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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
                                   FORM 10-K
(MARK ONE)
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
                      FOR THE YEAR ENDED DECEMBER 31, 2000
                                       OR
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
          FOR THE TRANSACTION PERIOD FROM                TO
                          COMMISSION FILE NUMBER: 000-27927

                            CHARTER COMMUNICATIONS, INC.
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                                        
                 DELAWARE                                  43-1857213
     (STATE OR OTHER JURISDICTION OF                    (I.R.S. EMPLOYER
      INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)

   12444 POWERSCOURT DRIVE -- SUITE 100
           ST. LOUIS, MISSOURI                               63131
 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                  (ZIP CODE)


                                 (314) 965-0555
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                     CLASS A COMMON STOCK, $.001 PAR VALUE
                    5.75% CONVERTIBLE SENIOR NOTES DUE 2005

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     Aggregate market value of the registrant of outstanding Class A Common
Stock held by non-affiliates of the registrant at January 31, 2001 was
approximately $4.29 billion, computed based on the closing sale price as quoted
on the NASDAQ National Market System on that date. For purposes of this
calculation only, directors, executive officers and the principal controlling
shareholder of the registrant are deemed to be affiliates of the registrant.

     There were 233,718,422 shares of Class A Common Stock outstanding as of
January 31, 2001. There were 50,000 shares of Class B Common Stock outstanding
as of the same date.

     DOCUMENTS INCORPORATED BY REFERENCE:  Portions of the Proxy Statement for
the 2001 Annual Meeting of Shareholders are incorporated by reference into Part
III.
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                          CHARTER COMMUNICATIONS, INC.

               FORM 10-K -- FOR THE YEAR ENDED DECEMBER 31, 2000

                               TABLE OF CONTENTS



                                                                        PAGE
                                                                        ----
                                                                  
                                   PART I

Item 1.   Business....................................................    4
Item 2.   Properties..................................................   27
Item 3.   Legal Proceedings...........................................   27
Item 4.   Submission of Matters to a Vote of Security Holders.........   28

                                  PART II

Item 5.   Market for Registrant's Common Equity and Related
          Stockholder Matters.........................................   29
Item 6.   Selected Financial Data.....................................   30
Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................   30
Item 7.a  Quantitative and Qualitative Disclosure about Market Risk...   51
Item 8.   Financial Statements and Supplementary Data.................   52
Item 9.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure....................................   52

                                  PART III

Item 10.  Directors and Executive Officers of the Registrant..........   52
Item 11.  Executive Compensation......................................   53
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management..................................................   53
Item 13.  Certain Relationships and Related Transactions..............   53

                                  PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form
          8-K.........................................................   53
SIGNATURES............................................................   65


     This Annual Report on Form 10-K is for the year ended December 31, 2000.
This Annual Report modifies and supersedes documents filed prior to this Annual
Report. The Securities and Exchange Commission (SEC) allows us to "incorporate
by reference" information that we file with the SEC, which means that we can
disclose important information to you by referring you directly to those
documents. Information incorporated by reference is considered to be part of
this Annual Report. In addition, information that we file with the SEC in the
future will automatically update and supersede information contained in this
Annual Report. In this Annual Report, "we," "us" and "our" refer to Charter
Communications, Inc., Charter Communications Holding Company, LLC and its
subsidiaries.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     This Annual Report includes forward-looking statements 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 Annual
Report may be identified by the use of forward-looking words such as "believe,"
"expect," "anticipate," "should," "planned," "will," "may," "intend,"
"estimate," and "potential," among others. Important factors that could cause
actual results to differ materially from the forward-looking statements we make
in this Annual Report are set forth in this Annual Report and in other reports
or documents that we file from time to time with the SEC and include, but are
not limited to:

     - Our plans to offer advanced products and services;

     - Our anticipated capital expenditures for our upgrades and new equipment
       and facilities;

     - Our beliefs regarding the effects of governmental regulation on our
       business;

     - Our ability to effectively compete in a highly competitive and changing
       environment;

     - Our ability to fund anticipated capital expenditures and any future
       acquisitions;

     - Our ability to obtain equipment, inventory and programming as needed and
       at a reasonable price.

     All forward-looking statements attributable to us or a person acting on our
behalf are expressly qualified in their entirety by this cautionary statement.

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                                     PART I

ITEM 1.  BUSINESS.

INTRODUCTION

     Charter Communications, Inc., operating through its subsidiaries (the
"Company"), is the fourth largest operator of cable systems in the United
States. Through our broadband network of coaxial and fiber optic cable, we
provide video, data, interactive and private business network services, to
approximately 6.4 million customers in 40 states. All of our systems offer
traditional analog cable television. We also offer digital television, along
with an array of advanced products and services such as high-speed Internet
access, interactive video programming and video-on-demand, in an increasing
number of our systems. We continue to explore opportunities to offer telephony
through our broadband network. The introduction and roll-out of new products and
services represents an important step toward the realization of our Wired
World(TM) vision, where cable's ability to transmit voice, video and data at
high speeds enables it to serve as the primary platform for the delivery of new
services to the home and workplace.

     Charter Communications, Inc. was organized as a Delaware corporation in
1999 and conducted an initial public offering of its Class A common stock in
November 1999. Certain of our subsidiaries commenced operations under the
"Charter Communications" name in 1994. Our principal executive offices are
located at 12444 Powerscourt Drive, Suite 100, St. Louis, Missouri 63131. Our
telephone number is (314) 965-0555. We have a web site accessible at
http://www.charter.com. The information posted on our web site is not
incorporated into this Annual Report.

GENERAL BUSINESS DEVELOPMENTS IN 2000

     In 2000, we focused on integrating the operations of our newly acquired
systems and improving the cable systems we acquired. In 16 acquisitions
completed in 1999 and 2000, we added approximately 3.9 million customers. These
acquisitions are identified in a chart included in "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations." We
implemented core operating strategies to achieve our high standards for customer
satisfaction and financial and operating performance in each of the newly
acquired systems.

     We also focused in 2000 on the upgrade of our cable systems to more quickly
provide advanced products and services and improve service reliability. Our
upgrade plan emphasizes higher bandwidth capacity and two-way communication
capability, as well as reduction of the number of headend control centers. As a
result of this rebuild effort, by year-end 2002, we expect that 93% of our
customers will be served by systems with bandwidth of 550 megahertz or more.
Complementing our system upgrade in 2000, we emphasized the roll-out of our
digital services, which we believe will serve as the platform for interactive
and other advanced services.

     To finance our acquisitions and the upgrade of our systems, as well as to
pay off certain debt, we issued additional long-term debt and refinanced some of
our existing debt.

     We will continue to evaluate opportunities for new acquisitions and swaps
of our cable systems for systems of other cable operators. Our primary criterion
in considering these opportunities is the potential financial benefits we expect
to ultimately realize as a result of the acquisition or swap. We consider each
acquisition or swap in the context of our overall existing and planned
operations. In particular, we focus on the impact the acquisition or swap may
have on our ability to enhance our operations in existing markets or to develop
major new markets for our operations.

ORGANIZATIONAL STRUCTURE

     Charter Communications, Inc.'s principal asset is an approximate 41% equity
interest and a 100% voting interest in Charter Communications Holding Company,
LLC. Charter Communications Holding Company, through its subsidiaries, owns
cable systems and certain strategic investments. Charter Communications, Inc.
provides management services to Charter Communications Holding Company and its
subsidiaries. As sole

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manager, Charter Communications, Inc. controls the affairs of Charter
Communications Holding Company and its subsidiaries.

OUTSTANDING AND PRO FORMA SHARES OF CHARTER COMMUNICATIONS, INC.

     The following table sets forth information as of January 31, 2001 with
respect to the outstanding shares of common stock of Charter Communications,
Inc. and pro forma for the exchange of membership units in subsidiaries (Charter
Communications Holding Company, LLC and CC VIII, LLC), which are exchangeable
for common shares of Charter Communications, Inc. common stock on a one-for-one
basis at any time.



                                                                         PRO FORMA FOR EXCHANGE OF
                                            AS OF JANUARY 31, 2001         EQUITY IN SUBSIDIARIES
                                          ---------------------------    --------------------------
                                           NUMBER OF      PERCENT OF      NUMBER OF     PERCENT OF
                                            SHARES       TOTAL SHARES      SHARES         SHARES
                                          OUTSTANDING    OUTSTANDING     OUTSTANDING    OUTSTANDING
                                          -----------    ------------    -----------    -----------
                                                                            
Class A Common Stock(a).................  233,718,422        99.98%      233,718,422       39.14%
Class B Common Stock....................       50,000          .02            50,000         .01
                                          -----------       ------       -----------      ------
     Total Common Stock Outstanding.....  233,768,422       100.00%      233,768,422       39.15%
                                          -----------       ======       -----------
Exchangeable Equity in Subsidiaries:
  Charter Investment, Inc.(b)...........                                 217,585,246       36.44
  Vulcan Cable III, Inc.(b).............                                 106,715,233       17.88
  Sellers of Bresnan cable systems(c)...                                  39,011,744        6.53
                                                                         -----------      ------
     Total Pro Forma Common Stock
       Outstanding......................                                 597,080,645      100.00%
                                                                         -----------      ======


---------------
(a) Includes 25,108,387 shares of Class A common stock issued in connection with
    certain acquisitions. These shares are unregistered and subject to certain
    restrictions on transfer.

(b) Assumes exchange of units in Charter Communications Holding Company held by
    such entity. Both Charter Investment, Inc. and Vulcan Cable III, Inc. are
    controlled by Paul G. Allen.

(c) Assumes exchange of units in Charter Communications Holding Company and CC
    VIII, LLC held by such persons.

     OWNERSHIP OF CHARTER COMMUNICATIONS, INC.  Paul G. Allen owns approximately
3.8% of the outstanding capital stock of Charter Communications, Inc. and
controls approximately 93.5% of the voting power of Charter Communications,
Inc.'s capital stock. The remaining equity interests and voting power are held
by the public. Mr. Allen's voting control arises primarily from his ownership of
Charter Communications, Inc.'s high vote Class B common stock, which gives him
voting rights that reflect investments by his affiliates (Charter Investment,
Inc. and Vulcan Cable III, Inc.) in our subsidiary, Charter Communications
Holding Company.

     VULCAN CABLE III INC.  Vulcan Cable III has a 18.6% equity interest and no
voting rights in Charter Communications Holding Company. Vulcan Cable III's
membership units in Charter Communication Holding Company are exchangeable for
shares of Charter Communications, Inc. Class B common stock on a one-for-one
basis at any time. Mr. Allen owns 100% of the outstanding stock of Vulcan Cable
III.

     CHARTER INVESTMENT, INC.  Charter Investment, Inc. has a 38.0% equity
interest and no voting rights in Charter Communications Holding Company. Charter
Investment's membership units in Charter Communications Holding Company are
exchangeable for shares of Charter Communications, Inc. Class B common stock at
any time on a one-for-one basis. Mr. Allen owns approximately 96.8% of the
outstanding capital stock of Charter Investment. The remaining 3.2% equity is
beneficially owned by our founders, Jerald L. Kent, Howard L. Wood and Barry L.
Babcock.

     SELLERS OF BRESNAN CABLE SYSTEMS.  Upon the closing of the Bresnan
acquisition, some of the sellers received a portion of their purchase price in
the form of equity interests in our subsidiaries rather than in cash. The common
membership units in Charter Communications Holding Company and the preferred
member-

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ship units in CC VIII, LLC which were issued to these sellers are exchangeable
for shares of Charter Communications, Inc. Class A common stock on a one-for-one
basis at any time.

     CHARTER COMMUNICATIONS HOLDING COMPANY, LLC.  Charter Communications
Holding Company is the direct 100% parent of Charter Communications Holdings,
LLC. Charter Communications Holding Company is owned as follows:



                                                             EQUITY      VOTING
                                                            OWNERSHIP    POWER
                                                            ---------    ------
                                                                   
Charter Communications, Inc...............................     40.8%      100%
Vulcan Cable III Inc......................................     18.6%       --
Charter Investment, Inc...................................     38.0%       --
Sellers of Bresnan cable systems..........................      2.6%       --
                                                              -----       ---
                                                              100.0%      100%
                                                              =====       ===


     CHARTER COMMUNICATIONS HOLDINGS, LLC.  Charter Holdings is a co-issuer of
publicly held Charter Holdings notes. Charter Holdings owns 100% of Charter
Communications Holdings Capital Corporation, the co-issuer of these notes.
Charter Holdings also owns the subsidiaries that conduct all of our operations,
including the Charter, CC V, CC VI, CC VII and CC VIII Companies described
below.

     OPERATING SUBSIDIARIES.  Charter Holdings owns all of our operating
subsidiaries. There are separate credit facilities for each of four groups of
these operating subsidiaries. As indicated below, these groups include systems
acquired in the acquisitions listed in "Item 13. Management's Discussion and
Analysis of Financial Condition and Results of Operations." These groups consist
of:

     - the Charter Companies, including Charter Operating and its subsidiaries,
       which own or operate all of the cable systems formerly operated by
       Charter Investment, Inc. under the "Charter Communications" name, and the
       cable systems acquired in the following 1999 and 2000 transactions:
       Marcus, American Cable, Greater Media, Helicon, Vista, Rifkin, South
       Miami, Farmington and Capital Cable. The Charter Companies also include
       the issuers of outstanding publicly held notes of a subsidiary acquired
       in the Renaissance acquisition;

     - the CC V and CC VIII Companies, which own or operate all of the cable
       systems acquired in the Avalon, Interlake and Bresnan acquisitions, and
       include co-issuers of outstanding publicly held notes;

     - the CC VI Companies, which own or operate all of the cable systems
       acquired in the Fanch and Kalamazoo acquisitions; and

     - the CC VII Companies, which own or operate all of the cable systems
       acquired in the Falcon acquisition.

ACQUISITIONS COMPLETED IN 2000

     BRESNAN.  In February 2000, we purchased Bresnan Communications Company
Limited Partnership for a total purchase price of approximately $3.1 billion,
consisting of approximately $1.1 billion in cash, $1.0 billion in membership
units in Charter Communications Holding Company and CC VIII, an indirect
subsidiary of Charter Communications Holding Company, and $963.3 million in
assumed debt. The cable systems acquired in the Bresnan acquisition are located
in Michigan, Minnesota, Wisconsin and Nebraska and served approximately 697,400
customers as of December 31, 2000. For the year ended December 31, 2000, these
systems had revenues of approximately $334.7 million.

     KALAMAZOO.  In September 2000, we completed a stock-for-stock merger with
Cablevision of Michigan, Inc., the owner of a cable system in Kalamazoo,
Michigan. In the merger, we issued 11,173,376 shares of our Class A common stock
valued at approximately $170.6 million. After the merger, we contributed 100% of
the equity interests we acquired to Charter Communications Holding Company in
exchange for membership units. Charter Communications Holding Company in turn
contributed these equity interests to Charter Holdings, which in turn
contributed the equity interests to a subsidiary. The Kalamazoo system has

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approximately 52,100 customers as of December 31, 2000 and had revenues of
approximately $21.5 million for the year ended December 31, 2000.

     OTHER ACQUISITIONS.  Also in 2000, we completed other acquisitions for an
aggregate purchase price of $88 million in cash. These systems served
approximately 34,200 customers as of December 31, 2000 and had revenues of
approximately $14.0 million for the year ended December 31, 2000.

PENDING AT&T TRANSACTIONS

     In February 2001, we entered into several agreements with AT&T Broadband,
LLC involving several strategic cable system transactions that will result in a
net addition of approximately 512,000 customers for the Charter cable systems.
In the pending AT&T transactions, we expect to acquire cable systems from AT&T
Broadband serving approximately 574,000 customers in Missouri, Alabama, Nevada
and California for a total of $1.79 billion. A portion of the purchase price
will consist of Charter cable systems valued at $249 million serving
approximately 62,000 customers in Florida. Of the balance of the purchase price,
up to $501.5 million will be paid in Class A common stock and the remainder will
be paid in cash. Charter Holdings and Charter Capital have a commitment for a
bridge loan from Morgan Stanley Senior Funding, Inc. and Goldman Sachs Credit
Partners LP for temporary financing of the cash portion of the purchase price.
We expect to obtain permanent financing through one or more debt or equity
financing transactions or a combination thereof. The acquisition transactions
are expected to close in the second and/or third quarters of 2001, subject to
certain closing conditions and regulatory review.

     Unless otherwise stated in this Annual Report, the operating and financial
data provided do not include the effect of the pending AT&T transactions.

BUSINESS STRATEGY

     Our ultimate objective is to increase our customer base and the amount of
cash flow per customer. To achieve this objective, we are pursuing the following
strategies:

     BUILD AND OPERATE A TECHNOLOGICALLY ADVANCED BROADBAND NETWORK.  We are
upgrading the technical quality and capacity of our existing systems. We will
build out new systems to a minimum bandwidth of 550 megahertz or greater, which
will allow us to:

     - offer advanced products and services, such as digital television,
       high-speed Internet access and other interactive services;

     - increase channel capacity up to 82 analog channels, and add even more
       channels and services when our bandwidth is used for digital signal
       transmission; and

     - permit two-way communication, so that Internet access does not require a
       separate telephone line and our systems can provide telephony services.

     By year-end 2002, when we anticipate that the upgrade of our existing
systems will be substantially complete, we expect that approximately 93% of our
customers will be served by cable systems with at least 550 megahertz bandwidth
capacity, 88% of our customers will be served by cable systems with at least 750
megahertz bandwidth capacity and 89% of our customers will have two-way
communication capability.

     It is anticipated that upon completion of our upgrade, approximately 87% of
our customers will be served by headends serving at least 10,000 customers.
Headends are the control centers of a cable television system, where incoming
signals are amplified, converted, processed and combined for transmission to the
customer. Reducing the number of headends will reduce headend equipment and
maintenance expenditures and, together with our other upgrades, will provide
enhanced picture quality and system reliability.

     In 2001, we plan to complete a national network operations center to
monitor and control all aspects of our network to enhance the reliability of our
upgraded systems and support our high-speed Internet access and other advanced
products.

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     As we complete our planned upgrade and build out new systems, we will be
well positioned to migrate our customers to the digital platform and deploy new
technologically advanced products and services as they are developed.

     OFFER AN ARRAY OF ADVANCED PRODUCTS AND SERVICES.  We offer an array of
advanced products and services to our customers, consistent with our Wired
World(TM) vision. Using digital technology, we offer additional channels on our
standard service packages, create new service packages, introduce multiple
packages of premium services, increase the number of pay-per-view channels, and
offer programming of local interest. We also offer digital music services and
interactive program guides that are comprehensive guides to television program
listings that can be accessed by channel, time, date or programming type. In
addition, we offer interactive video programming, high-speed Internet access,
including Internet access over the television, and video-on-demand. We also are
currently exploring opportunities for telephony. We have entered into the Digeo
Broadband joint venture to deliver high-speed Internet television portal
services to our customers.

     FOCUS ON THE CUSTOMER.  To maximize customer satisfaction and loyalty, we
operate our business to provide reliable, high-quality products and services and
superior customer care. We tailor our product and service packages to suit the
diverse communities we serve and satisfy local preferences for programming and
value. We maintain a strong management presence at the local system level to
improve our customer service and respond to local customer needs. We have
launched one state-of-the-art regional customer contact center that provides
customers with 24 X 7 access to specialized customer care representatives. Our
objective is to have a customer contact center serving each of our 12 operating
regions. We believe that our customer service efforts have contributed to our
superior customer growth and will strengthen the Charter brand name and increase
acceptance of our new advanced products and services.

     EMPLOY INNOVATIVE MARKETING.  We have developed and successfully
implemented a variety of innovative marketing techniques to attract new
customers, win back former customers, and increase revenue per customer. Our
marketing efforts focus on offering Charter-branded entertainment and
information services that provide value, choice, convenience and quality to our
customers. We offer our expanded product and service offerings on a stand-alone
basis and in varied packages that result in an attractive price/value
relationship. We utilize database marketing to target audiences through direct
mail and telemarketing. In addition, we promote our services in media
advertising, by door-to-door selling and through e-marketing. We are
implementing a retail sales strategy in coordination with consumer electronics
retailers and other retailers. In addition, we have a retention and loyalty
program for retaining customers that includes televised advertising to reinforce
the link between quality service and the Charter brand name.

PRODUCTS AND SERVICES

     We offer our customers traditional cable television services and
programming as well as new and advanced high bandwidth services such as digital
television and high-speed Internet access. We plan to continue to enhance and
upgrade these services by adding new programming and other advanced products and
services as they are developed. In 2001, we plan to focus on our digital
television and high-speed Internet services, both of which are increasingly
desired by customers. We will also increase the number of markets where we offer
video-on-demand services.

     TRADITIONAL CABLE TELEVISION SERVICES.  Customers subscribing to both
"basic" and "expanded basic" service generally receive a line-up of between 33
and 82 channels of television programming, depending on the bandwidth capacity
of the system. Customers who pay additional amounts can also subscribe to
additional channels, either individually or in packages, as add-ons to the basic
channels. We tailor both our basic channel line-up and our additional channel
offerings to each system according to demographics, programming preferences,
competition, price sensitivity and local regulation.

     Our traditional cable television service offerings include the following:

     - BASIC CABLE.  All of our customers receive a package of basic
       programming, which generally consists of local broadcast television,
       local community programming, including governmental and public access,

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       and limited satellite-delivered or non-broadcast channels (such as
       C-Span, religious and home-shopping).

     - EXPANDED BASIC CABLE.  This expanded programming level includes a package
       of satellite-delivered or non-broadcast channels (such as ESPN, CNN and
       Lifetime Television) in addition to the basic channel line-up.

     - PREMIUM CHANNELS.  These channels provide commercial-free movies, sports
       and other special event entertainment programming. Home Box Office,
       Cinemax, Showtime, the Movie Channel, Starz and Encore are examples of
       premium channels. Although we offer subscriptions to premium channels on
       an individual basis, we are offering an increasing number of premium
       channel packages and are bundling premium channels with our advances
       services.

     - PAY-PER-VIEW CHANNELS.  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 or concert on a commercial-free basis.

     ADVANCED PRODUCTS AND SERVICES.  Cable's high bandwidth is a key factor in
the successful delivery of advanced products and services. A variety of emerging
technologies and increasing Internet usage by our customer base have presented
us with substantial opportunities to expand our sources of revenue. In an
increasing number of our systems, we now offer a variety of advanced products
and services, including:

     - digital television and its related enhancements, such as an interactive
       programming guide;

     - high-speed Internet access via cable modems;

     - television-based Internet access, which allows customers to access the
       Internet through the use of our two-way cable plant without the need for
       a personal computer;

     - video-on-demand;

     - interactive services, such as Wink, which adds interactivity and
       electronic commerce opportunities to traditional programming and
       advertising; and

     - private network services such as voice and data transmission services to
       a network of interconnected locations of a single customer.

     The following table summarizes our customer statistics for our analog and
digital cable and advanced products and services. The pro forma statistics as of
December 31, 1999 reflect all acquisitions closed since that date as if such
acquisitions occurred on January 1, 1999:

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                                                     AS OF AND FOR THE YEAR ENDED
                                                     ----------------------------
                                                        ACTUAL        PRO FORMA
                                                     DECEMBER 31,    DECEMBER 31,
                                                         2000            1999
                                                     ------------    ------------
                                                               
VIDEO SERVICES
Basic cable (Analog signal)
  Homes passed(a)..................................    10,225,000       9,970,000
  Basic customers(b)...............................     6,350,900       6,193,700
  Penetration(c)...................................          62.1%           62.1%
Digital cable
  Homes passed(a)..................................     8,793,000       4,675,000
  Digital customers................................     1,069,500         155,400
  Penetration(c)...................................          12.2%            3.3%
  Number of digital terminals deployed.............     1,336,900         176,600
INTERNET AND OTHER DATA SERVICES
Cable modem high-speed Internet access
  Homes passed(a)..................................     5,550,800       4,422,000
  Cable modem customers............................       252,400          84,400
  Penetration......................................           4.5%            1.9%
Television-based Internet access
  Homes passed(a)..................................       472,100         429,000
  TV Internet customers............................         9,700           7,100
  Penetration......................................           2.1%            1.7%
INTERACTIVE TELEVISION (WINK)
  Homes passed(a)..................................     3,271,430         983,239
  Interactive TV customers.........................       304,362          39,477




                                                     PRO FORMA FOR THE YEAR ENDED
                                                     ----------------------------
                                                     DECEMBER 31,    DECEMBER 31,
                                                         2000            1999
                                                     ------------    ------------
                                                               
Average monthly pro forma revenue per basic
  customer(b)(d)...................................     $43.31          $39.70
Average monthly pro forma operating cash flow per
  basic customer(b)(e).............................     $20.52          $17.67


---------------
(a) Homes passed are the number of living units, such as single residence homes,
    apartments and condominium units, passed by the cable television
    distribution network in a given cable system service area to which we offer
    the named service.

(b) Basic customers are customers who receive basic cable service. All of our
    customers, including those receiving digital or advanced services, receive
    basic cable service.

(c) Penetration represents customers as a percentage of homes passed.

(d) Average pro forma monthly revenue per basic customer represents pro forma
    revenues from all sources, adjusted to illustrate the effect of all 1999 and
    2000 acquisitions as if they had closed on January 1, 1999, divided by
    twelve, divided by the number of basic customers at the end of the year
    (actual for December 31, 2000 and pro forma for December 31, 1999,
    reflecting all acquisitions closed since this date).

(e) Average pro forma monthly operating cash flow per basic customer represents
    operating cash flow (defined as revenues less the sum of operating, general
    and administrative expenses and corporate expense charges-related party),
    adjusted to illustrate the effect of all 1999 and 2000 acquisitions as if
    they had closed on January 1, 1999, divided by twelve, divided by the number
    of basic customers at the end of

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the year (actual for December 31, 2000 and pro forma for December 31, 1999,
reflecting all acquisitions closed since this date).

     DIGITAL TELEVISION.  As part of our systems upgrade, we are installing
headend equipment capable of delivering digitally encoded cable transmissions to
a two-way digital-capable set-top terminal in the customer's home. This digital
connection offers significant advantages. For example, we can compress the
digital signal to allow the transmission of up to twelve digital channels in the
bandwidth normally used by one analog channel. The increased channel capacity
will allow us to increase both programming and service offerings, including
offering video-on-demand to pay-per-view customers.

     We offer digital service to our customers in several different service
combination packages. All digital packages include a digital set-top terminal,
an interactive electronic programming guide, 45 channels of CD quality digital
music, an expanded menu of pay-per-view channels and at least thirty additional
digital channels. Certain digital packages also offer customers one or more
premium channels of their choice with "multiplexes." Multiplexes give customers
access to several different versions of the same premium channel which are
varied as to time of broadcast (such as east and west coast time slots) or
programming content theme (such as westerns or romance). Other digital packages
bundle digital television with other advanced services, such as Internet access.

     We expect to increase our digital customers to approximately two million
and our digital penetration to over 30% of digital homes passed by December 31,
2001.

     CABLE MODEM-BASED HIGH-SPEED INTERNET ACCESS.  We offer high-speed data and
Internet access to our residential customers primarily via cable modems attached
to personal computers, at speeds of up to approximately 50 times the speed of a
conventional telephone modem. By December 31, 2001, we expect to have
approximately 500,000 cable-modem high-speed Internet customers.

     We generally offer high-speed Internet access services under the Charter
Pipeline(TM) brand. In some of our markets, however, our cable modem and
Internet access service is a co-branded service with an Internet service
provider.

     TRADITIONAL DIAL-UP MODEM INTERNET ACCESS.  Traditional dial-up Internet
access is available upon customer request in a limited number of our markets
where two-way cable modem Internet access is not yet available.

     TV-BASED INTERNET ACCESS.  We also have agreements with WorldGate, ICTV and
Digeo to offer our residential customers high-speed Internet access over the
television.

     Our WorldGate television-based Internet access service offers easy,
low-cost Internet access to customers at connection speeds ranging up to 128
kilobits per second. This service, with its user-friendly interface, appeals to
first-time Internet users and does not require the use of a PC, an existing or
additional telephone line, or any additional equipment. The Internet domain name
of the customers who use this service is "Charter.net." This allows customers to
switch or expand to our other Internet services without a change of e-mail
address.

