings notes, the Renaissance notes, the CC V
Holdings notes, the Charter Operating credit facilities and the
Charter Operating notes.
Charter Holdings and Charter Capital will not
have the right to redeem the May 2001 9.625% Charter Holdings
notes prior to their maturity on November 15, 2009. On or
after May 15, 2006, Charter Holdings and Charter Capital
may redeem some or all of the May 2001 10.000% Charter Holdings
notes and the May 2001 11.750% Charter Holdings notes at any
time, in each case, at a premium. The optional redemption price
declines to 100% of the principal amount of the May 2001 Charter
Holdings notes redeemed, plus accrued and unpaid interest, if
any, for redemption on or after May 15, 2009.
In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding May 2001 Charter Holdings notes
at 101% of their total principal amount or accreted value, as
applicable, plus accrued and unpaid interest, if any.
The indentures governing the May 2001 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999, January
2000 and January 2001 Charter Holdings notes.
January 2002 Charter Holdings Notes.
The January 2002 Charter Holdings
notes are general unsecured obligations of Charter Holdings and
Charter Capital. The January 2002 Charter Holdings notes consist
of $330 million in total principal amount at maturity of
12.125% senior discount notes due 2012.
The January 2002 12.125% senior discount
notes mature on January 15, 2012, and as of
December 31, 2004, the total principal amount outstanding
was $330 million and the total accreted value of these
notes was approximately $259 million. Cash interest on the
January 2002 12.125% Charter Holdings notes will not accrue
prior to January 15, 2007.
The January 2002 Charter Holdings notes are
senior debt obligations of Charter Holdings and Charter Capital.
They rank equally with the current and future unsecured and
unsubordinated debt of Charter Holdings. They are structurally
subordinated to the obligations of Charter Holdings'
subsidiaries, including the CCH II notes, the CCO Holdings
notes, the Renaissance notes, the CC V Holdings notes, the
Charter Operating credit facilities and the Charter Operating
notes.
The Charter Holdings 12.125% senior discount
notes are redeemable at the option of the issuers at amounts
decreasing from 106.063% to 100% of accreted value beginning
January 15, 2007.
In the event that a specified change of control
event occurs, Charter Holdings and Charter Capital must offer to
repurchase any then outstanding January 2002 Charter Holdings
notes at 101% of their total principal amount or accreted value,
as applicable, plus accrued and unpaid interest, if any.
The indentures governing the January 2002 Charter
Holdings notes contain substantially identical events of
default, affirmative covenants and negative covenants as those
contained in the indentures governing the March 1999, January
2000, January 2001 and May 2001 Charter Holdings notes.
CCH II Notes.
In September 2003, CCH II and CCH II Capital Corp.
jointly issued $1.6 billion total principal amount of
10.25% senior notes due 2010. The CCH II notes are
general unsecured obligations of CCH II and CCH II
Capital Corp. They rank equally with all other current or future
unsubordinated obligations of CCH II and CCH II
Capital Corp. The CCH II notes are structurally
subordinated to all obligations of subsidiaries of CCH II,
including the CCO Holdings notes, the Renaissance notes, the
CC V Holdings notes, the Charter Operating credit
facilities and the Charter Operating notes.
F-51
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Interest on the CCH II notes accrues at
10.25% per annum and is payable semi-annually in arrears on
each March 15 and September 15, commencing on
March 15, 2004.
At any time prior to September 15, 2006, the
issuers of the CCH II notes may redeem up to 35% of the
total principal amount of the CCH II notes on a pro rata
basis at a redemption price equal to 110.25% of the principal
amount of CCH II notes redeemed, plus any accrued and
unpaid interest.
On or after September 15, 2008, the issuers
of the CCH II notes may redeem all or a part of the notes
at a redemption price that declines ratably from the initial
redemption price of 105.125% to a redemption price on or after
September 15, 2009 of 100.0% of the principal amount of the
CCH II notes redeemed, plus, in each case, any accrued and
unpaid interest.
In the event of specified change of control
events, CCH II must offer to purchase the outstanding
CCH II notes from the holders at a purchase price equal to
101% of the total principal amount of the notes, plus any
accrued and unpaid interest.
The indenture governing the CCH II notes
contains restrictive covenants that limit certain transactions
or activities by CCH II and its restricted subsidiaries.
Substantially all of CCH II's direct and indirect
subsidiaries are currently restricted subsidiaries.
CCO Holdings Notes.
8 3/4% Senior Notes due 2013
In November 2003, CCO Holdings and CCO Holdings
Capital Corp. jointly issued $500 million total principal
amount of 8 3/4% senior notes due 2013. The CCO Holdings
notes are general unsecured obligations of CCO Holdings and CCO
Holdings Capital Corp. They rank equally with all other current
or future unsubordinated obligations of CCO Holdings and CCO
Holdings Capital Corp. The CCO Holdings notes are structurally
subordinated to all obligations of CCO Holdings'
subsidiaries, including the Renaissance notes, the CC V Holdings
notes, the Charter Operating credit facilities and the Charter
Operating notes.
Interest on the CCO Holdings senior notes accrues
at 8 3/4% per year and is payable semi-annually in arrears on
each May 15 and November 15.
At any time prior to November 15, 2006, the
issuers of the CCO Holdings senior notes may redeem up to 35% of
the total principal amount of the CCO Holdings senior notes to
the extent of public equity proceeds they have received on a pro
rata basis at a redemption price equal to 108.75% of the
principal amount of CCO Holdings senior notes redeemed, plus any
accrued and unpaid interest.
On or after November 15, 2008, the issuers
of the CCO Holdings senior notes may redeem all or a part of the
notes at a redemption price that declines ratably from the
initial redemption price of 104.375% to a redemption price on or
after November 15, 2011 of 100.0% of the principal amount
of the CCO Holdings senior notes redeemed, plus, in each case,
any accrued and unpaid interest.
In the event of specified change of control
events, CCO Holdings must offer to purchase the outstanding CCO
Holdings senior notes from the holders at a purchase price equal
to 101% of the total principal amount of the notes, plus any
accrued and unpaid interest.
Senior Floating Rate Notes Due 2010
In December 2004, CCO Holdings and CCO Holdings
Capital Corp. jointly issued $550 million total principal
amount of senior floating rate notes due 2010.
F-52
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Interest on the CCO Holdings senior floating rate
notes accrues at the LIBOR rate plus 4.125% annually, from
December 15, 2004 or, if interest already has been paid,
from the date it was most recently paid. Interest is reset and
payable quarterly in arrears on each March 15,
June 15, September 15 and December 15, commencing on
March 15, 2005.
At any time prior to December 15, 2006, the
issuers of the senior floating rate notes may redeem up to 35%
of the notes in an amount not to exceed the amount of proceeds
of one or more public equity offerings at a redemption price
equal to 100% of the principal amount, plus a premium equal to
the interest rate per annum applicable to the notes on the date
notice of redemption is given, plus accrued and unpaid interest,
if any, to the redemption date, provided that at least 65% of
the original aggregate principal amount of the notes issued
remains outstanding after the redemption.
The issuers of the senior floating rate notes may
redeem the notes in whole or in part at the issuers' option
from December 15, 2006 until December 14, 2007 for
102% of the principal amount, from December 15, 2007 until
December 14, 2008 for 101% of the principal amount and from
and after December 15, 2008, at par, in each case, plus
accrued and unpaid interest.
The indentures governing the CCO Holdings senior
notes contain restrictive covenants that limit certain
transactions or activities by CCO Holdings and its restricted
subsidiaries. Substantially all of CCO Holdings' direct and
indirect subsidiaries are currently restricted subsidiaries.
Charter Operating Notes.
On April 27, 2004, Charter
Operating and Charter Communications Operating Capital Corp.
jointly issued $1.1 billion of 8% senior second-lien
notes due 2012 and $400 million of 8 3/8% senior
second-lien notes due 2014, for total gross proceeds of
$1.5 billion. Interest on the Charter Operating notes is
payable semi-annually in arrears on each April 30 and
October 30, commencing on October 30, 2004.
The Charter Operating notes were sold in a
private transaction that was not subject to the registration
requirements of the Securities Act of 1933. The Charter
Operating notes are not expected to have the benefit of any
exchange or other registration rights, except in specified
limited circumstances. On the issue date of the Charter
Operating notes, because of restrictions contained in the
Charter Holdings indentures, there were no Charter Operating
note guarantees, even though Charter Operating's immediate
parent, CCO Holdings, and certain of the Company's
subsidiaries were obligors and/or guarantors under the Charter
Operating credit facilities. Upon the occurrence of the
guarantee and pledge date (generally, the fifth business day
after the Charter Holdings leverage ratio is certified to be
below 8.75 to 1.0), CCO Holdings and those subsidiaries of
Charter Operating that are then guarantors of, or otherwise
obligors with respect to, indebtedness under the Charter
Operating credit facilities and related obligations will be
required to guarantee the Charter Operating notes. The note
guarantee of each such guarantor will be:
•
a senior obligation of such guarantor;
•
structurally senior to the outstanding senior
    notes of CCO Holdings and CCO Holdings Capital Corp. (except in
    the case of CCO Holdings' note guarantee, which ranks
    equally with such senior notes), the outstanding senior notes of
    CCH II and CCH II Capital Corp., the outstanding
    senior notes and senior discount notes of Charter Holdings and
    the outstanding convertible senior notes of Charter (but subject
    to provisions in the Charter Operating indenture that permit
    interest and, subject to meeting the 4.25 to 1.0 leverage ratio
    test, principal payments to be made thereon); and
•
senior in right of payment to any future
    subordinated indebtedness of such guarantor.
As a result of the above leverage ratio test
being met, CCO Holdings and certain of its subsidiaries provided
the additional guarantees described above during the first
quarter of 2005.
F-53
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
All the subsidiaries of Charter Operating (except
CCO NR Sub, LLC, and certain other subsidiaries that are not
deemed material and are designated as nonrecourse subsidiaries
under the Charter Operating credit facilities) are restricted
subsidiaries of Charter Operating under the Charter Operating
notes. Unrestricted subsidiaries generally will not be subject
to the restrictive covenants in the Charter Operating indenture.
In the event of specified change of control
events, Charter Operating must offer to purchase the Charter
Operating notes at a purchase price equal to 101% of the total
principal amount of the Charter Operating notes repurchased plus
any accrued and unpaid interest thereon.
The indenture governing the Charter Operating
senior notes contains restrictive covenants that limit certain
transactions or activities by Charter Operating and its
restricted subsidiaries. Substantially all of Charter
Operating's direct and indirect subsidiaries are currently
restricted subsidiaries.
Renaissance Notes.
In connection with the acquisition of Renaissance in April 1999,
the Company assumed $163 million principal amount at
maturity of 10.000% senior discount notes due 2008 of which
$49 million was repurchased in May 1999. The Renaissance
notes did not require the payment of interest until
April  15, 2003. From and after April 15, 2003,
the Renaissance notes bear interest, payable semi-annually, on
April 15 and October 15, commencing on
October 15, 2003. The Renaissance notes are due on
April 15, 2008.
CC V Holdings Notes.
Charter Holdco acquired CC V Holdings in November 1999 and
assumed CC V Holdings' outstanding 11.875% senior
discount notes due 2008 with an accreted value of
$113 million as of December 31, 2003. Commencing
December  1, 2003, cash interest on the CC V Holdings
11.875% notes will be payable semi-annually on June 1
and December 1 of each year. In February 2005, these notes
were called with an anticipated redemption date of
March 14, 2005.
High-Yield Restrictive Covenants; Limitation
on Indebtedness.
The indentures
governing the notes of the Company's subsidiaries contain
certain covenants that restrict the ability of Charter Holdings,
Charter Capital, CCH II, CCH II Capital Corp., CCO
Holdings, CCO Holdings Capital Corp., Charter Operating, Charter
Communications Operating Capital Corp., the CC V Holdings notes
issuers, Renaissance Media Group, and all of their restricted
subsidiaries to:
•
incur additional debt;
•
pay dividends on equity or repurchase equity;
•
make investments;
•
sell all or substantially all of their assets or
    merge with or into other companies;
•
sell assets;
•
enter into sale-leasebacks;
•
in the case of restricted subsidiaries, create or
    permit to exist dividend or payment restrictions with respect to
    the bond issuers, guarantee their parent companies debt, or
    issue specified equity interests;
•
engage in certain transactions with
    affiliates; and
•
grant liens.
Charter Operating Credit
Facilities.
In April 2004, Charter
Operating amended and restated its $5.1 billion credit
facilities, among other things, to defer maturities and increase
availability under those
F-54
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
facilities to approximately $6.5 billion,
consisting of a $1.5 billion revolving credit facility with
a maturity date in 2010; a $2.0 billion Term A loan
facility of which 12.5% matures in 2007, 30% matures in 2008,
37.5% matures in 2009 and 20% matures in 2010; and a
$3.0 billion Term B loan facility which is repayable in 27
equal quarterly installments aggregating in each loan year to 1%
of the original amount of the Term B facility, with the
remaining balance due at final maturity in 2011. Charter
Operating used the additional borrowings under the amended and
restated credit facilities, together with proceeds from the sale
of the Charter Operating senior second-lien notes to refinance
the credit facilities of its subsidiaries, CC VI Operating,
Falcon Cable, and CC VIII Operating,, all in concurrent
transactions. In addition, Charter Operating was substituted as
the lender in place of the banks under those subsidiaries'
credit facilities.
Amounts outstanding under the Charter Operating
credit facilities bear interest, at Charter Operating's
election, at a base rate or the Eurodollar rate (2.07% to 2.28%
as of December 31, 2004), as defined, plus a margin for
Eurodollar loans of up to 3.00% for the Term A facility and
revolving credit facility, and up to 3.25% for the Term B
facility, and for base rate loans of up to 2.00% for the Term A
facility and revolving credit facility, and up to 2.25% for the
Term B facility. A quarterly commitment fee of up to .75% is
payable on the average daily unborrowed balance of the revolving
credit facilities.
The obligations of Charter's subsidiaries
under the Charter Operating credit facilities (the
"Obligations") are guaranteed by Charter
Operatings' immediate parent company, CCO Holdings, and the
subsidiaries of Charter Operating, except for immaterial
subsidiaries and subsidiaries precluded from guaranteeing by
reason of the provisions of other indebtedness to which they are
subject (the "non-guarantor subsidiaries", primarily
Renaissance and CC V Holdings and their subsidiaries). The
Obligations are also secured by (i) a lien on all of the
assets of Charter Operating and its subsidiaries (other than
assets of the non-guarantor subsidiaries), to the extent such
lien can be perfected under the Uniform Commercial Code by the
filing of a financing statement, and (ii) by a pledge by
CCO Holdings of the equity interests owned by it in Charter
Operating or any of Charter Operating's subsidiaries, as
well as intercompany obligations owing to it by any of such
entities. Upon the Charter Holdings Leverage Ratio (as defined
in the indenture governing the Charter Holdings senior notes and
senior discount notes) being under 8.75 to 1.0, the Charter
Operating credit facilities require that the 11.875% notes
due 2008 issued by CC V Holdings, LLC be redeemed. Because
such Leverage Ratio was determined to be under 8.75 to 1.0 in
February 2005, CC V Holdings has called for redemption of such
notes with an anticipated redemption date of March 14,
2005. Following such redemption and provided the Leverage Ratio
of Charter Holdings remains under 8.75 to 1.0, CC V
Holdings and its subsidiaries (other than non-guarantor
subsidiaries) will guarantee the Obligations and grant a lien on
all of their assets as to which a lien can be perfected under
the Uniform Commercial Code by the filing of a financing
statement.
The Charter Operating credit facilities were
amended and restated previously as of June 19, 2003 to
allow for the insertion of intermediate holding companies
between Charter Holdings and Charter Operating. In exchange for
the lenders' consent to the organizational restructuring,
Charter Operating's pricing increased by 50 basis
points across all levels in the pricing grid then in effect
under the Charter Operating credit facilities.
Amounts under the Charter Operating credit
facilities, as amended in 2003, bore interest at the Eurodollar
rate or the base rate, each as defined, plus a margin of up to
3.0% for Eurodollar loans (3.15% to 3.92% as of
December 31, 2003) and 2.0% for base rate loans. A
quarterly commitment fee of between 0.25% and 0.375% per
annum was payable on the unborrowed balance of the revolving
credit facilities.
As of December 31, 2004, outstanding
borrowings under the Charter Operating credit facilities were
approximately $5.5 billion and the unused total potential
availability was $804 million.
F-55
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
CC VI Operating Credit
Facilities.
As discussed above, in
April 2004, Charter Operating was substituted as the lender in
place of the banks for the CC VI Operating Credit
Facilities.
Prior to April 2004, amounts under the CC VI
Operating credit facilities bore interest at the Eurodollar rate
or the base rate, each as defined, plus a margin of up to 2.5%
for Eurodollar loans (2.40% to 3.66% as of December 31,
2003) and 1.5% for base rate loans. A quarterly commitment fee
of 0.25% per year was payable on the unborrowed balance of
the Term A facility and the revolving facility.
Falcon Cable Credit
Facilities.
As discussed above, in
April 2004, Charter Operating was substituted as the lender in
place of the banks for the Falcon Cable Credit Facilities.
Prior to April 2004, amounts under the Falcon
Cable credit facilities bore interest at the Eurodollar rate or
the base rate, each as defined, plus a margin of up to 2.25% for
Eurodollar loans (2.40% to 3.42% as of December 31, 2003)
and up to 1.25% for base rate loans. A quarterly commitment fee
of between 0.25% and 0.375% per year was payable on the
unborrowed balance of the revolving facilities.
CC VIII Operating Credit
Facilities.
As discussed above, in
April 2004, Charter Operating was substituted as the lender in
place of the banks for the CC VIII Operating Credit
Facilities.
Prior to April 2004, amounts under the
CC VIII Operating credit facilities bear interest at the
Eurodollar rate or the base rate, each as defined, plus a margin
of up to 2.50% for Eurodollar loans (2.15% to 3.66% as of
December 31, 2003) and up to 1.50% for base rate loans. A
quarterly commitment fee of 0.25% was payable on the unborrowed
balance of the revolving credit facilities.
Charter Operating Credit Facilities
Restrictive Covenants.
The Charter
Operating credit facilities contain representations and
warranties, affirmative and negative covenants similar to those
described above with respect to the indentures governing the
Company's notes, information requirements, events of
default and financial covenants. The financial covenants, as
defined, measure performance against standards set for leverage,
debt service coverage, and operating cash flow coverage of cash
interest expense on a quarterly basis or as applicable.