     During 2001, we expect to offer Digeo Broadband's television-based Internet
access service in several markets. The Digeo product is designed to blend the
power of the Internet with the convenience of the television. Through the use of
an advanced digital set-top terminal, customers will be able to access Internet-
based streaming media on the television, including both local and national news,
sports and entertainment. The Internet domain name of customers using this
service will be "Charter TV." The Digeo product is a "portal," which is an
Internet web site that serves as a user's initial point of entry to the World
Wide Web. By offering selected content, services and links to other web sites, a
portal guides and directs users through the World Wide Web. In addition, the
portal generates revenues from advertising on its own web pages and by sharing
revenues generated by linked or featured web sites.

     We plan to use Digeo as our television-based portal for an initial six-year
period. A Charter subsidiary and an affiliate of Mr. Allen own equity interests
in Digeo.

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     VIDEO-ON-DEMAND.  In 2000, we began the roll-out of video-on-demand (VOD)
service to digital customers in some of our markets. With VOD service, customers
can access hundreds of movies and other programming at any time, with digital
picture quality. VOD allows full VCR functionality, including the ability to
pause, rewind and fast-forward programs. Customers can also stop a program and
resume watching it several hours later during the rental period. In addition,
the VOD programming available in a particular market can be customized for
market-based or customer preferences and local interest. For example, foreign
language or other local programming could be offered in markets where such
programming is likely to appeal to customers. Generally, customers pay for VOD
(such as movies) on a per-selection basis. Some VOD programming is also
available on a category basis (such as children's programming) for a single
monthly fee.

     At December 31, 2000, VOD was available to approximately 170,000 homes in
our Los Angeles and Atlanta markets with approximately 450 titles available to
customers. We expect VOD to be available to approximately 2.2 million homes
passed by the end of 2001. In systems where VOD is available, it is included as
a standard feature of our digital service packages. We utilize DIVA Systems
Corporation, a company providing interactive VOD products and services to the
cable industry, to provide us with hardware, software, programming and
operational support.

     INTERACTIVE VIDEO PROGRAMMING.  We provide interactive programming using
technology developed by Wink Communications, Inc. The Wink technology embeds
interactive features, such as additional information and statistics about a
television program or the option to order an advertised product, into
programming and advertisements. A customer with a Wink-enabled set-top terminal
and a Wink-enabled cable provider sees an icon flash on the screen when
additional Wink features are available to enhance a program or advertisement. By
pressing the select button on a standard remote control, a viewer of a
Wink-enhanced program is able to access additional information regarding such
program, including, for example, information on prior episodes or the program's
characters. A viewer watching an advertisement would be able to access
additional information regarding the advertised product and may also be able to
utilize the two-way transmission features to order a product. We have bundled
Wink's services with our traditional cable services in both our advanced analog
and digital platforms. Wink's services are provided free of charge to the
customer. A company controlled by Mr. Allen has a 4.0% equity interest in Wink.

     Various programming networks, including CNN, NBC, ESPN, HBO, Showtime,
Lifetime, VH1, the Weather Channel and Nickelodeon, together currently produce
over 2,000 hours of Wink-enhanced programming per week. Under certain
revenue-sharing arrangements, we will modify our headend technology to allow
Wink-enabled programming to be offered on our systems. We receive fees from Wink
each time one of our customers uses Wink to request certain additional
information or order advertised products. Our customers average approximately
246,000 clicks per week on Wink icons.

     PRIVATE BUSINESS NETWORKS.  During 2000, we established Charter Business
Networks as a separate division to offer integrated network solutions for data,
video, Internet, and private voice communications to commercial and
institutional customers in certain of our markets. These solutions include
virtual local area and wide area networks with bandwidth and Internet access
capacity based on customer needs, supported by remote monitoring.

     TELEPHONY/VOICE SERVICES.  We expect to be able to offer cable telephony
services by the end of 2003 in selected markets using our systems' direct,
two-way connections to homes and other buildings. We are exploring technologies
using Internet protocol telephony to transmit digital voice signals over our
systems. We have already begun an Internet protocol (IP) telephony trial in
Wisconsin, and expect to launch a second trial in St. Louis in 2001. We have
marketed telephony services as a competitive access provider in the state of
Wisconsin through one of our subsidiaries, and are currently looking to expand
our services as a competitive access provider into other states.

     OTHER NEW BUSINESS INITIATIVES.  We are seeking to provide our customers in
2001 with advanced digital set-top terminals that include digital video
recording capabilities (commonly referred to as "DVR"). Built-in DVR capability
in the set-top terminal will enable customers to store video, audio and Internet
content. We are also exploring deployment of wireless networking technology for
our cable modem customers.
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     SALE OF LOCAL ADVERTISING.  We receive revenue from the sale of local
advertising on satellite-delivered networks such as MTV, CNN, ESPN. In any
particular system, we generally insert local advertising on a minimum of twelve
networks, and have covered up to 40 channels. Our system rebuild and additional
digital services launches have increased the number of channels, and made it
possible to insert local advertising.

     HOME SHOPPING.  In 2000, we also received revenues from channels devoted
exclusively to home shopping (such as HSN) and other channels that allow us to
insert info-mercials during off-peak hours.

     PRICING FOR OUR PRODUCTS AND SERVICES.  Our revenues are derived
principally from the monthly fees our customers pay for cable services. The
rates we charge vary based on the market served and level of service selected,
and are usuallyadjusted on an annual basis. As of December 31, 2000, the average
monthly fee was $13.16 for basic service and $17.93 for expanded basic service.
A one-time installation fee, which may be waived in part during certain
promotional periods, is charged to new customers. We believe our rate practices
are in accordance with Federal Communications Commission Guidelines and are
consistent with those prevailing in the industry generally. See "Regulation and
Legislation."

     In accordance with the Federal Communications Commission's rules, the rates
we charge for cable-related equipment, such as set-top terminals and remote
control devices, and installation services are based on actual costs plus a
permitted rate of return.

     Although our service offerings vary according to market because of
differences in the bandwidth capacity of the cable systems in each of our
markets, competitive and regulatory factors, when offered on a stand-alone
basis, our services are typically offered at monthly price ranges as follows:



SERVICE                                                         PRICE RANGE
-------                                                       ---------------
                                                           
Basic cable.................................................  $ 9.95 - $14.00
Expanded basic cable........................................  $15.00 - $29.00
Premium channel.............................................  $10.95 - $13.50
Pay-Per-View (per movie or event)...........................  $ 2.95 - $50.95
Digital cable video packages................................  $45.95 - $59.95
High-speed Internet access by cable modem...................  $24.95 - $34.95
Video-on-Demand (per selection).............................  $ 0.99 - $ 9.95


     MANAGEMENT OF OUR SYSTEMS.  Our operating philosophy emphasizes
decentralized management, with decisions being made as close to the customer as
possible. We are organized into two divisions that contain a total of twelve
operating regions. Each of the two divisions is managed by a Senior Vice
President, who is responsible for overall supervision of the operating regions
within the division. Each operating region is managed by a Senior Vice President
or a Vice President, supported by operational, marketing and engineering
personnel at the regional and local system level. Our consolidation of certain
functions at the regional level has resulted in numerous operating efficiencies
and superior customer care. At the same time, our centralized financial
management by the corporate office enables us to set financial and operating
benchmarks and monitor system performance on an ongoing basis. The corporate
office also performs certain financial control functions such as accounting,
finance and acquisitions, payroll and benefit administration, internal audit,
purchasing and programming contract administration on a centralized basis.

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     The following table indicates the states covered by, and customer data for,
each of our operating regions as of December 31, 2000.



                                                                                    NUMBER OF
REGION                                               STATES COVERED                 CUSTOMERS
------                                               --------------                 ---------
                                                                              
WESTERN DIVISION
Central................................  Missouri, Illinois, Indiana, Arkansas       486,800
North Central..........................  Wisconsin, Minnesota                        806,400
Southern California....................  Central and Southern California             642,200
Northwest..............................  Northern California, Idaho, Oregon,
                                           Washington                                486,200
Michigan...............................  Michigan                                    621,300
National...............................  Colorado, Kansas, Nebraska, New Mexico,
                                           Oklahoma, Texas, Utah, Arizona,
                                           Nevada                                    461,200
EASTERN DIVISION
Southeast..............................  North Carolina, South Carolina              568,400
South-Atlantic.........................  Georgia, Florida                            391,400
Mid-South..............................  Georgia, Kentucky, Tennessee                557,800
Northeast..............................  Connecticut, Massachusetts, New York,
                                           Vermont, New Hampshire                    364,100
Gulf Coast.............................  Alabama, Louisiana, Mississippi             427,400
Mid-Atlantic...........................  Maryland, New York, Ohio, Pennsylvania,
                                           Virginia, W. Virginia, Delaware           537,700


CUSTOMER CARE

     Maximizing customer satisfaction is a key element of our business strategy.
In support of our commitment to customer satisfaction, we operate a 24-hour
customer service hotline for nearly all of our systems and offer on-time
installation and service guarantees.

     To better serve our customers, we are consolidating some of our local
customer care functions at the regional level. At December 31, 2000, we
maintained 22 call centers handling approximately 56% of our customers,
including our first state-of-the-art regional customer contact center that was
established in 2000. We expect to complete six additional state-of-the-art
regional customer contact centers in 2001. By establishing regional customer
contact centers, we are able to service our customers 24 hours a day, seven days
a week, with highly trained personnel. These regional centers utilize
state-of-the-art equipment that enhances all interactions with our customers and
provides a high-performance employee environment. Our customer care specialists
receive extensive training to develop customer contact skills and product
knowledge critical to high rates of customer retention as well as to selling
additional services and higher levels of service to our customers. We expect
that our customer care functions will benefit from the additional technologies
available when our national and regional network operations centers are opened.
We utilize surveys, focus groups and other research tools as part of our efforts
to determine and respond to customer needs.

     Consistent with our focus on customer satisfaction, we have implemented
stringent customer care standards that we believe meet or exceed those
established by the National Cable Television Association, the Washington,
D.C.-based trade association for the cable industry. It is our policy that if an
installer is late for a scheduled appointment the customer receives free
installation, and if a service technician is late for a service call the
customer receives a $20 credit.

OUR NETWORK TECHNOLOGY

     As of December 31, 2000, our cable systems consisted of approximately
220,347 sheath miles, including approximately 29,829 sheath miles of fiber optic
cable, passing approximately 10.2 million households and serving approximately
6.4 million customers. Fiber optic cable is a communications medium that uses
glass fibers to transmit signals over long distances with minimal signal loss or
distortion.

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     The following table describes the technological state of our systems as of
December 31, 2000 and the anticipated progress of planned upgrades through
year-end 2002, based on the percentage of our customers who will have access to
the bandwidths listed below and two-way capability.



                                                    550 MEGAHERTZ
                                    LESS THAN            TO              750          870        TWO-WAY
                                  550 MEGAHERTZ     660 MEGAHERTZ     MEGAHERTZ    MEGAHERTZ    CAPABILITY
                                  -------------    ---------------    ---------    ---------    ----------
                                                                                 
December 31, 2000...............      33.4%             12.6%           37.5%        16.5%         57.1%
December 31, 2001...............      19.6%             12.8%           39.3%        28.3%         70.8%
December 31, 2002...............       6.9%              5.5%           43.8%        43.8%         89.0%


     We have adopted the hybrid fiber coaxial cable (HFC) architecture as the
standard for our ongoing systems upgrades. HFC architecture combines the use of
fiber optic cable with coaxial cable. 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 380 homes passed. Our system design provides
for six strands of fiber to each node, with two strands activated and four
strands reserved for future services (sometimes referred to as "dark fiber"). We
believe that this hybrid network design provides high capacity and superior
signal quality, and will enable us to provide the newest forms of
telecommunications services to our customers. It 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 otherwise occur with two-way communication
       capability;

     - improved picture quality and service reliability; and

     - operating efficiencies resulting from a reduced number of headends.

     In 2001, we will have a fully operational national network operations
center to monitor our networks and ensure maximum quality of service. Monitoring
becomes increasingly important as we increase the number of customers utilizing
two-way high-speed data service. We plan to open regional operations centers in
the future to augment our national center on an as-needed basis.

SALES AND MARKETING

     We have a centralized team responsible for overseeing the sales and
marketing strategies of our individual systems. For most of our systems with
over 30,000 customers, we have a dedicated marketing manager, while smaller
systems are handled regionally. We believe our success in marketing comes in
large part from new and innovative ideas and from good interaction, quick
information flow and sharing of best practices between our corporate office,
which handles programs and administration, and our regional offices, which
implement the various programs. In addition, we constantly monitor the
regulatory arena, customer perception, competition, pricing and product
preferences to increase our responsiveness to our customers.

     Our long-term marketing objective is to increase our cash flow through
deeper market penetration and growth in revenue per household. We hope that
customers will come to view their cable connection as the best "pipeline" to the
home for a multitude of services. To achieve this objective, we are pursuing the
following strategies:

     - increase the number of residential consumers who subscribe to digital
       service, which enables them to receive a greater number of television
       channels and interactive services;

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     - introduce new advanced products and services;

     - design product offerings to enable greater opportunity for customer
       entertainment and information choices;

     - package product offerings to promote the sale of premium services and
       niche programming, providing an attractive price/value relationship with
       our customers;

     - target marketing opportunities based on geodemographic data and past
       purchasing behavior;

     - develop specialized programs to attract former customers, households that
       have never subscribed and customers of competitive services; and

     - employ Charter branding of products to promote customer awareness and
       loyalty.

     We invest significant amounts of time, effort and financial resources in
marketing new and existing services. To increase customer penetration and
increase the level of services used by our customers, we use coordinated
marketing techniques, including door-to-door solicitation, telemarketing, media
advertising, e-marketing and direct mail solicitation. We believe we have one of
the cable industry's highest success rates in attracting and retaining customers
who have never before subscribed to cable services.

     In 2001, we have begun to sell our services through consumer electronics
retailers and other retailers that sell televisions or cable modems.

PROGRAMMING

     GENERAL.  We believe that offering a wide variety of conveniently scheduled
programming is an important factor influencing a customer's decision to
subscribe to and retain our cable services. We devote considerable resources to
obtaining a wide range of programming that we believe will appeal to both
existing and potential customers. We rely on extensive 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
support for the launch of a new channel and ongoing marketing support. We also
try to negotiate volume discount pricing structures.

     COSTS.  Programming tends to be made available to us for a flat fee per
customer. However, some channels are available without cost to us. In connection
with the launch of a new channel, we may receive a distribution fee to support
the channel launch. For home shopping channels, we receive a percentage of the
amount spent in home shopping purchases by our customers on channels we carry.

     Our cable programming costs have increased in recent years and are expected
to continue to increase due to factors including:

     - system acquisitions that increase the number of customers;

     - additional programming being provided to customers as a result of system
       rebuilds that increase channel capacity;

     - increased cost to produce or purchase cable programming; and

     - inflationary or negotiated annual increases.

     In every year we have operated, our costs to acquire programming have
substantially exceeded customary inflationary and cost-of-living type increases.
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.

     Under rate regulations of the Federal Communications Commission, cable
operators may increase their rates to customers to cover increased costs for
programming, subject to certain limitations. See "Regulation and Legislation."
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FRANCHISES

     As of December 31, 2000, our systems operated under a total of
approximately 4,520 franchises, permits and similar authorizations issued by
local and state governmental authorities. Each franchise is awarded by a
governmental authority and is usually not transferable unless the granting
governmental authority consents. 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 gross
revenues as defined by the franchise agreements, which is the maximum amount
that may be charged under the applicable law.

     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 and often involves substantial
expense. The Communications Act provides for an orderly franchise renewal
process in which granting authorities may not unreasonably withhold renewals. If
a renewal is withheld and the granting authority takes over operation of the
affected cable system or awards the cable franchise to another party, the
granting authority must pay the existing cable operator the "fair market value"
of the system. The Communications Act also established comprehensive renewal
procedures requiring that an incumbent franchisee's renewal application be
evaluated on its own merit and not as part of a comparative process with
competing applications. In connection with the franchise renewal process, many
governmental authorities require the cable operator to make certain commitments,
such as technological upgrades to the system, which may require substantial
capital expenditures. We cannot assure you that any particular franchise will be
renewed or that it can be renewed on commercially favorable terms. Our failure
to obtain renewals of our franchises, especially those in major metropolitan
areas where we have the most customers, would have a material adverse effect on
our business, results of operations and financial condition. Approximately 44%
of the Company's franchises covering approximately 42% of the Company's basic
cable customers expire within five years after December 31, 2000.

     Under 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.

     We believe our relations with the franchising authorities under which our
systems are operated are generally good. Substantially all of the material
franchises relating to our systems which are eligible for renewal have been
renewed or extended at or prior to their stated expiration dates.

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 expand into additional
services such as interactive services and telephony, we will 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.

     To date, we believe that we have not lost a significant number of customers
or a significant amount of revenue to our competitors. However, competition from
other providers of the technologies we expect to offer in the future may have a
negative impact on our business in the future.

     Through business developments such as the mergers of Tele-Communications,
Inc. and AT&T and merger of America Online, Inc. (AOL) and Time Warner Inc.,
customers have come to expect a variety of services from a single provider.
While these mergers are not expected to have a direct or immediate impact on our
business, they encourage providers of cable and telecommunications services to
expand their service offerings. They also encourage consolidation in the cable
industry as cable operators recognize the competitive benefits of a large
customer base and expanded financial resources.

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   18

     Our key competitors include:

          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. The recent licensing of digital
     spectrum by the Federal Communications Commission will provide incumbent
     television licenses 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.

          DBS.  Direct broadcast satellite, known as 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 15 million subscribers nationwide. DBS
     service allows the subscriber to receive video services directly via
     satellite using a relatively small dish antenna. Moreover, video
     compression technology allows DBS providers to offer more than 100 digital
     channels, thereby surpassing the typical analog cable system. DBS companies
     historically were prohibited from retransmitting popular local broadcast
     programming. However, a change to the copyright laws in November 1999
     eliminated this legal impediment. As a result, DBS companies are required
     to secure retransmission consent from the popular broadcast stations they
     wish to carry, and they will face mandatory carriage obligations of less
     popular broadcast stations as of January 2002. In response to the
     legislation, DirecTV, Inc. and EchoStar Communications Corporation have
     begun carrying the major network stations in the nation's top television
     markets. DBS, however, is limited in the local programming it can provide
     because of the current capacity limitations of satellite technology. It is,
     therefore, expected that DBS companies will offer local broadcast
     programming only in the larger U.S. markets in the foreseeable future. The
     DBS industry recently initiated a judicial challenge to the 2002
     requirement mandating carriage of less popular broadcast stations. This
     lawsuit alleges that the requirement (similar to the one applicable to
     cable systems) is unconstitutional. EchoStar began providing high-speed
     Internet access in late 2000, and DirecTV, who has partnered with AOL,
     reports that it will begin providing its own version of high-speed Internet
     access shortly.

          DSL.  The deployment of digital subscriber line technology, known as
     DSL, allows Internet access to subscribers at data transmission speeds
     greater than available over conventional telephone lines. DSL service,
     therefore is competitive with high-speed Internet access over cable
     systems. Several telephone companies and other companies offer DSL service.
     The Federal Communications Commission has a policy of encouraging the
     deployment of DSL and similar technologies, both by incumbent telephone
     companies and newer, competing telephone companies. The Federal
     Communication Commission's decisions and policies in this area are subject
     to change. We cannot predict the likelihood of success of the Internet
     access services offered by our competitors, or the impact on our business
     and operations of these competitive ventures.

          TRADITIONAL OVERBUILDS.  Cable television 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 has been a recent increase
     in the number of cities that have constructed their own cable systems, in a
     manner similar to city-provided utility services. There also has been an
     increased 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 us.
     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.
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          As of December 31, 2000, we were aware of overbuild situations in some
     of our cable systems. Approximately 139,000 basic customers, or
     approximately 2% of our total basic customers, are passed by these
     overbuilds. Additionally, we have been notified that franchises have been
     awarded, and present potential overbuild situations, in other systems.
     Approximately 253,000 or 4% of our total customers are located in areas
     with potential overbuilds. 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. We have upgraded many of these systems
     to at least 750 megahertz two-way HFC architecture, and anticipate
     upgrading the other systems to at least 750 megahertz by December 31, 2001.

          TELEPHONE COMPANIES AND UTILITIES.  The competitive environment has
     been significantly affected by technological developments and regulatory
     changes enacted under the 1996 Telecom Act, which was 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.

          Several telephone companies have obtained or are seeking cable
     franchises from local governmental authorities and are constructing cable
     systems. Cross-subsidization by local exchange carriers of video and
     telephony services poses a strategic advantage over cable operators seeking
     to compete with local exchange carriers that provide video services. Some
     local exchange carriers may choose to make broadband services available
     under the open video regulatory framework of the Federal Communications
     Commission or through wireless technology. In addition, local exchange
     carriers 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,
     including Internet service, as well as data and other non-video services.
     We cannot predict the likelihood of success of the broadband services
     offered by our competitors or the impact on us of such competitive
     ventures. Although enthusiasm on the part of local exchange carriers
     appears to have waned in recent months, the entry of telephone companies as
     direct competitors in the video marketplace may become more widespread and
     could adversely affect the profitability 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. 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.

          Additionally, we are subject to competition from utilities which
     possess fiber optic transmission lines capable of transmitting signals with
     minimal signal distortion.

          PRIVATE CABLE.  Additional competition is posed by satellite master
     antenna television systems known as "SMATV systems" serving multiple
     dwelling units, referred to in the cable industry as "MDU's", such as
     condominiums, apartment complexes and private residential communities.
     These private cable systems may enter into exclusive agreements with MDUs,
     which may preclude operators of franchise systems from serving residents of
     the 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. The Federal Communications
     Commission ruled in 1998 that private cable operators can lease video
     distribution capacity from local telephone companies and distribute cable
     programming services over public rights-of-way without

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     obtaining a cable franchise. In 1999, both the Fifth and Seventh Circuit
     Courts of Appeals upheld this Federal Communications Commission policy.

          WIRELESS DISTRIBUTION.  Cable television systems also compete with
     wireless program distribution services such as multi-channel multipoint
     distribution systems or "wireless cable," known as MMDS. MMDS uses
     low-power microwave frequencies to transmit television programming
     over-the-air to paying customers. Wireless distribution services generally
     provide many of the programming services provided by cable systems, and
     digital compression technology is likely to increase significantly the
     channel capacity of their systems. Both analog and digital MMDS services
     require unobstructed "line of sight" transmission paths. Analog MMDS has
     impacted our customer growth in Riverside and Sacramento, California and
     Missoula, Montana. Digital MMDS is a more significant competitor,
     presenting potential challenges to us in Los Angeles, California and
     Atlanta, Georgia.

REGULATION AND LEGISLATION

     The following summary addresses the key regulatory developments and
legislation affecting the cable industry.

     The operation of a cable system is extensively regulated by the Federal
Communications Commission, some state governments and most local governments.
The Federal Communications Commission has the authority to enforce its
regulations through the imposition of substantial fines, the issuance of cease
and desist orders and/or the imposition of other administrative sanctions, such
as the revocation of Federal Communications Commission licenses needed to
operate certain transmission facilities used in connection with cable
operations. The 1996 Telecom Act has 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 also 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 Federal Communications Commission to
undertake a host of implementing rulemakings. Moreover, Congress and the Federal
Communications Commission have frequently revisited the subject of cable
regulation. Future legislative and regulatory changes could adversely affect our
operations, and there have been calls in Congress and at the Federal
Communications Commission to maintain or even tighten cable regulation in the
absence of widespread effective competition.

     CABLE RATE REGULATION.  The 1992 Cable Act imposed an extensive rate
regulation regime on the cable television industry, which limited the ability of
cable companies to increase subscriber fees. Under that regime, all cable
systems were subjected to rate regulation, unless they faced "effective
competition" in their local franchise area. Federal law defines "effective
competition" on a community-specific basis as requiring satisfaction of
conditions not typically satisfied in the current marketplace.

     Although the Federal Communications Commission established the underlying
regulatory scheme, local government units, commonly referred to as local
franchising authorities, are primarily responsible for administering the
regulation of the lowest level of cable service -- the basic service tier, which
typically contains local broadcast stations and public, educational, and
government access channels. Before a local franchising authority begins basic
service rate regulation, it must certify to the Federal Communications
Commission that it will follow applicable federal rules. Many local franchising
authorities have voluntarily declined to exercise their authority to regulate
basic service rates. Local franchising authorities also have primary
responsibility for regulating cable equipment rates. Under federal law, charges
for various types of cable equipment must be unbundled from each other and from
monthly charges for programming services.

     As of December 31, 2000, approximately 17% of our local franchising
authorities were certified to regulate basic tier rates. The 1992 Cable Act
permits communities to certify and regulate rates at any time, so that it is
possible that additional localities served by the systems may choose to certify
and regulate basic rates in the future.

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     The Federal Communications Commission historically administered rate
regulation of cable programming service tiers, which are the expanded basic
programming packages that offer services other than basic programming and which
typically contain satellite-delivered programming. As of December 31, 2000, we
had cable programming service tier rate complaints relating to approximately
414,000 customers pending at the Federal Communications Commission. Under the
1996 Telecom Act, however, the Federal Communications Commission's authority to
regulate cable programming service tier rates expired on March 31, 1999. The
Federal Communications Commission has taken the position that it will still
adjudicate pending cable programming service tier complaints but will strictly
limit its review, and possible refund orders, to the time period until March 31,
1999. We do not believe any adjudications regarding these complaints will have a
material adverse effect on our business. The elimination of cable programming
service tier regulation affords us substantially greater pricing flexibility.

     Under the rate regulations of the Federal Communication Commission, most
cable systems were required to reduce their basic service tier and cable
programming service tier rates in 1993 and 1994, and have since had their rate
increases governed by a complicated price cap scheme that allows for the
recovery of inflation and certain increased costs, as well as providing some
incentive for expanding channel carriage. The Federal Communications Commission
has modified its rate adjustment regulations to allow for annual rate increases
and to minimize previous problems associated with regulatory lag. Operators also
have the opportunity to bypass this "benchmark" regulatory scheme in favor of
traditional "cost-of-service" regulation in cases where the latter methodology
appears favorable. Cost of service regulation is a traditional form of rate
regulation, under which a utility is allowed to recover its costs of providing
the regulated service, plus a reasonable profit. The Federal Communications
Commission and Congress have provided various forms of rate relief for smaller
cable systems owned by smaller operators. Premium cable services offered on a
per-channel or per-program basis remain unregulated. However, federal law
requires that the basic service tier be offered to all cable subscribers and
limits the ability of operators to require purchase of any cable programming
service tier if a customer seeks to purchase premium services offered on a
per-channel or per-program basis, subject to a technology exception which
expires in 2002.

     As noted above, Federal Communications Commission regulation of cable
programming service tier rates for all systems, regardless of size, expired
pursuant to the 1996 Telecom Act on March 31, 1999. As a result, the regulatory
requirements just discussed are now essentially applicable only to the basic
service tier and cable equipment. The 1996 Telecom Act also relaxes existing
"uniform rate" requirements by specifying that uniform rate requirements do not
apply where the operator faces "effective competition," and by exempting bulk
discounts to multiple dwelling units, although complaints about predatory
pricing still may be made to the Federal Communications Commission.

     CABLE ENTRY INTO TELECOMMUNICATIONS.  The 1996 Telecom Act creates a more
favorable environment for us to provide telecommunications services beyond
traditional video delivery. It provides that no state or local laws or
regulations may prohibit or have the effect of prohibiting any entity from
providing any interstate or intrastate telecommunications service. A cable
operator is authorized under the 1996 Telecom Act to provide telecommunications
services without obtaining a separate local franchise. States are authorized,
however, to impose "competitively neutral" requirements regarding universal
service, public safety and welfare, service quality, and consumer protection.
State and local governments also retain their authority to manage the public
rights-of-way and may require reasonable, competitively neutral compensation for
management of the public rights-of-way when cable operators provide
telecommunications service. The favorable pole attachment rates afforded cable
operators under federal law can be gradually increased by utility companies
owning the poles, beginning in 2001, if the operator provides telecommunications
service, as well as cable service, over its plant. The Federal Communications
Commission clarified that a cable operator's favorable pole rates are not
endangered by the provision of Internet access, but a recent decision by the
11th Circuit Court of Appeals disagreed and suggested that Internet traffic is
neither cable service nor telecommunications service and might leave cable
attachments that carry Internet traffic ineligible for Pole Attachment Act
protections. This decision could lead to substantial increases in pole
attachment rates, and certain utilities have already proposed vastly higher pole
attachment rates based in part on the existing court decision. The

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United States Supreme Court is now reviewing this decision, and the Eleventh
Circuit mandate has been stayed pending Supreme Court action.