Additionally, the credit facilities contain provisions requiring
mandatory loan prepayments under specific circumstances,
including when significant amounts of assets are sold and the
proceeds are not promptly reinvested in assets useful in the
business of the borrower within a specified period. The Charter
Operating credit facilities also provide that in the event that
any indebtedness of CCO Holdings remains outstanding on the
date, which is six months prior to the scheduled final maturity,
the term loans under the Charter Operating credit facilities
will mature and the revolving credit facilities will terminate
on such date. The events of default under the Charter Operating
credit facilities include, among other things:
•
the failure to make payments when due or within
    the applicable grace period,
•
the failure to comply with specified covenants,
    including but not limited to a covenant to deliver audited
    financial statements with an unqualified opinion from the
    Company's independent auditors,
•
the failure to pay or the occurrence of events
    that cause or permit the acceleration of other indebtedness
    owing by CCO Holdings, Charter Operating or Charter
    Operating's subsidiaries in amounts in excess of
    $50 million in aggregate principal amount,
•
the failure to pay or the occurrence of events
    that result in the acceleration of other indebtedness owing by
    certain of CCO Holdings' direct and indirect parent
    companies in amounts in excess of $200 million in aggregate
    principal amount,
F-56
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
•
Paul Allen and/or certain of his family members
    and/or their exclusively owned entities (collectively, the
    "Paul Allen Group") ceasing to have the power,
    directly or indirectly, to vote at least 35% of the ordinary
    voting power of Charter Operating,
•
the consummation of any transaction resulting in
    any person or group (other than the Paul Allen Group) having
    power, directly or indirectly, to vote more than 35% of the
    ordinary voting power of Charter Operating, unless the Paul
    Allen Group holds a greater share of ordinary voting power of
    Charter Operating,
•
certain of Charter Operating's indirect or
    direct parent companies having indebtedness in excess of
    $500 million aggregate principal amount which remains
    undefeased three months prior to the final maturity of such
    indebtedness, and
•
Charter Operating ceasing to be a wholly-owned
    direct subsidiary of CCO Holdings, except in certain very
    limited circumstances.
In the event of a default under the
Company's subsidiaries' credit facilities or notes,
the subsidiaries' creditors could elect to declare all
amounts borrowed, together with accrued and unpaid interest and
other fees, to be due and payable. In such event, the
subsidiaries' credit facilities and indentures would not
permit the Company's subsidiaries to distribute funds to
Charter Holdco or Charter to pay interest or principal on
Charter's notes. In addition, the lenders under the
Company's credit facilities could foreclose on their
collateral, which includes equity interests in the
Company's subsidiaries, and exercise other rights of
secured creditors. In any such case, the Company might not be
able to repay or make any payments on its notes. Additionally,
an acceleration or payment default under Charter
Operating's credit facilities would cause a cross-default
in the indentures governing the Charter Holdings notes,
CCH II notes, CCO Holdings notes, Charter Operating notes
and Charter's convertible senior notes and would trigger
the cross-default provision of the Charter Operating Credit
Agreement. Any default under any of the subsidiaries'
credit facilities or notes might adversely affect the holders of
Charter's notes and the Company's growth, financial
condition and results of operations and could force the Company
to examine all options, including seeking the protection of the
bankruptcy laws.
Based upon outstanding indebtedness as of
December 31, 2004, the amortization of term loans,
scheduled reductions in available borrowings of the revolving
credit facilities, and the maturity dates for all senior and
subordinated notes and debentures, total future principal
payments on the total borrowings under all debt agreements as of
December 31, 2004, are as follows:
Year
Amount
2005
$
30
2006
186
2007
731
2008
858
2009
5,040
Thereafter
12,946
$
19,791
For the amounts of debt scheduled to mature
during 2005, it is management's intent to fund the
repayments from borrowings on the Company's revolving
credit facility. The accompanying consolidated balance sheet
reflects this intent by presenting all debt balances as
long-term while the table above reflects actual debt maturities
as of the stated date.
F-57
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
10.
Minority Interest and Equity Interest of
    Charter Holdco
Charter is a holding company whose primary asset
is a controlling equity interest in Charter Holdco, the indirect
owner of the Company's cable systems, and $990 million
and $774 million at December 31, 2004 and 2003,
respectively, of mirror notes which are payable by Charter
Holdco to Charter and have the same principal amount and terms
as those of Charter's convertible senior notes. Minority
interest on the Company's consolidated balance sheets
represents the ownership percentage of Charter Holdco not owned
by Charter, or 52.8% of total members' equity of Charter
Holdco, plus $656 million and $694 million of
preferred membership interests in CC VIII, LLC ("CC
VIII"), an indirect subsidiary of Charter Holdco, as of
December 31, 2004 and 2003 respectively. As more fully
described in Note 22, this preferred interest arises from
the approximately $630 million of preferred membership
units issued by CC VIII in connection with an acquisition in
February 2000. As of December 31, 2003, minority interest
also includes $25 million of preferred interest in Charter
Helicon, LLC, another indirect subsidiary of Charter Holdco,
issued in connection with the 1999 Helicon acquisition. As of
December 31, 2004, the preferred interest in Charter
Helicon, LLC was reclassified to other long-term liabilities.
Members' equity of Charter Holdco was
($4.4) billion, ($57) million and $662 million as
of December 31, 2004, 2003 and 2002, respectively. Gains
and losses arising from the issuance by Charter Holdco of its
membership units are recorded as capital transactions, thereby
increasing or decreasing shareholders' equity and
decreasing or increasing minority interest on the accompanying
consolidated balance sheets. Minority interest was 52.8% as of
December 31, 2004 and 53.5% as of December 31, 2003
and 2002. Minority interest includes the proportionate share of
changes in fair value of interest rate risk derivative
agreements. Such amounts are temporary as they are contractually
scheduled to reverse over the life of the underlying instrument.
Additionally, reported losses allocated to minority interest on
the consolidated statement of operations are limited to the
extent of any remaining minority interest on the balance sheet
related to Charter Holdco. Because minority interest in Charter
Holdco was substantially eliminated at December 31, 2003,
beginning in 2004, the Company began to absorb substantially all
losses before income taxes that otherwise would have been
allocated to minority interest. This resulted in an additional
$2.4 billion of net loss for the year ended
December 31, 2004. Subject to any changes in Charter
Holdco's capital structure, future losses will be
substantially absorbed by Charter. Changes to minority interest
consist of the following for the periods presented:
Minority
Interest
Balance, December 31, 2001
$
4,434
Minority interest in loss of a subsidiary
(3,176
)
Minority interest in change in accounting
    principle
(306
)
Minority interest in income tax benefit
132
Changes in fair value of interest rate agreements
(35
)
Other
1
Balance, December 31, 2002
1,050
Minority interest in loss of a subsidiary
(377
)
Minority interest in income tax benefit
(8
)
Changes in fair value of interest rate agreements
25
Other
(1
)
F-58
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Minority
Interest
Balance, December 31, 2003
689
Minority interest in loss of a subsidiary
(19
)
Minority interest in cumulative effect of
    accounting change
(19
)
Reclass of Helicon, LLC interest
(25
)
Changes in fair value of interest rate agreements
22
Balance, December 31, 2004
$
648
11.
Preferred Stock —
    Redeemable
On August 31, 2001, in connection with its
acquisition of Cable USA, Inc. and certain cable system assets
from affiliates of Cable USA, Inc., the Company issued
505,664 shares of Series A Convertible Redeemable
Preferred Stock (the Preferred Stock) valued at and with a
liquidation preference of $51 million. Holders of the
Preferred Stock have no voting rights but are entitled to
receive cumulative cash dividends at an annual rate of 5.75%,
payable quarterly. If for any reason Charter fails to pay the
dividends on the Preferred Stock on a timely basis, the dividend
rate on each share increases to an annual rate of 7.75% until
the payment is made. The Preferred Stock is redeemable by
Charter at its option on or after August 31, 2004 and must
be redeemed by Charter at any time upon a change of control, or
if not previously redeemed or converted, on August 31,
2008. The Preferred Stock is convertible, in whole or in part,
at the option of the holders from April 1, 2002 through
August 31, 2008, into shares of common stock at an initial
conversion rate equal to a conversion price of $24.71 per
share of common stock, subject to certain customary adjustments.
The redemption price per share of Preferred Stock is the
Liquidation Preference of $100, subject to certain customary
adjustments. In the first quarter of 2003, the Company issued
39,595 additional shares of preferred stock valued at and with a
liquidation preference of $4 million.
12.
Common Stock
The Company's Class A common stock and
Class B common stock are identical except with respect to
certain voting, transfer and conversion rights. Holders of
Class A common stock are entitled to one vote per share and
holder of Class B common stock is entitled to ten votes for
each share of Class B common stock held and for each
Charter Holdco membership unit held. The Class B common
stock is subject to significant transfer restrictions and is
convertible on a share for share basis into Class A common
stock at the option of the holder. Charter Holdco membership
units are exchangeable on a one-for-one basis for shares of
Class A common stock.
13.
Comprehensive Loss
Certain marketable equity securities are
classified as available-for-sale and reported at market value
with unrealized gains and losses recorded as accumulated other
comprehensive loss on the accompanying consolidated balance
sheets. Additionally, the Company reports changes in the fair
value of interest rate agreements designated as hedging the
variability of cash flows associated with floating-rate debt
obligations, that meet the effectiveness criteria of
SFAS No. 133,
Accounting for Derivative Instruments
and Hedging Activities
, in accumulated other comprehensive
loss, after giving effect to the minority interest share of such
gains and losses. Comprehensive loss for the years ended
December 31, 2004, 2003 and 2002 was $4.3 billion,
$219 million and $2.5 billion, respectively.
F-59
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
14.
Accounting for Derivative Instruments and
    Hedging Activities
The Company uses interest rate risk management
derivative instruments, such as interest rate swap agreements
and interest rate collar agreements (collectively referred to
herein as interest rate agreements) to manage its interest
costs. The Company's policy is to manage interest costs
using a mix of fixed and variable rate debt. Using interest rate
swap agreements, the Company has agreed to exchange, at
specified intervals through 2007, the difference between fixed
and variable interest amounts calculated by reference to an
agreed-upon notional principal amount. Interest rate collar
agreements are used to limit the Company's exposure to and
benefits from interest rate fluctuations on variable rate debt
to within a certain range of rates.
The Company does not hold or issue derivative
instruments for trading purposes. The Company does, however,
have certain interest rate derivative instruments that have been
designated as cash flow hedging instruments. Such instruments
effectively convert variable interest payments on certain debt
instruments into fixed payments. For qualifying hedges,
SFAS No. 133 allows derivative gains and losses to
offset related results on hedged items in the consolidated
statement of operations. The Company has formally documented,
designated and assessed the effectiveness of transactions that
receive hedge accounting. For the years ended December 31,
2004, 2003 and 2002, net gain (loss) on derivative instruments
and hedging activities includes gains of $4 million and
$8 million and losses of $14 million, respectively,
which represent cash flow hedge ineffectiveness on interest rate
hedge agreements arising from differences between the critical
terms of the agreements and the related hedged obligations.
Changes in the fair value of interest rate agreements designated
as hedging instruments of the variability of cash flows
associated with floating-rate debt obligations that meet the
effectiveness criteria SFAS No. 133 are reported in
accumulated other comprehensive loss. For the years ended
December 31, 2004, 2003 and 2002, a gain of
$42 million and $48 million and losses of
$65 million, respectively, related to derivative
instruments designated as cash flow hedges, was recorded in
accumulated other comprehensive loss and minority interest. The
amounts are subsequently reclassified into interest expense as a
yield adjustment in the same period in which the related
interest on the floating-rate debt obligations affects earnings
(losses).
Certain interest rate derivative instruments are
not designated as hedges as they do not meet the effectiveness
criteria specified by SFAS No. 133. However,
management believes such instruments are closely correlated with
the respective debt, thus managing associated risk. Interest
rate derivative instruments not designated as hedges are marked
to fair value, with the impact recorded as gain (loss) on
derivative instruments and hedging activities in the
Company's consolidated statement of operations. For the
years ended December 31, 2004, 2003 and 2002, net gain
(loss) on derivative instruments and hedging activities includes
gains of $65 million, $57 million and losses of
$101 million, respectively, for interest rate derivative
instruments not designated as hedges.
As of December 31, 2004, 2003 and 2002, the
Company had outstanding $2.7 billion, $3.0 billion and
$3.4 billion and $20 million, $520 million and
$520 million, respectively, in notional amounts of interest
rate swaps and collars, respectively. The notional amounts of
interest rate instruments do not represent amounts exchanged by
the parties and, thus, are not a measure of exposure to credit
loss. The amounts exchanged are determined by reference to the
notional amount and the other terms of the contracts.
15.
Fair Value of Financial Instruments
The Company has estimated the fair value of its
financial instruments as of December 31, 2004 and 2003
using available market information or other appropriate
valuation methodologies. Considerable judgment, however, is
required in interpreting market data to develop the estimates of
fair value.
F-60
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Accordingly, the estimates presented in the
accompanying consolidated financial statements are not
necessarily indicative of the amounts the Company would realize
in a current market exchange.
The carrying amounts of cash, receivables,
payables and other current assets and liabilities approximate
fair value because of the short maturity of those instruments.
The Company is exposed to market price risk volatility with
respect to investments in publicly traded and privately held
entities.
The fair value of interest rate agreements
represents the estimated amount the Company would receive or pay
upon termination of the agreements. Management believes that the
sellers of the interest rate agreements will be able to meet
their obligations under the agreements. In addition, some of the
interest rate agreements are with certain of the participating
banks under the Company's credit facilities, thereby
reducing the exposure to credit loss. The Company has policies
regarding the financial stability and credit standing of major
counterparties. Nonperformance by the counterparties is not
anticipated nor would it have a material adverse effect on the
Company's consolidated financial condition or results of
operations.
The estimated fair value of the Company's
notes and interest rate agreements at December 31, 2004 and
2003 are based on quoted market prices, and the fair value of
the credit facilities is based on dealer quotations.
A summary of the carrying value and fair value of
the Company's debt and related interest rate agreements at
December 31, 2004 and 2003 is as follows:
2004
2003
Carrying
Fair
Carrying
Fair
Value
Value
Value
Value
Debt
Charter convertible notes
$
990
$
1,127
$
774
$
732
Charter Holdings debt
8,579
7,669
8,316
7,431
CCH II debt
1,601
1,698
1,601
1,680
CCO Holdings debt
1,050
1,064
500
510
Charter Operating debt
1,500
1,563
—
—
Credit facilities
5,515
5,502
7,227
6,949
Other
229
236
229
238
Interest Rate Agreements
Assets (Liabilities)
Swaps
(69
)
(69
)
(171
)
(171
)
Collars
(1
)
(1
)
(8
)
(8
)
The weighted average interest pay rate for the
Company's interest rate swap agreements was 8.07% and 7.25%
at December 31, 2004 and 2003, respectively.
F-61
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
16.
Revenues
Revenues consist of the following for the years
presented:
Year Ended December 31,
2004
2003
2002
Video
$
3,373
$
3,461
$
3,420
High-speed data
741
556
337
Advertising sales
289
263
302
Commercial
238
204
161
Other
336
335
346
$
4,977
$
4,819
$
4,566
17.
Operating Expenses
Operating expenses consist of the following for
the years presented:
Year Ended December 31,
2004
2003
2002
Programming
$
1,319
$
1,249
$
1,166
Advertising sales
98
88
87
Service
663
615
554
$
2,080
$
1,952
$
1,807
18.     Selling,
General and Administrative Expenses
Selling, general and administrative expenses
consist of the following for the years presented:
Year Ended December 31,
2004
2003
2002
General and administrative
$
849
$
833
$
810
Marketing
122
107
153
$
971
$
940
$
963
Components of selling expense are included in
general and administrative and marketing expense.
19.
Stock Compensation Plans
The Company grants stock options, restricted
stock and other incentive compensation pursuant to the 2001
Stock Incentive Plan of Charter (the "2001 Plan").
Prior to 2001, options were granted under the 1999 Option Plan
of Charter Holdco (the "1999 Plan").
The 1999 Plan provided for the grant of options
to purchase membership units in Charter Holdco to current and
prospective employees and consultants of Charter Holdco and its
affiliates and current and prospective non-employee directors of
Charter. Options granted generally vest over five years from the
grant date, with 25% vesting 15 months after the
anniversary of the grant date and ratably thereafter. Options
not exercised accumulate and are exercisable, in whole or in
part, in any subsequent period, but
F-62
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
not later than 10 years from the date of
grant. Membership units received upon exercise of the options
are automatically exchanged into Class A common stock of
Charter on a one-for-one basis.
The 2001 Plan provides for the grant of
non-qualified stock options, stock appreciation rights, dividend
equivalent rights, performance units and performance shares,
share awards, phantom stock and/or shares of restricted stock
(not to exceed 3,000,000), as each term is defined in the
2001 Plan. Employees, officers, consultants and directors
of the Company and its subsidiaries and affiliates are eligible
to receive grants under the 2001 Plan. Options granted generally
vest over four years from the grant date, with 25% vesting on
the anniversary of the grant date and ratably thereafter.
Generally, options expire 10 years from the grant date.
The 2001 Plan allows for the issuance of up to a
total of 90,000,000 shares of Charter Class A common
stock (or units convertible into Charter Class A common
stock). The total shares available reflect a July 2003 amendment
to the 2001 Plan approved by the board of directors and the
shareholders of Charter to increase available shares by
30,000,000 shares. In 2001, any shares covered by options
that terminated under the 1999 Plan were transferred to the 2001
Plan, and no new options can be granted under the 1999 Plan.
In the years ended December 31, 2004 and
2003, certain directors were awarded a total of 182,932 and
80,603 shares, respectively, of restricted Class A
common stock of which 25,705 shares had been cancelled as
of December 31, 2004. The shares vest one year from the
date of grant. In December 2003 and January 2004, in connection
with new employment agreements, certain officers were awarded
50,000 and 50,000 shares, respectively, of restricted
Class A common stock of which 50,000 shares had been
cancelled as of December 31, 2004. The shares vest annually
over a four-year period beginning from the date of grant. As of
December 31, 2004, deferred compensation remaining to be
recognized in future period totaled $0.4 million.
A summary of the activity for the Company's
stock options, excluding granted shares of restricted
Class A common stock, for the years ended December 31,
2004, 2003 and 2002, is as follows (amounts in thousands, except
per share data):
2004
2003
2002
Weighted
Weighted
Weighted
Average
Average
Average
Exercise
Exercise
Exercise
Shares
Price
Shares
Price
Shares
Price
Options outstanding, beginning of period
47,882
$
12.48
53,632
$
14.22
46,558
$
17.10
Granted
9,405
4.88
7,983
3.53
13,122
4.88
Exercised
(839
)
2.02
(165
)
3.96
—
—
Cancelled
(31,613
)
15.16
(13,568
)
14.10
(6,048
)
16.32
Options outstanding, end of period
24,835
$
6.57
47,882
$
12.48
53,632
$
14.22
Weighted average remaining contractual life
8 years
8 years
8  years
Options exercisable, end of period
7,731
$
10.77
22,861
$
16.36
17,844
$
17.93
Weighted average fair value of options granted
$
3.71
$
2.71
$
2.89
F-63
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
The following table summarizes information about
stock options outstanding and exercisable as of
December 31, 2004:
Options Outstanding
Options Exercisable
Weighted-
Weighted-
Average
Weighted-
Average
Weighted-
Remaining
Average
Remaining
Average
Range of
Number
Contractual
Exercise
Number
Contractual
Exercise
Exercise Prices
Outstanding
Life
Price
Exercisable
Life
Price
(In thousands)
(In thousands)
$ 1.11 - $1.60
3,144
8 years
$
1.52
782
8 years
$
1.45
$ 2.85 - $4.56
7,408
8 years
3.45
2,080
8 years
3.28
$ 5.06 - $5.17
8,857
9 years
5.14
533
9 years
5.06
$ 9.13 - $13.68
2,264
7 years
11.08
1,481
7 years
11.28
$13.96 - $23.09
3,162
5 years
19.63
2,855
5 years
19.59
On January 1, 2003, the Company adopted the
fair value measurement provisions of SFAS No. 123,
under which the Company recognizes compensation expense of a
stock-based award to an employee over the vesting period based
on the fair value of the award on the grant date. Adoption of
these provisions resulted in utilizing a preferable accounting
method as the consolidated financial statements present the
estimated fair value of stock-based compensation in expense
consistently with other forms of compensation and other expense
associated with goods and services received for equity
instruments. In accordance with SFAS No. 123, the fair
value method will be applied only to awards granted or modified
after January 1, 2003, whereas awards granted prior to such
date will continue to be accounted for under APB No. 25,
unless they are modified or settled in cash. The ongoing effect
on consolidated results of operations or financial condition
will be dependent upon future stock based compensation awards
granted. The Company recorded $31 million of option
compensation expense for the year ended December 31, 2004.