     Cable entry into telecommunications will be affected by the rulings and
regulations implementing the 1996 Telecom Act, including the rules governing
interconnection. A cable operator offering telecommunications generally needs
efficient interconnection with other telephone companies to provide a viable
service. A number of details designed to facilitate interconnection are subject
to ongoing regulatory and judicial review, but the basic obligation of incumbent
telephone companies to interconnect with competitors, such as cable companies
offering telephone service, is well established. Even so, the economic viability
of different interconnection arrangements can be greatly affected by regulatory
changes. Consequently, we cannot predict whether reasonable interconnection
terms will be available in any particular market we may choose to enter.

     INTERNET SERVICE.  Although there is at present no significant federal
regulation of cable system delivery of Internet services, and the Federal
Communications Commission has issued several reports finding no immediate need
to impose such regulation, this situation may change as cable systems expand
their broadband delivery of Internet services. In particular, proposals have
been advanced at the Federal Communications Commission and Congress that would
require cable operators to provide access to unaffiliated Internet service
providers and online service providers. The Federal Communications Commission
recently rejected a petition by certain Internet service providers attempting to
use existing access rules designed for video programming service providers to
gain access to cable system delivery. The Federal Trade Commission and the
Federal Communications Commission recently imposed certain "open-access"
requirements on Time Warner and AOL in connection with their merger, but those
requirements are not applicable to other cable operators.

     Some states and local franchising authorities are considering the
imposition of mandatory Internet access requirements as part of cable franchise
renewals or transfers and a few local jurisdictions have adopted these
requirements. In June 2000, the Federal Court of Appeals for the Ninth Circuit
rejected an attempt by the City of Portland, Oregon to impose mandatory Internet
access requirements on the local cable operator. In reversing a contrary ruling
by the lower court, the Ninth Circuit court held that Internet service was not a
cable service, and therefore could not be subject to local cable franchising. At
the same time, the Court suggested that at least the transport component of
broadband Internet service could be subject to regulation as a
"telecommunications" service. Although regulation of this form of
telecommunications service would presumably be reserved for the Federal
Communications Commission (which has so far resisted requests for active
regulation), some states may argue that they are entitled to impose
"open-access" requirements pursuant to their authority over intrastate
telecommunications. In addition, some local governments may argue that a cable
operator must secure a local telecommunications franchise before providing
Internet service.

     In response to the Ninth Circuit decision, the Federal Communications
Commission has initiated a new proceeding to categorize cable-delivered Internet
service and perhaps establish an appropriate regulatory scheme. The Ninth
Circuit decision is the leading case on cable-delivered Internet service at this
point, but the Federal District Court for the Eastern District of Virginia
reached a similar deregulatory result in a May 2000 ruling, albeit using a
different legal analysis. It concluded that broadband Internet service was a
cable service, but that multiple provisions of the Telecommunications Act
preempted local regulation. A Federal district court in Florida recently
addressed a similar "open-access" requirement in a local franchise and struck
down the requirement as unconstitutional. There are other instances where
"open-access" requirements have been imposed and judicial challenges are
pending. If regulators are allowed to impose Internet access requirements on
cable operators, it could burden the capacity of cable systems and complicate
our own plans for providing Internet service.

     TELEPHONE COMPANY ENTRY INTO CABLE TELEVISION.  The 1996 Telecom Act allows
telephone companies to compete directly with cable operators by repealing the
historic telephone company/cable cross-ownership ban. Local exchange carriers,
including the regional telephone companies, can now compete with cable operators
both inside and outside their telephone service areas with certain regulatory
safeguards. Because of their resources, local exchange carriers could be
formidable competitors to traditional cable operators. Various local exchange
carriers already are providing video programming services within their telephone
service areas

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through a variety of distribution methods, including both the deployment of
broadband wire facilities and the use of wireless transmission.

     Under the 1996 Telecom Act, local exchange carriers or any other cable
competitor providing video programming to subscribers through broadband wire
should be regulated as a traditional cable operator, subject to local
franchising and federal regulatory requirements, unless the local exchange
carrier or other cable competitor elects to deploy its broadband plant as an
open video system (OVS). To qualify for favorable open video system status, the
competitor must reserve two-thirds of the system's activated channels for
unaffiliated entities. The Fifth Circuit Court of Appeals reversed certain of
the Federal Communications Commission's open video system rules, including its
preemption of local franchising. The Federal Communications Commission
subsequently revised its OVS rules to eliminate this general preemption, thereby
leaving franchising discretion to state and local authorities. It is unclear
what effect this ruling will have on the entities pursuing open video system
operation.

     Although local exchange carriers and cable operators can now expand their
offerings across traditional service boundaries, the general prohibition remains
on local exchange carrier buyouts of co-located cable systems. Co-located cable
systems are cable systems serving an overlapping territory. Cable operator
buyouts of co-located local exchange carrier systems, and joint ventures between
cable operators and local exchange carriers in the same market are also
prohibited. The 1996 Telecom Act provides a few limited exceptions to this
buyout prohibition, including a carefully circumscribed "rural exemption." The
1996 Telecom Act also provides the Federal Communications Commission with the
limited authority to grant waivers of the buyout prohibition.

     ELECTRIC UTILITY ENTRY INTO TELECOMMUNICATIONS/CABLE TELEVISION.  The 1996
Telecom Act provides that registered utility holding companies and subsidiaries
may provide telecommunications services, including cable television,
notwithstanding the Public Utility Holding Company Act. Electric utilities must
establish separate subsidiaries, known as "exempt telecommunications companies"
and must apply to the Federal Communications Commission for operating authority.
Like telephone companies, electric utilities have substantial resources at their
disposal, and could be formidable competitors to traditional cable systems.
Several such utilities have been granted broad authority by the Federal
Communications Commission to engage in activities which could include the
provision of video programming.

     ADDITIONAL OWNERSHIP RESTRICTIONS.  The 1996 Telecom Act eliminates
statutory restrictions on broadcast/cable cross-ownership, including broadcast
network/cable restrictions, but leaves in place existing Federal Communications
Commission regulations prohibiting local cross-ownership between co-located
television stations and cable systems.

     Pursuant to the 1992 Cable Act, the Federal Communications Commission
adopted rules precluding a cable system from devoting more than 40% of its
activated channel capacity to the carriage of affiliated national video program
services. Also pursuant to the 1992 Cable Act, the Federal Communications
Commission has adopted rules that preclude any cable operator from serving more
than 30% of all U.S. domestic multichannel video subscribers, including cable
and direct broadcast satellite subscribers. The D.C. District Court of Appeals
upheld this statutory restriction, and the Federal Communications Commission has
now ruled that AT&T must divest certain properties to come into compliance. The
Federal Communications Commission's implementation of ownership restrictions is
currently subject to judicial review.

     MUST CARRY/RETRANSMISSION CONSENT.  The 1992 Cable Act contains broadcast
signal carriage requirements. Broadcast signal carriage is the transmission of
broadcast television signals over a cable system to cable customers. These
requirements, among other things, allow local commercial television broadcast
stations to elect once every three years between "must carry" status or
"retransmission consent" status. Less popular stations typically elect must
carry, which is the broadcast signal carriage requirement that allows local
commercial television broadcast stations to require a cable system to carry the
station. More popular stations, such as those affiliated with a national
network, typically elect retransmission consent which is the broadcast signal
carriage requirement that allows local commercial television broadcast stations
to negotiate for payments for granting permission to the cable operator to carry
the stations. Must carry requests can dilute the appeal of a cable system's
programming offerings because a cable system with limited channel capacity may
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be required to forego carriage of popular channels in favor of less popular
broadcast stations electing must carry. Retransmission consent demands may
require substantial payments or other concessions. Either option has a
potentially adverse effect on our business. The burden associated with must
carry may increase substantially if broadcasters proceed with planned conversion
to digital transmission and the Federal Communications Commission determines
that cable systems must carry all analog and digital broadcasts in their
entirety. This burden would reduce capacity available for more popular video
programming and new internet and telecommunications offerings. The Federal
Communications Commission tentatively decided against imposition of dual digital
and analog must carry in a January 2001 ruling. At the same time, however, it
initiated further fact-gathering which ultimately could lead to a
reconsideration of the tentative conclusion.

     ACCESS CHANNELS.  Local franchising authorities can include franchise
provisions requiring 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, up to 15% in some
cases, for commercial leased access by unaffiliated third parties. The Federal
Communications Commission has adopted rules regulating the terms, conditions and
maximum rates a cable operator may charge for commercial leased access use. We
believe that requests for commercial leased access carriages have been
relatively limited. The Federal Communications Commission recently rejected a
request that unaffiliated Internet service providers be found eligible for
commercial leased access.

     ACCESS TO PROGRAMMING.  To spur the development of independent cable
programmers and competition to incumbent cable operators, the 1992 Cable Act
imposed restrictions on the dealings between cable operators and cable
programmers. Of special significance from a competitive business posture, the
1992 Cable Act precludes video programmers affiliated with cable companies from
favoring their cable operators over new competitors and requires such
programmers to sell their programming to other multichannel video distributors.
This provision limits the ability of vertically integrated cable programmers to
offer exclusive programming arrangements to cable companies. This prohibition is
scheduled to expire in October 2002, unless the Federal Communications
Commission determines that an extension is necessary to protect competition and
diversity. There also has been interest expressed in further restricting the
marketing practices of cable programmers, including subjecting programmers who
are not affiliated with cable operators to all of the existing program access
requirements, and subjecting terrestrially-delivered programming to the program
access requirements. Terrestrially-delivered programming is programming
delivered other than by satellite. These changes should not have a dramatic
impact on us, but would limit potential competitive advantages we now enjoy.
Pursuant to the Satellite Home Viewer Improvement Act, the Federal
Communications Commission has adopted regulations governing retransmission
consent negotiations between broadcasters and all multichannel video programming
distributors, including cable and DBS.

     INSIDE WIRING; SUBSCRIBER ACCESS.  In an order issued in 1997, the Federal
Communications Commission established rules that require an incumbent cable
operator upon expiration of a multiple dwelling unit service contract to sell,
abandon, or remove "home run" wiring that was installed by the cable operator in
a multiple dwelling unit building. These inside wiring rules are expected to
assist building owners in their attempts to replace existing cable operators
with new programming providers who are willing to pay the building owner a
higher fee, where such a fee is permissible. The Federal Communications
Commission has also proposed terminating all exclusive multiple dwelling unit
service agreements held by incumbent operators, but allowing such contracts when
held by new entrants. In another proceeding, the Federal Communications
Commission has preempted restrictions on the deployment of private antenna on
rental property within the exclusive use of a tenant, such as balconies and
patios. This Federal Communications Commission ruling may limit the extent to
which we along with multiple dwelling unit owners may enforce certain aspects of
multiple dwelling unit agreements which otherwise prohibit, for example,
placement of digital broadcast satellite receiver antennae in multiple dwelling
unit areas under the exclusive occupancy of a renter. These developments may
make it even more difficult for us to provide service in multiple dwelling unit
complexes.

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     OTHER REGULATIONS OF THE FEDERAL COMMUNICATIONS COMMISSION.  In addition to
the Federal Communications Commission regulations noted above, there are other
regulations of the Federal Communications Commission covering such areas as:

     - equal employment opportunity,

     - subscriber privacy,

     - programming practices, including, among other things,

        (1) syndicated program exclusivity, which is a Federal Communications
            Commission rule which requires a cable system to delete particular
            programming offered by a distant broadcast signal carried on the
            system which duplicates the programming for which a local broadcast
            station has secured exclusive distribution rights,

        (2) network program nonduplication,

        (3) local sports blackouts,

        (4) indecent programming,

        (5) lottery programming,

        (6) political programming,

        (7) sponsorship identification,

        (8) children's programming advertisements, and

        (9) closed captioning,

     - registration of cable systems and facilities licensing,

     - maintenance of various records and public inspection files,

     - aeronautical frequency usage,

     - lockbox availability,

     - antenna structure notification,

     - tower marking and lighting,

     - consumer protection and customer service standards,

     - technical standards,

     - consumer electronics equipment compatibility, and

     - emergency alert systems.

     The Federal Communications Commission recently 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 basic converter functions,
which could then be satisfied by third party vendors. The first phase
implementation date was July 1, 2000. Compliance was technically and
operationally difficult in some locations, so we and several other cable
operators filed a request at the Federal Communications Commission that the
requirement be waived in those systems. The request resulted in a temporary
deferral of the compliance deadline for those systems.

     The Federal Communications Commission recently initiated an inquiry to
determine whether the cable industry's future provision of interactive services
should be subject to regulations ensuring equal access and competition among
service vendors. The inquiry, which grew out of the Commission's review of the
AOL-Time Warner merger, is in its earliest stages, but is yet another expression
of regulatory concern regarding control over cable capacity.

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     COPYRIGHT.  Cable television systems are subject to federal copyright
licensing covering carriage of television and radio broadcast signals. In
exchange for filing certain reports and contributing a percentage of their
revenues to a federal copyright royalty pool, that varies depending on the size
of the system, the number of distant broadcast television signals carried, and
the location of the cable system, cable operators can obtain blanket permission
to retransmit copyrighted material included in broadcast signals. The U.S.
Copyright Office recently adopted an industry agreement providing for a modest
increase in the copyright royalty rates. 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. Copyright clearances for nonbroadcast programming services are
arranged through private negotiations.

     Cable operators distribute locally originated programming and advertising
that use music controlled by the two principal major music performing rights
organizations, the American Society of Composers, Authors and Publishers and
Broadcast Music, Inc. The cable industry has had a long series of negotiations
and adjudications with both organizations. A prior voluntarily negotiated
agreement with Broadcast Music has now expired, and is subject to further
proceedings. The governing rate court recently set retroactive and prospective
cable industry rates for American Society of Composers music based on the
previously negotiated Broadcast Music rate. Although we cannot predict the
ultimate outcome of these industry proceedings or the amount of any license fees
we may be required to pay for past and future use of association-controlled
music, we do not believe such license fees will be significant to our business
and operations.

     STATE AND LOCAL REGULATION.  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. Federal law now
prohibits local franchising authorities from granting exclusive franchises or
from unreasonably refusing to award additional franchises. Cable franchises
generally are granted for fixed terms and in many cases include monetary
penalties for non-compliance and may be terminable if the franchisee fails to
comply with material provisions.

     The specific terms and conditions of franchises vary materially between
jurisdictions. Each franchise generally contains provisions governing cable
operations, service rates, franchising fees, system construction and maintenance
obligations, system channel capacity, design and technical performance, customer
service standards, and indemnification protections. A number of states,
including Connecticut, subject cable systems to the jurisdiction of centralized
state governmental agencies, some of which impose regulation of a character
similar to that of a public utility. Although local franchising authorities have
considerable discretion in establishing franchise terms, there are certain
federal limitations. For example, local franchising authorities cannot insist on
franchise fees exceeding 5% of the system's gross cable-related revenues, cannot
dictate the particular technology used by the system, and cannot specify video
programming other than identifying broad categories of programming. Certain
states are considering the imposition of new broadly applied telecommunications
taxes.

     Federal law contains renewal procedures designed to protect incumbent
franchisees against arbitrary denials of renewal. Even if a franchise is
renewed, the local franchising authority may seek to impose new and more onerous
requirements such as significant upgrades in facilities and service or increased
franchise fees as a condition of renewal. Similarly, if a local franchising
authority's consent is required for the purchase or sale of a cable system or
franchise, such local franchising authority may attempt to impose more
burdensome or onerous franchise requirements in connection with a request for
consent. Historically, most franchises have been renewed for and consents have
been granted to cable operators that have provided satisfactory services and
have complied with the terms of their franchise.

     Under the 1996 Telecom Act, states and local franchising authorities are
prohibited from limiting, restricting, or conditioning the provision of
competitive telecommunications services, except for certain "competitively
neutral" requirements and as necessary to manage the public rights-of-way. This
law should facilitate entry into competitive telecommunications services,
although certain jurisdictions still may attempt to impose rigorous entry
requirements. In addition, local franchising authorities may not require a cable
operator to provide any telecommunications service or facilities, other than
institutional networks under

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certain circumstances, as a condition of an initial franchise grant, a franchise
renewal, or a franchise transfer. The 1996 Telecom Act also provides that
franchising fees are limited to an operator's cable-related revenues and do not
apply to revenues that a cable operator derives from providing new
telecommunications services.

EMPLOYEES

     During 2000, pursuant to mutual services agreement between Charter
Communications Inc. and Charter Investment, Inc., Charter Investment leased the
necessary personnel and provided services to Charter Communications, Inc. to
manage Charter Communications Holding Company and its subsidiaries. Effective
January 1, 2001, Charter Investment personnel became employees of Charter
Communications Holding Company and the mutual services agreement was amended to
add Charter Communications Holding Company as a party and provide that both
Charter Investment and Charter Communications Holding Company will provide
services to Charter Communications, Inc. on a cost reimbursement basis.

     Charter Communications, Inc. currently has only fifteen employees, all of
whom are senior management. The corporate office also includes employees of
Charter Communications Holdings Company. The corporate officers are responsible
for coordinating and overseeing our operations, including certain critical
functions, such as marketing and engineering, that are conducted by personnel at
the regional and local system level. The corporate office also performs certain
financial control functions such as accounting, finance and acquisitions,
payroll and benefit administration, internal audit, purchasing and programming
contract administration on a centralized basis.

     As of December 31, 2000, our operating subsidiaries had approximately
13,490 full-time equivalent employees of which approximately 300 were
represented by collective bargaining agreements. We believe we have a good
relationship with our employees and have never experienced a work stoppage.

ITEM 2.  PROPERTIES

     Our principal physical assets consist of a cable television 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 television systems.

     Our cable television 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 underground ducts or
trenches. We own or lease real property for signal reception sites and business
offices in many of the communities served by our systems and for our principal
executive offices. We own most of our service vehicles.

     Our subsidiaries own or lease the real property and buildings for our
regional data and call centers and our regional and divisional administrative
offices. Our subsidiaries generally have leased space for business offices
throughout our operating regions, although an increasing number of our systems
are now purchasing property for system offices. Our headend locations are
generally located on owned or leased parcels of land, and we generally own the
towers on which our equipment is located. We plan to purchase real property in
May 2001 for our corporate office.

     We believe that our properties are in good operating condition and are
suitable for our business operations.

ITEM 3.  LEGAL PROCEEDINGS

     We are involved from time to time in routine legal matters and other claims
incidental to our business. We believe that the resolution of such matters,
taking into account established reserves and insurance, will not have a material
adverse impact on our consolidated financial position or results of operations.

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ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     The owner of our Class B common stock voted to amend Charter's Restated
Certificate of Incorporation on October 24, 2000 to become a member of Cable
Sports Southeast, LLC and a shareholder of High-Speed Access Corp. In accordance
with the certificate of incorporation of Charter Communications, Inc., these
matters were voted on by the holders of Class B common stock only. Mr. Allen is
the sole holder of our Class B common stock.

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                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(A) MARKET INFORMATION

     Our Class A common stock is quoted on the Nasdaq National Market System
under the ticker symbol "CHTR."

              QUARTERLY MARKET INFORMATION -- CLASS A COMMON STOCK



2000                                                           HIGH        LOW
----                                                          -------    -------
                                                                   
First quarter...............................................  $22.625    $14.000
Second quarter..............................................  $16.563    $10.000
Third quarter...............................................  $17.063    $12.375
Fourth quarter..............................................  $24.188    $16.188




1999                                                           HIGH        LOW
----                                                          -------    -------
                                                                   
Fourth quarter*.............................................   27.750     19.500


---------------
* We completed our initial public offering of Class A common stock on November
  8, 1999. The initial public offering price per share was $19.00.

(B) HOLDERS

     As of February 26, 2000, there were approximately 2,773 holders of our
Class A common stock (representing an aggregate of approximately 176,045
beneficial holders) and one holder of our Class B common stock. No preferred
stock is outstanding.

(C) DIVIDENDS

     There have been no stock dividends paid on any of our equity securities. We
do not intend to pay cash dividends in the foreseeable future. We intend to
retain future earnings, if any, to finance the expansion of our business.
Charter Communications Holding Company is required under certain circumstances
to pay distributions pro rata to all holders of its common membership units,
including us, to the extent necessary for any holder of common membership units
to pay income taxes incurred with respect to its share of taxable income
attributed to Charter Communications Holding Company. Covenants in the
indentures and credit agreements governing the debt obligations of Charter
Communications Holdings and its subsidiaries restrict their ability to make
distributions to us, and accordingly, limit our ability to declare or pay cash
dividends.

(D) RECENT SALES OF UNREGISTERED SECURITIES

     On February 14, 2000, we purchased Bresnan Communications Company Limited
Partnership for a total purchase price of approximately $3.1 billion, consisting
of approximately $1.1 billion in cash, $1.0 billion in Class C membership units
in Charter Communications Holding Company and Class A membership units in CC
VII, LLC that are exchangeable for Charter Communications, Inc. Class A common
stock, and $963.3 million in assumed debt. The Bresnan sellers have unlimited
"piggyback" registration rights and up to four "demand" registration rights with
respect to the Class A common stock issued in exchange for the membership units
in Charter Communications Holding Company and CC VII, LLC. The demand
registration rights must be exercised with respect to tranches of Class A common
stock worth at least $40 million at the time of notice of demand or at least $60
million at the initial public offering price. The above securities were offered
and sold by Charter in reliance upon the exemption from registration pursuant to
Section 4(2) of the Securities Act.

                                        29
   30

ITEM 6.  SELECTED FINANCIAL DATA.



                                         CHARTER COMMUNICATIONS PROPERTIES
                                                      HOLDINGS                        CHARTER COMMUNICATIONS, INC.
                                         ----------------------------------   ---------------------------------------------
                                              YEAR ENDED                                               YEAR ENDED
                                             DECEMBER 31,          1/1/98       12/24/98              DECEMBER 31,
                                         ---------------------    THROUGH       THROUGH      ------------------------------
                                           1996        1997       12/23/98      12/31/98         1999             2000
                                         ---------   ---------   ----------   ------------   -------------   --------------
                                                                              (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                                           
Statement of Operations:
  Revenues.............................   $14,881     $18,867     $ 49,731     $   13,713     $ 1,428,244     $  3,249,222
                                          -------     -------     --------     ----------     -----------     ------------
Operating Expenses:
  Operating, general and
    administrative.....................     8,123      11,767       25,952          7,134         737,957        1,651,353
  Depreciation and amortization........     4,593       6,103       16,864          8,318         745,315        2,473,082
  Option compensation expense..........        --          --           --            845          79,979           40,978
  Management fees/corporate expense
    charges............................       446         566        6,176            473          51,428           55,243
                                          -------     -------     --------     ----------     -----------     ------------
  Total operating expenses.............    13,162      18,436       48,992         16,770       1,614,679        4,220,656
                                          -------     -------     --------     ----------     -----------     ------------
Income (loss) from operations..........     1,719         431          739         (3,057)       (186,435)        (971,434)
Interest expense.......................    (4,415)     (5,120)     (17,277)        (2,353)       (477,799)      (1,059,130)
Interest income........................        20          41           44            133          34,467            7,348
Loss on equity investments.............        --          --           --             --              --          (19,262)
Other income (expense).................       (47)         25         (728)            --          (8,039)         (12,467)
                                          -------     -------     --------     ----------     -----------     ------------
Income (loss) before income taxes and
  minority interest....................    (2,723)     (4,623)     (17,222)        (5,277)       (637,806)      (2,054,945)
Income tax expense.....................        --          --           --             --          (1,030)              --
                                          -------     -------     --------     ----------     -----------     ------------
Income (loss) before minority
  interest.............................    (2,723)     (4,623)     (17,222)        (5,277)       (638,836)      (2,054,945)
                                          -------     -------     --------     ----------     -----------     ------------
Minority interest in loss of
  subsidiary...........................        --          --           --          5,275         572,607        1,226,295
                                          -------     -------     --------     ----------     -----------     ------------
Net income (loss)......................   $(2,723)    $(4,623)    $(17,222)    $       (2)    $   (66,229)    $   (828,650)
                                          -------     -------     --------     ----------     -----------     ------------
Loss per common share, basic and
  diluted..............................       N/A         N/A          N/A     $    (0.04)    $     (2.22)    $      (3.67)
                                          -------     -------     --------     ----------     -----------     ------------
Weighted-average common shares
  outstanding..........................       N/A         N/A          N/A         50,000      29,811,202      225,697,775
                                          -------     -------     --------     ----------     -----------     ------------
Balance sheet data (at end of
  period)..............................
Total assets...........................   $67,994     $55,811     $281,969     $4,335,527     $18,966,507     $ 23,043,566
Total debt.............................    59,222      41,500      274,698      2,002,206       8,936,455       13,060,455
Minority interest......................        --          --           --      2,146,549       5,381,331        4,089,329
Redeemable securities..................        --          --           --             --         750,937        1,104,327
Member's equity (deficit)/Shareholders'
  equity...............................     2,648      (1,975)      (8,397)           830       3,011,079        3,123,204


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

     Reference is made to the "Certain Trends and Uncertainties" section below
in this Management's Discussion and Analysis for a discussion of 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. as of and for the years ended
December 31, 2000 and 1999 and for the period from December 24, 1998 through
December 31, 1998 and the audited consolidated financial statements of Charter
Communications Properties Holdings, LLC (CCPH) for the period from January 1,
1998 through December 23, 1998.

INTRODUCTION

     We do not believe that our historical financial condition and results of
operations are accurate indicators of future results because of certain
significant past events. Those events include numerous mergers,

                                        30
   31

acquisitions, and debt financing transactions over the last few years and our
initial public stock offering in November 1999.

ORGANIZATIONAL HISTORY

     Our organizational structure is very complex and is described in more
detail in the forepart of this Form 10-K. Prior to the acquisition of the
Charter companies by Mr. Allen on December 23, 1998 and the merger of Marcus
Holdings with and into Charter Holdings effective April 7, 1999, the cable
systems of the Charter and Marcus companies were operated under four groups of
companies. Three of these groups were comprised of companies that were managed
by Charter Investment and in which Charter Investment had an ownership interest.
The fourth group was comprised of companies that were subsidiaries of Marcus
Holdings which Charter Investment began managing in October 1998.

THE CHARTER COMPANIES

     Prior to the acquisition by Mr. Allen, the Charter companies were as
follows:

     (1) CCPH

             CCPH was a wholly owned subsidiary of Charter Investment. The
        primary subsidiary of CCPH, which owned the cable systems, was Charter
        Communications Properties, LLC. On May 20, 1998, CCPH acquired certain
        cable systems from Sonic Communications, Inc. for a total purchase
        price, net of cash acquired, of $228.4 million, including $60.9 million
        of assumed debt. In connection with Mr. Allen's acquisition on December
        23, 1998, CCPH was merged out of existence, and Charter Communications
        Properties became a direct, wholly owned subsidiary of Charter
        Investment.

     (2) CCA Group

             The controlling interests in CCA Group were held by affiliates of
        Kelso & Co., and Charter Investment had only a minority interest.
        Effective December 23, 1998, prior to Mr. Allen's acquisition, Charter
        Investment acquired from the Kelso affiliates the interests the Kelso
        affiliates held in CCA Group. Later, the operating companies comprising
        CCA Group became wholly owned subsidiaries of Charter Investment.

     (3) CharterComm Holdings, LLC

             The controlling interests in CharterComm Holdings were held by
        affiliates of Charterhouse Group International Inc., and Charter
        Investment had only a minority interest. Effective December 23, 1998,
        prior to Mr. Allen's acquisition, Charter Investment acquired from the
        Charterhouse Group affiliates the interests the Charterhouse Group
        affiliates held in CharterComm Holdings. Consequently, CharterComm
        Holdings became a wholly owned subsidiary of Charter Investment.