Prior to the adoption of SFAS No. 123,
the Company used the intrinsic value method prescribed by
APB No. 25,
Accounting for Stock Issued to
Employees
, to account for the option plans. Option
compensation expense of $5 million for the year ended
December 31, 2002, was recorded in the consolidated
statements of operations since the exercise prices of certain
options were less than the estimated fair values of the
underlying membership interests on the date of grant.
In January 2004, the Company began an option
exchange program in which the Company offered its employees the
right to exchange all stock options (vested and unvested) under
the 1999 Charter Communications Option Plan and 2001 Stock
Incentive Plan that had an exercise price over $10 per
share for shares of restricted Charter Class A common stock
or, in some instances, cash. Based on a sliding exchange ratio,
which varied depending on the exercise price of an employees
outstanding options, if an employee would have received more
than 400 shares of restricted stock in exchange for
tendered options, Charter issued that employee shares of
restricted stock in the exchange. If, based on the exchange
ratios, an employee would have received 400 or fewer shares of
restricted stock in exchange for tendered options, Charter
instead paid the employee cash in an amount equal to the number
of shares the employee would have received multiplied by $5.00.
The offer applied to options (vested and unvested) to purchase a
total of 22,929,573 shares of Class A common stock, or
approximately 48% of the Company's 47,882,365 total options
issued and outstanding as of December 31, 2003.
Participation by employees was voluntary. Those members of the
Company's board of directors who were not also employees of
the Company or any of its subsidiaries were not eligible to
participate in the exchange offer.
In the closing of the exchange offer on
February 20, 2004, the Company accepted for cancellation
eligible options to purchase approximately
18,137,664 shares of its Class A common stock. In
exchange,
F-64
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
the Company granted 1,966,686 shares of
restricted stock, including 460,777 performance shares to
eligible employees of the rank of senior vice president and
above, and paid a total cash amount of approximately
$4 million (which amount includes applicable withholding
taxes) to those employees who received cash rather than shares
of restricted stock. The restricted stock was granted on
February 25, 2004. Employees tendered approximately 79% of
the options eligible to be exchanged under the program.
The cost to the Company of the stock option
exchange program was approximately $10 million, with a 2004
cash compensation expense of approximately $4 million and a
non-cash compensation expense of approximately $6 million
to be expensed ratably over the three-year vesting period of the
restricted stock in the exchange.
In January 2004, the Compensation Committee of
the board of directors of Charter approved Charter's
Long-Term Incentive Program ("LTIP"), which is a
program administered under the 2001 Stock Incentive Plan. Under
the LTIP, employees of Charter and its subsidiaries whose pay
classifications exceed a certain level are eligible to receive
stock options, and more senior level employees are eligible to
receive stock options and performance shares. The stock options
vest 25% on each of the first four anniversaries of the date of
grant. The performance shares vest on the third anniversary of
the grant date and shares of Charter Class A common stock
are issued, conditional upon Charter's performance against
financial performance measures established by Charter's
management and approved by its board of directors as of the time
of the award. Charter granted 6.9 million shares in January
2004 under this program and recognized expense of
$8 million in the first three quarters of 2004. However, in
the fourth quarter of 2004, the Company reversed the entire
$8 million of expense based on the Company's
assessment of the probability of achieving the financial
performance measures established by Charter and required to be
met for the performance shares to vest.
20.
Special Charges
In the fourth quarter of 2002, the Company began
a workforce reduction program and consolidation of its
operations from three divisions and ten regions into five
operating divisions, eliminating redundant practices and
streamlining its management structure. The Company has recorded
special charges as a result of reducing its workforce and
consolidating administrative offices in 2003 and 2004. The
activity associated with this initiative is summarized in the
table below.
Total
Severance
Special
/Leases
Litigation
Other
Charge
Special Charges
$
31
$
—
$
5
$
36
Balance at December 31, 2002
31
Special Charges
26
$
—
$
(5
)
$
21
Payments
(43
)
Balance at December 31, 2003
14
Special Charges
12
$
92
$
—
$
104
Payments
(20
)
Balance at December 31, 2004
$
6
For the year ended December 31, 2002 special
charges include $4 million related to legal and other costs
associated with the Company's ongoing grand jury
investigation, shareholder lawsuits and SEC investigation and
$1 million associated with severance costs related to a
2001 restructuring plan. For the
F-65
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
year ended December 31, 2003, the severance
and lease costs were offset by a $5 million settlement from
the Internet service provider Excite@Home related to the
conversion of high-speed data customers to Charter Pipeline
service in 2001. For the year ended December 31, 2004,
special charges include approximately $85 million,
representing the aggregate value of the Charter Class A
common stock and warrants to purchase Charter Class A
common stock contemplated to be issued as part of a settlement
of consolidated federal and state class actions and federal
derivative action lawsuits and approximately $10 million of
litigation costs related to the tentative settlement of a
national class action suit, all of which are subject to final
documentation and court approval (see Note 23). For the
year ended December 31, 2004, special charges were offset
by $3 million received from a third party in settlement of
a dispute.
21.
Income Taxes
All operations are held through Charter Holdco
and its direct and indirect subsidiaries. Charter Holdco and the
majority of its subsidiaries are not subject to income tax.
However, certain of these subsidiaries are corporations and are
subject to income tax. All of the taxable income, gains, losses,
deductions and credits of Charter Holdco are passed through to
its members: Charter, Charter Investment, Inc. ("Charter
Investment") and Vulcan Cable III Inc. ("Vulcan
Cable"). Charter is responsible for its share of taxable
income or loss of Charter Holdco allocated to Charter in
accordance with the Charter Holdco limited liability company
agreement ("LLC Agreement") and partnership tax rules
and regulations.
The LLC Agreement provides for certain special
allocations of net tax profits and net tax losses (such net tax
profits and net tax losses being determined under the applicable
federal income tax rules for determining capital accounts).
Pursuant to the LLC Agreement, through the end of 2003, net tax
losses of Charter Holdco that would otherwise have been
allocated to Charter based generally on its percentage ownership
of outstanding common units were allocated instead to membership
units held by Vulcan Cable and Charter Investment (the
"Special Loss Allocations") to the extent of their
respective capital account balances. After 2003, pursuant to the
LLC Agreement, net tax losses of Charter Holdco are to be
allocated to Charter, Vulcan Cable and Charter Investment based
generally on their respective percentage ownership of
outstanding common units to the extent of their respective
capital account balances. The LLC Agreement further provides
that, beginning at the time Charter Holdco generates net tax
profits, the net tax profits that would otherwise have been
allocated to Charter based generally on its percentage ownership
of outstanding common membership units will instead generally be
allocated to Vulcan Cable and Charter Investment (the
"Special Profit Allocations"). The Special Profit
Allocations to Vulcan Cable and Charter Investment will
generally continue until the cumulative amount of the Special
Profit Allocations offsets the cumulative amount of the Special
Loss Allocations. The amount and timing of the Special Profit
Allocations are subject to the potential application of, and
interaction with, the Curative Allocation Provisions described
in the following paragraph. The LLC Agreement generally provides
that any additional net tax profits are to be allocated among
the members of Charter Holdco based generally on their
respective percentage ownership of Charter Holdco common
membership units.
Because the respective capital account balance of
each of Vulcan Cable and Charter Investment was reduced to zero
by December 31, 2002, certain net tax losses of Charter
Holdco that were to be allocated for 2002, 2003, 2004 and
possibly later years (subject to resolution of the issue
described in Note 22) to Vulcan Cable and Charter
Investment instead have been and will be allocated to Charter
(the "Regulatory Allocations"). The LLC Agreement
further provides that, to the extent possible, the effect of the
Regulatory Allocations is to be offset over time pursuant to
certain curative allocation provisions (the "Curative
Allocation Provisions") so that, after certain offsetting
adjustments are made, each member's capital account balance
is equal to the capital account balance such member would have
had if the
F-66
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Regulatory Allocations had not been part of the
LLC Agreement. The cumulative amount of the actual tax losses
allocated to Charter as a result of the Regulatory Allocations
through the year ended December 31, 2004 is approximately
$4.0 billion.
As a result of the Special Loss Allocations and
the Regulatory Allocations referred to above, the cumulative
amount of losses of Charter Holdco allocated to Vulcan Cable and
Charter Investment is in excess of the amount that would have
been allocated to such entities if the losses of Charter Holdco
had been allocated among its members in proportion to their
respective percentage ownership of Charter Holdco common
membership units. The cumulative amount of such excess losses
was approximately $2.1 billion through December 31,
2003 and $1.0 billion through December 31, 2004.
In certain situations, the Special Loss
Allocations, Special Profit Allocations, Regulatory Allocations
and Curative Allocation Provisions described above could result
in Charter paying taxes in an amount that is more or less than
if Charter Holdco had allocated net tax profits and net tax
losses among its members based generally on the number of common
membership units owned by such members. This could occur due to
differences in (i) the character of the allocated income
(e.g., ordinary versus capital), (ii) the allocated amount
and timing of tax depreciation and tax amortization expense due
to the application of section 704(c) under the Internal
Revenue Code, (iii) the potential interaction between the
Special Profit Allocations and the Curative Allocation
Provisions, (iv) the amount and timing of alternative
minimum taxes paid by Charter, if any, (v) the
apportionment of the allocated income or loss among the states
in which Charter Holdco does business, and (vi) future
federal and state tax laws. Further, in the event of new capital
contributions to Charter Holdco, it is possible that the tax
effects of the Special Profit Allocations, Special Loss
Allocations, Regulatory Allocations and Curative Allocation
Provisions will change significantly pursuant to the provisions
of the income tax regulations or the terms of a contribution
agreement with respect to such contribution. Such change could
defer the actual tax benefits to be derived by Charter with
respect to the net tax losses allocated to it or accelerate the
actual taxable income to Charter with respect to the net tax
profits allocated to it. As a result, it is possible under
certain circumstances, that Charter could receive future
allocations of taxable income in excess of its currently
allocated tax deductions and available tax loss carryforwards.
The ability to utilize net operating loss carryforwards is
potentially subject to certain limitations as discussed below.
In addition, under their exchange agreement with
Charter, Vulcan Cable and Charter Investment may exchange some
or all of their membership units in Charter Holdco for
Charter's Class B common stock, be merged with
Charter, or be acquired by Charter in a non-taxable
reorganization. If such an exchange were to take place prior to
the date that the Special Profit Allocation provisions had fully
offset the Special Loss Allocations, Vulcan Cable and Charter
Investment could elect to cause Charter Holdco to make the
remaining Special Profit Allocations to Vulcan Cable and Charter
Investment immediately prior to the consummation of the
exchange. In the event Vulcan Cable and Charter Investment
choose not to make such election or to the extent such
allocations are not possible, Charter would then be allocated
tax profits attributable to the membership units received in
such exchange pursuant to the Special Profit Allocation
provisions. Mr. Allen has generally agreed to reimburse
Charter for any incremental income taxes that Charter would owe
as a result of such an exchange and any resulting future Special
Profit Allocations to Charter. The ability of Charter to utilize
net operating loss carryforwards is potentially subject to
certain limitations as discussed below. If Charter were to
become subject to certain limitations (whether as a result of an
exchange described above or otherwise), and as a result were to
owe taxes resulting from the Special Profit Allocations, then
Mr. Allen may not be obligated to reimburse Charter for
such income taxes.
For the years ended December 31, 2004, 2003
and 2002, the Company recorded deferred income tax benefits as
shown below. The income tax benefits were realized through
reductions in the deferred tax
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
liabilities related to Charter's investment
in Charter Holdco, as well as the deferred tax liabilities of
certain of Charter's indirect corporate subsidiaries. In
2003, Charter received tax loss allocations from Charter Holdco.
Previously, the tax losses had been allocated to Vulcan Cable
and Charter Investment in accordance with the Special Loss
Allocations provided under the Charter Holdco amended and
restated limited liability company agreement. The Company does
not expect to recognize a similar benefit related to its
investment in Charter Holdco after 2003 due to limitations on
its ability to offset future tax benefits against the remaining
deferred tax liabilities. However, the actual tax provision
calculation in future periods will be the result of current and
future temporary differences, as well as future operating
results.
Current and deferred income tax expense (benefit)
is as follows:
December 31,
2004
2003
2002
Current expense:
Federal income taxes
$
2
$
1
$
—
State income taxes
4
1
2
Current income tax expense
6
2
2
Deferred benefit:
Federal income taxes
(175
)
(98
)
(456
)
State income taxes
(25
)
(14
)
(66
)
Deferred income tax benefit:
(200
)
(112
)
(522
)
Total income benefit
$
(194
)
$
(110
)
$
(520
)
The Company recorded the portion of the income
tax benefit associated with the adoption of EITF Topic D-108 and
SFAS No. 142 as a $91 million and a
$60 million reduction of the cumulative effect of
accounting change on the accompanying statement of operations
for the years ended December 31, 2004 and December 31,
2002, respectively.
The Company's effective tax rate differs
from that derived by applying the applicable federal income tax
rate of 35%, and average state income tax rate of 5% for the
years ended December 31, 2004, 2003 and 2002 as follows:
December 31,
2004
2003
2002
Statutory federal income taxes
$
(1,288
)
$
(122
)
$
(969
)
State income taxes, net of federal benefit
(184
)
(17
)
(138
)
Valuation allowance provided
1,278
29
587
(194
)
(110
)
(520
)
Less: cumulative effect of accounting change
91
—
60
Income tax benefit
$
(103
)
$
(110
)
$
(460
)
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
The tax effects of these temporary differences
that give rise to significant portions of the deferred tax
assets and deferred tax liabilities at December 31, 2004
and 2003 which are included in long-term liabilities are
presented below.
December 31,
2004
2003
Deferred tax assets:
Net operating loss carryforward
$
3,533
$
1,723
Other
8
6
Total gross deferred tax assets
3,541
1,729
Less: valuation allowance
(3,151
)
(1,291
)
Net deferred tax assets
$
390
$
438
Deferred tax liabilities:
Investment in Charter Holdco
$
(365
)
$
(553
)
Indirect Corporate Subsidiaries:
Property, plant & equipment
(40
)
(42
)
Franchises
(201
)
(260
)
Gross deferred tax liabilities
(606
)
(855
)
Net deferred tax liabilities
$
(216
)
$
(417
)
As of December 31, 2004, the Company has
deferred tax assets of $3.5 billion, which primarily relate
to financial and tax losses allocated to Charter from Charter
Holdco. The deferred tax assets include $2.1 billion of tax
net operating loss carryforwards (generally expiring in years
2005 through 2024) of Charter and its indirect corporate
subsidiaries. Valuation allowances of $3.2 billion exist
with respect to these deferred tax assets.
The change of approximately $1.9 billion in
valuation allowance between the years ended December 31,
2004 and 2003, presented above, includes the provision for
valuation allowance, the impact of the decrease in deferred tax
liabilities and the impact of additional losses resulting from
the cumulative effect of accounting change.
Full realization of the Company's tax net
operating losses is dependent on: (1) Charter and its
indirect corporate subsidiaries' ability to generate future
taxable income and (2) the absence of certain future
"ownership changes" of Charter's common stock. An
"ownership change" as defined in the applicable
federal income tax rules, would place significant limitations,
on an annual basis, on the use of such net operating losses to
offset any future taxable income the Company may generate. Such
limitations, in conjunction with the net operating loss
expiration provisions, could effectively eliminate the
Company's ability to use a substantial portion of its net
operating losses to offset future taxable income. Future
transactions and the timing of such transactions could cause an
ownership change. Such transactions include additional issuances
of common stock by the Company (including but not limited the
anticipated issuances of 150 million shares of common stock
under the share lending agreement in conjunction with the
issuance of 5.875% convertible senior notes in November 2004 or
upon future conversion of Charter's convertible senior
notes), reacquisitions of the borrowed shares by Charter, or
acquisitions or sales of shares by certain holders of
Charter's shares, including persons who have held,
currently hold, or accumulate in the future five percent or more
of Charter's outstanding stock (including upon an exchange
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
by Paul Allen or his affiliates, directly or
indirectly, of membership units of Charter Holdco into CCI
common stock). Many of the foregoing transactions are beyond
management's control.
The total valuation allowance for deferred tax
assets as of December 31, 2004 and 2003 was
$3.2 billion and $1.3 billion, respectively. In
assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion
or all of the deferred tax assets will be realized. Because of
the uncertainties in projecting future taxable income of Charter
Holdco, valuation allowances have been established except for
deferred benefits available to offset certain deferred tax
liabilities.
The Company is currently under examination by the
Internal Revenue Service for the tax years ending
December 31, 1999 and 2000. Management does not expect the
results of this examination to have a material adverse effect on
the Company's consolidated financial condition or results
of operation.
22.
Related Party Transactions
The following sets forth certain transactions in
which the Company and the directors, executive officers and
affiliates of the Company are involved. Unless otherwise
disclosed, management believes that each of the transactions
described below was on terms no less favorable to the Company
than could have been obtained from independent third parties.
Charter is a holding company and its principal
assets are its equity interest in Charter Holdco and certain
mirror notes payable by Charter Holdco to Charter and mirror
preferred units held by Charter, which have the same principal
amount and terms as those of Charter's convertible senior
notes and Charter's outstanding preferred stock. In 2004,
Charter Holdco paid to Charter $49 million related to
interest on the mirror notes, and Charter Holdco paid an
additional $4 million related to dividends on the mirror
preferred membership units. Further, during 2004 Charter Holdco
issued 7,252,818 common membership units to Charter in
cancellation of $30 million principal amount of mirror
notes so as to mirror the issuance by Charter of Class A
common stock in exchange for a like principal amount of its
outstanding convertible notes.
Charter is a party to management arrangements
with Charter Holdco and certain of its subsidiaries. Under these
agreements, Charter provides management services for the cable
systems owned or operated by its subsidiaries. The management
services include such services as centralized customer billing
services, data processing and related support, benefits
administration and coordination of insurance coverage and
self-insurance programs for medical, dental and workers'
compensation claims. Costs associated with providing these
services are billed and charged directly to the Company's
operating subsidiaries and are included within operating costs
in the accompanying consolidated statements of operations. Such
costs totaled $202 million, $210 million and
$176 million for the years ended December 31, 2004,
2003 and 2002, respectively. All other costs incurred on the
behalf of Charter's operating subsidiaries are considered a
part of the management fee and are recorded as a component of
selling, general and administrative expense, in the accompanying
consolidated financial statements. For the years ended
December 31, 2004, 2003 and 2002, the management fee
charged to the Company's operating subsidiaries
approximated the expenses incurred by Charter Holdco and Charter
on behalf of the Company's operating subsidiaries. The
credit facilities of the Company's operating subsidiaries
prohibit payments of management fees in excess of 3.5% of
revenues until repayment of the outstanding indebtedness. In the
event any portion of the management fee due and payable is not
paid, it is deferred by Charter and accrued as a liability of
such subsidiaries. Any deferred amount of the management fee
will bear interest at the rate of 10% per year, compounded
annually, from the date it was due and payable until the date it
is paid.