     The cable systems were owned by the various subsidiaries of CharterComm
Holdings. In connection with Mr. Allen's acquisition of us on December 23, 1998,
some of the non-operating subsidiaries, including CharterComm Holdings were
merged out of existence.

     The acquisition by Mr. Allen became effective on December 23, 1998, through
a series of transactions in which Mr. Allen acquired approximately 94% of the
equity interests of Charter Investment for an aggregate purchase price of $2.2
billion, excluding $2.0 billion in assumed debt. CCPH and the operating
companies that formerly comprised CCA Group and CharterComm Holdings were
contributed to Charter Operating subsequent to Mr. Allen's acquisition. CCPH is
deemed to be our predecessor. Consequently, the contribution of CCPH was
accounted for as a reorganization under common control. Accordingly, our results
of operations for periods prior to and including December 23, 1998 include the
accounts of CCPH. The contributions of the operating companies that formerly
comprised CCA Group and CharterComm Holdings were accounted for in accordance
with purchase accounting. Accordingly, our results of operations for periods
after December 23, 1998 include the accounts of CCPH, CCA Group and CharterComm
Holdings.
                                        31
   32

     In February 1999, Charter Holdings was formed as a wholly owned subsidiary
of Charter Investment, and Charter Operating was formed as a wholly owned
subsidiary of Charter Holdings. All of Charter Investment's direct interests in
the entities described above were transferred to Charter Operating. All of the
prior management agreements were terminated, and a single new management
agreement was entered into between Charter Investment and Charter Operating to
cover all of the subsidiaries.

     In May 1999, Charter Communications Holding Company was formed as a wholly
owned subsidiary of Charter Investment. All of Charter Investment's interests in
Charter Holdings were transferred to Charter Communications Holding Company.

     In July 1999, Charter Communications, Inc. was formed as a wholly owned
subsidiary of Charter Investment.

     In November 1999, Charter Communications, Inc. conducted its initial public
offering. In the initial public offering, substantially all of the equity
interests in Charter Communications, Inc. were sold to the public, and less than
1% of its equity interests were sold to Mr. Allen. Charter Communications, Inc.
contributed substantially all of the proceeds of its initial public offering to
Charter Communications Holding Company, which issued membership units to Charter
Communications, Inc. In November 1999, the management agreement between Charter
Investment and Charter Operating was amended and assigned from Charter
Investment to Charter Communications, Inc. Also in November 1999, Charter
Communications Holding Company sold membership units to Vulcan Cable III.

THE MARCUS COMPANIES

     In April 1998, Mr. Allen acquired approximately 99% of the non-voting
economic interests in Marcus Cable, and agreed to acquire the remaining
interests. The owner of the remaining partnership interests retained voting
control of Marcus Cable. In October 1998, Marcus Cable entered into a management
consulting agreement with Charter Investment, pursuant to which Charter
Investment provided management and consulting services to Marcus Cable and its
subsidiaries which own cable systems. This agreement placed the Marcus cable
systems under common management with the cable systems of the Charter companies
acquired by Mr. Allen in December 1998.

     In March 1999, all of Mr. Allen's interests in Marcus Cable were
transferred to Marcus Holdings, a then newly formed company. Later in March
1999, Mr. Allen acquired the remaining interests in Marcus Cable, including
voting control, which interests were transferred to Marcus Holdings. In April
1999, Mr. Allen merged Marcus Holdings into Charter Holdings, and the operating
subsidiaries of Marcus Holdings and all of the cable systems they owned came
under the ownership of Charter Holdings and, in turn, Charter Operating. For
financial reporting purposes, the merger of Marcus Holdings with and into
Charter Holdings was accounted for as an acquisition of Marcus Holdings
effective March 31, 1999, and accordingly, the results of operations of Marcus
Holdings have been included in our consolidated financial statements since that
date.

ACQUISITIONS

     Since January 1, 1999, we completed sixteen acquisitions for an aggregate
purchase price of $14.3 billion including aggregate cash payments of $9.1
billion, $3.3 billion of assumed debt and $1.9 billion of equity interests
issued. These acquisitions were funded through the issuance of stock and
long-term debt, bank borrowings and internally generated funds. In 2000, we
transferred the cable systems we acquired in three of those acquisitions (Fanch,
Falcon and Avalon) to Charter Holdings. 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.

                                        32
   33

     The following table sets forth information on our acquisitions in 1999 and
2000.



                                                      PURCHASE PRICE (IN MILLIONS)                         REVENUES SINCE
                                                ----------------------------------------                  ACQUISITION DATE
                                  ACQUISITION    CASH    ASSUMED   SECURITIES     TOTAL     ACQUIRED    ---------------------
                                     DATE        PAID     DEBT       ISSUED       PRICE     CUSTOMERS     1999        2000
                                  -----------   ------   -------   ----------    -------    ---------   --------   ----------
                                                                                                           (IN THOUSANDS)
                                                                                           
Renaissance.....................      4/99      $  348   $  111          --      $   459      134,000   $ 42,032   $   70,312
American Cable..................      5/99         240       --          --          240       69,000     24,904       42,151
Greater Media Systems...........      6/99         500       --          --          500      176,000     32,313       95,988
Helicon.........................      7/99         410      115          25(a)       550      171,000     35,658       89,872
Vista...........................      7/99         126       --          --          126       26,000      5,751       14,253
Cable Satellite.................      8/99          22       --          --           22        9,000      1,917        4,750
Rifkin..........................      9/99       1,200      128         133(b)     1,461      463,000     67,514      236,370
InterMedia......................     10/99         873       --          --          873(c)   278,000     54,850      229,489
Fanch...........................     11/99       2,400       --          --        2,400      535,600     32,281      266,031
Falcon..........................     11/99       1,250    1,700         550(d)     3,500      977,200     56,051      456,999
Avalon..........................     11/99         558      274          --          832      270,800     13,929      124,068
                                                ------   ------      ------      -------    ---------
    Total -- 1999
      Acquisitions..............                $7,927   $2,328      $  708      $10,963    3,109,600
Interlake.......................      1/00          13       --          --           13        6,000         --        1,713
Bresnan.........................      2/00       1,100      963       1,015(e)     3,078      695,800         --      297,080(g)
Capital Cable...................      4/00          60       --          --           60       23,200         --        7,513
Farmington......................      4/00          15       --          --           15        5,700         --        1,571
Kalamazoo.......................      9/00          --       --         171(f)       171       50,700         --        7,360
                                                ------   ------      ------      -------    ---------   --------   ----------
    Total -- 2000
      Acquisitions..............                $1,188   $  963      $1,186      $ 3,337      781,400
    Total -- 1999 & 2000
      Acquisitions..............                $9,115   $3,291      $1,894      $14,300    3,891,000   $367,200   $1,945,520
                                                ======   ======      ======      =======    =========   ========   ==========


---------------
(a) Purchase price component represents a preferred limited liability interest
    of Charter-Helicon, LLC, a direct wholly owned subsidiary.

(b) Purchase price component relates to equity in Charter Communications Holding
    Company.

(c) As part of this transaction, we agreed to "swap" some of our non-strategic
    cable systems serving customers in Indiana, Montana, Utah & Northern
    Kentucky. At the closing we retained a cable system located in Indiana for
    which we were unable to timely obtain necessary regulatory approvals of the
    system transfer. Such approval was subsequently obtained and the Indiana
    system assets were transferred in March 2000. This transaction, including
    the transfer of the retained Indiana system, resulted in a net increase of
    273,300 customers.

(d) Purchase price component relates to common membership units in Charter
    Communications Holding Company issued to certain of the Falcon sellers.

(e) Purchase price component is comprised of $385 million in equity in Charter
    Communications Holding Company and $630 million of equity in CC VIII.

(f) 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's Class A common stock.

(g) Includes revenues of approximately $.6 million related to the cable systems
    acquired by Bresnan since December 31, 1999.

PENDING AT&T TRANSACTIONS

     In February 2001, we entered into several agreements with AT&T Broadband,
LLC involving several strategic cable system transactions that will result in a
net addition of approximately 512,000 customers for the Charter cable systems.
In the pending AT&T transactions, we expect to acquire cable systems from AT&T
Broadband serving approximately 574,000 customers in Missouri, Alabama, Nevada
and California for a total of $1.79 billion. A portion of the purchase price
will consist of Charter cable systems valued at $249 million serving
approximately 62,000 customers in Florida. Of the balance of the purchase price,
up to $501.5 million

                                        33
   34

will be paid in Class A common stock and the remainder will be paid in cash.
Charter Holdings and Charter Capital have a commitment for a bridge loan from
Morgan Stanley Senior Funding, Inc. and Goldman Sachs Credit Partners LP for
temporary financing of the cash portion of the purchase price. See "-- Financing
Activities." We expect to obtain permanent financing through one or more debt or
equity financing transactions or a combination thereof. The acquisition
transactions are expected to close in the second and/or third quarters of 2001,
subject to certain closing conditions and regulatory review.

OVERVIEW OF OPERATIONS

     Approximately 87% of our revenues for the year ended December 31, 2000 are
attributable to monthly subscription fees charged to customers for our basic,
expanded basic, premium and digital cable television programming services,
Internet access through television-based service, dial-up telephone modems and
high-speed cable modem service, equipment rental and ancillary services provided
by our cable systems. The remaining 13% of revenue is derived from installation
and reconnection fees charged to customers to commence or reinstate service,
pay-per-view programming, where users are charged a fee for individual programs
requested, advertising revenues and commissions related to the sale of
merchandise by home shopping services and franchise revenues. We have generated
increased revenues in each of the past three years, primarily through customer
growth from acquisitions, internal customer growth, basic and expanded tier rate
increases and revenues from new services and products.

     Our expenses primarily consist of operating costs, general and
administrative expenses, depreciation and amortization expense, interest expense
and management fees/corporate expense charges. Operating costs primarily include
programming costs, cable service related expenses, marketing and advertising
costs, franchise fees and expenses related to customer billings.

     We have had a history of net losses and expect to continue to report net
losses for the foreseeable future. The principal reasons for our prior and
anticipated net losses include depreciation and amortization expenses associated
with our acquisitions and capital expenditures related to construction and
upgrading of our systems, and interest costs on borrowed money. We cannot
predict what impact, if any, continued losses will have on our ability to
finance our operations in the future.

                                        34
   35

RESULTS OF OPERATIONS

     The following table sets forth the percentages of revenues that items in
the statements of operations constitute for the indicated periods (dollars in
thousands).



                                    CHARTER
                                 COMMUNICATIONS
                              PROPERTIES HOLDINGS                        CHARTER COMMUNICATIONS, INC.
                              --------------------      --------------------------------------------------------------
                                     PERIOD                  PERIOD
                                JANUARY 1, 1998         DECEMBER 24, 1998        YEAR ENDED            YEAR ENDED
                                TO DECEMBER 23,          TO DECEMBER 31,        DECEMBER 31,          DECEMBER 31,
                                      1998                    1998                  1999                  2000
                              --------------------      -----------------    ------------------    -------------------
                                                                                         
STATEMENTS OF OPERATIONS:
Revenues....................   $ 49,731     100.0%      $13,713    100.0%    $1,428,244   100.0%   $ 3,249,222   100.0%
Operating expenses:
  Operating, general and
    administrative costs....     25,952      52.2%        7,134     52.0%       737,957    51.7%     1,651,353    50.8%
  Deprecation and
    Amortization............     16,864      33.9%        8,318     60.7%       745,315    52.2%     2,473,082    76.1%
  Option compensation
    expense.................         --        --           845      6.2%        79,979     5.6%        40,978     1.3%
  Management fees/corporate
    expense charges.........      6,176      12.4%          473      3.4%        51,428     3.6%        55,243     1.7%
                               --------     -----       -------    -----     ----------   -----    -----------   -----
Total operating expenses....     48,992      98.5%       16,770    122.3%     1,614,679   113.1%     4,220,656   129.9%
                               --------     -----       -------    -----     ----------   -----    -----------   -----
Income (loss) from
  operations................        739       1.5%       (3,057)   (22.3)%     (186,435)  (13.1)%     (971,434)  (29.9)%
Interest expense............    (17,277)    (34.7)%      (2,353)   (17.2)%     (477,799)  (33.5)%   (1,059,130)  (32.6)%
Interest income.............         44        .1%          133      1.0%        34,467     2.4%         7,348      .2%
Loss on equity
  investments...............         --        --            --       --             --      --        (19,262)    (.6)%
Other income (expense)......       (728)     (1.5)%          --       --         (8,039)    0.6%       (12,467)    (.4)%
                               --------     -----       -------    -----     ----------   -----    -----------   -----
Loss before taxes and
  minority interest.........    (17,222)    (34.6)%      (5,277)   (38.5)%     (637,806)  (44.7)%   (2,054,945)  (63.2)%
                               --------     -----       -------    -----     ----------   -----    -----------   -----
Income Tax Expense..........         --        --            --       --         (1,030)     --             --      --
Minority interest in loss of
  subsidiary................         --        --         5,275     38.5%       572,607    40.1%     1,226,295    37.7%
                               --------     -----       -------    -----     ----------   -----    -----------   -----
Net Loss....................   $(17,222)    (34.6)%     $    (2)     0.0%    $  (66,229)   (4.6)%  $  (828,650)  (25.5)%
                               ========     =====       =======    =====     ==========   =====    ===========   =====


                                        35
   36

FISCAL 2000 COMPARED TO FISCAL 1999

     REVENUES.  Revenues increased by $1,821.0 million or 127% from $1,428.2
million in 1999 to $3,249.2 million in 2000. System operations acquired after
January 1, 1999 accounted for $1,578.3 million or 87% of the increase in 2000,
while systems acquired before January 1, 1999 accounted for $242.7 million or
13%. Revenues by service offering are as follows (dollars in thousands):



                                     2000                    1999
                             ---------------------   ---------------------
                                            % OF                    % OF                    %
                              BALANCE     REVENUES    BALANCE     REVENUES     CHANGE     CHANGE
                             ----------   --------   ----------   --------   ----------   ------
                                                                        
Basic......................  $2,249,339      69%     $1,002,954      70%     $1,246,385    124%
Premium....................     226,598       7%        124,788       9%        101,810     82%
Pay-per-view...............      28,590       1%         27,537       2%          1,053      4%
Digital....................      91,115       3%          8,299      .5%         82,816    998%
Data services..............      63,330       2%         10,107      .5%         53,223    527%
Advertising sales..........     220,205       7%         71,997       5%        148,208    206%
Other......................     370,045      11%        182,562      13%        187,483    103%
                             ----------     ---      ----------     ---      ----------
                             $3,249,222     100%     $1,428,244     100%     $1,820,978
                             ==========     ===      ==========     ===      ==========


     In 2000, we added 898,300 basic customers from 5,452,600 to 6,350,900, of
which approximately 741,100 was a result of acquisitions. The remaining 157,200
relates to internal growth, which is an increase of approximately 2.5% compared
to the prior year on a pro forma basis.

     Premium units increased by 2,094,700 from 2,844,400 to 4,939,100, of which
approximately 300,100 was a result of acquisitions. The remaining increase of
1,794,600 is the result of aggressive marketing and pricing of premium products
related to upgrades.

     In 2000, we added 943,300 digital customers from 126,200 to 1,069,500. Of
the total increase, approximately 29,200 was the result of acquisitions and
914,100 was the result of internal growth or upgrades. The pace of growth
increased throughout the year as we upgraded our systems. We surpassed our
expectations throughout the year, with an average of 17,500 digital
installations per week during 2000 which increased to 40,000 digital
installations per week in December 2000. Growth was a result of intense
marketing efforts and strong demand for this service.

     Data customers increased by 180,400 from 72,000 to 252,400 of which 12,400
was the result of acquisitions and 168,000 was the result of internal growth.
Our system upgrades facilitated interactive capability necessary to offer high
speed interactive service. Growth in data services was also the result of strong
marketing efforts coupled with increased demand for such services.

     Advertising revenues increased $148.2 million from $72.0 million in 1999 to
$220.2 million in 2000 of which approximately $101.8 million was the result of
operations acquired after January 1, 1999. In addition, as a result of our
rebuild efforts, we experienced increased capacity due to expanded channel
line-ups and thus, increased advertising. The significant level of political
campaign advertising in 2000 also contributed to increased advertising revenues.

     OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES.  Operating, general and
administrative expenses increased by $913.4 million from $738.0 million in 1999
to $1,651.4 million in 2000. System operations acquired after January 1, 1999
accounted for $813.8 million or 89% of the increase in 2000 while systems

                                        36
   37

acquired before January 1, 1999 accounted for $99.6 million or 11%. Key expense
components as a percentage of revenues are as follows (dollars in thousands):



                                        2000                   1999
                                ---------------------   -------------------
                                               % OF                  % OF                  %
                                 BALANCE     REVENUES   BALANCE    REVENUES    CHANGE    CHANGE
                                ----------   --------   --------   --------   --------   ------
                                                                       
Programming...................  $  736,043      23%     $330,754      23%     $405,289    123%
General and Administrative....     543,865      17%      237,480      17%      306,385    129%
Service.......................     192,603       6%       99,486       7%       93,117     94%
Marketing.....................      63,789       2%       23,447       2%       40,342    172%
Advertising sales.............      56,499       2%       31,281       2%       25,218     81%
Other.........................      58,554       2%       15,509       1%       43,045    278%
                                ----------              --------              --------
                                $1,651,353              $737,957              $913,396
                                ==========              ========              ========


     Of the $405.3 million increase in programming, approximately $355.7 million
or 88% relates to operations acquired after January 1, 1999. The remaining $49.6
million increase is due to continued inflationary or negotiated increases,
particularly in sports programming, coupled with increased channel capacity. The
increase in general and administrative costs of $306.4 million reflects an
increase of $275.0 million or 90% related to operations acquired after January
1, 1999. The remaining increase of $31.4 million is due to increases in
corporate and regional resources to support our growth. Service expenses
increased $93.1 million, of which $87.0 million or 93% relates to operations
acquired after January 1, 1999 and $6.1 million or 7% is a result of internal
growth. Marketing expenses increased $40.3 million to $63.8 million in 2000, of
which approximately $20.1 million or 50% relates to operations acquired after
January 1, 1999. The remaining increase of $20.2 million relates to promotions
of advanced product offerings, including Charter Digital Cable and TV-based high
speed internet service. Advertising expenses increased $25.2 million, of which
the majority relates to operations acquired after January 1, 1999. Other
operating expenses increased by $43.0 million from $15.5 million in 1999 to
$58.6 million in 2000, of which the majority relates to operations acquired
after January 1, 1999.

     MANAGEMENT FEES/CORPORATE EXPENSE CHARGES.  Corporate expense charges
increased by $3.8 million from $51.4 million in 1999 to $55.2 million in 2000.
The increase was primarily a result of continued growth from acquisitions.

     DEPRECIATION AND AMORTIZATION.  Depreciation and amortization expense
increased by $1,727.8 million from $745.3 million in 1999 to $2,473.1 million in
2000. This increase was due to a full year of expense on the fixed assets and
franchises of our 1999 acquisitions, a partial year of expense on 2000
acquisitions and capital expenditures of $2.8 billion to rebuild and upgrade our
cable systems in 2000. Related to the rebuild and upgrade of our plant, the
useful lives of certain depreciable assets were shortened. As a result, an
additional $508.5 million of depreciation expense was recorded during 2000.
These increases were partially offset by the elimination of depreciation and
amortization expense related to dispositions of cable systems.

     OPTION COMPENSATION EXPENSE.  Option compensation expense decreased by
$39.0 million from $80.0 million in 1999 to $41.0 million in 2000. The expense
relates to option grants at the time of our initial public offering at prices
less than the estimated fair market value of our stock resulting in compensation
expense to be accrued over the vesting period of the options.

     INTEREST EXPENSE.  Interest expense increased by $581.3 million from $477.8
million in 1999 to $1,059.1 million in 2000. The increase in interest expense
was a result of increased average debt outstanding in 2000 of $12,281.2 million
compared to $7,108.5 million in 1999, coupled with an increase in our average
borrowing rate of .66% from 8.36% in 1999 to 9.02% in 2000. The increased debt
was used for acquisitions, capital expenditures and for other corporate
purposes.

     INTEREST INCOME.  Interest income decreased by $27.1 million from $34.5
million in 1999 to $7.3 million in 2000. The decrease in interest income was a
result of lower cash on hand in 2000 due to required credit facility draw downs
in 1999 which were not required in 2000.

                                        37
   38

     LOSS ON EQUITY INVESTMENTS.  The loss in 2000 was primarily due to losses
of $7.5 million on investments carried under the equity method of accounting and
other than temporary losses of $11.8 million on investments carried under the
cost method.

     MINORITY INTEREST IN LOSS OF SUBSIDIARY.  Minority interest in loss of
subsidiary represents the allocation of losses to the minority interest in loss
of subsidiary based on ownership of Charter Communications Holding Company and
the 2% accretion of the preferred membership units in an indirect subsidiary of
Charter Holdings issued to certain Bresnan sellers. These membership units are
exchangeable on a one-for-one basis for shares of Class A common stock of
Charter Communications, Inc.

     NET LOSS.  Net loss increased by $762.5 million from $66.2 million in 1999
to $828.7 million in 2000 as a result of the combination of factors discussed
above.

FISCAL 1999 COMPARED TO PERIOD FROM JANUARY 1, 1998 THROUGH DECEMBER 23, 1998

     REVENUES.  Revenues increased by $1,378.5 million, from $49.7 million for
the period from January 1, 1998 through December 23, 1998 to $1,428.2 million in
1999. The increase in revenues primarily resulted from the acquisitions of CCA
Group and CharterComm Holdings, Marcus Holdings and 1999 acquisitions.
Additional revenues from these entities included for the year ended December 31,
1999 were $618.8 million, $386.7 million and $350.1 million, respectively.

     OPERATING, GENERAL AND ADMINISTRATIVE COSTS.  Operating, general and
administrative costs increased by $712.0 million, from $26.0 million for the
period from January 1, 1998 through December 23, 1998 to $738.0 million in 1999.
This increase was due primarily to the acquisition of the CCA Group and
CharterComm Holdings, Marcus Holdings and 1999 acquisitions. Additional
operating, general and administrative expenses from these entities included for
the year ended December 31, 1999 were $338.5 million, $209.3 million and $158.8
million, respectively.

     DEPRECIATION AND AMORTIZATION Depreciation and amortization expense
increased by $728.5 million, from $16.9 million, for the period from January 1,
1998 through December 23, 1998 to $745.3 million in 1999. There was a
significant increase in amortization expense resulting from the acquisitions of
the CCA Group and CharterComm Holdings, Marcus Holdings and 1999 acquisitions.
Additional depreciation and amortization expense from these entities included
for the year ended December 31, 1999 were $346.3 million, $203.5 million and
$195.1 million, respectively. The increases were offset by the elimination of
depreciation and amortization expense related to disposition of cable systems.

     OPTION COMPENSATION EXPENSE.  Option compensation expense in 1999 was $80.0
million due to the granting of options to employees in December 1998, February
1999 and April 1999. The exercise prices of the options on the date of grant
were less than the estimated fair values of the underlying membership units,
resulting in compensation expense accrued over the vesting period of each grant
that varies from four to five years.

     MANAGEMENT FEES/CORPORATE EXPENSE CHARGES.  Management fees/corporate
expense charges increased by $45.3 million, from $6.2 million, for the period
from January 1, 1998 through December 23, 1998 to $51.4 million in 1999. The
increase in 1998 compared to 1999 was the result of the acquisitions of CCA
Group and CharterComm Holdings, Marcus Holdings and 1999 acquisitions.

     INTEREST INCOME.  Interest income increased by $34.4 million, from $.04
million for the period from January 1, 1998 through December 23, 1998 to $34.5
million in 1999. The increase was primarily due to investing excess cash that
resulted from required credit facilities drawdowns, the initial public offering
and the sale of the March 1999 Charter Holdings notes.

     INTEREST EXPENSE.  Interest expense increased by $460.5 million, from $17.3
million for the period from January 1, 1998 through December 23, 1998 to $477.8
million in 1999. This increase resulted primarily from interest on the notes and
credit facilities used to finance the acquisitions of CCA Group and CharterComm
Holdings, Marcus Holdings and 1999 acquisitions.

                                        38
   39

     MINORITY INTEREST.  Minority interest is $5.3 million for the period from
December 24, 1998 through December 31, 1998 and $572.6 million for the year
ended December 31, 1999. The minority interest represents the ownership in
Charter Communications Holding Company by entities other than Charter
Communications, Inc. For financial reporting purposes, 50,000 of the membership
units Charter Communications Holding Company previously issued to companies
controlled by Mr. Allen are considered held by Charter Communications, Inc.
since December 24, 1998.

     NET LOSS.  Net loss increased by $49.0 million, from $17.2 million for the
period from January 1, 1998 through December 23, 1998 to $66.2 million in 1999.
The increase in revenues that resulted from the acquisitions of CCA Group,
CharterComm Holdings and Marcus Holdings was not sufficient to offset the
operating expenses associated with the acquired systems.

LIQUIDITY AND CAPITAL RESOURCES

     Our business requires significant cash to fund acquisitions, capital
expenditures, debt service costs and ongoing operations. We have historically
funded and expect to fund future liquidity and capital requirements through cash
flows from operations, borrowings under our credit facilities and debt and
equity transactions. Our cash flows from operating activities were $1.1 billion,
$479.9 million and $22.6 million in 2000, 1999 and 1998, respectively. As of
December 31, 2000, we have availability of $805.6 million under our bank credit
facilities. Since January 1, 1999, we have incurred significant additional debt
to fund our capital expenditures and growth through acquisition. Our significant
amount of debt may adversely affect our ability to obtain financing in the
future and react to changes in our business. We anticipate incurring substantial
additional debt in the future. Our credit facilities and other debt instruments
contain various financial and operating covenants that could adversely impact
our ability to operate our business, including restrictions on the ability of
our operating subsidiaries to distribute cash to their parents. See "-- Certain
Trends and Uncertainties -- Restrictive Covenants" for further information.

CAPITAL EXPENDITURES

     We have substantial ongoing capital expenditure requirements. We make
capital expenditures primarily to upgrade, rebuild and expand our cable systems,
as well as for system maintenance, the development of new products and services,
and set-top terminals.

     Upgrading our cable systems will enable us to offer new products and
services, including digital television, additional channels and tiers, expanded
pay-per-view options, high-speed Internet access, video-on-demand, telephony and
interactive services.

     We made capital expenditures, excluding acquisitions of cable systems, of
$2.83 billion and $741.5 million for the years ended December 31, 2000 and 1999,
respectively. The majority of these capital expenditures in 2000 relate to our
accelerated rebuild and upgrade program and purchases of converters and were
funded from cash flows from operations and borrowings under credit facilities.

     Excluding the pending AT&T transactions, for 2001, 2002 and 2003, we expect
to spend a total of approximately $2.9 billion, $1.75 billion and $950,000,
respectively, to upgrade and rebuild our systems in order to offer advanced
services to our customers. In addition, we anticipate rebuild costs associated
with the AT&T systems we expect to acquire to total approximately $350 million.
In 2001, our capital expenditures will include extensions of systems,
development of new products and services, purchases of converters, system
improvements and the build out of six new advanced customer call centers in
2001. The amount that we spend on these types of capital expenditures will
depend on the level of our growth in digital cable customers and in the delivery
of other advanced services. We currently expect to finance the anticipated
capital expenditures with cash generated from operations, additional borrowings
under credit facilities, one or more debt or equity financings and borrowings
under the 2001 senior bridge loan commitment described in "-- Financing
Activities." Currently, our planned capital expenditures are funded through
second quarter 2002. A projected $500 million to $750 million funding shortfall
exists through late 2002 or early 2003 when we expect to become cash flow
positive. If we borrow the full amount available under the bridge loan
commitment, our planned capital expenditures are funded through the end of 2002
and our funding shortfall will be $300 million
                                        39
   40

to $500 million through 2003. We expect to fund our projected shortfall with
additional bank debt, high yield debt, or equity offerings or any combination
thereof. The amount of this projected shortfall could increase if there is
accelerated growth in digital cable customers or in the delivery of other
advanced services.

     We cannot be sure that our anticipated levels of capital expenditures will
be sufficient to accomplish our planned system upgrades, expansion and
maintenance and to roll out advanced services or that we will be able to acquire
necessary plant and equipment from vendors to complete our upgrade and rebuild
on schedule. If we are not able to obtain financing sufficient to fund our
planned upgrades and other capital expenditures, it could adversely affect our
ability to offer new products and services and compete effectively, and could
adversely affect our growth, financial condition and results of operations. See
"-- Certain Trends and Uncertainties" for further information.

RECENT INVESTING ACTIVITIES

     HIGH SPEED ACCESS CORP.  In December 2000, Vulcan Ventures, Inc., an entity
controlled by Mr. Allen, and Charter Communications Ventures, LLC invested $38.0
million and $37.0 million, respectively, in exchange for 38,000 shares and
37,000 shares, respectively, of senior convertible preferred stock of High Speed
Access. The preferred stock has a liquidation preference of $1,000 per share, in
general, shares in dividends on High Speed Access common stock on an "as
converted to common stock" basis and is convertible into common stock of High
Speed Access at a conversion rate of $5.01875 per share of High Speed Access
common stock, subject to certain adjustments. Vulcan Ventures and Charter
Ventures were granted certain preemptive, first refusal, registration and
significant board representation rights as part of the transaction.

FINANCING ACTIVITIES

     As of December 31, 2000, our total debt was approximately $13.1 billion.
Actual debt outstanding at December 31, 2000 and pro forma for the issuance of
the January 2001 Charter Holdings Notes described herein is summarized below
(dollars in thousands):



                                                               ACTUAL        PRO FORMA
                                                             BALANCE AT      BALANCE AT
                                                            DECEMBER 31,    DECEMBER 31,
                                                                2000            2000
                                                            ------------    ------------
                                                                      
LONG TERM DEBT
Charter Communications, Inc.:
  5.75% Convertible Senior Notes, due 2005................  $   750,000     $   750,000
Charter Holdings:
  8.250% Senior Notes, due 2007...........................      600,000         600,000
  8.625% Senior Discount Notes, due 2009..................    1,500,000       1,500,000
  9.920% Senior Notes, due 2011...........................    1,475,000       1,475,000
  10.0% Senior Notes, due 2009............................      675,000         675,000
  10.25% Senior Notes, due 2010...........................      325,000         325,000
  11.75% Senior Discount Notes, due 2010..................      532,000         532,000
  10.75% Senior Notes, due 2009...........................           --         900,000
  11.125% Senior Notes, due 2011..........................           --         500,000
  13.5% Senior Discount Notes, due 2011...................           --         675,000
Senior Bridge Loan Facility...............................      272,500              --
Renaissance:
  10.00% Senior Discount Notes, due 2008..................      114,413         114,413
CC V Holdings -- Avalon:
  11.875% Senior Discount Notes, due 2006.................      179,750         179,750
Other long-term debt......................................        1,971           1,971


                                        40
   41



                                                               ACTUAL        PRO FORMA
                                                             BALANCE AT      BALANCE AT
                                                            DECEMBER 31,    DECEMBER 31,
                                                                2000            2000
                                                            ------------    ------------
                                                                      
CREDIT FACILITIES
Charter Operating.........................................    4,432,000       3,555,000
CC V -- Avalon............................................      213,000         213,000
CC VI -- Fanch............................................      895,000         825,000
CC VII -- Falcon..........................................    1,050,000         565,000
CC VIII -- Bresnan........................................      712,000         712,000
                                                            -----------     -----------
                                                             13,727,634      14,098,134
Unamortized discount......................................     (667,179)       (992,338)
                                                            -----------     -----------
                                                            $13,060,455     $13,105,796
                                                            ===========     ===========


     MARCH 1999 CHARTER HOLDINGS NOTES.  In March 1999, Charter Holdings and
Charter Communications Holdings Capital Corporation issued $3.6 billion
principal amount of senior notes. The March 1999 Charter Holdings notes
consisted of $600.0 million in aggregate principal amount of 8.250% senior notes
due 2007, $1.5 billion in aggregate principal amount of 8.625% senior notes due
2009, and $1.475 billion in aggregate principal amount at maturity of 9.920%
senior discount notes due 2011. The net proceeds of approximately $2.9 billion,
combined with the borrowings under our credit facilities, were used to
consummate tender offers for publicly held debt of several of our subsidiaries,
as described below, to refinance borrowings under our previous credit
facilities, for working capital purposes and to finance a number of
acquisitions.

     As of December 31, 2000, a total of $2.1 billion was outstanding under the
8.250% notes and the 8.625% notes, and the accreted value of the outstanding
9.920% notes was $1.08 billion.

     JANUARY 2000 CHARTER HOLDINGS NOTES.  In January 2000, Charter Holdings and
Charter Communications Holdings Capital Corporation issued $1.5 billion
principal amount of senior notes. The January 2000 Charter Holdings notes
consisted of $675.0 million in aggregate principal amount of 10.00% senior notes
due 2009, $325.0 million in aggregate principal amount of 10.25% senior notes
due 2010, and $532.0 million in aggregate principal amount at maturity of 11.75%
senior discount notes due 2010. The net proceeds of approximately $1.25 billion
were used to consummate change of control offers for certain of the Falcon,
Avalon and Bresnan notes and debentures.

     As of December 31, 2000, $1.0 billion of the January 2000 Charter Holdings
10.00% and 10.25% senior notes were outstanding, and the accreted value of the
11.75% senior discount notes was approximately $335.5 million.

     CHARTER OPERATING CREDIT FACILITIES.  The Charter Operating credit
facilities provide for two term facilities, one with a principal amount of $1.0
billion that matures in September 2007 (Term A), and the other with a principal
amount of $2.45 billion that matures in March 2008 (Term B). The Charter
Operating credit facilities also provide for a $1.25 billion revolving credit
facility with a maturity date in September 2007 and, at the option of the
lenders, supplemental credit facilities in the amount of $400.0 million
available until March 18, 2002. Amounts under the Charter Operating credit
facilities bear interest at the Base Rate or the Eurodollar rate, as defined,
plus a margin of up to 2.75% (8.39% to 9.27% as of December 31, 2000). A
quarterly commitment fee of between 0.25% and 0.375% per annum is payable on the
unborrowed balance of Term A and the revolving credit facility. As of December
31, 2000, outstanding borrowings were approximately $4.4 billion, and the unused
availability was $268.0 million.

     RENAISSANCE NOTES.  In connection with the acquisition of Renaissance in
April 1999, the Company assumed $163.2 million principal amount at maturity of
10% senior discount notes due 2008. The Renaissance notes do not require the
payment of interest until April 15, 2003. From and after April 15, 2003, the
Renaissance notes bear interest, payable semi-annually in cash, on April 15 and
October 15, commencing on October 15, 2003. The Renaissance notes are due on
April 15, 2008. In May 1999, $48.8 million aggregate face amount of the
Renaissance notes was repurchased at 101% of the accreted value plus accrued and
unpaid

                                        41
   42

interest. As of December 31, 2000, the accreted value of the Renaissance notes
that remain outstanding was approximately $94.6 million.

     FALCON DEBENTURES.  We acquired Falcon in November 1999 and assumed
Falcon's outstanding $375.0 million in principal amount of 8.375% senior
debentures due 2010 and 9.285% senior discount debentures due 2010 with an
accreted value of approximately $319.1 million.

     In February 2000, through change of control offers and purchases in the
open market, all of the Falcon 8.375% senior debentures with a principal amount
of $375.0 million were repurchased for $388.0 million, and all of the Falcon
9.285% senior discount debentures with an aggregate principal amount at maturity
of $435.3 million were repurchased for $328.1 million.

     FALCON CREDIT FACILITIES.  In connection with the Falcon acquisition, the
previous Falcon credit facilities were amended to provide for two term
facilities, one with a principal amount of $196.0 million that matures June 2007
(Term B), and the other with the principal amount of $294.0 million that matures
December 2007 (Term C). The Falcon credit facilities also provide for a $646.0
million revolving credit facility with a maturity date of December 2006 and, at
the option of the lenders, supplemental credit facilities in the amount of up to
$700.0 million with a maturity date in December 2007. Amounts under the Falcon
credit facilities bear interest at the Base Rate or the Eurodollar rate, as
defined, plus a margin of up to 2.5% (8.14% to 9.50% as of December 31, 2000). A
quarterly commitment fee of between 0.25% and 0.375% per annum is payable on the
unborrowed balance. As of December 31, 2000, unused availability was $196.1
million.

     AVALON CREDIT FACILITIES.  In January 2001, two of our subsidiaries,
Bresnan and Avalon, were merged. Upon completion of the Bresnan/Avalon
Combination, all amounts outstanding under the Avalon credit facilities were
repaid and the Avalon credit facilities were terminated. The Bresnan Credit
facilities were amended and restated to among other things, increase borrowing
availability by $550.0 million.

     AVALON NOTES.  In connection with the acquisition of Avalon in November
1999, we assumed Avalon's outstanding 11.875% senior discount notes due 2008
with an accreted value of $123.3 million and $150.0 million in principal amount
of 9.375% senior subordinated notes due 2008. After December 1, 2003, cash
interest on the Avalon 11.875% notes will be payable semi-annually on June 1 and
December 1 of each year, commencing June 1, 2004.

     In January 2000, we completed change of control offers in which we
repurchased $16.3 million aggregate principal amount at maturity of the 11.875%
notes at a purchase price of 101% of accreted value as of January 28, 2000, for
$10.5 million. As of December 31, 2000, Avalon 11.875% notes with an aggregate
principal amount of $179.8 million at maturity remained outstanding with an
accreted value of $128.4 million.

     At the same time, through change of control offers and purchases in the
open market, we repurchased all of the $150.0 million aggregate principal amount
of the Avalon 9.375% notes. The aggregate repurchase price was $153.7 million
and was funded with equity contributions from Charter Holdings, which made the
cash available from the proceeds of its sale of the January 2000 Charter
Holdings notes.

     FANCH CREDIT FACILITIES.  The Fanch credit facilities provide for two term
facilities, one with a principal amount of $450.0 million that matures May 2008
(Term A), and the other with a principal amount of $400.0 million that matures
November 2008 (Term B). The Fanch credit facilities also provide for a $350.0
million revolving credit facility with a maturity date in May 2008 and, at the
option of the lenders, supplemental credit facilities in the amount of $300.0
million available until December 31, 2004. Amounts under the Fanch credit
facilities bear interest at the Base Rate or the Eurodollar rate, as defined,
plus a margin of up to 3.0% (8.15% to 9.55% as of December 31, 2000). A
quarterly commitment fee of between 0.250% and 0.375% per annum is payable on
the unborrowed balance. We used $850.0 million of the credit facilities to fund
a portion of the Fanch purchase price. As of December 31, 2000, outstanding
borrowings were $895.0 million, and unused availability was $305.0 million.
However, debt covenants limit the amount that can be borrowed to $153.5 million
at December 31, 2000.

     BRESNAN NOTES.  We acquired Bresnan in February 2000 and assumed Bresnan's
outstanding $170.0 million in principal amount of 8% senior notes due 2009 and
$275.0 million in principal amount at maturity of

                                        42
   43

9.25% senior discount notes due 2009 with an accreted value of $192.2 million.
In March 2000, we repurchased all of the outstanding Bresnan notes at purchase
prices of 101% of the outstanding principal amounts plus accrued and unpaid
interest or accreted value, as applicable, for a total of $369.7 million, using
proceeds from the sale of the January 2000 Charter Holdings notes.

     BRESNAN CREDIT FACILITIES.  Upon the closing of the Bresnan/Avalon
combination, the Bresnan credit facilities were amended and restated. As
amended, the Bresnan credit facilities provide for borrowings of up to $1.45
billion. The Bresnan credit facilities provide for two term facilities, one with
a principal amount of $500.0 million (Term A), and the other with a principal
amount of $500.0 million (Term B). The Bresnan credit facilities also provide
for a $450.0 million revolving credit facility with a maturity date in June 2007
and, at the option of lenders, supplemental facilities in the amount of $500.0
million. Amounts under the Bresnan credit facilities bear interest at the Base
Rate or the Eurodollar Rate, as defined, plus a margin of up to 2.75%. A
quarterly commitment fee of between 0.250% and 0.375% is payable on the
unborrowed balance of Term A and the revolving credit facility. At the closing
of the Bresnan acquisition, we borrowed approximately $599.9 million to replace
the borrowings outstanding under the previous credit facilities and an
additional $30.0 million to fund a portion of the Bresnan purchase price. As of
December 31, 2000, outstanding borrowings were $712.0 million and unused
availability was $188.0 million.

     CHARTER HOLDINGS SENIOR BRIDGE LOAN FACILITY.  On August 4, 2000, Charter
Holdings and Charter Communications Holdings Capital Corporation entered into a
senior bridge loan agreement providing for senior increasing rate bridge loans
in an aggregate principal amount of up to $1.0 billion.

     On August 14, 2000, Charter Holdings borrowed $1.0 billion under the senior
bridge loan facility and used substantially all of the proceeds to repay a
portion of the amounts outstanding under the Charter Operating and the Falcon
revolving credit facilities. The bridge loan initially bore interest at an
annual rate of 10.21%. For amounts not repaid by November 14, 2000, the interest
rate increased by 1.25% at such date.

     The net proceeds from the sale of Charter Communications, Inc.'s
convertible senior notes were contributed as equity to Charter Holdings. Charter
Holdings used all of the net proceeds therefrom to repay $727.5 million of the
amount outstanding under the Charter Holdings senior bridge loan facility. As of
January 5, 2001, the remaining balance of $272.5 million on the senior bridge
loan facility was paid down with the proceeds from the sale of the Charter
Holdings January 2001 notes.

     CONVERTIBLE SENIOR NOTES.  On October 30, 2000, Charter Communications,
Inc. issued convertible senior notes due 2005 with a principal amount of $650.0
million. An additional $100.0 million pursuant to the initial purchasers'
over-allotment option were issued on November 3, 2000. The convertible senior
notes have an annual interest rate of 5.75%, payable semi-annually, and are
convertible into shares of Charter Communications, Inc.'s Class A common stock
at $21.56 per share. The issuance was initially made in a private placement
pursuant to Rule 144A under the Securities Act and registered with the
Securities and Exchange Commission in February 2001. The net proceeds were used
to repay $727.5 million outstanding under the Charter Holdings senior bridge
loan facility.

     JANUARY 2001 CHARTER HOLDINGS NOTES.  On January 5, 2001, Charter Holdings
and Charter Communications Holdings Capital Corporation issued $900 million
10.75% Senior Notes due 2009, $500 million 11.125% Senior Notes due 2011 and
$350.6 million 13.5% Senior Discount Notes due 2011 with a principal amount at
maturity of $675 million. The net proceeds were approximately $1.72 billion,
after giving effect to discounts, commissions and expenses. The net proceeds
from the January 2001 Charter Holdings notes were used to repay all remaining
amounts outstanding under the Charter Holdings senior bridge loan facility and
the Fanch revolving credit facility, a portion of the amounts outstanding under
the Charter Operating and Falcon revolving credit facilities, and for general
corporate purposes.

     The 10.75% Senior Notes are not redeemable prior to maturity. Interest is
payable semi-annually on April 1 and October 1, beginning October 1, 2001 until
maturity.

     The 11.125% Senior Notes are redeemable at the option of the issuers at
amounts decreasing from 106.750% to 100% of par value beginning on January 15,
2006, plus accrued and unpaid interest, to the date of redemption. At any time
prior to January 15, 2004, the issuers may redeem up to 35% of the aggregate
                                        43
   44

principal amount of the 11.125% Senior Notes at a redemption price of 111.125%
of the principal amount under certain conditions. Interest is payable
semi-annually in arrears on January 15 and July 15, beginning on July 15, 2001,
until maturity.

     The 13.5% Senior Discount Notes are redeemable at the option of the issuers
at amounts decreasing from 105.563% to 100% of the accreted value beginning
January 15, 2006. At any time prior to January 15, 2004, the issuers may redeem
up to 35% of the aggregate principal amount of the 13.5% Senior Notes at a
redemption price of 113.5% of the accreted value under certain conditions.
Interest is payable in arrears on January 15 and July 15, beginning on July 15,
2006, until maturity. The discount on the 13.5% Senior Discount Notes is being
accreted using the effective interest method.

     These notes rank equally with the current and future unsecured and
unsubordinated indebtedness of Charter Holdings, including the existing senior
notes and senior discount notes and trade payables. The notes are structurally
subordinated to all existing and future liabilities, including trade payables of
the subsidiaries of Charter Holdings.

     2001 SENIOR BRIDGE LOAN COMMITMENT.  On February 26, 2001, Charter Holdings
and Charter Capital signed a commitment with Morgan Stanley Senior Funding, Inc.
and Goldman Sachs Credit Partners LP, to provide senior increasing rate bridge
loans of up to $2 billion for capital expenditures, general corporate purposes,
and to fund the cash portion of the pending AT&T transactions. If any of the
pending AT&T transactions is not completed, the commitment would be reduced by
the amount of the commitment allocated to such portion of the transaction, up to
$1 billion.

     The bridge loans would bear interest initially at a rate equal to the
bid-side yield of the 11.125% Senior Notes, less 25 basis points. The rate would
increase by 125 basis points at the end of the first 90 days after funding, and
50 basis points for each 90-day period after the first 90 days.

     The commitment expires on December 31, 2001 unless the bridge loan
agreement has been signed. The bridge loans would mature one year from the date
of first funding, but can, at the borrowers' election, be converted into senior
term loans that would be due nine years after such conversion. Interest on the
senior term loans would initially be the rate then in effect for the bridge
loans, plus 50 basis points, and would increase by 50 basis points after every
90 days' period after such conversion.

     Following any conversion of the bridge loans into senior term loans, the
lenders would have the right to request that their notes be exchanged for notes
that would be issued under an indenture with covenants and events of default
similar to those in the 11.125% Senior Notes, but may not be redeemed until the
fifth anniversary of the first funding of the bridge loan. After the fifth
anniversary, the notes would be redeemable at a premium of one-half of the
coupon on the note, declining ratably annually to zero on the date that is two
years prior to the maturity date. The bridge loan agreement would require that
the borrowers file a shelf registration statement with respect to the exchange
notes and to use commercially reasonable efforts to have the statement become
effective and available to allow for unrestricted resales of the exchange notes.
The exchange notes would bear interest at the higher of the rate of interest
applicable to the senior term loans and the bid-side yield of the 11.125% Senior
Notes.

     Interest on the bridge loans, senior term loans or exchange notes would not
be lower than 9% and may not exceed 15% annually.

     The prospective lenders' commitments to us are subject to a number of
conditions. We cannot assure you that such conditions will be met. If these
conditions are not met, these funds will not be available to us and we will need
to obtain alternative financing. If we are unable to obtain replacement
financing, we could be unable to consummate the pending AT&T transactions.

     For a description of our acquisitions completed in 1999 and 2000, see
"Business -- Acquisitions."

OUTLOOK

     We believe we are uniquely positioned in the forefront of our industry
going into 2001. In 2001, we will continue to aggressively roll out our advanced
services, focusing on digital cable and high speed data. We
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expect to complete the AT&T transactions in the second and/or third quarters of
2001. The effect of these transactions is not included in this Outlook
discussion.

     With "same store" systems running smoothly and major 1999 and 2000
acquisitions successfully integrated, we expect 2001 revenue growth of 14-16%
and operating cash flow growth after corporate overhead expense of 12-14%. Basic
customer growth is expected to exceed 2% in 2001, consistent with 2000 growth.
Digital revenues are expected to increase dramatically from 1.07 million
customers at December 31, 2000 with 2 million customers by the end of 2001. In
addition, we expect VOD to be available to approximately 2.2 million homes
passed by the end of the year. Telephony initiatives will continue to be tested
and developed during 2001 with targeted market entry in 2002 or 2003.
Furthermore, we will continue our focus on interactive TV, with trials currently
in process and expected launches in several markets beginning in 2001. Our
advanced technology team is working on DVR capability in advanced digital
set-top terminals and wireless home networking. Set-top terminals with built-in
DVR functionality should be available to our digital customers in 2001.

     Operating expenses are expected to increase 18%-19% in 2001, driven
primarily by increased digital and data sales, as well as higher programming and
G&A costs. Programming costs are expected to increase approximately 25%. The
year over year increase on a per channel basis is approximately 12-13%. Sports
programming is the largest portion of the expected increase. The remainder of
the increase is due to digital and basic customer growth, new channel launches
and higher premium rates. The primary drivers for increased G&A costs are higher
property taxes of approximately $22 million, resulting from the network upgrades
and approximately $11 million of expenses associated with new customer call
centers.

     We will continue to evaluate strategic acquisitions and "swaps" of cable
systems in order to enlarge the coverage of our current areas of operations.
This approach will allow us to generate higher growth in revenues and operating
cash flow.

     Customer care will remain a priority at Charter. We plan to build six new
customer contact centers in 2001 with capital expenditures of $66 million in
2001. These new centers will serve our customer base with state-of-the-art
technology to further improve customer satisfaction. Eventually, each of our
twelve regions will have its own customer contact center.

     We will continue our system rebuilds and upgrades so that our customers
have access to the latest advanced service technology. We will aggressively
evaluate funding opportunities, including bank, equity or high-yield financing,
to meet the needs of our future growth plans, including future strategic
acquisitions.

CERTAIN TRENDS AND UNCERTAINTIES

     The following discussion highlights a number of trends and uncertainties,
in addition to those discussed elsewhere in this Form 10-K, that could
materially impact our business, results of operations and financial condition.

     SUBSTANTIAL LEVERAGE.  As of December 31, 2000, pro forma for the offering
of the January 2001 Charter Holdings notes and the application of the net
proceeds therefrom, our total debt was approximately $13.1 billion. We
anticipate incurring significant additional debt in the future, including the
2001 senior bridge loan commitment, to fund future acquisitions and the
expansion, maintenance and upgrade of our cable systems.

     Our ability to make payments on our debt and to fund our planned capital
expenditures for upgrading our cable systems and our ongoing operations will
depend on our ability to generate cash and secure financing in the future. This,
to a certain extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors beyond our control. We cannot assure
you that our business will generate sufficient cash flow from operations, or
that future borrowings will be available to us under our existing credit
facilities, new facilities or from other sources of financing at acceptable
rates or in an amount sufficient to enable us to repay our debt, to grow our
business or to fund our other liquidity and capital needs.

     VARIABLE INTEREST RATES.  At December 31, 2000, approximately 53% of our
debt bears interest at variable rates that are linked to short-term interest
rates. In addition, a significant portion of our existing debt,

                                        45
   46

assumed debt or debt we might arrange in the future will bear interest at
variable rates. If interest rates rise, our costs relative to those obligations
will also rise. At December 31, 2000, our weighted-average rate on outstanding
bank commitments is approximately 8.33% and approximately 9.50% on high-yield
debt, resulting in a blended weighted-average rate of 8.94%. See "-- Interest
Rate Risk."

     RESTRICTIVE COVENANTS.  Our credit facilities and the indentures governing
our outstanding debt contain a number of significant covenants that, among other
things, restrict our ability and the ability of our subsidiaries to:

     - pay dividends or make other distributions;

     - make certain investments or acquisitions;

     - dispose of assets or merge;

     - incur additional debt;

     - issue equity;

     - repurchase or redeem equity interests and debt;

     - create liens; and

     - pledge assets.

     Furthermore, in accordance with our credit facilities we are required to
maintain specified financial ratios and meet financial tests. The ability to
comply with these provisions may be affected by events beyond our control. The
breach of any of these covenants will result in a default under the applicable
debt agreement or instrument, which could trigger acceleration of the debt. Any
default under our credit facilities or the indentures governing our outstanding
debt may adversely affect our growth, our financial condition, and our results
of operations and the ability to repay amounts due under the notes issued by
Charter Communications, Inc. or its subsidiaries.

     NEW SERVICES AND PRODUCTS GROWTH STRATEGY.  We expect that a substantial
portion of any of our future growth will be achieved through revenues from
additional services. We cannot be assured that we will be able to offer new
advanced services successfully to our customers or that those new advanced
services will generate revenues. The amount of our capital expenditures and
related roll-out of advanced services may be limited by the availability of
certain equipment (in particular, digital set-top terminals and cable modems)
due to production capacity constraints of certain vendors and/or materials
shortages. We continue to work with our primary vendors to address such problems
and have been assured that we will have an adequate supply to meet our demand.
If we are unable to grow our cash flow sufficiently, we may be unable to fulfill
our obligations or obtain alternative financing.

     MANAGEMENT OF GROWTH.  We have experienced rapid growth that has placed and
is expected to continue to place a significant strain on our management,
operations and other resources. Our future success will depend in part on our
ability to successfully integrate the operations acquired and to be acquired and
to attract and retain qualified personnel. No significant severance cost was
incurred in conjunction with acquisitions in 1999 and 2000. The failure to
retain or obtain needed personnel or to implement management, operating or
financial systems necessary to successfully integrate acquired operations or
otherwise manage growth when and as needed could have a material adverse effect
on our business, results of operations and financial condition.

     REGULATION AND LEGISLATION.  Cable systems are extensively regulated at the
federal, state, and local level. Effective March 31, 1999, the scope of rate
regulation was reduced so that it continues to impact only the lowest level of
basic cable service and associated equipment. This change affords cable
operators much greater pricing flexibility, although Congress could revisit this
issue if confronted with substantial rate increases.

     Cable operators also face significant regulation of their channel capacity.
They currently can be required to devote substantial capacity to the carriage of
programming that they would not carry voluntarily, including
                                        46
   47

certain local broadcast signals, local public, educational and government access
users, and unaffiliated commercial leased access programmers. This carriage
burden could increase in the future, particularly if the Federal Communications
Commission (FCC) were to require cable systems to carry both the analog and
digital versions of local broadcast signals. The FCC is currently conducting a
proceeding in which it is considering this channel usage possibility.

     There is also uncertainty whether local franchising authorities, state
regulators, the FCC, or the U.S. Congress will impose obligations on cable
operators to provide unaffiliated Internet service providers with access to
cable plant on non-discriminatory terms. If they were to do so, and the
obligations were found to be lawful, it could complicate our operations in
general, and our Internet operations in particular, from a technical and
marketing standpoint. These access obligations could adversely impact our
profitability and discourage system upgrades and the introduction of new
products and services. Recently, a federal district court in Virginia and a
federal circuit court in California struck down as unlawful open-access
requirements imposed by two different franchising authorities. The federal
circuit court ruling reversed an earlier district court decision that had upheld
an open-access requirement. The FCC has announced that it will soon consider how
Internet service provided over cable systems should be classified for regulatory
purposes and what, if any, regulations should be imposed.

     There are other instances where "open-access" requirements have been
imposed and judicial challenges are pending. The FCC has initiated a new
proceeding to categorize cable-delivered Internet service and perhaps establish
an appropriate regulatory scheme.

INTEREST RATE RISK

     The use of interest rate risk management instruments, such as interest rate
exchange agreements, interest rate cap agreements and interest rate collar
agreements, is 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, 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 us to otherwise pay lower market rates. Collars
limit our exposure to and benefits from interest rate fluctuations on variable
rate debt to within a certain range of rates.

     Our participation in interest rate hedging transactions involves
instruments that have a close correlation with our debt, thereby managing our
risk. Interest rate hedge agreements have been designated for hedging purposes
and are not held or issued for speculative purposes.

     At December 31, 2000, we had outstanding $1.9 billion, $15.0 million and
$520 million in notional amounts of interest rate swaps, caps and collars,
respectively.

     The notional amounts of interest rate instruments are used to measure
interest to be paid or received and do not represent the amount of exposure to
credit loss. While swaps, caps and collars represent an integral part of our
interest rate risk management program, their incremental effect on interest
expense for the years ended December 31, 2000 and 1999, was not significant.

     The fair value of fixed-rate debt at December 31, 2000, was $5.5 billion.
The fair value of fixed-rate debt is based on quoted market prices. The fair
value of variable-rate debt approximates the carrying value of $7.3 billion at
December 31, 2000, since this debt bears interest at current market rates.