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Mr. Allen, the controlling shareholder of
Charter, and a number of his affiliates have interests in
various entities that provide services or programming to
Charter's subsidiaries. Given the diverse nature of
Mr. Allen's investment activities and interests, and
to avoid the possibility of future disputes as to potential
business, Charter and Charter Holdco, under the terms of their
respective organizational documents, may not, and may not allow
their subsidiaries to engage in any business transaction outside
the cable transmission business except for certain existing
approved investments. Should Charter or Charter Holdco or any of
their subsidiaries wish to pursue, or allow their subsidiaries
to pursue, a business transaction outside of this scope, it must
first offer Mr. Allen the opportunity to pursue the
particular business transaction. If he decides not to pursue the
business transaction and consents to Charter or its subsidiaries
engaging in the business transaction, they will be able to do
so. The cable transmission business means the business of
transmitting video, audio, including telephony, and data over
cable systems owned, operated or managed by Charter, Charter
Holdco or any of their subsidiaries from time to time.
Mr. Allen or his affiliates own or have
owned equity interests or warrants to purchase equity interests
in various entities with which the Company does business or
which provides it with products, services or programming. Among
these entities are TechTV L.L.C. ("TechTV"), Oxygen
Media Corporation ("Oxygen Media"), Digeo, Inc.,
Click2learn, Inc., Trail Blazer Inc., Action Sports Cable
Network ("Action Sports") and Microsoft Corporation.
In addition, Mr. Allen and William Savoy, a former Charter
director, were directors of USA Networks, Inc. ("USA
Networks"), who operates the USA Network, The Sci-Fi
Channel, Trio, World News International and Home Shopping
Network, owning approximately 5% and less than 1%, respectively,
of the common stock of USA Networks. In 2002, Mr. Allen and
Mr. Savoy sold their common stock and are no longer
directors of the USA Network. In May 2004, TechTV was sold to an
unrelated third party. Mr. Allen owns 100% of the equity of
Vulcan Ventures Incorporated ("Vulcan Ventures") and
Vulcan Inc. and is the president of Vulcan Ventures. Ms. Jo
Allen Patton is a director and the President and Chief Executive
Officer of Vulcan Inc. and is a director and Vice President of
Vulcan Ventures. Mr. Lance Conn is Executive Vice President
of Vulcan Inc. and Vulcan Ventures. Mr. Savoy was a vice
president and a director of Vulcan Ventures until his
resignation in September 2003 and he resigned as a director of
Charter in April 2004. The various cable, media, Internet and
telephony companies in which Mr. Allen has invested may
mutually benefit one another. The Company can give no assurance,
nor should you expect, that any of these business relationships
will be successful, that the Company will realize any benefits
from these relationships or that the Company will enter into any
business relationships in the future with Mr. Allen's
affiliated companies.
Mr. Allen and his affiliates have made, and
in the future likely will make, numerous investments outside of
the Company and its business. The Company cannot assure that, in
the event that the Company or any of its subsidiaries enter into
transactions in the future with any affiliate of Mr. Allen,
such transactions will be on terms as favorable to the Company
as terms it might have obtained from an unrelated third party.
Also, conflicts could arise with respect to the allocation of
corporate opportunities between the Company and Mr. Allen
and his affiliates. The Company has not instituted any formal
plan or arrangement to address potential conflicts of interest.
High Speed Access
Corp.
("High Speed Access")
was a provider of high-speed Internet access services over cable
modems. During the period from 1997 to 2000, certain Charter
entities entered into Internet-access related service
agreements, and both Vulcan Ventures, an entity owned by
Mr. Allen, and Charter Holdco made equity investments in
High Speed Access.
On February 28, 2002, Charter's
subsidiary, CC Systems, purchased from High Speed Access the
contracts and associated assets, and assumed related
liabilities, that served the Company's customers, including
a customer contact center, network operations center and
provisioning software. Immediately prior to the asset purchase,
Vulcan Ventures beneficially owned approximately 37%, and the
Company
F-71
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
beneficially owned approximately 13%, of the
common stock of High Speed Access (including the shares of
common stock which could be acquired upon conversion of the
Series D preferred stock, and upon exercise of the warrants
owned by Charter Holdco). Following the consummation of the
asset purchase, neither the Company nor Vulcan Ventures
beneficially owned any securities of, or were otherwise
affiliated with, High Speed Access.
The Company receives or will receive programming
for broadcast via its cable systems from TechTV (now G4), USA
Networks, Oxygen Media, Trail Blazers Inc. and Action Sports.
The Company pays a fee for the programming service generally
based on the number of customers receiving the service. Such
fees for the years ended December 31, 2004, 2003 and 2002
were each less than 1% of total operating expenses with the
exception of USA Networks which was 2%, 2% and 2% of total
operating expenses for the years ended December 31, 2004,
2003 and 2002, respectively. In addition, the Company receives
commissions from USA Networks for home shopping sales generated
by its customers. Such revenues for the years ended
December 31, 2004, 2003 and 2002 were less than 1% of total
revenues. On November 5, 2002, Action Sports announced that
it was discontinuing its business. The Company believes that the
failure of Action Sports will not materially affect the
Company's business or results of operations.
Tech TV.
The Company
receives from TechTV programming for distribution via its cable
system pursuant to an affiliation agreement. The affiliation
agreement provides, among other things, that TechTV must offer
Charter certain terms and conditions that are no less favorable
in the affiliation agreement than are given to any other
distributor that serves the same number of or fewer TechTV
viewing customers. Additionally, pursuant to the affiliation
agreement, the Company was entitled to incentive payments for
channel launches through December 31, 2003.
In March 2004, Charter Holdco entered into
agreements with Vulcan Programming and TechTV, which provide for
(i) Charter Holdco and TechTV to amend the affiliation
agreement which, among other things, revises the description of
the TechTV network content, provides for Charter Holdco to waive
certain claims against TechTV relating to alleged breaches of
the affiliation agreement and provides for TechTV to make
payment of outstanding launch receivables due to Charter Holdco
under the affiliation agreement, (ii) Vulcan Programming to
pay approximately $10 million and purchase over a 24-month
period, at fair market rates, $2 million of advertising
time across various cable networks on Charter cable systems in
consideration of the agreements, obligations, releases and
waivers under the agreements and in settlement of the
aforementioned claims and (iii) TechTV to be a provider of
content relating to technology and video gaming for
Charter's interactive television platforms through
December 31, 2006 (exclusive for the first year). For the
year ended December 31, 2004, the Company recognized
approximately $5 million of the Vulcan Programming payment
as an offset to programming expense and paid approximately
$2 million to Tech TV under the affiliation agreement.
Oxygen.
Concurrently
with the execution of a carriage agreement, Charter Holdco
entered into an equity issuance agreement pursuant to which
Oxygen Media LLC's ("Oxygen") parent company,
Oxygen Media Corporation ("Oxygen Media"), granted a
subsidiary of Charter Holdco a warrant to
purchase 2.4 million shares of common stock of Oxygen
Media for an exercise price of $22.00 per share. In
February 2005, the warrant expired unexercised. Charter Holdco
was also to receive unregistered shares of Oxygen Media common
stock with a guaranteed fair market value on the date of
issuance of $34 million, on or prior to February 2,
2005 with the exact date to be determined by Oxygen Media, but
this commitment was later revised as discussed below.
The Company recognizes the guaranteed value of
the investment over the life of the carriage agreement as a
reduction of programming expense. For the years ended
December 31, 2004, 2003 and 2002, the Company recorded
approximately $13 million, $9 million, and
$6 million, respectively, as a
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
reduction of programming expense. The carrying
value of the Company's investment in Oxygen was
approximately $32 million and $19 million as of
December 31, 2004 and 2003, respectively.
In August 2004, Charter Holdco and Oxygen entered
into agreements that amended and renewed the carriage agreement.
The amendment to the carriage agreement (a) revises the
number of the Company's customers to which Oxygen
programming must be carried and for which the Company must pay,
(b) releases Charter Holdco from any claims related to the
failure to achieve distribution benchmarks under the carriage
agreement, (c) requires Oxygen to make payment on
outstanding receivables for marketing support fees due to the
Company under the affiliation agreement; and (d) requires
that Oxygen provide its programming content to the Company on
economic terms no less favorable than Oxygen provides to any
other cable or satellite operator having fewer subscribers than
the Company. The renewal of the carriage agreement
(a) extends the period that the Company will carry Oxygen
programming to its customers through January 31, 2008, and
(b) requires license fees to be paid based on customers
receiving Oxygen programming, rather than for specific customer
benchmarks.
In August 2004, Charter Holdco and Oxygen also
amended the equity issuance agreement to provide for the
issuance of 1 million shares of Oxygen Preferred Stock with
a liquidation preference of $33.10 per share plus accrued
dividends to Charter Holdco on February 1, 2005 in place of
the $34 million of unregistered shares of Oxygen Media
common stock. Oxygen Media will deliver these shares in March
2005. The preferred stock is convertible into common stock after
December 31, 2007 at a conversion ratio, the numerator of
which is the liquidation preference and the denominator which is
the fair market value per share of Oxygen Media common stock on
the conversion date.
Digeo, Inc.
In March
2001, Charter Ventures and Vulcan Ventures Incorporated formed
DBroadband Holdings, LLC for the sole purpose of purchasing
equity interests in Digeo. In connection with the execution of
the broadband carriage agreement, DBroadband Holdings, LLC
purchased an equity interest in Digeo funded by contributions
from Vulcan Ventures Incorporated. The equity interest is
subject to a priority return of capital to Vulcan Ventures up to
the amount contributed by Vulcan Ventures on Charter
Ventures' behalf. After Vulcan Ventures recovers its amount
contributed and any cumulative loss allocations, Charter
Ventures has a 100% profit interest in DBroadband Holdings, LLC.
Charter Ventures is not required to make any capital
contributions, including capital calls, and may require Vulcan
Ventures, through January 24, 2004, to make certain
additional contributions through DBroadband Holdings, LLC to
acquire additional equity in Digeo as necessary to maintain
Charter Ventures' pro rata interest in Digeo in the event
of certain future Digeo equity financings by the founders of
Digeo. These additional equity interests are also subject to a
priority return of capital to Vulcan Ventures up to amounts
contributed by Vulcan Ventures on Charter Ventures' behalf.
DBroadband Holdings, LLC is therefore not included in the
Company's consolidated financial statements. Pursuant to an
amended version of this arrangement, in 2003, Vulcan Ventures
contributed a total of $29 million to Digeo,
$7 million of which was contributed on Charter
Ventures' behalf, subject to Vulcan Ventures'
aforementioned priority return. Since the formation of
DBroadband Holdings, LLC, Vulcan Ventures has contributed
approximately $56 million on Charter Ventures' behalf.
On June 30, 2003, Charter Holdco entered
into an agreement with Motorola, Inc. for the purchase of
100,000 digital video recorder ("DVR") units. The
software for these DVR units is being supplied by Digeo
Interactive, LLC under a license agreement entered into in April
2004. Under the license agreement Digeo Interactive granted to
Charter Holdco the right to use Digeo's proprietary
software for the number of DVR units that Charter deploys from a
maximum of 10 headends through year-end 2004. This maximum
number of headends was increased from 10 to 15 pursuant to a
letter agreement executed on June 11, 2004 and the date for
entering into license agreements for units deployed was extended
to June 30, 2005. The number of headends was increased
again from 15 to 20 pursuant to a letter agreement
F-73
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
dated August 4, 2004, from 20 to 30 pursuant
to a letter agreement dated September 28, 2004 and from 30
to 50 headends by a letter agreement in February 2005. The
license granted for each unit deployed under the agreement is
valid for five years. In addition, Charter will pay certain
other fees including a per-headend license fee and maintenance
fees. Maximum license and maintenance fees during the term of
the agreement are expected to be approximately $7 million.
The agreement provides that Charter is entitled to receive
contract terms, considered on the whole, and license fees,
considered apart from other contract terms, no less favorable
than those accorded to any other Digeo customer. Charter paid
$474,400 in license and maintenance fees in 2004.
In April 2004, the Company launched DVR service
(using units containing the Digeo software) in its Rochester,
Minnesota market using a broadband media center that is an
integrated set-top terminal with a cable converter, DVR hard
drive and connectivity to other consumer electronics devices
(such as stereos, MP3 players, and digital cameras).
In May 2004, Charter Holdco entered into a
binding term sheet with Digeo Interactive for the development,
testing and purchase of 70,000 Digeo PowerKey DVR units. The
term sheet provided that the parties would proceed in good faith
to negotiate, prior to year-end 2004, definitive agreements for
the development, testing and purchase of the DVR units and that
the parties would enter into a license agreement for
Digeo's proprietary software on terms substantially similar
to the terms of the license agreement described above. In
November 2004, Charter Holdco and Digeo Interactive executed the
license agreement and in December 2004, the parties executed the
purchase agreement, each on terms substantially similar to the
binding term sheet. Product development and testing is
continuing. Total purchase price and license and maintenance
fees during the term of the definitive agreements are expected
to be approximately $41 million. The definitive agreements
are terminable at no penalty to Charter in certain circumstances.
A wholly owned subsidiary of Digeo, Digeo
Interactive, provides interactive channel (i-channel) service to
Charter on a month-to-month basis. In the years ended
December 31, 2004, 2003 and 2002, Charter paid Digeo
Interactive $3 million, $4 million and
$3 million, respectively, for customized development of
i-channels and an interactive "toolkit" to enable
Charter to develop interactive local content.
On January 10, 2003, the Company signed an
agreement to carry two around-the-clock, high-definition
networks, HDNet and HDNet Movies. HDNet Movies delivers a
commercial-free schedule of full-length feature films converted
from 35mm to high-definition, including titles from an extensive
library of Warner Bros. films. HDNet Movies will feature a mix
of theatrical releases, made-for-TV movies, independent films
and shorts. The HDNet channel features a variety of HDTV
programming, including live sports, sitcoms, dramas, action
series, documentaries, travel programs, music concerts and
shows, special events, and news features including HDNet World
Report. HDNet also offers a selection of classic and recent
television series. The Company paid HDNet and HDNet Movies
approximately $0.6 million in 2004. The Company believes
that entities controlled by Mr. Cuban owned approximately
81% of HDNet as of December 31, 2004. As of
December 31, 2004, the Company believes that Mark Cuban,
co-founder and president of HDNet, owned approximately 6.2% of
the total common equity in Charter based on a Schedule 13G
filed with the SEC on May 21, 2003.
Certain related parties, including members of the
board of directors and officers, hold interests in the
Company's senior convertible debt and senior notes and
discount notes of the Company's subsidiary of approximately
$59.6 million of face value at December 31, 2004.
As part of the acquisition of the cable systems
owned by Bresnan Communications Company Limited Partnership in
February 2000, CC VIII, LLC, Charter's indirect
limited liability company subsidiary,
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Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
issued, after adjustments, 24,273,943
Class A preferred membership units (collectively, the
"CC VIII interest") with a value and an initial
capital account of approximately $630 million to certain
sellers affiliated with AT&T Broadband, subsequently owned
by Comcast Corporation (the "Comcast sellers"). While
held by the Comcast sellers, the CC VIII interest was
entitled to a 2% priority return on its initial capital account
and such priority return was entitled to preferential
distributions from available cash and upon liquidation of
CC VIII. While held by the Comcast sellers, the
CC VIII interest generally did not share in the profits and
losses of CC VIII. Mr. Allen granted the Comcast
sellers the right to sell to him the CC VIII interest for
approximately $630 million plus 4.5% interest annually from
February 2000 (the "Comcast put right"). In April
2002, the Comcast sellers exercised the Comcast put right in
full, and this transaction was consummated on June 6, 2003.
Accordingly, Mr. Allen has become the holder of the
CC VIII interest, indirectly through an affiliate.
Consequently, subject to the matters referenced in the next
paragraph, Mr. Allen generally thereafter will be allocated
his pro rata share (based on number of membership interests
outstanding) of profits or losses of CC VIII. In the event
of a liquidation of CC VIII, Mr. Allen would be
entitled to a priority distribution with respect to the 2%
priority return (which will continue to accrete). Any remaining
distributions in liquidation would be distributed to CC V
Holdings, LLC and Mr. Allen in proportion to CC V
Holdings, LLC's capital account and Mr. Allen's
capital account (which will equal the initial capital account of
the Comcast sellers of approximately $630 million,
increased or decreased by Mr. Allen's pro rata share
of CC VIII's profits or losses (as computed for
capital account purposes) after June 6, 2003). The limited
liability company agreement of CC VIII does not provide for
a mandatory redemption of the CC VIII interest.
An issue has arisen as to whether the
documentation for the Bresnan transaction was correct and
complete with regard to the ultimate ownership of the
CC VIII interest following consummation of the Comcast put
right. Specifically, under the terms of the Bresnan transaction
documents that were entered into in June 1999, the Comcast
sellers originally would have received, after adjustments,
24,273,943 Charter Holdco membership units, but due to an FCC
regulatory issue raised by the Comcast sellers shortly before
closing, the Bresnan transaction was modified to provide that
the Comcast sellers instead would receive the preferred equity
interests in CC VIII represented by the CC VIII
interest. As part of the last-minute changes to the Bresnan
transaction documents, a draft amended version of the Charter
Holdco limited liability company agreement was prepared, and
contract provisions were drafted for that agreement that would
have required an automatic exchange of the CC VIII interest
for 24,273,943 Charter Holdco membership units if the Comcast
sellers exercised the Comcast put right and sold the
CC VIII interest to Mr. Allen or his affiliates.
However, the provisions that would have required this automatic
exchange did not appear in the final version of the Charter
Holdco limited liability company agreement that was delivered
and executed at the closing of the Bresnan transaction. The law
firm that prepared the documents for the Bresnan transaction
brought this matter to the attention of Charter and
representatives of Mr. Allen in 2002.
Thereafter, the board of directors of Charter
formed a Special Committee (currently comprised of
Messrs. Merritt, Tory and Wangberg) to investigate the
matter and take any other appropriate action on behalf of
Charter with respect to this matter. After conducting an
investigation of the relevant facts and circumstances, the
Special Committee determined that a "scrivener's
error" had occurred in February 2000 in connection with the
preparation of the last-minute revisions to the Bresnan
transaction documents and that, as a result, Charter should seek
the reformation of the Charter Holdco limited liability company
agreement, or alternative relief, in order to restore and ensure
the obligation that the CC VIII interest be automatically
exchanged for Charter Holdco units. The Special Committee
further determined that, as part of such contract reformation or
alternative relief, Mr. Allen should be required to
contribute the CC VIII interest to Charter Holdco in
exchange for 24,273,943 Charter Holdco membership units. The
Special Committee also recommended to the board of directors of
Charter that, to the extent the contract
F-75
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
reformation is achieved, the board of directors
should consider whether the CC VIII interest should ultimately
be held by Charter Holdco or Charter Holdings or another entity
owned directly or indirectly by them.