ACCOUNTING STANDARDS NOT YET IMPLEMENTED

     SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,
as amended by SFAS 137, Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of FASB Statement No. 133, and SFAS
138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities, is effective for the Company as of January 1, 2001. SFAS No. 133
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or liability
measured at its
                                        47
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fair value and that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and requires
that a company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting. Adoption of these new accounting
standards is expected to result in a cumulative effect of a change in accounting
principle that increases net loss by approximately $23.9 million.

                     SUPPLEMENTAL UNAUDITED PRO FORMA DATA

     The following Supplemental Unaudited Pro Forma Data is based on the
historical financial data of Charter and does not include the effect of the
pending AT&T transactions or any borrowings under the 2001 senior bridge loan
commitment. Our financial data, on a consolidated basis, is adjusted on a pro
forma basis to illustrate the estimated effects of the following transactions as
if they had occurred on January 1, 2000:

     - the acquisitions by Charter Communications, Inc. and its subsidiaries
       completed since January 1, 2000, including the Bresnan and Kalamazoo
       acquisitions;

     - borrowings under the Charter Holdings senior bridge loan facility and the
       application of a portion of such borrowings to repay a portion of the
       amounts outstanding under the Charter Operating and CC VIII revolving
       credit facilities;

     - the repayment of a portion of the Charter Holdings senior bridge loan
       facility with net proceeds from the issuance and sale of the senior
       convertible notes; and

     - the issuance and sale of the January 2001 Charter Holdings notes and the
       application of the net proceeds to repay all remaining amounts
       outstanding under the Charter Holdings senior bridge loan facility and
       the Fanch revolving credit facility, and a portion of the amounts
       outstanding under the Charter Operating and Falcon revolving credit
       facilities.

     The pro forma impact of the issuance and sale of the January 2000 Charter
Holdings notes is not significant and is therefore not taken into account below.

     The Supplemental Unaudited Pro Forma Data reflects the application of the
principles of purchase accounting to the acquisitions completed since January 1,
2000. The purchase price allocations are based, in part, on preliminary
information, which is subject to adjustment upon obtaining complete valuation
information of intangible assets and is subject to post-closing purchase price
adjustments. We believe that finalization of the purchase price allocation will
not have a material impact on our results of operations or financial position.

     The Supplemental Unaudited Pro Forma Data does not purport to be indicative
of what our results of operations would actually have been had the transactions
described above been completed on the dates indicated or to project our results
of operations for any future date.

                                        48
   49



                                                       SUPPLEMENTAL UNAUDITED PRO FORMA DATA
                                                   AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2000
                                               ------------------------------------------------------
                                                     CHARTER             PRO FORMA
                                               COMMUNICATIONS, INC.    ADJUSTMENTS(A)       TOTAL
                                               --------------------    --------------    ------------
                                                   (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                                
STATEMENT OF OPERATIONS DATA
REVENUES:
Basic........................................      $ 2,249,339            $ 36,382       $  2,285,721
Premium......................................          226,598               5,152            231,750
Pay-per-view.................................           28,590                 474             29,064
Digital......................................           91,115                 736             91,851
Advertising sales............................          220,205               2,519            222,724
Data services................................           63,330               1,643             64,973
Other........................................          370,045               2,846            372,891
                                                   -----------            --------       ------------
     Total revenues..........................        3,249,222              49,752          3,298,974
OPERATING EXPENSES:
Programming..................................          736,043              13,144            749,187
General and administrative...................          543,865               2,300            546,165
Service......................................          192,603               6,766            199,369
Marketing....................................           63,789                 541             64,330
Advertising Sales............................           56,499               5,222             61,721
Other........................................           58,554               1,339             59,893
Depreciation.................................        1,209,698              15,592          1,225,290
Amortization.................................        1,263,384              31,253          1,294,637
Option compensation expense..................           40,978                  --             40,978
Corporate expense charges....................           55,243                 707             55,950
                                                   -----------            --------       ------------
     Total operating expenses................        4,220,656              76,864          4,297,520
Loss from operations.........................         (971,434)            (27,112)          (998,546)
Interest expense.............................       (1,059,130)            (65,020)        (1,124,150)
Interest income..............................            7,348                 (49)             7,299
Loss on equity investments...................          (19,262)                 --            (19,262)
Other income (expense).......................          (12,467)                (77)           (12,544)
                                                   -----------            --------       ------------
Loss before minority interest................       (2,054,945)            (92,258)        (2,147,203)
Minority interest in loss of subsidiary(b)...        1,226,295              40,793          1,267,088
                                                   -----------            --------       ------------
Net loss.....................................      $  (828,650)           $(51,465)      $   (880,115)
                                                   ===========            ========       ============
Loss per common share, basic and
  diluted(c).................................                                            $      (3.77)
Weighted-average common shares outstanding,
  basic and diluted(d).......................                                             233,403,320
Converted loss per common share(e)...........                                            $      (3.60)
Weighted-average common shares outstanding --
  converted(f)...............................                                             596,715,543
OTHER FINANCIAL DATA:
EBITDA(g)....................................        1,469,919              19,656          1,489,575
EBITDA margin(h).............................             45.2%               39.5%              45.2%
Adjusted EBITDA(i)...........................        1,597,869              20,440          1,618,309


                                        49
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                                                       SUPPLEMENTAL UNAUDITED PRO FORMA DATA
                                                   AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2000
                                               ------------------------------------------------------
                                                     CHARTER             PRO FORMA
                                               COMMUNICATIONS, INC.    ADJUSTMENTS(A)       TOTAL
                                               --------------------    --------------    ------------
                                                   (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                                
OPERATING DATA
  (at end of period, except for average)
Homes passed(j)..............................                                              10,225,000
Basic customers(k)...........................                                               6,350,900
Basic penetration(l).........................                                                    62.1%
Premium units(m).............................                                               4,939,100
Premium penetration(n).......................                                                    77.8%
Average monthly revenue per basic
  customer(o)................................                                            $      43.29


---------------
(a) Comprised of: (1) Our acquisitions' results of operations since their
    respective acquisition dates (Interlake -- January 31, 2000;
    Bresnan -- February 14, 2000; Capital Cable and Farmington -- April 1, 2000;
    Kalamazoo  -- September 7, 2000), as well as the sale of 4,715 customers in
    Dickinson, North Dakota, completed on December 31, 2000; (2) borrowings
    under the Charter Holdings senior bridge loan facility and the application
    of a portion of such borrowings to repay a portion of the amounts
    outstanding under the Charter Operating and CC VIII revolving credit
    facilities; (3) repayment of a portion of the Charter Holdings senior bridge
    loan facility with net proceeds from the issuance and sale of the senior
    convertible notes; and (4) the issuance and sale of the January 2001 Charter
    Holdings notes and the application of the net proceeds to repay all
    remaining amounts outstanding under the Charter Holdings senior bridge loan
    facility and the Fanch revolving credit facility, and a portion of the
    amounts outstanding under the Charter Operating and Falcon revolving credit
    facilities.

(b) Represents the allocation of losses to the minority interest in loss of
    subsidiary based on ownership of Charter Communications Holding Company and
    the accretion of the preferred membership units in an indirect subsidiary of
    Charter Holdings issued to certain Bresnan sellers. These membership units
    are exchangeable on a one-for-one basis for shares of Class A common stock
    of Charter Communications, Inc.

(c) Basic and diluted loss per common share equals net loss divided by
    weighted-average common shares outstanding. Basic and diluted loss per
    common share assumes none of the membership units of Charter Communications
    Holding Company or preferred membership units in a subsidiary of Charter
    Holdings held by certain Bresnan sellers as of December 31, 2000, are
    exchanged for shares of Charter Communications, Inc.'s Class A common stock,
    none of the convertible senior notes are converted into shares of Class A
    common stock and none of the outstanding options to purchase membership
    units of Charter Holdco that are automatically exchanged for shares of Class
    A common stock are exercised. If the membership units were exchanged, notes
    converted or options exercised, the effects would be antidilutive.

(d) Represents all shares outstanding as of January 1, 2000 (195,550,000
    shares), plus shares issued to the Rifkin, Falcon and Kalamazoo sellers
    through December 31, 2000 (37,713,122 shares), plus the weighted average of
    all other shares issued in 2000.

(e) Converted loss per common share assumes all common membership units of
    Charter Communications Holding Company and preferred membership units in a
    subsidiary of Charter Holdings held by certain Bresnan sellers as of
    December 31, 2000, are exchanged for shares of Charter Communications,
    Inc.'s Class A common stock. If all these shares are converted, minority
    interest would equal zero. Converted loss per common share is calculated by
    dividing loss before minority interest by the weighted-average common shares
    outstanding -- converted.

(f) Weighted-average common shares outstanding -- converted assumes the total
    common membership units in Charter Holdco totaling 324,300,479 held by
    Charter Investment and Vulcan Cable III Inc., both entities controlled by
    Mr. Allen, and 39,011,744 preferred membership units in a subsidiary of
    Charter Holdings held by certain Bresnan sellers are exchanged on a
    one-for-one basis for shares of Charter

                                        50
   51

    Communications, Inc.'s Class A common stock. Converted loss per common share
    assumes no conversion of the convertible senior notes and no exercise of any
    options.

(g) EBITDA represents earnings (loss) before interest, income taxes,
    depreciation and amortization, and minority interest. EBITDA is presented
    because it is a widely accepted financial indicator of a cable company's
    ability to service indebtedness. However, EBITDA should not be considered as
    an alternative to income from operations or to cash flows from operating,
    investing or financing activities, as determined in accordance with
    generally accepted accounting principles. EBITDA should also not be
    construed as an indication of a company's operating performance or as a
    measure of liquidity. In addition, because EBITDA is not calculated
    identically by all companies, the presentation here may not be comparable to
    other similarly titled measures of other companies. Management's
    discretionary use of funds depicted by EBITDA may be limited by working
    capital, debt service and capital expenditure requirements and by
    restrictions related to legal requirements, commitments and uncertainties.

(h) EBITDA margin represents EBITDA as a percentage of revenues.

(i) Adjusted EBITDA means EBITDA before option compensation expense, corporate
    expense charges, loss on equity investments and other income (expense).
    Adjusted EBITDA is presented because it is a widely accepted financial
    indicator of a cable company's ability to service indebtedness. However,
    adjusted EBITDA should not be considered as an alternative to income from
    operations or to cash flows from operating, investing or financing
    activities, as determined in accordance with generally accepted accounting
    principles. Adjusted EBITDA should also not be construed as an indication of
    a company's operating performance or as a measure of liquidity. In addition,
    because adjusted EBITDA is not calculated identically by all companies, the
    presentation here may not be comparable to other similarly titled measures
    of other companies. Management's discretionary use of funds depicted by
    adjusted EBITDA may be limited by working capital, debt service and capital
    expenditure requirements and by restrictions related to legal requirements,
    commitments and uncertainties.

(j) Homes passed are the number of living units, such as single residence homes,
    apartments and condominium units, passed by the cable distribution network
    in a given cable system service area.

(k) Basic customers are customers who receive basic cable service.

(l) Basic penetration represents basic customers as a percentage of homes
    passed.

(m) Premium units represent the total number of subscriptions to premium
    channels.

(n) Premium penetration represents premium units as a percentage of basic
    customers.

(o) Average monthly revenue per basic customer represents revenues divided by
    the number of months in the period divided by the number of basic customers
    at period end.

ITEM 7a.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

INTEREST RATE RISK

     The use of interest rate risk management instruments, such as interest rate
exchange agreements, interest rate cap agreements and interest rate collar
agreements is 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, 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 us to otherwise pay lower market rates. Collars
limit our exposure to and benefits from interest rate fluctuations on variable
rate debt to within a certain range of rates.

     Our participation in interest rate hedging transactions involves
instruments that have a close correlation with its debt, thereby managing its
risk. Interest rate hedge agreements have been designed for hedging purposes and
are not held or issued for speculative purposes.

                                        51
   52

     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, 2000 (dollars in thousands):



                                                                                                            FAIR VALUE AT
                                                                                                            DECEMBER 31,
                             2001       2002       2003       2004       2005     THEREAFTER     TOTAL          2000
                           --------   --------   --------   --------   --------   ----------   ----------   -------------
                                                                                    
DEBT
Fixed Rate...............        --   $    495   $ 67,247   $    279   $750,000   $5,607,613   $6,425,634    $5,496,923
  Average Interest
    Rate.................        --        7.5%      11.8%       7.5%       5.8%         9.7%         9.3%           --
Variable Rate............  $     --   $129,645   $286,170   $418,593   $590,332   $5,877,260   $7,302,000    $7,302,000
  Average Interest
    Rate.................        --        7.6%       7.7%       7.7%       7.7%         8.3%         8.2%           --
INTEREST RATE INSTRUMENTS
Variable to Fixed
  Swaps..................  $720,000   $330,000   $ 80,000   $140,000   $300,000   $  372,713   $1,942,713    $    5,236
  Average Pay Rate.......       7.8%       7.5%       6.8%       6.8%       7.8%         7.7%         7.6%           --
  Average Receive Rate...       7.8%       7.7%       7.7%       7.8%       7.8%         7.9%         7.8%           --
Cap......................        --   $ 15,000         --         --         --           --   $   15,000            --
  Average Cap Rate.......        --        9.0%        --         --         --           --          9.0%           --


     The notional amounts of interest rate instruments, as presented in the
above table, are used to measure interest to be paid or received and do not
represent the amount of exposure to credit loss. 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, 2000. While swaps, caps and collars
represent an integral part of our interest rate risk management program, their
incremental effect on interest expense for the years ended December 31, 2000,
1999 and 1998 was not significant.

     In addition to the interest rate instruments listed in the table above, we
maintain collars with an aggregate $520 million notional amount maturing in
2004. The collar agreements are structured so that if LIBOR falls below 5.3%,
the Company pays 6.7%. If the LIBOR rate is between 5.3% and 8.0%, the Company
pays LIBOR. The LIBOR rate is capped at 8.0% if LIBOR falls between 8.0% and
9.9%. If rates go above 9.9%, the cap is removed. As of December 31, 2000, the
fair value of the collars was a liability of $10.8 million.

     In January 2001, Charter Holdings and Charter Communications Holdings
Capital Corporation issued $900 million 10.75% Senior Notes due 2009, $500
million 11.125% Senior Notes due 2011 and $675 million 13.5% Senior Discount
Notes due 2011. The net proceeds from the selling of these notes, approximately
$1.72 billion, were used, in part, to repay all remaining amounts outstanding
under the Charter Holdings Senior Bridge Loan Facility and the Fanch revolving
credit facility, and a portion of the amounts outstanding under the Charter
Operating and Falcon revolving credit facilities.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     Our consolidated financial statements, predecessor financial statements and
certain financial statements of entities or cable systems we acquired (as
required to comply with the application of Rule 3-05 of Regulation S-X and Staff
Accounting Bulletin 80), the related notes thereto, and the reports of
independent auditors are included in this Annual Report beginning on page F-1.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

     None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The information required by this Item is incorporated by reference to our
Proxy Statement for the 2001 Annual Meeting of Shareholders.

                                        52
   53

ITEM 11.  EXECUTIVE COMPENSATION.

     The information required by this Item is incorporated by reference to our
Proxy Statement for the 2001 Annual Meeting of Shareholders.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The information required by this Item is incorporated by reference to our
Proxy Statement for the 2001 Annual Meeting of Shareholders.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information required by this Item is incorporated by reference to our
Proxy Statement for the 2001 Annual Meeting of Shareholders.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

     (a) The following documents are filed as part of this Annual Report:

        (1) Financial Statements.

            A listing of the financial statements, notes and reports of
            independent public accountants required by Item 8 begins on page F-1
            of this Annual Report.

        (2) Financial Statement Schedules.

            No financial statement schedules are required to be filed by Items 8
            and 14(d) because they are not required or are not applicable, or
            the required information is set forth in the applicable financial
            statements or notes thereto.

        (3) Exhibits (listed by numbers corresponding to the Exhibit Table of
            Item 601 in Regulation S-K).



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
2.1           Merger Agreement, dated March 31, 1999, by and between
              Charter Communications Holdings, LLC and Marcus Cable
              Holdings, LLC (Incorporated by reference 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))
2.6(a)        Asset and Stock Purchase Agreement, dated April 20, 1999,
              between InterMedia Partners of West Tennessee, L.P. and
              Charter Communications, LLC (Incorporated by reference 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))
2.6(b)        Stock Purchase Agreement, dated April 20, 1999, between TCID
              1P-V, Inc. and Charter Communications, LLC (Incorporated by
              reference 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))
2.6(c)        RMG Purchase Agreement, dated as of April 20, 1999, between
              Robin Media Group, Inc., InterMedia Partners of West
              Tennessee, L.P. and Charter RMG, LLC (Incorporated by
              reference 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))


                                        53
   54



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
2.6(d)        Asset Exchange Agreement, dated April 20, 1999, among
              InterMedia Partners Southeast, Charter Communications, LLC,
              Charter Communications Properties, LLC, and Marcus Cable
              Associates, L.L.C. (Incorporated by reference 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))
2.6(d)(i)     Amendment to Asset Exchange Agreement, made as of October 1,
              1999, by and among InterMedia Partners Southeast and Charter
              Communications, LLC, Charter Communications Properties, LLC
              and Marcus Cable Associates, L.L.C. (Incorporated by
              reference 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))
2.6(e)        Asset Exchange Agreement, dated April 20, 1999, among
              InterMedia Partners, a California Limited Partnership,
              Brenmor Cable Partners, L.P. and Robin Media Group, Inc.
              (Incorporated by reference 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))
2.6(f)        Common Agreement, dated April 20, 1999, between InterMedia
              Partners, InterMedia Partners Southeast, InterMedia Partners
              of West Tennessee, L.P., InterMedia Capital Partners IV,
              L.P., InterMedia Partners IV, L.P., Brenmor Cable Partners,
              L.P., TCID IP-V, Inc., Charter Communications, LLC, Charter
              Communications Properties, LLC, Marcus Cable Associates,
              L.L.C. and Charter RMG, LLC (Incorporated by reference to
              Amendment No. 3 to the registration statement on Form S-4 of
              Charter Communications Holdings, LLC and Charter
              Communications Holdings Capital Corporation filed on July 2,
              1999 (File No. 333-77499)) (Portions of this exhibit have
              been omitted pursuant to a request for confidential
              treatment.)
2.7(a)        Purchase and Sale Agreement, dated as of April 26, 1999, by
              and among InterLink Communications Partners, LLLP, the
              sellers listed therein and Charter Communications, Inc. (now
              called Charter Investment, Inc.) (Incorporated by reference
              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))
2.7(b)        Purchase and Sale Agreement, dated as of April 26, 1999, by
              and among Rifkin Acquisition Partners, L.L.L.P., the sellers
              listed therein and Charter Communications, Inc. (now called
              Charter Investment, Inc.) (Incorporated by reference 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))
2.7(c)        RAP Indemnity Agreement, dated April 26, 1999, by and among
              the sellers listed therein and Charter Communications, Inc.
              (now called Charter Investment, Inc.) (Incorporated by
              reference 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))
2.7(d)        Assignment of Purchase Agreement with InterLink
              Communications Partners, LLLP, dated as of June 30, 1999, by
              and between Charter Communications, Inc. (now called Charter
              Investment, Inc.) and Charter Communications Operating, LLC
              (Incorporated by reference 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))


                                        54
   55



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
2.7(e)        Assignment of Purchase Agreement with Rifkin Acquisition
              Partners L.L.L.P., dated as of June 30, 1999, by and between
              Charter Communications, Inc. (now called Charter Investment,
              Inc.) and Charter Communications Operating, LLC
              (Incorporated by reference 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))
2.7(f)        Assignment of RAP Indemnity Agreement, dated as of June 30,
              1999, by and between Charter Communications, Inc. (now
              called Charter Investment, Inc.) and Charter Communications
              Operating, LLC (Incorporated by reference 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))
2.7(g)        Amendment to the Purchase Agreement with InterLink
              Communications Partners, LLLP, dated June 29, 1999
              (Incorporated by reference 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))
2.7(h)        Contribution Agreement, dated as of September 14, 1999, by
              and among Charter Communications Operating, LLC, Charter
              Communications Holding Company, LLC, Charter Communications,
              Inc., Paul G. Allen and the certain other individuals and
              entities listed on the signature pages thereto (Incorporated
              by reference 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))
2.7(i)        Form of First Amendment to the Contribution Agreement dated
              as of September 14, 1999, by and among Charter
              Communications Operating, LLC, Charter Communications
              Holding Company, LLC, Charter Communications, Inc. and Paul
              G. Allen (Incorporated by reference to Amendment No. 5 to
              the registration statement on Form S-1 of Charter
              Communications, Inc. filed on November 4, 1999 (File No.
              333-83887))
2.8           Contribution and Sale Agreement dated as of December 30,
              1999, by and among Charter Communications Holding Company,
              LLC, CC VII Holdings, LLC and Charter Communications VII,
              LLC (Incorporated by reference to the report on Form 8-K of
              Charter Communications Holdings, LLC and Charter
              Communications Holdings Capital Corporation filed on January
              18, 2000 (File No. 333-77499))
2.9           Contribution and Sale Agreement dated as of December 30,
              1999, by and among Charter Communications Holding Company,
              LLC and Charter Communications Holdings, LLC (Incorporated
              by reference to the report on Form 8-K of Charter
              Communications Holdings, LLC and Charter Communications
              Holdings Capital Corporation filed on January 18, 2000 (File
              No. 333-77499))
2.10(a)       Securities Purchase Agreement, dated May 13, 1999, by and
              between Avalon Cable Holdings LLC, Avalon Investors, L.L.C.,
              Avalon Cable of Michigan Holdings, Inc. and Avalon Cable LLC
              and Charter Communications Holdings LLC and Charter
              Communications, Inc. (now called Charter Investment, Inc.)
              (Incorporated by reference to Amendment No. 1 to the
              registration statement on Form S-4 of Avalon Cable of
              Michigan LLC, Avalon Cable of Michigan Inc., Avalon Cable of
              New England LLC and Avalon Cable Finance Inc. filed on May
              28, 1999 (File No. 333-75453))


                                        55
   56



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
2.10(b)       Assignment and Contribution Agreement, entered into as of
              October 11, 1999 by and between Charter Communications
              Holding Company, LLC and Charter Communications, Inc.
              (Incorporated by reference 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))
2.10(c)       Assignment Agreement effective as of June 16, 1999, by and
              among Charter Communications, Inc., Charter Communications
              Holdings LLC, Charter Communications Holding Company, LLC,
              Avalon Cable Holdings LLC, Avalon Investors, L.L.C., Avalon
              Cable of Michigan Holdings, Inc. and Avalon Cable LLC
              (Incorporated by reference 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))
2.11(a)       Purchase and Contribution Agreement, dated as of May 26,
              1999, by and among Falcon Communications, L.P., Falcon
              Holding Group, L.P., TCI Falcon Holdings, LLC, Falcon Cable
              Trust, Falcon Holding Group, Inc. and DHN Inc. and Charter
              Communications, Inc. (now called Charter Investment,
              Inc.)(Incorporated by reference 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))
2.11(b)       First Amendment to Purchase and Contribution Agreement,
              dated as of June 22, 1999, by and among Charter
              Communications, Inc., Charter Communications Holding
              Company, LLC, Falcon Communications, L.P., Falcon Holding
              Group, L.P., TCI Falcon Holdings, LLC, Falcon Cable Trust,
              Falcon Holding Group, Inc. and DHN Inc. (Incorporated by
              reference to the quarterly report on Form 10-Q filed by
              Falcon Communications, L.P. and Falcon Funding Corporation
              on August 13, 1999 (File Nos. 333-60776 and 333-55755))
2.11(c)       Form of Second Amendment to Purchase And Contribution
              Agreement, dated as of October 27, 1999, by and among
              Charter Investment, Inc., Charter Communications Holding
              Company, LLC, Falcon Communications, L.P., Falcon Holding
              Group, L.P., TCI Falcon Holdings, LLC, Falcon Holding Group,
              Inc. and DHN Inc. (Incorporated by reference to Amendment
              No. 5 to the registration statement on Form S-1 of Charter
              Communications, Inc. filed on November 4, 1999 (File No.
              333-83887))
2.11(d)       Third Amendment to Purchase and Contribution Agreement dated
              as of November 12, 1999, by and among Charter
              Communications, Inc., Falcon Communications L.P., Falcon
              Holdings Group, L.P., TCI Falcon Holdings, LLC, Falcon Cable
              Trust, Falcon Holding Group, Inc. and DHN Inc. (Incorporated
              by reference to the report on Form 8-K of CC VII Holdings,
              LLC and Falcon Funding Corporation filed on November 26,
              1999 (File No. 033-60776))
2.12(a)       Purchase Agreement, dated as of May 21, 1999, among
              Blackstone TWF Capital Partners, L.P., Blackstone TWF
              Capital Partners A L.P., Blackstone TWF Capital Partners B
              L.P., Blackstone TWF Family Investment Partnership, L.P.,
              RCF Carry, LLC, Fanch Management Partners, Inc., PBW Carried
              Interest, Inc., RCF Indiana Management Corp, The Robert C.
              Fanch Revocable Trust, A. Dean Windry, Thomas Binning, Jack
              Pottle, SDG/Michigan Communications Joint Venture, Fanch-JV2
              Master Limited Partnership, Cooney Cable Associates of Ohio,
              Limited Partnership, North Texas Cablevision, LTD., Post
              Cablevision of Texas, Limited Partnership, Spring Green
              Communications, L.P., Fanch-Narragansett CSI Limited
              Partnership, and Fanch Cablevision of Kansas General
              Partnership and Charter Communications, Inc. (now called
              Charter Investment, Inc.) (Incorporated by reference 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))


                                        56
   57



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
2.12(b)       Assignment of Purchase Agreement by and between Charter
              Investment, Inc. and Charter Communications Holding Company,
              LLC, effective as of September 21, 1999 (Incorporated by
              reference 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))
2.13          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 (now
              called Charter Investment, Inc.)(Incorporated by reference
              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))
2.14(a)       Asset Purchase Agreement, dated as of February 26, 2001,
              among Marcus Cable of Alabama, L.L.C., on the one hand, and
              TCI of Selma, Inc., TCI of Lee County, Inc., TCI Cablevision
              of Alabama, Inc., Alabama T.V. Cable, Inc. and TCI
              Southeast, Inc., on the other hand
2.14(b)       Reorganization Agreement, dated as of February 26, 2001,
              among Charter Communications, Inc., on the one hand, and TCI
              TKR of Alabama, Inc. and TCI Southeast, Inc., on the other
              hand
2.14(c)       Asset Purchase Agreement, dated as of February 26, 2001,
              among Falcon Cable Systems Company II, L.P., on the one
              hand, and AT&T Broadband, LLC, Communication Services, Inc.,
              Ohio Cablevision Network, Inc., TCI Cablevision of
              California, Inc. and TCI Washington Associates, L.P., on the
              other hand
2.14(d)       Reorganization Agreement, dated as of February 26, 2001,
              among Charter Communications, Inc., on the one hand, and TCI
              Cablevision of Nevada, Inc. and TCI West, Inc., on the other
              hand
2.14(e)       Asset Purchase Agreement, dated as of February 26, 2001,
              among Charter Communications, Inc., Interlink Communications
              Partners, LLC, Charter Communications, LLC and Falcon Cable
              Media, on the one hand, and TCI Cable Partners of St. Louis,
              L.P. and TCI Cablevision of Missouri, Inc., on the other
              hand
2.14(f)       Asset Purchase Agreement, dated as of February 26, 2001,
              among Charter Communications Entertainment I, LLC, on the
              one hand, and St. Louis Tele-Communications, Inc., TCI Cable
              Partners of St. Louis, L.P., TCI Cablevision of Missouri,
              Inc., TCI of Illinois, Inc., TCI TKR of Central Florida,
              Inc. and TCI Holdings, Inc., on the other hand
2.14(g)       Agreement Regarding Closing Matters, dated as of February
              26, 2001, among Charter Communications, Inc., on behalf of
              itself, Marcus Cable of Alabama, L.L.C., Falcon Cable
              Systems Company II, L.P., Interlink Communications Partners,
              LLC, Charter Communications, LLC, Falcon Cable Media, and
              Charter Communications Entertainment I, LLC, on the one
              hand, and AT&T Broadband, LLC, on behalf of itself, TCI TKR
              of Alabama, Inc., TCI of Selma, Inc., TCI of Lee County, TCI
              Cablevision of Alabama, Inc. and Alabama T.V. Cable, Inc.,
              TCI Southeast, Inc., TCI Cablevision of Nevada, Inc., TCI
              West, Inc., Communications Services, Inc., Ohio Cablevision
              Network, Inc., TCI Cablevision of California, Inc., TCI
              Washington Associates, LP., TCI of Illinois, Inc., TCI
              Cablevision of Missouri, Inc., St. Louis
              Tele-Communications, Inc., TCI Cable Partners of St. Louis,
              L.P., TCI TKR of Central Florida, Inc. and TCI Holdings,
              Inc., on the other hand