Mr. Allen disagrees with the Special
Committee's determinations described above and has so
notified the Special Committee. Mr. Allen contends that the
transaction is accurately reflected in the transaction
documentation and contemporaneous and subsequent company public
disclosures.
The parties engaged in a process of non-binding
mediation to seek to resolve this matter, without success. The
Special Committee is evaluating what further actions or
processes it may undertake to resolve this dispute. To
accommodate further deliberation, each party has agreed to
refrain from initiating legal proceedings over this matter until
it has given at least ten days' prior notice to the other.
In addition, the Special Committee and Mr. Allen have
determined to utilize the Delaware Court of Chancery's
program for mediation of complex business disputes in an effort
to resolve the CC VIII interest dispute. If the Special
Committee and Mr. Allen are unable to reach a resolution
through that mediation process or to agree on an alternative
dispute resolution process, the Special Committee intends to
seek resolution of this dispute through judicial proceedings in
an action that would be commenced, after appropriate notice, in
the Delaware Court of Chancery against Mr. Allen and his
affiliates seeking contract reformation, declaratory relief as
to the respective rights of the parties regarding this dispute
and alternative forms of legal and equitable relief. The
ultimate resolution and financial impact of the dispute are not
determinable at this time.
23.
Commitments and Contingencies
Commitments
The following table summarizes the Company's
payment obligations as of December 31, 2004 for its
contractual obligations.
Total
2005
2006
2007
2008
2009
Thereafter
Contractual Obligations
Operating and Capital Lease Obligations(1)
$
88
$
23
$
17
$
13
$
10
$
7
$
18
Programming Minimum Commitments(2)
1,579
318
344
375
308
234
—
Other(3)
272
62
50
47
25
21
67
Total
$
1,939
$
403
$
411
$
435
$
343
$
262
$
85
(1)
The Company leases certain facilities and
    equipment under noncancellable operating leases. Leases and
    rental costs charged to expense for the years ended
    December 31, 2004, 2003 and 2002, were $23 million,
    $30 million and $31 million, respectively.
(2)
The Company pays programming fees under
    multi-year contracts ranging from three to six years typically
    based on a flat fee per customer, which may be fixed for the
    term or may in some cases, escalate over the term. Programming
    costs included in the accompanying statement of operations were
    $1.3 billion, $1.2 billion and $1.2 billion for
    the years ended December 31, 2004, 2003 and 2002,
    respectively. Certain of the Company's programming
    agreements are based on a flat fee per month or have guaranteed
    minimum payments. The table sets forth the aggregate guaranteed
    minimum commitments under the Company's programming
    contracts.
(3)
"Other" represents other guaranteed
    minimum commitments, which consist primarily of commitments to
    the Company's billing services vendors.
F-76
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
The following items are not included in the
contractual obligation table due to various factors discussed
below. However, the Company incurs these costs as part of its
operations:
•
The Company also rents utility poles used in its
    operations. Generally, pole rentals are cancelable on short
    notice, but the Company anticipates that such rentals will
    recur. Rent expense incurred for pole rental attachments for the
    years ended December 31, 2004, 2003 and 2002, was
    $43 million, $40 million and $41 million,
    respectively.
•
The Company pays franchise fees under multi-year
    franchise agreements based on a percentage of revenues earned
    from video service per year. The Company also pays other
    franchise related costs, such as public education grants under
    multi-year agreements. Franchise fees and other
    franchise-related costs included in the accompanying statement
    of operations were $164 million, $162 million and
    $160 million for the years ended December 31, 2004,
    2003 and 2002, respectively.
•
The Company also has $166 million in letters
    of credit, primarily to its various worker's compensation,
    property casualty and general liability carriers as collateral
    for reimbursement of claims. These letters of credit reduce the
    amount the Company may borrow under its credit facilities.
Litigation
Fourteen putative federal class action lawsuits
(the "Federal Class Actions") were filed against
Charter and certain of its former and present officers and
directors in various jurisdictions allegedly on behalf of all
purchasers of Charter's securities during the period from
either November 8 or November 9, 1999 through
July 17 or July 18, 2002. Unspecified damages were
sought by the plaintiffs. In general, the lawsuits alleged that
Charter utilized misleading accounting practices and failed to
disclose these accounting practices and/or issued false and
misleading financial statements and press releases concerning
Charter's operations and prospects. The Federal
Class Actions were specifically and individually identified
in public filings made by Charter prior to the date of these
financial statements.
In October 2002, Charter filed a motion with the
Judicial Panel on Multidistrict Litigation (the
"Panel") to transfer the Federal Class Actions to
the Eastern District of Missouri. On March 12, 2003, the
Panel transferred the six Federal Class Actions not filed
in the Eastern District of Missouri to that district for
coordinated or consolidated pretrial proceedings with the eight
Federal Class Actions already pending there. The
Panel's transfer order assigned the Federal
Class Actions to Judge Charles A. Shaw. By virtue of a
prior court order, StoneRidge Investment Partners LLC became
lead plaintiff upon entry of the Panel's transfer order.
StoneRidge subsequently filed a Consolidated Amended Complaint.
The Court subsequently consolidated the Federal
Class Actions into a single action (the "Consolidated
Federal Class Action") for pretrial purposes. On
June 19, 2003, following a status and scheduling conference
with the parties, the Court issued a Case Management Order
setting forth a schedule for the pretrial phase of the
Consolidated Class Action. Motions to dismiss the
Consolidated Amended Complaint were filed. On
February  10, 2004, in response to a joint motion made
by StoneRidge and defendants, Charter, Vogel and Allen, the
court entered an order providing, among other things, that:
(1) the parties who filed such motion engage in a mediation
within ninety (90) days; and (2) all proceedings in
the Consolidated Federal Class Actions were stayed until
May 10, 2004. On May 11, 2004, the Court extended the
stay in the Consolidated Federal Class Action for an
additional sixty (60) days. On July 12, 2004, the
parties submitted a joint motion to again extend the stay, this
time until September 10, 2004. The Court granted that
extension on July 20, 2004. On August 5, 2004,
Stoneridge, Charter and the individual defendants who were the
subject of the suit entered into a Memorandum of Understanding
setting forth agreements in principle to settle the Consolidated
Federal Class Action. These parties subsequently entered
into
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Stipulations of Settlement dated as of
January 24, 2005 (described more fully below) which
incorporate the terms of the August 5, 2004 Memorandum of
Understanding.
On September 12, 2002, a shareholders
derivative suit (the "State Derivative Action") was
filed in the Circuit Court of the City of St. Louis, State
of Missouri (the "Missouri State Court") against
Charter and its then current directors, as well as its former
auditors. A substantively identical derivative action was later
filed and consolidated into the State Derivative Action. The
plaintiffs allege that the individual defendants breached their
fiduciary duties by failing to establish and maintain adequate
internal controls and procedures. Unspecified damages, allegedly
on Charter's behalf, were sought by the plaintiffs.
On March 12, 2004, an action substantively
identical to the State Derivative Action was filed in the
Missouri State Court, against Charter and certain of its current
and former directors, as well as its former auditors. The
plaintiffs in that case alleged that the individual defendants
breached their fiduciary duties by failing to establish and
maintain adequate internal controls and procedures. Unspecified
damages, allegedly on Charter's behalf, were sought by
plaintiffs. On July 14, 2004, the Court consolidated this
case with the State Derivative Action.
Separately, on February 12, 2003, a
shareholders derivative suit (the "Federal Derivative
Action") was filed against Charter and its then current
directors in the United States District Court for the Eastern
District of Missouri. The plaintiff in that suit alleged that
the individual defendants breached their fiduciary duties and
grossly mismanaged Charter by failing to establish and maintain
adequate internal controls and procedures.
As noted above, Charter entered into Memoranda of
Understanding on August 5, 2004 setting forth agreements in
principle regarding settlement of the Consolidated Federal
Class Action, the State Derivative Action(s) and the
Federal Derivative Action (the "Actions"). Charter and
various other defendants in those actions subsequently entered
into Stipulations of Settlement dated as of January 24,
2005, setting forth a settlement of the Actions in a manner
consistent with the terms of the Memorandum of Understanding.
The Stipulations of Settlement, along with the various
supporting documentation, were filed with the Court on
February 2, 2005. The Settlements provide that, in exchange
for a release of all claims by plaintiffs against Charter and
its former and present officers and directors named in the
Actions, Charter will pay to the plaintiffs a combination of
cash and equity collectively valued at $144 million, which
will include the fees and expenses of plaintiffs' counsel.
Of this amount, $64 million will be paid in cash (by
Charter's insurance carriers) and the balance will be paid
in shares of Charter Class A common stock having an
aggregate value of $40 million and ten-year warrants to
purchase shares of Charter Class A common stock having an
aggregate warrant value of $40 million. The warrants would
have an exercise price equal to 150% of the fair market value
(as defined) of Charter Class A common stock as of the date
of the entry of the order of final judgment approving the
settlement. In addition, Charter expects to issue additional
shares of its Class A common stock to its insurance carrier
having an aggregate value of $5 million. As a result, in
the second quarter of 2004, the Company recorded a
$149 million litigation liability within other long-term
liabilities and a $64 million insurance receivable as part
of other non-current assets on its consolidated balance sheet
and an $85 million special charge on its consolidated
statement of operations. Additionally, as part of the
settlements, Charter will also commit to a variety of corporate
governance changes, internal practices and public disclosures,
some of which have already been undertaken and none of which are
inconsistent with measures Charter is taking in connection with
the recent conclusion of the SEC investigation described below.
Documents related to the settlement of the Actions have now been
executed and filed. On February 15, 2005, the United States
District Court for the Eastern District of Missouri gave
preliminary approval to the settlement of the Actions. The
settlement of each of the lawsuits remains conditioned upon,
among other things, final judicial approval of the
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CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
settlements following notice to the class, and
dismissal, with prejudice, of the consolidated derivative
actions now pending in Missouri State Court, which are related
to the Federal Derivative Action.
In addition to the Federal Class Actions,
the State Derivative Action (s), the new Missouri State Court
derivative action and the Federal Derivative Action, six
putative class action lawsuits have been filed against Charter
and certain of its then current directors and officers in the
Court of Chancery of the State of Delaware (the "Delaware
Class Actions"). The lawsuits were filed after the
filing of a 13D amendment by Mr. Allen indicating that he
was exploring a number of possible alternatives with respect to
restructuring or expanding his ownership interest in Charter.
Charter believes the plaintiffs speculated that Mr. Allen
might have been contemplating an unfair bid for shares of
Charter or some other sort of going private transaction on
unfair terms and generally alleged that the defendants breached
their fiduciary duties by participating in or acquiescing to
such a transaction. The lawsuits, which are substantively
identical, were brought on behalf of Charter's securities
holders as of July  29, 2002, and sought unspecified
damages and possible injunctive relief. However, no such
transaction by Mr. Allen has been presented. On
April 30, 2004, orders of dismissal without prejudice were
entered in each of the Delaware Class Actions.
In August 2002, Charter became aware of a grand
jury investigation being conducted by the
U.S. Attorney's Office for the Eastern District of
Missouri into certain of its accounting and reporting practices,
focusing on how Charter reported customer numbers and its
reporting of amounts received from digital set-top terminal
suppliers for advertising. The U.S. Attorney's Office
has publicly stated that Charter is not a target of the
investigation. Charter was also advised by the
U.S. Attorney's Office that no current officer or
member of its board of directors is a target of the
investigation. On July 24, 2003, a federal grand jury
charged four former officers of Charter with conspiracy and mail
and wire fraud, alleging improper accounting and reporting
practices focusing on revenue from digital set-top terminal
suppliers and inflated customer account numbers. Trial was set
for February 7, 2005. Subsequently, each of the indicted
former officers pled guilty to single conspiracy counts related
to the original mail and wire fraud charges and are awaiting
sentencing. The Company is fully cooperating with the
investigation.
On November 4, 2002, Charter received an
informal, non-public inquiry from the staff of the Securities
and Exchange Commission ("SEC"). The SEC issued a
formal order of investigation dated January 23, 2003, and
subsequently served document and testimony subpoenas on Charter
and a number of its former employees. The investigation and
subpoenas generally concerned Charter's prior reports with
respect to its determination of the number of customers, and
various of its accounting policies and practices including its
capitalization of certain expenses and dealings with certain
vendors, including programmers and digital set-top terminal
suppliers. On July 27, 2004, the SEC and Charter reached a
final agreement to settle the investigation. In the Settlement
Agreement and Cease and Desist Order, Charter agreed to entry of
an administrative order prohibiting any future violation of
United States securities laws and requiring certain other
remedial internal practices and public disclosures. Charter
neither admitted nor denied any wrongdoing, and the SEC assessed
no fine against Charter.
Charter is generally required to indemnify each
of the named individual defendants in connection with the
matters described above pursuant to the terms of its bylaws and
(where applicable) such individual defendants' employment
agreements. In accordance with these documents, in connection
with the pending grand jury investigation, the now-settled SEC
investigation and the above-described lawsuits, some of
Charter's current and former directors and current and
former officers have been advanced certain costs and expenses
incurred in connection with their defense. On February 22,
2005, Charter filed suit against four of its former officers who
were indicted in the course of the grand jury investigation.
These suits seek to recover the legal fees and other related
expenses advanced to these individuals by Charter for the grand
jury investigation, SEC investigation and class action and
related lawsuits.
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Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
In October 2001, two customers, Nikki Nicholls
and Geraldine M. Barber, filed a class action suit against
Charter Holdco in South Carolina Court of Common Pleas (the
"South Carolina Class Action"), purportedly on
behalf of a class of Charter Holdco's customers, alleging
that Charter Holdco improperly charged them a wire maintenance
fee without request or permission. They also claimed that
Charter Holdco improperly required them to rent analog and/or
digital set-top terminals even though their television sets were
"cable ready." A substantively identical case was
filed in the Superior Court of Athens — Clarke County,
Georgia by Emma S. Tobar on March 26, 2002 (the
"Georgia Class Action"), alleging a nationwide
class for these claims. Charter Holdco removed the South
Carolina Class Action to the United States District Court
for the District of South Carolina in November 2001, and moved
to dismiss the suit in December 2001. The federal judge remanded
the case to the South Carolina Court of Common Pleas in August
2002 without ruling on the motion to dismiss. The plaintiffs
subsequently moved for a default judgment, arguing that upon
return to state court, Charter Holdco should have, but did not
file a new motion to dismiss. The state court judge granted the
plaintiff's motion over Charter Holdco's objection in
September 2002. Charter Holdco immediately appealed that
decision to the South Carolina Court of Appeals and the South
Carolina Supreme Court, but those courts ruled that until a
final judgment was entered against Charter Holdco, they lacked
jurisdiction to hear the appeal.
In January 2003, the Court of Common Pleas
granted the plaintiffs' motion for class certification. In
October and November 2003, Charter Holdco filed motions
(a) asking that court to set aside the default judgment,
and (b) seeking dismissal of plaintiffs' suit for
failure to state a claim. In January 2004, the Court of Common
Pleas granted in part and denied in part Charter Holdco's
motion to dismiss for failure to state a claim. It also took
under advisement Charter Holdco's motion to set aside the
default judgment. In April 2004, the parties to both the Georgia
and South Carolina Class Actions participated in a
mediation. The mediator made a proposal to the parties to settle
the lawsuits. In May 2004, the parties accepted the
mediator's proposal and reached a tentative settlement,
subject to final documentation and court approval. As a result
of the tentative settlement, we recorded a special charge of
$9 million in our consolidated statement of operations in
the first quarter of 2004. On July 8, 2004, the Superior
Court of Athens — Clarke County, Georgia granted a
motion to amend the Tobar complaint to add Nicholls, Barber and
April Jones as plaintiffs in the Georgia Class Action and
to add any potential class members in South Carolina. The court
also granted preliminary approval of the proposed settlement on
that date. On August 2, 2004, the parties submitted a joint
request to the South Carolina Court of Common Pleas to stay the
South Carolina Class Action pending final approval of the
settlement and on August 17, 2004, that court granted the
parties' request. On November 10, 2004, the court
granted final approval of the settlement, rejecting positions
advanced by two objectors to the settlement. On
December 13, 2004 the court entered a written order
formally approving that settlement. On January 11, 2005,
certain class members appealed the order entered by the Georgia
court. That appeal was dismissed on or about February 3,
2005. Additionally, one of the objectors to this settlement
recently filed a similar, but not identical, lawsuit.
Furthermore, Charter is also party to, other
lawsuits and claims that arose in the ordinary course of
conducting its business. In the opinion of management, after
taking into account recorded liabilities, the outcome of these
other lawsuits and claims are not expected to have a material
adverse effect on the Company's consolidated financial
condition, results of operations or its liquidity.
Regulation in the Cable
    Industry
The operation of a cable system is extensively
regulated by the Federal Communications Commission
("FCC"), some state governments and most local
governments. The FCC has the authority to enforce its
regulations through the imposition of substantial fines, the
issuance of cease and desist orders and/or the
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Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
imposition of other administrative sanctions,
such as the revocation of FCC licenses needed to operate certain
transmission facilities used in connection with cable
operations. The 1996 Telecom Act altered the regulatory
structure governing the nation's communications providers.
It removed barriers to competition in both the cable television
market and the local telephone market. Among other things, it
reduced the scope of cable rate regulation and encouraged
additional competition in the video programming industry by
allowing local telephone companies to provide video programming
in their own telephone service areas.
The 1996 Telecom Act required the FCC to
undertake a number of implementing rulemakings. Moreover,
Congress and the FCC have frequently revisited the subject of
cable regulation. Future legislative and regulatory changes
could adversely affect the Company's operations.
24.
Employee Benefit Plan
The Company's employees may participate in
the Charter Communications, Inc. 401(k) Plan. Employees that
qualify for participation can contribute up to 50% of their
salary, on a pre-tax basis, subject to a maximum contribution
limit as determined by the Internal Revenue Service. The Company
matches 50% of the first 5% of participant contributions. The
Company made contributions to the 401(k) plan totaling
$7 million, $7 million and $8 million for the
years ended December 31, 2004, 2003 and 2002, respectively.
25.
Recently Issued Accounting Standards
In December 2004, the Financial Accounting
Standards Board issued the revised SFAS No. 123,
Share — Based Payment
, which addresses the
accounting for share-based payment transactions in which a
company receives employee services in exchange for
(a) equity instruments of that company or
(b) liabilities that are based on the fair value of the
company's equity instruments or that may be settled by the
issuance of such equity instruments. This statement will be
effective for the Company beginning July 1, 2005. Because
Charter adopted the fair value recognition provisions of
SFAS No. 123 on January 1, 2003, the Company does
not expect this revised standard to have a material impact on
its financial statements.
Charter does not believe that any other recently
issued, but not yet effective accounting pronouncements, if
adopted, would have a material effect on the Company's
accompanying financial statements.
26.