                                        57
   58



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
3.1(a)        Restated Certificate of Incorporation of Charter
              Communications, Inc. (Originally incorporated July 22, 1999)
              (Incorporated by reference 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 October
              24, 2000
3.2           By-Laws of Charter Communications, Inc. (Incorporated by
              reference to Amendment No. 3 to the registration statement
              on Form S-1 of Charter Communications, Inc. filed on October
              18, 1999 (File No. 333-03887))
4.1(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 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))
4.1(b)        Form of 10.00% Senior Note due 2010 (included in Exhibit No.
              4.1(a)) (Incorporated by reference 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))
4.1(c)        Exchange and Registration Rights Agreement, dated January
              12, 2000, by and among Charter Communications Holdings, LLC,
              Charter Communications Holdings Capital Corporation,
              Goldman, Sachs & Co., Chase Securities Inc., FleetBoston
              Robertson Stephens Inc., Merrill Lynch, Pierce, Fenner &
              Smith Incorporated, Morgan Stanley & Co. Incorporated, TD
              Securities (USA) Inc., First Union Securities, Inc., PNC
              Capital Markets, Inc. and SunTrust Equitable Securities
              Corporation, relating to the 10.00% Senior Notes due 2009
              (Incorporated by reference 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))
4.2(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 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))
4.2(b)        Form of 10.25% Senior Note due 2010 (included in Exhibit No.
              4.2(a)) (Incorporated by reference 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))
4.2(c)        Exchange and Registration Rights Agreement, dated January
              12, 2000, by and among Charter Communications Holdings, LLC,
              Charter Communications Holdings Capital Corporation,
              Goldman, Sachs & Co., Chase Securities Inc., FleetBoston
              Robertson Stephens Inc., Merrill Lynch, Pierce, Fenner &
              Smith Incorporated, Morgan Stanley & Co. Incorporated, TD
              Securities (USA) Inc., First Union Securities, Inc., PNC
              Capital Markets, Inc. and SunTrust Equitable Securities
              Corporation, relating to the 10.25% Senior Notes due 2010
              (Incorporated by reference 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))


                                        58
   59



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
4.3(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 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))
4.3(b)        Form of 11.75% Senior Discount Note due 2010 (included in
              Exhibit No. 4.3(a)) (Incorporated by reference 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))
4.3(c)        Exchange and Registration Rights Agreement, dated January
              12, 2000, by and among Charter Communications Holdings, LLC,
              Charter Communications Holdings Capital Corporation,
              Goldman, Sachs & Co., Chase Securities Inc., FleetBoston
              Robertson Stephens Inc., Merrill Lynch, Pierce, Fenner &
              Smith Incorporated, Morgan Stanley & Co. Incorporated, TD
              Securities (USA) Inc., First Union Securities, Inc., PNC
              Capital Markets, Inc. and SunTrust Equitable Securities
              Corporation, relating to the 11.75% Senior Discount Notes
              due 2010 (Incorporated by reference 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))
4.4(a)        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 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))
4.4(b)        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 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))
4.4(c)        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 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))
4.5           Indenture, dated as of April 9, 1998, by and 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 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))


                                        59
   60



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
4.6           Indenture, dated January 15, 1996, by and among Rifkin
              Acquisition Partners, L.L.L.P., Rifkin Acquisition Capital
              Corp., as issuers, Cable Equities of Colorado Management
              Corp., FNI Management Corp., Cable Equities of Colorado,
              Ltd., Cable Equities, Inc. and Rifkin/Tennessee, Ltd., as
              Subsidiary Guarantors, and Marine Midland Bank, as trustee
              (Incorporated by reference to the registration statement on
              Form S-1 of Rifkin Acquisition Capital Corp. and Rifkin
              Acquisition Partners, L.L.P. filed on April 2, 1996 (File
              No. 333-3084))
4.7(a)        Indenture, dated as of December 10, 1998, by and among
              Avalon Cable of Michigan Holdings, Inc., Avalon Cable LLC
              and Avalon Cable Holdings Finance, Inc., as issuers and The
              Bank of New York, as trustee for the Notes (Incorporated by
              reference to Amendment No. 1 to the registration statement
              on Form S-4 of Charter Communications Holdings, LLC and
              Charter Communications Holdings Capital Corporation filed on
              April 18, 2000 (File No. 333-77499))
4.7(b)        Supplemental Indenture, dated as of March 26, 1999, by and
              among Avalon Cable of Michigan Holdings, Inc., Avalon Cable
              LLC and Avalon Cable Holdings Finance, Inc., as issuers,
              Avalon Cable of Michigan, Inc., as guarantor, and The Bank
              of New York, as trustee for the Notes (Incorporated by
              reference to Amendment No. 1 to the registration statement
              on Form S-4 of Avalon Cable LLC, Avalon Cable Holdings
              Finance, Inc., Avalon Cable of Michigan Holdings, Inc. and
              Avalon Cable of Michigan, Inc. filed on May 28, 1999 (File
              No. 333-75415))
4.8           Indenture relating to 5.75% Convertible Senior Notes due
              2005, dated as of October 25, 2000, among Charter
              Communications, Inc. and BNY Midwest Trust Company as
              trustee (Incorporated by reference to the quarterly report
              on Form 10-Q filed by Charter Communications, Inc. on
              November 14, 2000 (File No. 000-27927))
4.9           Registration Rights Agreement relating to 5.75% Convertible
              Senior Notes due 2005, dated as of October 30, 2000, among
              Charter Communications, Inc., Goldman, Sachs & Co., Morgan
              Stanley & Co. Incorporated, Bear, Stearns & Co., and Merrill
              Lynch Pierce, Fenner & Smith Incorporated (Incorporated by
              reference to the quarterly report on Form 10-Q filed by
              Charter Communications, Inc. on November 14, 2000 (File No.
              000-27927))
10.1          Credit Agreement, dated as of March 18, 1999, between
              Charter Communications Operating, LLC, and certain lenders
              and agents named therein (Incorporated by reference 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))
10.1(a)       First Amendment to Credit Agreement dated as of June 28,
              1999 between Charter Communications Operating, LLC, Charter
              Communications Holdings LLC and certain lenders and agents
              named therein (Incorporated by reference 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))
10.1(b)       Second Amendment to Credit Agreement dated as of December
              14, 1999 between Charter Communications Operating, LLC,
              Charter Communications Holdings LLC and certain lenders and
              agents named therein (Incorporated by reference 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))
10.1(c)       Third Amendment to Credit Agreement dated as of March 18,
              2000, between Charter Communications Operating, LLC, Charter
              Communications, LLC and certain lenders and agents named
              therein (Incorporated by reference to the annual report on
              Form 10-K filed by Charter Communications, Inc. on March 30,
              2000 (File No. 333-83887))


                                        60
   61



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
10.2(a)(1)    Form of Second Amended Management Agreement, dated as of
              November 9, 1999, by and among Charter Investment, Inc.,
              Charter Communications, Inc. and Charter Communications
              Operating, LLC (Incorporated by reference 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))
10.2(b)       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 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))
10.2(c)       Form of Management Agreement, dated as of November 9, 1999,
              by and between Charter Communications Holding Company, LLC
              and Charter Communications, Inc. (Incorporated by reference
              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))
10.2(d)       Management Agreement, dated as of November 12, 1999, by and
              between CC VI Operating Company, LLC and Charter
              Communications, Inc. (Incorporated by reference to Amendment
              No. 1 to the registration statement on Form S-4 of Charter
              Communications Holdings, LLC and Charter Communications
              Holdings Capital Corporation filed on April 18, 2000 (File
              No. 333-77499))
10.2(e)       Management Agreement, dated as of November 12, 1999 by and
              between Falcon Cable Communications, LLC and Charter
              Communications, Inc. (Incorporated by reference to Amendment
              No. 1 to the registration statement on Form S-4 of Charter
              Communications Holdings, LLC and Charter Communications
              Holdings Capital Corporation filed on April 18, 2000 (File
              No. 333-77499))
10.2(f)       Management Agreement dated as of February 14, 2000, by and
              between CC VIII Operating, LLC, certain subsidiaries of CC
              VIII Operating, LLC and Charter Communications, Inc.
              (Incorporated by reference to the annual report on Form 10-K
              filed by Charter Communications, Inc. on March 30, 2000
              (File No. 333-83887))
10.3          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
              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))
10.4          Charter Communications Holdings, LLC 1999 Option Plan
              (Incorporated by reference 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))
10.4(a)       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 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))
10.4(b)       Form of Amendment No. 1 to the Charter Communications
              Holdings, LLC 1999 Option Plan (Incorporated by reference 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))


                                        61
   62



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
10.4(c)       Amendment No. 2 to the Charter Communications Holdings, LLC
              1999 Option Plan (Incorporated by reference to the annual
              report on Form 10-K filed by Charter Communications, Inc. on
              March 30, 2000 (File No. 333-83887))
10.6          Membership Interests Purchase Agreement, dated July 22,
              1999, by and between Charter Communications Holding Company,
              LLC and Paul G. Allen (Incorporated by reference 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))
10.7          Employment Agreement, dated as of August 28, 1998, between
              Jerald L. Kent and Paul G. Allen (Incorporated by reference
              to Amendment No. 5 to the registration statement on Form S-4
              of Charter Communications Holdings, LLC and Charter
              Communications Holdings Capital Corporation filed on August
              10, 1999 (File No. 333-77499))
10.8          Assignment of Employment Agreements, dated as of December
              23, 1998, between Paul G. Allen and Charter Communications,
              Inc. (now called Charter Investment, Inc.) (Incorporated by
              reference 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))
10.9(a)       Option Agreement, dated as of February 9, 1999, between
              Jerald L. Kent and Charter Communications Holdings, LLC
              (Incorporated by reference 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))
10.9(b)       Amendment to the Option Agreement, dated as of August 23,
              1999, between Jerald L. Kent and Charter Communications
              Holding Company, LLC (Incorporated by reference 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))
10.9(c)       Form of Amendment to the Option Agreement, dated as of
              November 8, 1999, by and among Jerald L. Kent, Charter
              Communications Holding Company, LLC and Charter
              Communications, Inc. (Incorporated by reference 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))
10.10         Letter Agreement, dated as of July 22, 1999 between Charter
              Communications Holding Company, LLC and Charter
              Communications Holdings, LLC (Incorporated by reference to
              Amendment No. 5 to the registration statement on Form S-4 of
              Charter Communications Holdings, LLC and Charter
              Communications Holdings Capital Corporation filed on August
              10, 1999 (File No. 333-77499))
10.11         Amendment to Membership Interests Purchase Agreement, dated
              as of August 10, 1999, by and among Charter Communications
              Holding Company, LLC, Vulcan Cable III Inc. and Paul G.
              Allen (Incorporated by reference 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))
10.12         Form of Assignment and Assumption Agreement, dated as of
              November 4, 1999, by and between Charter Investment, Inc.
              and Charter Communications, Inc. (Incorporated by reference
              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))


                                        62
   63



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
10.13         Form of Registration Rights Agreement, dated as of November
              12, 1999, by and among Charter Communications, Inc., Charter
              Investment, Inc., Vulcan Cable III Inc., Mr. Paul G. Allen,
              Mr. Jerald L. Kent, Mr. Howard L. Wood and Mr. Barry L.
              Babcock (Incorporated by reference 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))
10.14         Form of Consulting Agreement, dated as of November 1, 1999,
              by and between Howard L. Wood and Charter Communications,
              Inc. (Incorporated by reference 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))
10.15         Form of Termination of Employment Agreement, dated as of
              November 1, 1999, by and between Howard L. Wood and Charter
              Investment, Inc., Communications, Inc. and Charter
              Communications Holding Company, LLC (Incorporated by
              reference 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))
10.16         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 Amendment No. 3
              to the registration statement on Form S-1 of Charter
              Communications, Inc. filed on October 18, 1999 (File No.
              333-83887))
10.17         Second Amended and Restated Credit Agreement dated as of
              February 2, 1999, as Amended and Restated as of January 2,
              2001 by and among CC VIII Operating, LLC, as borrower, CC
              VIII Holdings, LLC, as guarantor, and several financial
              institutions or entities named therein (Incorporated by
              reference to the annual report on Form 10-K filed by Charter
              Communications, Inc. on March 30, 2000 (File No. 333-83887))
10.18         Form of Credit Agreement, dated as of June 30, 1998, as
              Amended and Restated as of November 12, 1999, among Falcon
              Cable Communications, LLC, certain guarantors and several
              financial institutions or entities named therein
              (Incorporated by reference 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))
10.19         Credit Agreement, dated as of November 12, 1999, among CC VI
              Holdings, LLC, CC VI Operating Company, LLC and several
              financial institutions or entities named therein
              (Incorporated by reference to the report on Form 8-K of
              Charter Communications, Inc. filed on November 29, 1999
              (File No. 333-83887))
10.20(a)      Amended and Restated Limited Liability Company Agreement for
              Charter Communications Holding Company, LLC, dated February
              14, 2000 (Incorporated by reference to the current report on
              Form 8-K of Charter Communications, Inc. filed on February
              29, 2000 (File No. 333-83887))
10.20(b)      Second Amendment to the Amended and Restated Limited
              Liability Company Agreement for Charter Communications
              Holding Company, LLC, dated October 24, 2000
10.21         Letter Agreement, dated May 25, 1999, between Charter
              Communications, Inc. and Marc Nathanson (Incorporated by
              reference 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))
10.22         Exchange Agreement, dated as of February 14, 2000, by and
              among Charter Communications, Inc., 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., and TCI Bresnan LLC
              (Incorporated by reference to the current report on Form 8-K
              of Charter Communications, Inc. filed on February 29, 2000
              (File No. 333-83887))


                                        63
   64



  EXHIBIT                             DESCRIPTION
  -------                             -----------
           
10.23         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 Amendment No. 3 to the registration
              statement on Form S-1 of Charter Communications, Inc. filed
              on October 18, 1999 (File No. 333-83887))
10.24         Commitment Letter, dated February 26, 2001, by and among
              Goldman Sachs Credit Partners, L.P. and Morgan Stanley
              Senior Funding, Inc., on the one hand, and Charter
              Communications Holdings, LLC and Charter Communications
              Holdings Capital Corporation, on the other hand
12.1          Computation of Ratio of Earnings to Fixed Charges
21.1          Subsidiaries of Charter Communications Holdings, LLC
23.2          Consent of Arthur Andersen LLP
23.3          Consent of Ernst & Young LLP
23.4          Consent of KPMG LLP
23.5          Consent of Ernst & Young LLP
99            Risk Factors


     (b) Reports on Form 8-K

          On October 25, 2000, the Registrant filed a current report on Form 8-K
     relating to the offering and pricing of $650.0 million of Convertible
     Senior Notes due 2005.

          On November 2, 2000, the Registrant filed a current report on Form 8-K
     to announce third quarter 2000 financial results.

          On December 28, 2000, the Registrant filed a current report on Form
     8-K to announce the Registrant's plans to raise, through its subsidiaries,
     Charter Communications Holdings, LLC and Charter Communications Holdings
     Capital Corporation, $850.0 million of senior and senior discount notes in
     a private placement. The transaction size was subsequently increased and
     the issuers received gross proceeds of approximately $1.75 billion when the
     notes were sold in January 2001.

                                        64
   65

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Charter Communications, Inc. has duly caused this Annual
Report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                          CHARTER COMMUNICATIONS, INC.,
                                          Registrant

                                          By:      /s/ JERALD L. KENT
                                            ------------------------------------
                                            Jerald L. Kent
                                            President and Chief Executive
                                              Officer

Date: February 28, 2001

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Charter
Communications, Inc. and in the capacities and on the dates indicated.



                     SIGNATURE                                    TITLE                     DATE
                     ---------                                    -----                     ----
                                                                                
                 /s/ PAUL G. ALLEN                   Chairman of the Board of         February 27, 2001
---------------------------------------------------    Directors
                   Paul G. Allen

                /s/ JERALD L. KENT                   President, Chief Executive       February 27, 2001
---------------------------------------------------    Officer, Director (Principal
                  Jerald L. Kent                       Executive Officer)

               /s/ KENT D. KALKWARF                  Executive Vice President and     February 27, 2001
---------------------------------------------------    Chief Financial Officer
                 Kent D. Kalkwarf                      (Principal Financial Officer
                                                       and Principal Accounting
                                                       Officer)

               /s/ MARC B. NATHANSON                 Director                         February 27, 2001
---------------------------------------------------
                 Marc B. Nathanson

               /s/ RONALD L. NELSON                  Director                         February 27, 2001
---------------------------------------------------
                 Ronald L. Nelson

              /s/ NANCY B. PERETSMAN                 Director                         February 27, 2001
---------------------------------------------------
                Nancy B. Peretsman


                                        65
   66



                     SIGNATURE                                    TITLE                     DATE
                     ---------                                    -----                     ----

                                                                                
               /s/ WILLIAM D. SAVOY                  Director                         February 27, 2001
---------------------------------------------------
                 William D. Savoy

                /s/ HOWARD L. WOOD                   Director                         February 27, 2001
---------------------------------------------------
                  Howard L. Wood


                                        66
   67

                         INDEX TO FINANCIAL STATEMENTS



                                                              PAGE
                                                              ----
                                                           
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES:
Report of Independent Public Accountants....................   F-2
Report of Independent Auditors..............................   F-3
Report of Independent Auditors..............................   F-4
Consolidated Balance Sheets as of December 31, 2000 and
  1999......................................................   F-5
Consolidated Statements of Operations for the Years Ended
  December 31, 2000 and 1999, and for the Period from
  December 24, 1998, through December 31, 1998..............   F-6
Consolidated Statements of Changes in Shareholders' Equity
  for the Years Ended December 31, 2000 and 1999 and for the
  Period from December 24, 1998, through December 31,
  1998......................................................   F-7
Consolidated Statements of Cash Flows for the Years Ended
  December 31, 2000 and 1999, and for the Period from
  December 24, 1998, through December 31, 1998..............   F-8
Notes to Consolidated Financial Statements..................   F-9
CHARTER COMMUNICATIONS PROPERTIES HOLDINGS, LLC AND
  SUBSIDIARIES:
Report of Independent Public Accountants....................  F-34
Consolidated Statement of Operations for the Period from
  January 1, 1998, through December 23, 1998................  F-35
Consolidated Statement of Changes in Shareholder's
  Investment for the Period from January 1, 1998 through
  December 23, 1998.........................................  F-36
Consolidated Statement of Cash Flows for the Period from
  January 1, 1998, through December 23, 1998................  F-37
Notes to Consolidated Financial Statements..................  F-38
BRESNAN COMMUNICATIONS GROUP LLC:
Independent Auditors' Report................................  F-44
Consolidated Balance Sheets as of December 31, 1999 and
  February 14, 2000.........................................  F-45
Consolidated Statements of Operations and Members' Equity
  (Deficit) for the Year Ended December 31, 1999 and for the
  Period from January 1, 2000 to February 14, 2000..........  F-46
Consolidated Statements of Cash Flows for the Year Ended
  December 31, 1999 and for the Period from January 1, 2000
  to February 14, 2000......................................  F-47
Notes to Consolidated Financial Statements..................  F-48


                                       F-1
   68

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO CHARTER COMMUNICATIONS, INC.:

     We have audited the accompanying consolidated balance sheets of Charter
Communications, Inc. and subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of operations, changes in shareholders' equity
and cash flows for the years then ended and for the period from December 24,
1998, through December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the
financial statements of Charter Communications VI Operating Company, LLC and
subsidiaries, and CC VII Holdings, LLC -- Falcon Systems, as of December 31,
1999, and for the periods from the dates of acquisition through December 31,
1999, which statements on a combined basis reflect total assets and total
revenues of 31 percent and 6 percent, respectively, of the related consolidated
totals of the Company. Those statements were audited by other auditors whose
reports have been furnished to us, and our opinion, insofar as it relates to the
amounts included for those entities, is based solely on the reports of the other
auditors.

     We conducted our audits in accordance with auditing standards generally
accepted in the 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 and the reports of other
auditors provide a reasonable basis for our opinion.

     In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Charter Communications, Inc. and subsidiaries as of
December 31, 2000 and 1999, and the results of their operations and their cash
flows for the years then ended, and for the period from December 24, 1998,
through December 31, 1998, in conformity with accounting principles generally
accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

St. Louis, Missouri,
February 8, 2001

                                       F-2
   69

                         REPORT OF INDEPENDENT AUDITORS

Charter Communications VI
  Operating Company, LLC

     We have audited the consolidated balance sheet of Charter Communications VI
Operating Company, LLC and subsidiaries as of December 31, 1999, and the related
consolidated statements of operations, member's equity and cash flows for the
period from inception (November 9, 1999) to December 31, 1999 (not presented
separately herein). These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

     We conducted our audit in accordance with auditing standards generally
accepted in the 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 audit provides a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Charter
Communications VI Operating Company, LLC and subsidiaries at December 31, 1999,
and the consolidated results of its operations and its cash flows for the period
from November 9, 1999 to December 31, 1999 in conformity with accounting
principles generally accepted in the United States.

                                          /s/ ERNST & YOUNG LLP

Denver, Colorado
February 11, 2000

                                       F-3
   70

                         REPORT OF INDEPENDENT AUDITORS

Sole Member
  CC VII Holdings, LLC

     We have audited the combined balance sheet of the CC VII Holdings,
LLC -- Falcon Systems as of December 31, 1999, and the related combined
statements of operations and parent's investment and cash flows for the period
from November 13, 1999 (commencement date) to December 31, 1999 (not presented
separately herein). These combined financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these combined financial statements based on our audit.

     We conducted our audit in accordance with auditing standards generally
accepted in the 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 audit provides a reasonable basis
for our opinion.

     In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of the CC VII
Holdings, LLC -- Falcon Systems at December 31, 1999 and the results of its
operations and its cash flows for the period from November 13, 1999
(commencement date) to December 31, 1999, in conformity with accounting
principles generally accepted in the United States.

                                          /s/ ERNST & YOUNG LLP

Los Angeles, California
March 2, 2000

                                       F-4
   71

                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS



                                                                     DECEMBER 31,
                                                              --------------------------
                                                                 2000           1999
                                                              -----------    -----------
                                                                (DOLLARS IN THOUSANDS)
                                                                       
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................  $   130,702    $   133,706
  Accounts receivable, less allowance for doubtful accounts
     of $12,421 and $11,471, respectively...................      217,667         93,743
  Receivables from related party............................        6,480             --
  Prepaid expenses and other................................       77,719         35,142
                                                              -----------    -----------
          Total current assets..............................      432,568        262,591
                                                              -----------    -----------
INVESTMENT IN CABLE PROPERTIES:
  Property, plant and equipment, net........................    5,267,519      3,490,573
  Franchises, net...........................................   17,068,702     14,985,793
                                                              -----------    -----------
                                                               22,336,221     18,476,366
                                                              -----------    -----------
OTHER ASSETS................................................      274,777        227,550
                                                              -----------    -----------
                                                              $23,043,566    $18,966,507
                                                              ===========    ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable and accrued expenses.....................  $ 1,367,234    $   706,775
  Payables to related party.................................           --         13,183
                                                              -----------    -----------
          Total current liabilities.........................    1,367,234        719,958
                                                              -----------    -----------
LONG-TERM DEBT..............................................   13,060,455      8,936,455
                                                              -----------    -----------
DEFERRED MANAGEMENT FEES -- RELATED PARTY...................       13,751         21,623
                                                              -----------    -----------
OTHER LONG-TERM LIABILITIES.................................      285,266        145,124
                                                              -----------    -----------
MINORITY INTEREST...........................................    4,089,329      5,381,331
                                                              -----------    -----------
REDEEMABLE SECURITIES.......................................    1,104,327        750,937
                                                              -----------    -----------
SHAREHOLDERS' EQUITY:
  Class A common stock......................................          234            195
  Class B common stock......................................           --             --
  Preferred stock...........................................           --             --
  Additional paid-in capital................................    4,018,444      3,075,694
  Accumulated deficit.......................................     (894,881)       (66,231)
  Accumulated other comprehensive income (loss).............         (593)         1,421
                                                              -----------    -----------
          Total shareholders' equity........................    3,123,204      3,011,079
                                                              -----------    -----------
                                                              $23,043,566    $18,966,507
                                                              ===========    ===========


 The accompanying notes are an integral part of these consolidated statements.
                                       F-5
   72

                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                                    PERIOD FROM
                                                                                    DECEMBER 24,
                                                                                       1998,
                                                       YEAR ENDED DECEMBER 31,        THROUGH
                                                     ---------------------------    DECEMBER 31,
                                                         2000           1999            1998
                                                     ------------    -----------    ------------
                                                      (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
                                                                           
REVENUES...........................................  $  3,249,222    $ 1,428,244      $13,713
                                                     ------------    -----------      -------
OPERATING EXPENSES:
  Operating, general and administrative............     1,651,353        737,957        7,134
  Depreciation and amortization....................     2,473,082        745,315        8,318
  Option compensation expense......................        40,978         79,979          845
  Corporate expense charge -- related party........        55,243         51,428          473
                                                     ------------    -----------      -------
                                                        4,220,656      1,614,679       16,770
                                                     ------------    -----------      -------
     Loss from operations..........................      (971,434)      (186,435)      (3,057)
OTHER INCOME (EXPENSE):
  Interest expense.................................    (1,059,130)      (477,799)      (2,353)
  Interest income..................................         7,348         34,467          133
  Loss on equity investments.......................       (19,262)            --           --
  Other, net.......................................       (12,467)        (8,039)          --
                                                     ------------    -----------      -------
     Loss before income tax expense and minority
       interest in loss of subsidiary..............    (2,054,945)      (637,806)      (5,277)
INCOME TAX EXPENSE.................................            --         (1,030)          --
                                                     ------------    -----------      -------
  Loss before minority interest in loss of
     subsidiary....................................    (2,054,945)      (638,836)      (5,277)
MINORITY INTEREST IN LOSS OF SUBSIDIARY............     1,226,295        572,607        5,275
                                                     ------------    -----------      -------
  Net loss.........................................  $   (828,650)   $   (66,229)     $    (2)
                                                     ============    ===========      =======
LOSS PER COMMON SHARE, basic and diluted...........  $      (3.67)   $     (2.22)     $ (0.04)
                                                     ============    ===========      =======
Weighted-average common shares outstanding.........   225,697,775     29,811,202       50,000
                                                     ============    ===========      =======


 The accompanying notes are an integral part of these consolidated statements.
                                       F-6
   73

                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY



                                                                                  ACCUMULATED
                                                                                     OTHER
                                  CLASS A   CLASS B   ADDITIONAL                 COMPREHENSIVE       TOTAL
                                  COMMON    COMMON     PAID-IN     ACCUMULATED      INCOME       SHAREHOLDERS'
                                   STOCK     STOCK     CAPITAL       DEFICIT        (LOSS)          EQUITY
                                  -------   -------   ----------   -----------   -------------   -------------
                                                             (DOLLARS IN THOUSANDS)
                                                                               