Parent Company Only Financial
    Statements
As the result of limitations on, and prohibitions
of, distributions, substantially all of the net assets of the
consolidated subsidiaries are restricted from distribution to
Charter, the parent company. The following condensed parent-only
financial statements of Charter account for the investment in
Charter Holdco under the equity method of accounting. The
financial statements should be read in conjunction with the
consolidated financial statements of the Company and notes
thereto.
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Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Charter Communications, Inc. (Parent Company
Only)
Condensed Balance Sheet
December 31,
2004
2003
ASSETS
Cash and cash equivalents
$
—
$
1
Receivable from related party
20
9
Investment in Charter Holdco
—
—
Notes receivable from Charter Holdco
1,073
828
$
1,093
$
838
LIABILITIES AND SHAREHOLDERS'
    DEFICIT
Current liabilities
$
20
$
10
Convertible notes
990
774
Deferred income taxes
6
149
Losses in excess of investment
4,406
25
Other long term liabilities
22
—
Preferred stock — redeemable
55
55
Shareholders' deficit
(4,406
)
(175
)
Total liabilities and shareholders' deficit
$
1,093
$
838
Condensed Statement of Operations
Year Ended December 31,
2004
2003
2002
REVENUES
Interest income
$
52
$
69
$
76
Management fees
15
11
9
Total revenues
67
80
85
EXPENSES
Equity in losses of Charter Holdco
(4,488
)
(359
)
(2,922
)
General and administrative expenses
(14
)
(11
)
(9
)
Interest expense
(49
)
(65
)
(73
)
Total expenses
(4,551
)
(435
)
(3,004
)
Net loss before income taxes
(4,484
)
(355
)
(2,919
)
Income taxes
143
117
405
Net loss
(4,341
)
(238
)
(2,514
)
Dividend on preferred equity
(4
)
(4
)
(3
)
Net loss after preferred dividends
$
(4,345
)
$
(242
)
$
(2,517
)
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Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
Condensed Statements of Cash Flows
Year Ended December 31,
2004
2003
2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss after preferred dividends
$
(4,345
)
$
(242
)
$
(2,517
)
Equity in losses of Charter Holdco
4,488
359
2,922
Changes in operating assets and liabilities
(1
)
(9
)
10
Deferred income taxes
(143
)
(117
)
(405
)
Net cash flows from operating activities
(1
)
(9
)
10
CASH FLOWS FROM INVESTING ACTIVITIES:
Receivables from Charter Holdco
(863
)
—
—
Payments from Charter Holdco
588
—
—
Investment in Charter Holdco
(2
)
—
—
Net cash flows from investing activities
(277
)
—
—
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of convertible notes
863
—
—
Paydown of convertible notes
(588
)
Net proceeds from issuance of common stock
2
—
—
Net cash flows from financing activities
277
—
—
NET INCREASE (DECREASE) IN CASH AND CASH
    EQUIVALENTS
(1
)
(9
)
10
CASH AND CASH EQUIVALENTS, beginning of year
1
10
—
CASH AND CASH EQUIVALENTS, end of year
$
—
$
1
$
10
F-83
Table of Contents
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2004, 2003 and
2002
(Dollars in millions, except where
indicated)
27.
Unaudited Quarterly Financial Data
The following table presents quarterly data for
the periods presented on the consolidated statement of
operations:
Year Ended December 31, 2004
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Revenues
$
1,214
$
1,239
$
1,248
$
1,276
Income (loss) from operations
175
15
(2,344
)
108
Loss before minority interest and income taxes
(235
)
(366
)
(2,776
)
(321
)
Net loss applicable to common stock
(294
)
(416
)
(3,295
)
(340
)
Basic and diluted loss per common share
(1.00
)
(1.39
)
(10.89
)
(1.12
)
Weighted-average shares outstanding, basic and
    diluted
295,106,077
300,522,815
302,604,978
302,934,348
Year Ended December 31, 2003
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Revenues
$
1,178
$
1,217
$
1,207
$
1,217
Income from operations
77
112
117
210
Income (loss) before minority interest and income
    taxes
(301
)
(286
)
23
(161
)
Net income (loss) applicable to common stock
(182
)
(38
)
36
(58
)
Basic income (loss) per common share
(0.62
)
(0.13
)
0.12
(0.20
)
Diluted income (loss) per common share
(0.62
)
(0.13
)
0.07
(0.20
)
Weighted-average shares outstanding, basic
294,466,137
294,474,596
294,566,878
294,875,504
Weighted-average shares outstanding, diluted
294,466,137
294,474,596
637,822,843
294,875,504
F-84
Table of Contents
ANNEX A
Form of Investor Acknowledgment
The undersigned acknowledges and agrees that the
shares of Charter's Class A common stock offered
pursuant to this prospectus are not being offered to, and may
not be purchased by, any person who has an open short position
in Charter's Class A common stock.
Each purchaser of Charter's Class A
common stock hereby represents and agrees that, at the time it
received an offer to purchase the shares and at the time of its
purchase of the shares:
•
it did not have an open short position in
    Charter's Class A common stock; and
•
it is not purchasing the shares on behalf of, or
    for the account of, any person described in the first bullet
    above, and has no arrangement or understanding to resell, lend
    or otherwise transfer (directly or indirectly) the shares to any
    such person.
For purposes of the foregoing, an "open
short position" means any contractual or other arrangement
whereby a holder is economically "short" Class A
common stock, including any so-called "synthetic short
position."
Each purchaser of Charter's Class A
common stock in this offering must execute and deliver this
Investor Acknowledgement to Citigroup by facsimile to
(646) 843-3922.
Purchaser of Class A common stock
By:
Name:
Title:
A-1
Table of Contents
122,830,000 Shares
Class A Common Stock
PROSPECTUS
,
2005
Citigroup
Table of Contents
PART II
INFORMATION NOT REQUIRED IN
PROSPECTUS
Item 13.
Other Expenses of Issuance and
    Distribution
The following table sets forth the various
expenses to be incurred in connection with the sale and
distribution of the securities covered by this prospectus, all
of which will be borne by the registrant. All amounts shown are
estimates except the SEC filing fee.
Regulatory filing fees
$
21,893
Legal fees and expenses
$
200,000
Accounting fees and expenses
$
200,000
Printing expenses
$
250,000
Total expenses
$
671,893
Item 14.
Indemnification of Directors and
    Officers
Indemnification Under the Certificate of
Incorporation and Bylaws of Charter Communications,
Inc.
Charter Communications, Inc.'s certificate
of incorporation provides that a director of Charter
Communications, Inc. shall not be personally liable to Charter
Communications, Inc. or its shareholders for monetary damages
for breach of fiduciary duty as a director, except for
liability: (i) for any breach of the directors' duty
of loyalty to Charter Communications, Inc. or its shareholders;
(ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of the Delaware General
Corporation law; or (iv) for any transaction from which the
director derived an improper personal benefit. Charter
Communications, Inc.'s bylaws require Charter
Communications, Inc., to the fullest extent authorized by the
Delaware General Corporation Law, to indemnify any person who
was or is made a party or is threatened to be made a party or is
otherwise involved in any action, suit or proceeding by reason
of the fact that he is or was a director or officer of Charter
Communications, Inc. or is or was serving at the request of
Charter Communications, Inc. as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other entity or enterprise, in each
case, against all expense, liability and loss (including
attorneys' fees, judgments, amounts paid in settlement,
fines, ERISA excise taxes or penalties) reasonably incurred or
suffered by such person in connection therewith.
Indemnification Under the Delaware General
Corporation Law
Section 145 of the Delaware General
Corporation Law, authorizes a corporation to indemnify any
person who was or is a party, or is threatened to be made a
party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses,
including attorneys' fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding, if
the person acted in good faith and in a manner the person
reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. In addition, the Delaware
General Corporation Law does not permit indemnification in any
threatened, pending or completed action or suit by or in the
right of the corporation in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable to the corporation, unless and only to the extent that
the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for
such expenses, which such court shall deem proper. To the extent
that a present or former director or officer of a corporation
has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of
any claim, issue or matter, such person shall be indemnified
against expenses, including attorneys' fees, actually and
reasonably incurred by such person. Indemnity is
II-1
Table of Contents
mandatory to the extent a claim, issue or matter
has been successfully defended. The Delaware General Corporation
Law also allows a corporation to provide for the elimination or
limit of the personal liability of a director to the corporation
or its shareholders for monetary damages for breach of fiduciary
duty as a director, provided that such provision shall not
eliminate or limit the liability of a director
(i) for any breach of the director's
    duty of loyalty to the corporation or its shareholders,
(ii) for acts or omissions not in good faith
    or which involve intentional misconduct or a knowing violation
    of law,
(iii) for unlawful payments of dividends or
    unlawful stock purchases or redemptions, or
(iv) for any transaction from which the
    director derived an improper personal benefit. These provisions
    will not limit the liability of directors or officers under the
    federal securities laws of the United States.
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the SEC such indemnification is
against public policy as expressed in the Act and is therefore
unenforceable.
Item 15.
Recent Sales of Unregistered
    Securities.
On March 29, 2004, Charter Communications,
Inc. issued 2,385,705 shares of its Class A common
stock in exchange for $10 million aggregate principal
amount of Charter's 5.75% convertible senior notes due
2005 in a privately negotiated transaction. The shares of
Class A common stock issued in this exchange were exempt
from registration under Section 3(a)(9) of the Securities
Act of 1933.
On May 6, 2004, Charter Communications, Inc.
issued 4,867,113 shares of its Class A common stock in
exchange for $20 million aggregate principal amount of
Charter's 5.75% convertible senior notes due 2005 in a
privately negotiated transaction. The shares of Class A
common stock issued in this exchange were exempt from
registration under Section 3(a)(9) of the Securities Act of
1933.
On November 22, 2004, Charter
Communications, Inc. issued and sold $862.5 million
original principal amount of 5.875% convertible senior
notes due 2009. The notes were sold in a private transaction to
qualified institutional buyers, and the sale was exempt from
registration by virtue of Section 4(2) of the Securities
Act of 1933 and Rule 506 of Regulation D. The notes
were eligible for resale to qualified institutional buyers
pursuant to Rule 144A of the Securities Act of 1933. The
initial conversion rate, subject to adjustment in certain
circumstances, will be 413.2231 shares of Charter's
Class A common stock per $1,000 original principal amount
of notes, which represents a conversion price of approximately
$2.42 per share. Consequently, the notes are convertible
into an aggregate of approximately 356,405,000 shares of
Class A common stock. A portion of the net proceeds from
the sale of the notes were used to purchase a portfolio of
U.S. Treasury securities which are pledged as security for
the notes and which Charter expects to use to fund the first six
scheduled interest payments on the notes. Charter also intends
to use a portion of the net proceeds to redeem outstanding
indebtedness in the aggregate principal amount of
$588 million. Excess proceeds will be used for general
corporate purposes.
In December 2003, subject to certain
conditions and finalizing appropriate documentation, Charter
agreed to issue 18,638 shares of Class A common stock in
exchange for cancellation of an option to purchase 186,385
shares which was issued in 2001 as compensation for services.
The exchange is scheduled to be consummated in 2005. In
addition, we agreed to issue to the same holder a new option to
purchase an additional 289,268 shares of Class A common
stock for an exercise price of $3.905 per share. The issuances
were in exchange for services rendered or to be rendered, and
were exempt from registration pursuant to Section 4(2)
under the Securities Act of 1933 and Rule 506 of
Regulation D.
On July 8, 2005, pursuant to a court
approved settlement of certain class action claims brought
against Charter and various individuals, Charter issued
13.4 million shares of its Class A common stock to a
claims administrator to be held in escrow for the benefit of the
class pending any appeals of the court approval. The issuance of
the shares is exempt from registration pursuant to
Section 3(a)(10) of the Securities Act of 1933, as amended.
II-2
Table of Contents
Item 16.
Exhibits
Exhibit
Description
1**
Form of Underwriting Agreement.
2
.1(a)
Purchase and Contribution Agreement, entered into
    as of June 1999, by and among BCI (USA), LLC, William Bresnan,
    Blackstone BC Capital Partners L.P., Blackstone BC Offshore
    Capital Partners L.P., Blackstone Family Investment
    Partnership III L.P., TCID of Michigan, Inc. and TCI
    Bresnan LLC and Charter Communications Holding Company, LLC
    (incorporated by reference to Exhibit 2.11 to Amendment
    No. 2 to the registration statement on Form S-1 of
    Charter Communications, Inc. filed on September 28, 1999
    (File No. 333-83887)).
2
.1(b)
First Amendment to Purchase and Contribution
    Agreement dated as of February 14, 2000, by and among BCI
    (USA), LLC, William J. Bresnan, Blackstone BC Capital Partners
    L.P., Blackstone BC Offshore Capital Partners, L.P., Blackstone
    Family Media III L.P. (as assignee of Blackstone Family
    Investment III, L.P.), TCID of Michigan, Inc., TCI Bresnan,
    LLC and Charter Communications Holding Company, LLC.
    (incorporated by reference to Exhibit 2.11(a) to the
    current report on Form 8-K filed by Charter Communications,
    Inc. on February 29, 2000 (File No. 000-27927)).
2
.2
Asset Purchase Agreement, dated as of
    September 28, 2001, between High Speed Access Corp. and
    Charter Communications Holding Company, LLC (including as
    Exhibit A, the Form of Voting Agreement, as Exhibit B,
    the form of Management Agreement, as Exhibit C, the form of
    License Agreement, and as Exhibit D, the Form of Billing
    Letter Agreement) (incorporated by reference to
    Exhibit 10.1 to Amendment No. 6 to Schedule 13D
    filed by Charter Communications, Inc. and others with respect to
    High Speed Access Corp., filed on October 1, 2001 (File
    No. 005-56431)).
2
.3(a)
Asset Purchase Agreement, dated August 29,
    2001, by and between Charter Communications
    Entertainment I, LLC, Interlink Communications Partners,
    LLC, and Rifkin Acquisitions Partners, LLC and Enstar Income
    Program II-1, L.P., Enstar Income Program II-2,
    L.P., Enstar Income Program IV-3, L.P., Enstar Income/
    Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture,
    and Enstar Cable of Macoupin County (incorporated by reference
    to Exhibit 2.1 to the current report of Form 8-K filed
    by Enstar IV-2, L.P. on September 13, 2001 (File
    No. 000-15706)).
2
.3(b)
Letter of Amendment, dated September 10,
    2001, by and between Charter Communications
    Entertainment I, LLC, Interlink Communications Partners,
    LLC, and Rifkin Acquisition Partners, LLC and Enstar Income
    Program II-1, L.P., Enstar Income Program II-2,
    L.P., Enstar Income Program IV-3, L.P., Enstar Income/
    Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture,
    and Enstar Cable of Macoupin County (incorporated by reference
    to Exhibit 2.1 to the current report of Form 8-K filed
    by Enstar IV-2, L.P. on September 13, 2001 (File
    No. 000-15706)).
2
.3(c)
Letter of Amendment, dated April 10, 2002,
    by and between Charter Communications Entertainment I, LLC,
    Interlink Communications Partners, LLC, and Rifkin Acquisition
    Partners, LLC and Enstar Income Program II-1, L.P.,
    Enstar Income Program II-2, L.P., Enstar Income
    Program IV-3, L.P., Enstar Income/ Growth Program
    Six-A, L.P., Enstar IV/ PBD Systems Venture, and
    Enstar Cable of Macoupin County (incorporated by reference to
    Exhibit 2.1 to the current report on Form 8-K filed by
    Enstar Income Program IV-1, L.P. on April 22,
    2002 (File No. 000-15705)).
2
.4
Asset Purchase Agreement, dated April 10,
    2002, by and between Charter Communications
    Entertainment I, LLC, and Enstar Income Program II-1,
    L.P. (incorporated by reference to Exhibit 2.2 to the
    current report on Form 8-K filed by Enstar Income
    Program II-1, L.P. on April 26, 2002
    (File No. 000-14508)).
II-3
Table of Contents
Exhibit
Description
2
.5
Purchase Agreement, dated May 29, 2003, by
    and between Falcon Video Communications, L.P. and WaveDivision
    Holdings, LLC (incorporated by reference to Exhibit 2.1 to
    Charter Communications, Inc.'s current report on
    Form 8-K filed on May 30, 2003
    (File No. 000-27927)).
2
.6
Asset Purchase Agreement, dated September 3,
    2003, by and between Charter Communications VI, LLC, The
    Helicon Group, L.P., Hornell Television Service, Inc., Interlink
    Communications Partners, LLC, Charter Communications Holdings,
    LLC and Atlantic Broadband Finance, LLC (incorporated by
    reference to Exhibit 2.1 to Charter Communications,
    Inc.'s current report on Form 8-K/A filed on
    September 3, 2003 (File No. 000-27927)).
3
.1(a)
Restated Certificate of Incorporation of Charter
    Communications, Inc. (Originally incorporated July 22,
    1999) (incorporated by reference to Exhibit 3.1 to
    Amendment No. 3 to the registration statement on
    Form S-1 of Charter Communications, Inc. filed on
    October 18, 1999 (File No. 333-83887)).
3
.1(b)
Certificate of Amendment of Restated Certificate
    of Incorporation of Charter Communications, Inc. filed
    May 10, 2001 (incorporated by reference to
    Exhibit 3.1(b) to the annual report of Form 10-K of
    Charter Communications, Inc. filed on March 29, 2002 (File
    No. 000-27927)).
3
.2(a)
Amended and Restated By-laws of Charter
    Communications, Inc. as of November 5, 1999 (incorporated
    by reference to Exhibit 3.2 to the quarterly report on
    Form 10-Q filed by Charter Communications, Inc. on
    November 14, 2001 (File No. 000-27927)).
3
.2(b)
Fourth Amendment to Amended and Restated By-Laws
    of Charter Communications, Inc. adopted as of October 3,
    2003 (incorporated by reference to Exhibit No. 3.3 to
    the quarterly report on Form 10-Q filed by Charter
    Communications, Inc. on November 3, 2003 (File
    No. 000-27927)).
3
.2(c)
Fifth Amendment to Amended and Restated By-Laws
    of Charter Communications, Inc. adopted as of October 28,
    2003 (incorporated by reference to Exhibit No. 3.3 to
    the quarterly report on Form 10-Q filed by Charter
    Communications, Inc. on November 3, 2003 (File
    No. 000-27927)).
3
.2(d)
Sixth Amendment to the Amended and Restated
    By-Laws of Charter Communications, Inc. adopted as of
    September 24, 2004 (incorporated by reference to
    Exhibit 99.1 to the current report on Form 8-K of
    Charter Communications, Inc. filed on September 30, 2004
    (File No. 000-27927)).
3
.2(e)
Seventh Amendment to the Amended and Restated
    By-Laws of Charter Communications, Inc. adopted as of
    October 21, 2004 (incorporated by reference to
    Exhibit 3.1 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 22, 2004
    (File No. 000-27927)).
3
.2(f)
Eighth Amendment to the Amended and Restated
    By-Laws of Charter Communications, Inc. adopted as of
    December 14, 2004 (incorporated by reference to
    Exhibit 3.1 to the current report on Form 8-K of
    Charter Communications, Inc. filed on December 15,
    2004 (File No. 000-27927)).
4
.1
Indenture dated May 30, 2001 between Charter
    Communications, Inc. and BNY Midwest Trust Company as Trustee
    governing 4.75% Convertible Senior Notes due 2006
    (incorporated by reference to Exhibit 4.1(b) to the current
    report on Form 8-K filed by Charter Communications, Inc. on
    June 1, 2001 (File No. 000-27927)).
4
.2
Certificate of Designation of Series A
    Convertible Redeemable Preferred Stock of Charter
    Communications, Inc. and related Certificate of Correction of
    Certificate of Designation (incorporated by reference to
    Exhibit 3.1 to the quarterly report on Form 10-Q filed
    by Charter Communications, Inc. on November 14, 2001 (File
    No. 000-27927)).
II-4
Table of Contents
Exhibit
Description
4
.3
Indenture relating to the 5.875% convertible
    senior notes due 2009, dated as of November 2004, by and among
    Charter Communications, Inc. and Wells Fargo Bank, N.A. as
    trustee (incorporated by reference to Exhibit 10.1 to the
    current report on Form 8-K of Charter Communications, Inc.
    filed on November 30, 2004 (File No. 000-27927)).
4
.4
5.875% convertible senior notes due 2009 Resale
    Registration Rights Agreement, dated November 22, 2004, by
    and among Charter Communications, Inc. and Citigroup Global
    Markets Inc. and Morgan Stanley and Co. Incorporated as
    representatives of the initial purchasers (incorporated by
    reference to Exhibit 10.2 to the current report on
    Form 8-K of Charter Communications, Inc. filed on
    November 30, 2004 (File No. 000-27927)).
4
.5
Share Loan Registration Rights Agreement, dated
    November 22, 2004, by and between Charter Communications,
    Inc. and Citigroup Global Markets Inc. (incorporated by
    reference to Exhibit 10.3 to the current report on
    Form 8-K of Charter Communications, Inc. filed on
    November 30, 2004 (File No. 000-27927)).
4
.6
Collateral Pledge and Security Agreement, dated
    as of November 22, 2004, by and between Charter
    Communications, Inc. and Wells Fargo Bank, N.A. as trustee and
    collateral agent (incorporated by reference to Exhibit 10.4
    to the current report on Form 8-K of Charter
    Communications, Inc. filed on November 30, 2004 (File
    No. 000-27927)).
4
.7
Collateral Pledge and Security Agreement, dated
    as of November 22, 2004 among Charter Communications, Inc.,
    Charter Communications Holding Company, LLC and Wells Fargo
    Bank, N.A. as trustee and collateral agent (incorporated by
    reference to Exhibit 10.5 to the current report on
    Form 8-K of Charter Communications, Inc. filed on
    November 30, 2004 (File No. 000-27927)).
5
.1**
Opinion of Gibson, Dunn & Crutcher LLP
    regarding legality.
10
.1
Indenture, dated as of April 9, 1998, by
    among Renaissance Media (Louisiana) LLC, Renaissance Media
    (Tennessee) LLC, Renaissance Media Capital Corporation,
    Renaissance Media Group LLC and United States Trust Company of
    New York, as trustee (incorporated by reference to
    Exhibit 4.1 to the registration statement on Forms S-4
    of Renaissance Media Group LLC, Renaissance Media (Tennessee)
    LLC, Renaissance Media (Louisiana) LLC and Renaissance Media
    Capital Corporation filed on June 12, 1998 (File
    No. 333-56679)).
10
.2
Indenture relating to the 8.250% Senior
    Notes due 2007, dated as of March 17, 1999, between Charter
    Communications Holdings, LLC, Charter Communications Holdings
    Capital Corporation and Harris Trust and Savings Bank
    (incorporated by reference to Exhibit 4.1(a) to Amendment
    No. 2 to the registration statement on Form S-4 of
    Charter Communications Holdings, LLC and Charter Communications
    Holdings Capital Corporation filed on June 22, 1999 (File
    No. 333-77499)).
10
.3(a)
Indenture relating to the 8.625% Senior
    Notes due 2009, dated as of March 17, 1999, among Charter
    Communications Holdings, LLC, Charter Communications Holdings
    Capital Corporation and Harris Trust and Savings Bank
    (incorporated by reference to Exhibit 4.2(a) to Amendment
    No. 2 to the registration statement on Form S-4 of
    Charter Communications Holdings, LLC and Charter Communications
    Holdings Capital Corporation filed on June 22, 1999 (File
    No. 333-77499)).
10
.3(b)
First Supplemental Indenture relating to the
    8.625% Senior Notes due 2009, dated as of September 28,
    2005, among Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee (incorporated by reference to
    Exhibit 10.3 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 4, 2005
    (File No. 000-27927)).
II-5
Table of Contents
Exhibit
Description
10
.4(a)
Indenture relating to the 9.920% Senior
    Discount Notes due 2011, dated as of March 17, 1999, among
    Charter Communications Holdings, LLC, Charter Communications
    Holdings Capital Corporation and Harris Trust and Savings Bank
    (incorporated by reference to Exhibit 4.3(a) to Amendment
    No. 2 to the registration statement on Form S-4 of
    Charter Communications Holdings, LLC and Charter Communications
    Holdings Capital Corporation filed on June 22, 1999 (File
    No. 333-77499)).
10
.4(b)
First Supplemental Indenture relating to the
    9.920% Senior Discount Notes due 2011, dated as of
    September 28, 2005, among Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee (incorporated by reference to
    Exhibit 10.4 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 4, 2005
    (File No. 000-27927)).
10
.5(a)
Indenture relating to the 10.00% Senior
    Notes due 2009, dated as of January 12, 2000, between
    Charter Communications Holdings, LLC, Charter Communications
    Holdings Capital Corporation and Harris Trust and Savings Bank
    (incorporated by reference to Exhibit 4.1(a) to the
    registration statement on Form S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on January 25, 2000 (File
    No. 333-95351)).
10
.5(b)
First Supplemental Indenture relating to the
    10.00% Senior Notes due 2009, dated as of September 28,
    2005, between Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee (incorporated by reference to
    Exhibit 10.5 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 4, 2005
    (File No. 000-27927)).
10
.6(a)
Indenture relating to the 10.25% Senior
    Notes due 2010, dated as of January 12, 2000, among Charter
    Communications Holdings, LLC, Charter Communications Holdings
    Capital Corporation and Harris Trust and Savings Bank
    (incorporated by reference to Exhibit 4.2(a) to the
    registration statement on Form S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on January 25, 2000 (File
    No. 333-95351)).
10
.6(b)
First Supplemental Indenture relating to the
    10.25% Senior Notes due 2010, dated as of September 28,
    2005, among Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee (incorporated by reference to
    Exhibit 10.6 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 4, 2005
    (File No. 000-27927)).
10
.7(a)
Indenture relating to the 11.75% Senior
    Discount Notes due 2010, dated as of January 12, 2000,
    among Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and Harris Trust and
    Savings Bank (incorporated by reference to Exhibit 4.3(a)
    to the registration statement on Form S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on January 25, 2000 (File
    No. 333-95351)).
10
.7(b)
First Supplemental Indenture relating to the
    11.75% Senior Discount Notes due 2010, among Charter
    Communications Holdings, LLC, Charter Communications Holdings
    Capital Corporation and BNY Midwest Trust Company as Trustee,
    dated as of September 28, 2005 (incorporated by reference
    to Exhibit 10.7 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 4, 2005
    (File No. 000-27927)).
10
.8(a)
Indenture dated as of January 10, 2001
    between Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee governing 10.750% senior notes due
    2009 (incorporated by reference to Exhibit 4.2(a) to the
    registration statement on Form S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on February 2, 2001 (File
    No. 333-54902)).
II-6
Table of Contents
Exhibit
Description
10
.8(b)
First Supplemental Indenture dated as of
    September 28, 2005 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 10.750% Senior Notes
    due 2009 (incorporated by reference to Exhibit 10.8 to the
    current report on Form 8-K of Charter
    Communications, Inc. filed on October 4, 2005 (File
    No. 000-27927)).
10
.9(a)
Indenture dated as of January 10, 2001
    between Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee governing 11.125% senior notes due
    2011 (incorporated by reference to Exhibit 4.2(b) to the
    registration statement on Form S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on February 2, 2001 (File
    No. 333-54902)).
10
.9(b)
First Supplemental Indenture dated as of
    September 28, 2005, between Charter Communications
    Holdings, LLC, Charter Communications Capital Corporation and
    BNY Midwest Trust Company governing 11.125% Senior Notes due
    2011 (incorporated by reference to Exhibit 10.9 to the
    current report on Form 8-K of Charter
    Communications, Inc. filed on October 4, 2005 (File
    No. 000-27927)).
10
.10(a)
Indenture dated as of January 10, 2001
    between Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee governing 13.500% senior discount
    notes due 2011 (incorporated by reference to Exhibit 4.2(c)
    to the registration statement on Form S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on February 2, 2001 (File
    No. 333-54902)).
10
.10(b)
First Supplemental Indenture dated as of
    September 28, 2005, between Charter Communications
    Holdings, LLC, Charter Communications Holdings Capital
    Corporation and BNY Midwest Trust Company as Trustee governing
    13.500% Senior Discount Notes due 2011 (incorporated by
    reference to Exhibit 10.10 to the current report on
    Form 8-K of Charter Communications, Inc. filed on
    October 4, 2005 (File No. 000-27927)).
10
.11(a)
Indenture dated as of May 15, 2001 between
    Charter Communications Holdings, LLC, Charter Communications
    Holdings Capital Corporation and BNY Midwest Trust Company as
    Trustee governing 9.625% Senior Notes due 2009
    (incorporated by reference to Exhibit 10.2(a) to the
    current report on Form 8-K filed by Charter Communications,
    Inc. on June 1, 2001 (File No. 000-27927)).
10
.11(b)
First Supplemental Indenture dated as of
    January 14, 2002 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 9.625% Senior
    Notes due 2009 (incorporated by reference to
    Exhibit 10.2(a) to the current report on Form 8-K
    filed by Charter Communications, Inc. on January 15, 2002
    (File No. 000-27927)).
10
.11(c)
Second Supplemental Indenture dated as of
    June 25, 2002 between Charter Communications Holdings, LLC,
    Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 9.625% Senior
    Notes due 2009 (incorporated by reference to Exhibit 4.1 to
    the quarterly report on Form 10-Q filed by Charter
    Communications, Inc. on August 6, 2002 (File
    No. 000-27927)).
10
.11(d)
Third Supplemental Indenture dated as of
    September 28, 2005 between Charter Communications Holdings,
    LLC, Charter Communications Capital Corporation and BNY Midwest
    Trust Company as Trustee governing 9.625% Senior Notes due 2009
    (incorporated by reference to Exhibit 10.11 to the current
    report on Form 8-K of Charter Communications, Inc.
    filed on October 4, 2005 (File No. 000-27927)).
II-7
Table of Contents
Exhibit
Description
10
.12(a)
Indenture dated as of May 15, 2001 between
    Charter Communications Holdings, LLC, Charter Communications
    Holdings Capital Corporation and BNY Midwest Trust Company as
    Trustee governing 10.000% Senior Notes due 2011
    (incorporated by reference to Exhibit 10.3(a) to the
    current report on Form 8-K filed by Charter Communications,
    Inc. on June 1, 2001 (File No. 000-27927)).
10
.12(b)
First Supplemental Indenture dated as of
    January 14, 2002 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 10.000% Senior
    Notes due 2011 (incorporated by reference to
    Exhibit 10.3(a) to the current report on Form 8-K
    filed by Charter Communications, Inc. on January 15, 2002
    (File No. 000-27927)).
10
.12(c)
Second Supplemental Indenture dated as of
    June 25, 2002 between Charter Communications Holdings, LLC,
    Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 10.000% Senior
    Notes due 2011 (incorporated by reference to Exhibit 4.2 to
    the quarterly report on Form 10-Q filed by Charter
    Communications, Inc. on August 6, 2002 (File
    No. 000-27927)).
10
.12(d)
Third Supplemental Indenture dated as of
    September 28, 2005 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing the 10.000% Senior
    Notes due 2011 (incorporated by reference to
    Exhibit 10.12 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 4, 2005
    (File No. 000-27927)).
10
.13(a)
Indenture dated as of May 15, 2001 between
    Charter Communications Holdings, LLC, Charter Communications
    Holdings Capital Corporation and BNY Midwest Trust Company as
    Trustee governing 11.750% Senior Discount Notes due 2011
    (incorporated by reference to Exhibit 10.4(a) to the
    current report on Form 8-K filed by Charter Communications,
    Inc. on June 1, 2001 (File No. 000-27927)).
10
.13(b)
First Supplemental Indenture dated as of
    September 28, 2005 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 11.750% Senior
    Discount Notes due 2011 (incorporated by reference to
    Exhibit 10.13 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 4, 2005
    (File No. 000-27927)).
10
.14
4.75% Mirror Note in the principal amount of
    $632.5 million dated as of May 30, 2001, made by
    Charter Communications Holding Company, LLC, a Delaware limited
    liability company, in favor of Charter Communications, Inc., a
    Delaware corporation (incorporated by reference to
    Exhibit 4.5 to the quarterly report on Form 10-Q filed
    by Charter Communications, Inc. on August 6, 2002 (File
    No. 000-27927)).
10
.15(a)
Indenture dated as of January 14, 2002
    between Charter Communications Holdings, LLC, Charter
    Communications Holdings Capital Corporation and BNY Midwest
    Trust Company as Trustee governing 12.125% Senior Discount
    Notes due 2012 (incorporated by reference to
    Exhibit 10.4(a) to the current report on Form 8-K
    filed by Charter Communications, Inc. on January 15, 2002
    (File No. 000-27927)).
10
.15(b)
First Supplemental Indenture dated as of
    June 25, 2002 between Charter Communications Holdings, LLC,
    Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 12.125% Senior
    Discount Notes due 2012 (incorporated by reference to
    Exhibit 4.3 to the quarterly report on Form 10-Q filed
    by Charter Communications, Inc. on August 6, 2002 (File
    No. 000-27927)).
10
.15(c)
Second Supplemental Indenture dated as of
    September 28, 2005 between Charter Communications Holdings,
    LLC, Charter Communications Holdings Capital Corporation and BNY
    Midwest Trust Company as Trustee governing 12.125% Senior
    Discount Notes due 2012 (incorporated by reference to
    Exhibit 10.14 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 4, 2005
    (File No. 000-27927)).
II-8
Table of Contents
Exhibit
Description
10
.16
Indenture relating to the 10.25% Senior
    Notes due 2010, dated as of September 23, 2003, among
    CCH II, LLC, CCH II Capital Corporation and Wells
    Fargo Bank, National Association (incorporated by reference to
    Exhibit 10.1 to the current report on Form 8-K of
    Charter Communications Inc. filed on September 26, 2003
    (File No. 000-27927)).
10
.17
Indenture relating to the 8 3/4% Senior
    Notes due 2013, dated as of November 10, 2003, by and among
    CCO Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo
    Bank, N.A., as trustee (incorporated by reference to
    Exhibit 4.1 to Charter Communications, Inc.'s current
    report on Form 8-K filed on November 12, 2003 (File
    No. 000-27927)).
10
.18
Indenture relating to the 8% senior second
    lien notes due 2012 and 8 3/8% senior second lien notes due
    2014, dated as of April 27, 2004, by and among Charter
    Communications Operating, LLC, Charter Communications Operating
    Capital Corp. and Wells Fargo Bank, N.A. as trustee
    (incorporated by reference to Exhibit 10.32 to Amendment
    No. 2 to the registration statement on Form S-4 of
    CCH II, LLC filed on May 5, 2004 (File
    No. 333-111423)).
10
.19
Share Lending Agreement, dated as of
    November 22, 2004 between Charter Communications, Inc.,
    Citigroup Global Markets Limited, through Citigroup Global
    Markets, Inc. (incorporated by reference to Exhibit 10.6 to
    the current report on Form 8-K of Charter Communications,
    Inc. filed on November 30, 2004 (File No. 000-27927)).
10
.20
Holdco Mirror Notes Agreement, dated as of
    November 22, 2004, by and between Charter Communications,
    Inc. and Charter Communications Holding Company, LLC
    (incorporated by reference to Exhibit 10.7 to the current
    report on Form 8-K of Charter Communications, Inc. filed on
    November 30, 2004 (File No. 000-27927)).
10
.21
Unit Lending Agreement, dated as of
    November 22, 2004, by and between Charter Communications,
    Inc. and Charter Communications Holding Company, LLC
    (incorporated by reference to Exhibit 10.8 to the current
    report on Form 8-K of Charter Communications, Inc. filed on
    November 30, 2004 (File No. 000-27927)).
10
.22
5.875% Mirror Convertible Senior Note due 2009,
    in the principal amount of $862,500,000 dated as of
    November 22, 2004 made by Charter Communications Holding
    Company, LLC, a Delaware limited liability company, in favor of
    Charter Communications, Inc., a Delaware limited liability
    company, in favor of Charter Communications, Inc., a Delaware
    corporation (incorporated by reference to Exhibit 10.9 to
    the current report on Form 8-K of Charter Communications,
    Inc. filed on November 30, 2004 (File No. 000-27927)).
10
.23
Indenture dated as of December 15, 2004 among CCO
    Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo Bank,
    N.A., as trustee (incorporated by reference to Exhibit 10.1
    to the current report on Form 8-K of CCO Holdings, LLC filed on
    December 21, 2004 (File No. 333-112593)).
10
.24
Exchange and Registration Rights Agreement dated
    December 15, 2004 by and among CCO Holdings, LLC, CCO Holdings
    Capital Corp, on the one hand, and Credit Suisse First Boston
    LLC and Citigroup Global Markets Inc, on the other hand, as
    representatives (incorporated by reference to Exhibit 10.2 to
    the current report on Form 8-K of CCO Holdings, LLC filed on
    December 21, 2004 (File No. 333-112593)).
10
.25
Indenture dated as of September 28, 2005
    among CCH I Holdings, LLC and CCH I Holdings
    Capital Corp., as Issuers and Charter Communications Holdings,
    LLC, as Parent Guarantor, and The Bank of New York Trust
    Company, NA, as Trustee, governing: 11.125% Senior Accreting
    Notes due 2014, 9.920% Senior Accreting Notes due 2014, 10.000%
    Senior Accreting Notes due 2014, 11.75% Senior Accreting Notes
    due 2014, 13.50% Senior Accreting Notes due 2014, 12.125% Senior
    Accreting Notes due 2015 (incorporated by reference to
    Exhibit 10.1 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 4, 2005
    (File No. 000-27927)).
II-9
Table of Contents
Exhibit
Description
10
.26
Indenture dated as of September 28, 2005
    among CCH I, LLC and CCH I Capital Corp., as
    Issuers, Charter Communications Holdings, LLC, as Parent
    Guarantor, and The Bank of New York Trust Company, NA, as
    Trustee, governing 11.00% Senior Secured Notes due 2015
    (incorporated by reference to Exhibit 10.2 to the current
    report on Form 8-K of Charter Communications, Inc.
    filed on October 4, 2005 (File No. 000-27927)).
10
.27
Pledge Agreement made by CCH I, LLC in favor
    of The Bank of New York Trust Company, NA, as Collateral Agent
    dated as of September 28, 2005 (incorporated by reference
    to Exhibit 10.15 to the current report on Form 8-K of
    Charter Communications, Inc. filed on October 4, 2005 (File
    No. 000-27927)).
10
.28
Consulting Agreement, dated as of March 10,
    1999, by and between Vulcan Northwest Inc., Charter
    Communications, Inc. (now called Charter Investment, Inc.) and
    Charter Communications Holdings, LLC (incorporated by reference
    to Exhibit 10.3 to Amendment No. 4 to the registration
    statement on Form S-4 of Charter Communications Holdings,
    LLC and Charter Communications Holdings Capital Corporation
    filed on July 22, 1999 (File No. 333-77499)).
10
.29
Letter Agreement, dated September 21, 1999,
    by and among Charter Communications, Inc., Charter Investment,
    Inc., Charter Communications Holding Company, Inc. and Vulcan
    Ventures Inc. (incorporated by reference to Exhibit 10.22
    to Amendment No. 3 to the registration statement on
    Form S-1 of Charter Communications, Inc. filed on
    October 18, 1999 (File No. 333-83887)).
10
.30
Form of Exchange Agreement, dated as of
    November 12, 1999 by and among Charter Investment, Inc.,
    Charter Communications, Inc., Vulcan Cable III Inc. and
    Paul G. Allen (incorporated by reference to Exhibit 10.13
    to Amendment No. 3 to the registration statement on
    Form S-1 of Charter Communications, Inc. filed on
    October 18, 1999 (File No. 333-83887)).
10
.31(a)
First Amended and Restated Mutual Services
    Agreement, dated as of December 21, 2000, by and between
    Charter Communications, Inc., Charter Investment, Inc. and
    Charter Communications Holding Company, LLC (incorporated by
    reference to Exhibit 10.2(b) to the registration statement
    on Form S-4 of Charter Communications Holdings, LLC and
    Charter Communications Holdings Capital Corporation filed on
    February 2, 2001 (File No. 333-54902)).
10
.31(b)
Letter Agreement, dated June 19, 2003, by
    and among Charter Communications, Inc., Charter Communications
    Holding Company, LLC and Charter Investment, Inc. regarding
    Mutual Services Agreement (incorporated by reference to Exhibit
    No. 10.5(b) to the quarterly report on Form 10-Q filed
    by Charter Communications, Inc. on August 5, 2003 (File
    No. 000-27927)).
10
.31(c)
Second Amended and Restated Mutual Services
    Agreement, dated as of June 19, 2003 between Charter
    Communications, Inc. and Charter Communications Holding Company,
    LLC (incorporated by reference to Exhibit 10.5(a) to the
    quarterly report on Form 10-Q filed by Charter
    Communications, Inc. on August 5, 2003 (File
    No. 000-27927)).
10
.32
Amended and Restated Limited Liability Company
    Agreement for Charter Communications Holding Company, LLC made
    as of August 31, 2001 (incorporated by reference to
    Exhibit 10.9 to the quarterly report on Form 10-Q
    filed by Charter Communications, Inc. on November 14, 2001
    (File No. 000-27927)).
10
.33
Amended and Restated Limited Liability Company
    Agreement for CC VIII, LLC, dated as of March 31,
    2003 (incorporated by reference to Exhibit 10.27 to the
    annual report on Form 10-K of Charter Communications, Inc.
    filed on April 15, 2003 (File No. 000-27927)).
II-10
Table of Contents
Exhibit
Description
10
.34
Amended and Restated Limited Liability Company
    Agreement of Charter Communications Operating, LLC, dated as of
    June 19, 2003 (incorporated by reference to
    Exhibit No. 10.2 to the quarterly report on
    Form 10-Q filed by Charter Communications, Inc. on
    August 5, 2003 (File No. 000-27927)).
10
.35
Amended and Restated Management Agreement, dated
    as of June 19, 2003, between Charter Communications
    Operating, LLC and Charter Communications, Inc. (incorporated by
    reference to Exhibit 10.4 to the quarterly report on
    Form 10-Q filed by Charter Communications, Inc. on
    August 5, 2003 (File No. 333-83887)).
10
.36
Amended and Restated Credit Agreement among
    Charter Communications Operating, LLC, CCO Holdings, LLC and
    certain lenders and agents named therein dated April 27,
    2004 (incorporated by reference to Exhibit 10.25 to
    Amendment No. 2 to the registration statement on
    Form S-4 of CCH II, LLC filed on May 5, 2004
    (File No. 333-111423)).
10
.37
Letter Agreement between Charter Communications,
    Inc. and Charter Investment Inc. and Vulcan Cable III Inc.
    amending the Amended and Restated Limited Liability Company
    Agreement of Charter Communications Holding Company, LLC, dated
    as of November 22, 2004 (incorporated by reference to
    Exhibit 10.10 to the current report on Form 8-K of
    Charter Communications, Inc. filed on November 30, 2004
    (File No. 000-27927)).
10
.38(a)
Stipulation of Settlement, dated as of
    January 24, 2005, regarding settlement of Consolidated
    Federal Class Action entitled in Re Charter
    Communications, Inc. Securities Litigation. (incorporated by
    reference to Exhibit 10.48 to the Annual Report on
    Form 10-K filed by Charter Communications, Inc. on
    March 3, 2005 (File No. 000-27927)).
10
.38(b)
Amendment to Stipulation of Settlement, dated as
    of May 23, 2005, regarding settlement of Consolidated
    Federal Class Action entitled In Re Charter Communications, Inc.
    Securities Litigation (incorporated by reference to
    Exhibit 10.35(b) to Amendment No. 3 to the
    registration statement on Form S-1 filed by Charter
    Communications, Inc. on June 8, 2005 (File
    No. 333-121186)).
10
.39
Settlement Agreement and Mutual Release, dated as
    of February 1, 2005, by and among Charter Communications,
    Inc. and certain other insureds, on the other hand, and Certain
    Underwriters at Lloyd's of London and certain subscribers,
    on the other hand. (incorporated by reference to
    Exhibit 10.49 to the annual report on Form 10-K filed
    by Charter Communications, Inc. on March 3, 2005 (File
    No. 000-27927)).
10
.40
Stipulation of Settlement, dated as of
    January 24, 2005, regarding settlement of Federal
    Derivative Action, Arthur J. Cohn v. Ronald L.
    Nelson et al and Charter Communications, Inc. (incorporated by
    reference to Exhibit 10.50 to the annual report on
    Form 10-K filed by Charter Communications, Inc. on
    March 3, 2005 (File No. 000-27927)).
10
.41(a)+
Letter Agreement, dated May 25, 1999,
    between Charter Communications, Inc. and Marc Nathanson
    (incorporated by reference to Exhibit 10.36 to the
    registration statement on Form S-4 of Charter
    Communications Holdings, LLC and Charter Communications Holdings
    Capital Corporation filed on January 25, 2000 (File
    No. 333-95351)).
10
.41(b)+
Letter Agreement, dated March 27, 2000,
    between CC VII Holdings, LLC and Marc Nathanson,
    amending the Letter Agreement dated May 25, 1999
    (incorporated by reference to Exhibit 10.13(b) to the
    annual report on Form 10-K of Charter Communications, Inc.
    filed on April 15, 2003 (File No. 000-27927)).
10
.42(a)+
Charter Communications Holdings, LLC 1999 Option
    Plan (incorporated by reference to Exhibit 10.4 to
    Amendment No. 4 to the registration statement on
    Form S-4 of Charter Communications Holdings, LLC and
    Charter Communications Holdings Capital Corporation filed on
    July 22, 1999 (File No. 333-77499)).
II-11
Table of Contents
Exhibit
Description
10
.42(b)+
Assumption Agreement regarding Option Plan, dated
    as of May 25, 1999, by and between Charter Communications
    Holdings, LLC and Charter Communications Holding Company, LLC
    (incorporated by reference to Exhibit 10.13 to Amendment
    No. 6 to the registration statement on Form S-4 of
    Charter Communications Holdings, LLC and Charter Communications
    Holdings Capital Corporation filed on August 27, 1999 (File
    No. 333-77499)).
10
.42(c)+
Form of Amendment No. 1 to the Charter
    Communications Holdings, LLC 1999 Option Plan (incorporated by
    reference to Exhibit 10.10(c) to Amendment No. 4 to
    the registration statement on Form S-1 of Charter
    Communications, Inc. filed on November 1, 1999 (File
    No. 333-83887)).
10
.42(d)+
Amendment No. 2 to the Charter
    Communications Holdings, LLC 1999 Option Plan (incorporated by
    reference to Exhibit 10.4(c) to the annual report on
    Form 10-K filed by Charter Communications, Inc. on
    March 30, 2000 (File No. 000-27927)).
10
.42(e)+
Amendment No. 3 to the Charter
    Communications 1999 Option Plan (incorporated by reference to
    Exhibit 10.14(e) to the annual report of Form 10-K of
    Charter Communications, Inc. filed on March 29, 2002 (File
    No. 000-27927)).
10
.42(f)+
Amendment No. 4 to the Charter
    Communications 1999 Option Plan (incorporated by reference to
    Exhibit 10.10(f) to the annual report on Form 10-K of
    Charter Communications, Inc. filed on April 15, 2003 (File
    No. 000-27927)).
10
.43(a)+
Charter Communications, Inc. 2001 Stock Incentive
    Plan (incorporated by reference to Exhibit 10.25 to the
    quarterly report on Form 10-Q filed by Charter
    Communications, Inc. on May 15, 2001 (File
    No. 000-27927)).
10
.43(b)+
Amendment No. 1 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan (incorporated by
    reference to Exhibit 10.11(b) to the annual report on
    Form 10-K of Charter Communications, Inc. filed on
    April 15, 2003 (File No. 000-27927)).
10
.43(c)+
Amendment No. 2 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan (incorporated by
    reference to Exhibit 10.10 to the quarterly report on
    Form 10-Q filed by Charter Communications, Inc. on
    November 14, 2001 (File No. 000-27927)).
10
.43(d)+
Amendment No. 3 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan effective
    January 2, 2002 (incorporated by reference to
    Exhibit 10.15(c) to the annual report of Form 10-K of
    Charter Communications, Inc. filed on March 29, 2002 (File
    No. 000-27927)).
10
.43(e)+
Amendment No. 4 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan (incorporated by
    reference to Exhibit 10.11(e) to the annual report on
    Form 10-K of Charter Communications, Inc. filed on
    April 15, 2003 (File No. 000-27927)).
10
.43(f)+
Amendment No. 5 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan (incorporated by
    reference to Exhibit 10.11(f) to the annual report on
    Form 10-K of Charter Communications, Inc. filed on
    April 15, 2003 (File No. 000-27927)).
10
.43(g)+*
Amendment No. 6 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan effective
    December 23, 2004.
10
.43(h)+*
Amendment No. 7 to the Charter
    Communications, Inc. 2001 Stock Incentive Plan effective
    August 23, 2005.
10
.43(i)+
Description of Long-Term Incentive Program to the
    Charter Communications, Inc. 2001 Stock Incentive Plan
    (incorporated by reference to Exhibit 10.11(g) to the
    annual report on Form 10-K filed by Charter Communications,
    Inc. on March 15, 2004 (File No. 000-27927)).
10
.44(a)+
Employment Offer Letter, dated December 2,
    2003 by and between Charter Communications, Inc. and Derek Chang
    (incorporated by reference to Exhibit 10.24 to the annual
    report on Form 10-K filed by Charter Communications, Inc.
    on March 15, 2004 (File No. 000-27927)).
II-12
Table of Contents
Exhibit
Description
10
.44(b)+
Amendment to Employment Offer Letter, dated
    January 27, 2005, by and between Charter Communications,
    Inc. and Derek Chang (incorporated by reference to
    Exhibit 99.1 to the current report on Form 8-K of
    Charter Communications, Inc. filed January 28, 2005 (File
    No. 000-27927)).
10
.45+
Employment Agreement between Charter
    Communications, Inc. and Margaret A. "Maggie"
    Bellville, entered into as of April 27, 2003 (Incorporated
    by reference to Exhibit 10.1 to the quarterly report on
    Form 10-Q filed by Charter Communications, Inc. on
    November 3, 2003 (File No. 000-27927)).
10
.46+
Separation Agreement and Release for Margaret A.
    Bellville, dated as of September 16, 2004 (incorporated by
    reference to Exhibit 10.1 to the quarterly report on
    Form 10-Q filed by Charter Communications, Inc. on
    November 4, 2004 (File No. 000-27927)).
10
.47+
Executive Services Agreement, dated as of
    January 17, 2005, between Charter Communications, Inc. and
    Robert P. May (incorporated by reference to Exhibit 99.1 to
    the current report on Form 8-K of Charter Communications,
    Inc. filed on January 21, 2005 (File No. 000-27927)).
10
.48+
Separation Agreement and Release for
    Steven A. Schumm, dated as of February 8, 2005
    (incorporated by reference to Exhibit 99.1 to the current
    report on Form 8-K filed by Charter Communications, Inc. on
    February 11, 2005 (File No. 000-27927)).
10
.49+
Employment Agreement, dated as of October 8,
    2001, by and between Carl E. Vogel and Charter Communications,
    Inc. (Incorporated by reference to Exhibit 10.4 to the
    quarterly report on Form 10-Q filed by Charter
    Communications, Inc. on November 14, 2001 (File
    No. 000-27927)).
10
.50+
Separation Agreement and Release for Carl E.
    Vogel, dated as of February 17, 2005 (incorporated by
    reference to Exhibit  99.1 to the current report on
    Form 8-K filed by Charter Communications, Inc. on
    February 22, 2005 (File No. 000-27927)).
10
.51+
Separation Agreement and Release for
    Thomas A. Cullen, dated as of March 15, 2005
    (incorporated by reference to Exhibit 99.1 to the current
    report on Form 8-K filed by Charter Communications, Inc. on
    March 17, 2005 (File No. 000-27927)).
10
.52+
Description of Charter Communications, Inc. 2005
    Executive Bonus Plan (incorporated by reference to
    Exhibit 10.51 to the annual report on Form 10-K filed
    by Charter Communications, Inc. on March 3, 2005 (File
    No. 000-27927)).
10
.53+
Employment Agreement, dated as of April 1, 2005,
    by and between Michael J. Lovett and Charter Communications,
    Inc. (incorporated by reference to Exhibit 10.11 to the
    quarterly report on Form 10-Q filed by Charter
    Communications, Inc. on May 3, 2005 (File
    No. 000-27927)).
10
.54+
Letter Agreement, dated April 15, 2005, by
    and between Charter Communications, Inc. and Paul E. Martin
    (incorporated by reference to Exhibit 99.1 to the current
    report on Form 8-K of Charter Communications, Inc. filed
    April 19, 2005 (File No. 000-27927)).
10
.55+
2005 Executive Cash Award Plan dated as of
    June 9, 2005 (incorporated by reference to
    Exhibit 99.1 to the current report on Form 8-K of
    Charter Communications, Inc. filed June 15, 2005 (File
    No. 000-27927)).
10
.56+
Restricted Stock Agreement, dated as of
    July 13, 2005, by and between Robert P. May and
    Charter Communications, Inc. (incorporated by reference to
    Exhibit 99.1 to the current report on Form 8-K of
    Charter Communications, Inc. filed July 13, 2005 (File
    No. 000-27927)).
10
.57+
Restricted Stock Agreement, dated as of
    July 13, 2005, by and between Michael J. Lovett and Charter
    Communications, Inc. (incorporated by reference to
    Exhibit 99.2 to the current report on Form 8-K of
    Charter Communications, Inc. filed July 13, 2005 (File
    No. 000-27927)).
II-13
Table of Contents
Exhibit
Description
10
.58+
Employment Agreement, dated as of August 9,
    2005, by and between Neil Smit and Charter Communications, Inc.
    (incorporated by reference to Exhibit 99.1 to the current
    report on Form 8-K of Charter Communications, Inc. filed on
    August 15, 2005 (File No. 000-27927)).
10
.59+
Employment Agreement dated as of
    September 2, 2005, by and between Paul E. Martin and
    Charter Communications, Inc. (incorporated by reference to
    Exhibit 99.1 to the current report on Form 8-K of
    Charter Communications, Inc. filed on September 9, 2005
    (File No. 000-27927)).
10
.60+
Employment Agreement dated as of
    September 2, 2005, by and between Wayne H. Davis and
    Charter Communications, Inc. (incorporated by reference to
    Exhibit 99.2 to the current report on Form 8-K of
    Charter Communications, Inc. filed on September 9, 2005
    (File No. 000-27927)).
21
.1*
Subsidiaries of Charter Communications, Inc.
23
.1*
Consent of KPMG LLP
23
.2**
Consent of Gibson, Dunn & Crutcher LLP
    (included with Exhibit 5.1)
24
.1*
Power of attorney (included in signature page)
*
Filed herewith
**
To be filed
+
Management compensatory plan or arrangement
Item 17.
Undertakings
The Undersigned Registrant Hereby Undertakes
That:
(1) For purpose of determining any liability
    under the Securities Act of 1933, the information omitted from
    the form of prospectus filed as part of this registration
    statement in reliance upon Rule 430A and contained in a
    form of prospectus filed by the registrant pursuant to
    Rule 424(b)(2) or (4) or 497(h) under the Securities
    Act shall be deemed to be part of this registration statement as
    of the time it was declared effective;
(2) For the purpose of determining any
    liability under the Securities Act of 1933, each post-effective
    amendment that contains a form of prospectus shall be deemed to
    be a new registration statement relating to the securities
    offered therein, and the offering of such securities at that
    time shall be deemed to be the initial bona fide offering
    thereof.
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this registration
statement on Form S-1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of
St. Louis, State of Missouri, on October 5, 2005.
CHARTER COMMUNICATIONS, INC.,
Registrant
By:
/s/ PAUL E. MARTIN
Name:        Paul
    E. Martin
Title:
Senior Vice President,
Interim Chief Financial Officer,
Principal Accounting Officer
and Corporate Controller
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints Neil
Smit, Paul E. Martin and Thomas J. Hearity, with full power to
act as his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to the
registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any other regulatory
authority, granting unto said attorney-in-fact and agent, full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed below
by the following persons in the capacities and on the dates
indicated.
Signature
Title
Date
/s/ PAUL G. ALLEN
Paul G. Allen
Chairman of the Board of Directors
October 5, 2005
/s/ NEIL SMIT
Neil Smit
President, Chief Executive Officer, Director
    (Principal Executive Officer)
October 5, 2005
/s/ PAUL E. MARTIN
Paul E. Martin
Senior Vice President,
Interim Chief Financial Officer,
Principal Accounting Officer and
Corporate Controller (Principal Financial Officer and Principal
    Accounting Officer)
October 5, 2005
/s/ W. LANCE CONN
W. Lance Conn
Director
October 5, 2005
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Signature
Title
Date
/s/ NATHANIEL A. DAVIS
Nathaniel A. Davis
Director
September 20, 2005
/s/ JONATHAN L. DOLGEN
Jonathan L. Dolgen
Director
September 23, 2005
/s/ ROBERT P. MAY
Robert P. May
Director
October 5, 2005
/s/ DAVID C. MERRITT
David C. Merritt
Director
October 5, 2005
/s/ MARC B. NATHANSON
Marc B. Nathanson
Director
October 5, 2005
/s/ JO ALLEN PATTON
Jo Allen Patton
Director
October 5, 2005
/s/ JOHN H. TORY
John H. Tory
Director
October 5, 2005
/s/ LARRY W. WANGBERG
Larry W. Wangberg
Director
September 21, 2005
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