BALANCE, December 24, 1998......   $ --       $--     $      832    $      --       $    --       $      832
  Net loss......................     --        --             --           (2)           --               (2)
                                   ----       ---     ----------    ---------       -------       ----------
BALANCE, December 31, 1998......     --        --            832           (2)           --              830
  Issuance of Class B common
     stock to Mr. Allen.........     --        --            950           --            --              950
  Net proceeds from initial
     public offering of Class A
     common stock...............    196        --      3,547,724           --            --        3,547,920
  Issuance of common stock in
     exchange for additional
     equity of subsidiary.......     26        --        638,535           --            --          638,561
  Distributions to Charter
     Investment.................     --        --         (2,233)          --            --           (2,233)
  Equity classified as
     redeemable securities......    (27)       --       (700,759)          --            --         (700,786)
  Option compensation expense...     --        --          4,493           --            --            4,493
  Loss on issuance of equity by
     subsidiary.................     --        --       (413,848)          --            --         (413,848)
  Net loss......................     --        --             --      (66,229)           --          (66,229)
  Unrealized gain on marketable
     securities available for
     sale.......................     --        --             --           --         1,421            1,421
                                   ----       ---     ----------    ---------       -------       ----------
BALANCE, December 31, 1999......    195        --      3,075,694      (66,231)        1,421        3,011,079
  Issuance of common stock
     related to acquisitions....     11        --        177,976           --            --          177,987
  Redeemable securities
     reclassified as equity.....     28        --        692,505           --            --          692,533
  Option compensation expense...     --        --         16,405           --            --           16,405
  Gain on issuance of equity by
     subsidiary.................     --        --         55,534           --            --           55,534
  Stock options exercised.......     --        --            330           --            --              330
  Net loss......................     --        --             --     (828,650)           --         (828,650)
  Unrealized loss on marketable
     securities available for
     sale.......................     --        --             --           --        (2,014)          (2,014)
                                   ----       ---     ----------    ---------       -------       ----------
BALANCE, December 31, 2000......   $234       $--     $4,018,444    $(894,881)      $  (593)      $3,123,204
                                   ====       ===     ==========    =========       =======       ==========


 The accompanying notes are an integral part of these consolidated statements.
                                       F-7
   74

                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                                      PERIOD FROM
                                                                                      DECEMBER 24,
                                                                                         1998,
                                                          YEAR ENDED DECEMBER 31,       THROUGH
                                                         --------------------------   DECEMBER 31,
                                                            2000           1999           1998
                                                         -----------   ------------   ------------
                                                                  (DOLLARS IN THOUSANDS)
                                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss.............................................  $  (828,650)  $    (66,229)    $     (2)
  Adjustments to reconcile net loss to net cash
     provided by operating activities --
     Minority interest in loss of subsidiary...........   (1,226,295)      (572,607)      (5,275)
     Depreciation and amortization.....................    2,473,082        745,315        8,318
     Option compensation expense.......................       40,978         79,979          845
     Noncash interest expense..........................      181,436        100,674           --
     Loss on equity investments........................       19,262             --           --
  Changes in assets and liabilities, net of effects
     from acquisitions --
     Accounts receivable...............................     (138,453)       (32,366)      (8,753)
     Prepaid expenses and other........................      (45,203)        13,627         (211)
     Accounts payable and accrued expenses.............      699,602        177,321       10,227
     Receivables from and payables to related party,
       including deferred management fees..............      (49,138)        27,653          473
  Other operating activities...........................        4,589          6,549        2,022
                                                         -----------   ------------     --------
       Net cash provided by operating activities.......    1,131,210        479,916        7,644
                                                         -----------   ------------     --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment............   (2,825,126)      (741,508)     (13,672)
  Payments for acquisitions, net of cash acquired......   (1,188,000)    (7,629,564)          --
  Loan to Marcus Cable Holdings........................           --     (1,680,142)          --
  Purchases of investments.............................      (59,149)            --           --
  Other investing activities...........................       18,307        (26,755)          --
                                                         -----------   ------------     --------
       Net cash used in investing activities...........   (4,053,968)   (10,077,969)     (13,672)
                                                         -----------   ------------     --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings of long-term debt.........................    7,504,565     10,114,188       14,200
  Repayments of long-term debt.........................   (4,499,793)    (5,694,375)          --
  Payments for debt issuance costs.....................      (85,348)      (113,481)          --
  Net proceeds from initial public offering of Class A
     common stock......................................           --      3,547,920           --
  Proceeds from issuance of Class B common stock.......           --            950           --
  Capital contributions to Charter Holdco by Vulcan
     Cable.............................................           --      1,894,290           --
  Distributions to Charter Investment..................           --        (10,931)          --
  Other financing activities...........................          330        (16,375)          --
                                                         -----------   ------------     --------
       Net cash provided by financing activities.......    2,919,754      9,722,186       14,200
                                                         -----------   ------------     --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...       (3,004)       124,133        8,172
CASH AND CASH EQUIVALENTS, beginning of period.........      133,706          9,573        1,401
                                                         -----------   ------------     --------
CASH AND CASH EQUIVALENTS, end of period...............  $   130,702   $    133,706     $  9,573
                                                         ===========   ============     ========
CASH PAID FOR INTEREST.................................  $   750,606   $    314,606     $  5,538
                                                         ===========   ============     ========
NONCASH TRANSACTIONS:
  Transfer of operating subsidiaries to the Company....  $        --   $  1,252,370     $     --
  Transfer of equity interests to the Company..........           --        180,710           --
  Issuance of equity as partial payments for
     acquisitions......................................    1,192,097        683,312           --


 The accompanying notes are an integral part of these consolidated statements.
                                       F-8
   75

                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

1. ORGANIZATION AND BASIS OF PRESENTATION:

  Charter Communications, Inc.

     On July 22, 1999, Charter Investment, Inc. (Charter Investment), a company
controlled by Paul G. Allen, formed a wholly owned subsidiary, Charter
Communications, Inc. (Charter), a Delaware corporation, with a nominal initial
investment.

     On November 12, 1999, Charter sold 195.5 million shares of Class A common
stock in an initial public offering and 50,000 shares of high vote Class B
common stock to Mr. Allen. The net proceeds from the offerings of approximately
$3.55 billion were used to purchase membership units of Charter Communications
Holding Company, LLC (Charter Holdco), except for a portion of the proceeds that
were retained by Charter to acquire a portion of the equity interests of Avalon
Cable of Michigan Holdings, Inc. (Avalon). In exchange for the contribution of
the net proceeds from the offerings and equity interests of Avalon, Charter
received 195.55 million membership units of Charter Holdco on November 12, 1999,
representing a 100% voting interest and an approximate 40.6% economic interest.
As of December 31, 2000, Charter owns a 40.8% economic interest in Charter
Holdco.

     Prior to November 12, 1999, Charter Holdco was owned 100% by Charter
Investment and Vulcan Cable III Inc. (Vulcan Cable), both entities controlled by
Mr. Allen. Subsequent to November 12, 1999, Mr. Allen controls Charter through
his ownership of all of the high vote Class B common stock and Charter controls
Charter Holdco through its ownership of all the voting interests. Charter's
purchase of 50,000 membership units of Charter Holdco was accounted for as a
reorganization of entities under common control similar to a pooling of
interests. Accordingly, beginning December 23, 1998, the date Mr. Allen first
controlled Charter Holdco, the assets and liabilities of Charter Holdco are
reflected in the consolidated financial statements of Charter at Mr. Allen's
basis and minority interest is recorded representing that portion of the
economic interests not owned by Charter. For financial reporting purposes,
50,000 of the membership units previously issued by Charter Holdco to companies
controlled by Mr. Allen are considered held by Charter effective December 23,
1998, representing an economic interest of less than 1%.

     Charter is a holding company whose sole asset is a controlling equity
interest in Charter Holdco, an indirect owner of cable systems. Charter and
Charter Holdco and its subsidiaries are collectively referred to as the Company.
The consolidated financial statements of Charter include the accounts of Charter
Holdco and all of its direct and indirect subsidiaries. All material
intercompany transactions and balances have been eliminated.

     As of December 31, 2000, the Company owns and operates cable systems
serving approximately 6.4 million (unaudited) customers. The Company currently
offers a full array of traditional analog cable television services and advanced
bandwidth services such as digital television, interactive video programming,
Internet access through television-based service, dial-up telephone modems and
high speed cable modems, and video-on-demand.

  Charter Communications Holding Company, LLC

     Charter Holdco, a Delaware limited liability company, was formed in
February 1999 as a wholly owned subsidiary of Charter Investment. Charter
Investment through its wholly owned subsidiary, Charter Communications
Properties Holdings, LLC (CCPH), commenced operations with the acquisition of a
cable system on September 30, 1995.

     Effective December 23, 1998, through a series of transactions, Mr. Allen
acquired approximately 94% of Charter Investment for an aggregate purchase price
of $2.2 billion, excluding $2.0 billion in debt assumed (the "Paul Allen
Transaction"). In conjunction with the Paul Allen Transaction, Charter
Investment acquired, for

                                       F-9
   76
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

fair value from unrelated third parties, all of the interests it did not already
own in CharterComm Holdings, LLC (CharterComm Holdings) and CCA Group (comprised
of CCA Holdings Corp., CCT Holdings Corp. and Charter Communications Long Beach,
Inc.), all cable television operating companies, for $2.0 billion, excluding
$1.8 billion in debt assumed. Charter Investment previously managed and owned
minority interests in these companies. These acquisitions were accounted for
using the purchase method of accounting and accordingly, results of operations
of CharterComm Holdings and CCA Group are included in the financial statements
from the date of acquisition. In February 1999, Charter Investment transferred
all of its cable television operating subsidiaries to a wholly owned subsidiary
of Charter Communications Holdings, LLC (Charter Holdings). Charter Holdings is
a wholly owned subsidiary of Charter Holdco. This transfer was accounted for as
a reorganization of entities under common control similar to a pooling of
interests.

     As a result of the change in ownership of CCPH, CharterComm Holdings and
CCA Group, Charter Holdco applied push-down accounting in the preparation of its
consolidated financial statements. Accordingly, on December 23, 1998, Charter
Holdco increased its members' equity by $2.2 billion to reflect the amounts paid
by Mr. Allen and Charter Investment. The purchase price was allocated to assets
acquired and liabilities assumed based on their relative fair values, including
amounts assigned to franchises of $3.6 billion.

     On April 23, 1998, Mr. Allen and a company controlled by Mr. Allen,
(collectively, the "Mr. Allen Companies") purchased substantially all of the
outstanding partnership interests in Marcus Cable Company, L.L.C. (Marcus Cable)
for $1.4 billion, excluding $1.8 billion in assumed liabilities. The owner of
the remaining partnership interest retained voting control of Marcus Cable. In
February 1999, Marcus Cable Holdings, LLC (Marcus Holdings) was formed, and Mr.
Allen's interests in Marcus Cable were transferred to Marcus Holdings on March
15, 1999. On March 31, 1999, Mr. Allen purchased the remaining partnership
interests in Marcus Cable, including voting control. On April 7, 1999, Marcus
Holdings was merged into Charter Holdings and Marcus Cable was transferred to
Charter Holdings. For financial reporting purposes, the merger was accounted for
as an acquisition of Marcus Cable effective March 31, 1999, the date Mr. Allen
obtained voting control of Marcus Cable. Accordingly, the results of operations
of Marcus Cable have been included in the consolidated financial statements from
April 1, 1999. The assets and liabilities of Marcus Cable have been recorded in
the consolidated financial statements using historical carrying values reflected
in the accounts of the Mr. Allen Companies. Total members' equity of Charter
Holdco increased by $1.3 billion as a result of the Marcus Cable acquisition.
Previously, on April 23, 1998, the Mr. Allen Companies recorded the assets
acquired and liabilities assumed of Marcus Cable based on their relative fair
values.

2. 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 that approximates market value.

  Property, Plant and Equipment

     Property, plant and equipment is recorded at cost, including all direct and
certain indirect costs associated with the construction of cable transmission
and distribution facilities, and the cost of new customer installations. The
costs of disconnecting a customer are charged to expense in the period incurred.
Expenditures for repairs and maintenance are charged to expense as incurred,
while equipment replacement and betterments are capitalized.

                                       F-10
   77
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Depreciation is provided on the straight-line basis over the estimated
useful lives of the related assets as follows:


                                                
Cable distribution systems.......................  3-15 years
Buildings and leasehold improvements.............  5-15 years
Vehicles and equipment...........................  3-5 years


  Franchises

     Costs incurred in obtaining and renewing cable franchises are deferred and
amortized over the lives of the franchises. Costs relating to unsuccessful
franchise applications are charged to expense when it is determined that the
efforts to obtain the franchise will not be successful. Franchise rights
acquired through the purchase of cable systems represent management's estimate
of fair value and are generally amortized using the straight-line method over a
period of 15 years. The period of 15 years is management's best estimate of the
useful lives of the franchises and assumes substantially all of those franchises
that expire during the period will be renewed by the Company. Accumulated
amortization related to franchises was $1.9 billion and $650.5 million, as of
December 31, 2000 and 1999, respectively. Amortization expense related to
franchises for the years ended December 31, 2000 and 1999, and for the period
from December 24, 1998, through December 31, 1998, was $1.2 billion, $520.0
million and $5.3 million, respectively.

  Other Assets

     Other assets include deferred financing costs, costs capitalized related to
customer acquisition and investments in equity securities. The accounting
policies for each are discussed below.

     Costs related to borrowings are deferred and amortized to interest expense
using the effective interest method over the terms of the related borrowings. As
of December 31, 2000 and 1999, other assets include $180.5 million and $120.7
million of deferred financing costs, net of accumulated amortization of $35.9
million and $10.3 million, respectively.

     The Company capitalizes incremental and direct contract acquisition and
origination costs associated with obtaining new customers by analogy to
Statement of Financial Accounting Standards (SFAS) No. 91, Accounting for
Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and
Initial Costs of Leases as permitted by Staff Accounting Bulletin (SAB) No. 101,
Revenue Recognition in Financial Statements. Costs capitalized are only those
that are realizable from future revenues. The Company capitalizes third party
incremental costs associated with obtaining new customers as well as internal
salaries and benefits for personnel directly involved in customer origination
and set up. Costs related to unsuccessful efforts and indirect costs are
expensed as incurred. Capitalized costs are charged to expense generally over
periods from one to twelve months. As of December 31, 2000 and 1999, the
unamortized portion of the deferred costs was $3.0 million and $2.4 million,
respectively.

     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 (loss). Comprehensive loss for the years ended December 31,
2000 and 1999, and for the period from December 24, 1998, through December 31,
1998, was

                                       F-11
   78
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$830.7 million, $64.8 million and $2.0, respectively. The following summarizes
information as of December 31, 2000, and for the year ended December 31, 2000:



                                                                       LOSS FOR THE
                                                  CARRYING VALUE AT     YEAR ENDED
                                                    DECEMBER 31,       DECEMBER 31,
                                                        2000               2000
                                                  -----------------    ------------
                                                                 
Equity investments, under the cost method.......       $14,091           $(11,759)
Equity investments, under the equity method.....        49,031             (7,503)
Marketable securities, at market value..........         3,767                 --
                                                       -------           --------
                                                       $66,889           $(19,262)
                                                       =======           ========


  Impairment of Assets

     If facts and circumstances suggest that a long-lived asset may be impaired,
the carrying value is reviewed. If a review indicates that the carrying value of
such asset is not recoverable based on projected undiscounted net cash flows
related to the asset over its remaining life, the carrying value of such asset
is reduced to its estimated fair value.

  Revenues

     Revenues from basic, premium, pay-per-view, digital and data services are
recognized when the related services are provided.

     Installation revenues are recognized to the extent of direct selling costs
incurred. The remainder, if any, is deferred and amortized to income over the
estimated average period that customers are expected to remain connected to the
cable system. As of December 31, 2000 and 1999, no installation revenue has been
deferred, as direct selling costs have exceeded installation revenue.

     Advertising sales are recognized in the period that the advertisements are
exhibited.

     Local governmental authorities impose franchise fees on the Company ranging
up to a federally mandated maximum of 5.0% of gross revenues. Such fees are
collected on a monthly basis, from the Company's customers and are periodically
remitted to local franchise authorities. Franchise fees collected and paid are
reported as revenues and expenses.

  Other Long-term Liabilities

     The Company receives upfront payments from certain programmers to launch
and promote new cable television channels. Revenue is recognized to the extent
of the fair value of the advertising services provided to promote the new
channel. Such revenue is classified as advertising revenue and totaled $51.5
million for the year ended December 31, 2000. The remaining portion is deferred
and amortized as an offset to programming expense over the respective terms of
the program agreements, which range from one to 20 years. For the years ended
December 31, 2000 and 1999, and for the period from December 24, 1998, through
December 31, 1998, the Company amortized and recorded as a reduction of
programming costs $6.9 million, $3.4 million and $12, respectively. As of
December 31, 2000 and 1999, the unamortized portion of the deferred launch
payments totaled $104.2 million and $13.4 million, respectively, and is included
in other long-term liabilities.

  Interest Rate Hedge Agreements

     The Company manages fluctuations in interest rates by using interest rate
hedge agreements, as required by certain debt agreements. Interest rate swaps,
caps and collars are accounted for as hedges of debt obligations, and
accordingly, the net settlement amounts are recorded as adjustments to interest
expense in the

                                       F-12
   79
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

period incurred. Premiums paid for interest rate caps are deferred, included in
other assets, and are amortized over the original term of the interest rate
agreement as an adjustment to interest expense.

     The Company's interest rate swap agreements require the Company to pay a
fixed rate and receive a floating rate thereby creating fixed rate debt.
Interest rate caps and collars are entered into by the Company to reduce the
impact of rising interest rates on floating rate debt.

     The Company's participation in interest rate hedging transactions involves
instruments that have a close correlation with its debt, thereby managing its
risk. Interest rate hedge agreements have been designated for hedging purposes
and are not held or issued for speculative purposes.

  Income Taxes

     Substantially all of the taxable income, gains, losses, deductions and
credits of Charter Holdco are passed through to its members, Charter, Charter
Investment, Vulcan Cable, and the former owners of an acquired company. Prior to
November 12, 1999, income taxes were the responsibility of the owners of Charter
Investment and Vulcan Cable and are not provided for in the accompanying
consolidated financial statements. Beginning November 12, 1999, Charter is
responsible for its share of taxable income (loss) of Charter Holdco allocated
to Charter in accordance with partnership tax rules and regulations. The tax
basis of Charter's investment in Charter Holdco is not materially different than
the carrying value of the investment for financial reporting purposes as of
December 31, 2000.

     Charter Holdco's limited liability company agreement provides that through
the end of 2003, tax losses of Charter Holdco that would otherwise have been
allocated to Charter will instead be allocated to the membership units held by
Vulcan Cable and Charter Investment. At the time Charter Holdco first becomes
profitable (as determined under the applicable federal income tax rules), the
profits that would otherwise have been allocated to Charter will instead be
allocated to the membership units held by Vulcan Cable and Charter Investment
until the tax benefits are fully restored. Management does not expect Charter
Holdco to generate taxable income in the foreseeable future.

  Segments

     In accordance with SFAS No. 131, Disclosure about Segments of an Enterprise
and Related Information, segments have been identified based upon management
responsibility. The individual segments have been aggregated into one reportable
segment, cable services.

  Loss per Common Share

     Basic loss per common share is computed by dividing the net loss by
225,697,775 shares, and 29,811,202 shares and 50,000 shares for 2000, 1999 and
for the period from December 24, 1998, through December 31, 1998, representing
the weighted-average common shares outstanding during the respective periods.
For purposes of the loss per common share calculation for the period from
December 24, 1998, through December 31, 1998, Mr. Allen's 50,000 shares of high
vote Class B common stock are considered to be outstanding for the entire
period. Diluted loss per common share equals basic loss per common share for the
periods presented, as the effect of stock options is anti-dilutive because the
Company generated 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. Should the holders exchange units for shares, the effect would
not be dilutive.

  Use of Estimates

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United Sates 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
                                       F-13
   80
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

3. ACQUISITIONS:

     During 2000, the Company acquired cable systems in five separate
transactions for an aggregate purchase price of $1.2 billion, net of cash
acquired, excluding debt assumed of $963.3 million. In connection with the
acquisitions, Charter issued shares of Class A common stock valued at
approximately $178.0 million, and Charter Holdco and an indirect subsidiary of
Charter Holdco issued equity interests totaling $384.6 million and $629.5
million, respectively. The purchase prices were allocated to assets and
liabilities assumed based on relative fair values, including amounts assigned to
franchises of $3.0 billion.

     During 1999, the Company acquired cable systems in 11 separate transactions
for an aggregate purchase price, of $7.6 billion, net of cash acquired,
excluding debt assumed of $2.5 billion. In connection with two of the
acquisitions, Charter Holdco issued equity interests totaling $683.3 million.
The purchase prices were allocated to assets acquired and liabilities assumed
based on their relative fair values, including amounts assigned to franchises of
$9.7 billion.

     All of the above acquisitions were accounted for using the purchase method
of accounting, and accordingly, results of operations of the acquired assets
have been included in the financial statements from their respective dates of
acquisition. The allocation of the purchase price for the acquisitions acquired
during 2000 are based, in part, on preliminary information, which is subject to
adjustment upon obtaining complete valuation information. Management believes
that finalization of the purchase prices and allocation will not have a material
impact on the consolidated results of operations or financial position of the
Company.

     Summarized pro forma operating results of the Company as though all
acquisitions and dispositions closed since January 1, 1999, the initial public
offering of common stock, the issuance and sale of the January 2000 Charter
Holdings Notes and the Charter Convertible Notes, and the drawdown of the
Charter Holdings Senior Bridge Loan Facility (see Note 7) had occurred on
January 1, 1999, with adjustments to give effect to amortization of franchises,
interest expense, minority interest, and certain other adjustments, follows.



                                                     YEAR ENDED DECEMBER 31,
                                                    --------------------------
                                                       2000           1999
                                                    -----------    -----------
                                                           (UNAUDITED)
                                                             
Revenues..........................................  $ 3,298,974    $ 2,949,147
Loss from operations..............................     (998,546)      (464,627)
Loss before minority interest.....................   (2,098,357)    (1,480,458)
Net loss..........................................     (860,210)      (609,944)
Loss per common share, basic and diluted..........        (3.69)         (2.61)


     The unaudited pro forma financial information has been presented for
comparative purposes and does not purport to be indicative of the consolidated
results of operations had these transactions been completed as of the assumed
date or which may be obtained in the future.

                                       F-14
   81
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. ALLOWANCE FOR DOUBTFUL ACCOUNTS:

     Activity in the allowance for doubtful accounts is summarized as follows
for the years ended December 31:



                                                           2000        1999
                                                         --------    --------
                                                               
Balance, beginning of year.............................  $ 11,471    $  1,728
Acquisitions of cable systems..........................       780       5,860
Charged to expense.....................................    46,151      20,872
Uncollected balances written off, net of recoveries....   (45,981)    (16,989)
                                                         --------    --------
Balance, end of year...................................  $ 12,421    $ 11,471
                                                         ========    ========


5. PROPERTY, PLANT AND EQUIPMENT:

     Property, plant and equipment consists of the following at December 31:



                                                        2000           1999
                                                     -----------    ----------
                                                              
Cable distribution systems.........................  $ 5,619,227    $3,523,217
Land, buildings and leasehold improvements.........      282,661       108,214
Vehicles and equipment.............................      426,847       176,221
                                                     -----------    ----------
                                                       6,328,735     3,807,652
Less -- Accumulated depreciation...................   (1,061,216)     (317,079)
                                                     -----------    ----------
                                                     $ 5,267,519    $3,490,573
                                                     ===========    ==========


     For the years ended December 31, 2000 and 1999, and for the period from
December 24, 1998, through December 31, 1998, depreciation expense was $1.2
billion, $225.0 million, and $2.8 million, respectively.

     During the year ended December 31, 2000, the Company reduced the estimated
useful lives of certain depreciable assets expected to have reduced lives as a
result of the rebuild and upgrade of the Company's cable distribution systems.
As a result, an additional $508.5 million of depreciation expense was recorded
during the year ended December 31, 2000.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

     Accounts payable and accrued expenses consist of the following at December
31:



                                                          2000         1999
                                                       ----------    --------
                                                               
Accounts payable.....................................  $  365,140    $112,233
Capital expenditures.................................     281,142      66,713
Accrued interest.....................................     212,958      85,870
Programming costs....................................     120,035      72,245
Accrued general and administrative...................      75,421      39,648
Franchise fees.......................................      53,494      46,524
Liability for pending transfer of cable system.......          --      88,200
Other accrued expenses...............................     259,044     195,342
                                                       ----------    --------
                                                       $1,367,234    $706,775
                                                       ==========    ========


     The liability for pending transfer of cable system represents the fair
value of a cable system to be transferred upon obtaining necessary regulatory
approvals in connection with the transaction with InterMedia

                                       F-15
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                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Capital Partners IV L. P., InterMedia Partners and their affiliates. Such
approvals were obtained and the system's assets were transferred in March 2000.

7. LONG-TERM DEBT:

     Long-term debt consists of the following at December 31:



                                                        2000           1999
                                                     -----------    ----------
                                                              
Charter Communications, Inc.:
  5.75% Convertible Senior Notes...................  $   750,000    $       --
Charter Holdings:
  8.250% Senior Notes..............................      600,000       600,000
  8.625% Senior Notes..............................    1,500,000     1,500,000
  9.920% Senior Discount Notes.....................    1,475,000     1,475,000
  10.00% Senior Notes..............................      675,000            --
  10.25% Senior Notes..............................      325,000            --
  11.75% Senior Discount Notes.....................      532,000            --
  Senior Bridge Loan Facility......................      272,500            --
Renaissance:
  10.00% Senior Discount Notes.....................      114,413       114,413
CC V Holdings, LLC (Avalon):
  9.375% Senior Subordinated Notes.................           --       150,000
  11.875% Senior Discount Notes....................      179,750       196,000
CC VII Holdings, LLC (Falcon):
  8.375% Senior Debentures.........................           --       375,000
  9.285% Senior Discount Debentures................           --       435,250
Credit Facilities:
  Charter Operating................................    4,432,000     2,906,000
  CC Michigan, LLC and CC New England, LLC
     (Avalon)......................................      213,000       170,000
  CC VI Operating Company, LLC (Fanch).............      895,000       850,000
  Falcon Cable Communications, LLC.................    1,050,000       865,500
  CC VIII Operating, LLC (Bresnan).................      712,000            --
Other debt.........................................        1,971         1,400
                                                     -----------    ----------
                                                      13,727,634     9,638,563
Unamortized net discount...........................     (667,179)     (702,108)
                                                     -----------    ----------
                                                     $13,060,455    $8,936,455
                                                     ===========    ==========


  Charter Convertible Notes

     In October and November 2000, Charter issued $750.0 million 5.75%
Convertible Senior Notes maturing on October 15, 2005 (the "Charter Convertible
Notes") for net proceeds of $727.5 million.

     The Charter Convertible Notes are 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 is equivalent to a price of $21.56 per
share, subject to certain adjustments. These notes are redeemable at the option
of Charter at amounts decreasing from 102.3% to 100% of the principal amount
plus accrued and unpaid interest

                                       F-16
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                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

beginning on October 15, 2003, to the date of redemption. Interest is payable
semiannually on April 15 and October 15, beginning April 15, 2001, until
maturity.

     The Charter Convertible Notes rank equally with any future unsubordinated
and unsecured indebtedness of Charter, but are structurally subordinated to all
existing and future indebtedness and other liabilities of our subsidiaries. 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 Holdings Notes

     In January 2000, the Charter Holdings and Charter Communications Holdings
Capital Corporation (Charter Holdings Capital), a wholly owned subsidiary of
Charter Holdings (collectively, the "Issuers"), issued $675.0 million 10.000%
Senior Notes due 2009 (the "10.000% Senior Notes"), $325.0 million 10.250%
Senior Notes due 2010 (the "10.25% Senior Notes"), and $532.0 million 11.75%
Senior Discount Notes due 2010 (the "11.75% Senior Discount Notes"),
collectively referred to as the "January 2000 Charter Holdings Notes". The net
proceeds were $1.25 billion, after giving effect to discounts, commissions and
expenses.

     The 10.00% Senior Notes are not redeemable prior to maturity. Interest is
payable semiannually on April 1 and October 1, beginning April 1, 2000 until
maturity.

     The 10.25% Senior Notes are redeemable at the option of the Issuers at
amounts decreasing from 105.125% to 100% of par value plus accrued and unpaid
interest, beginning on January 15, 2005, to the date of redemption. At any time
prior to January 15, 2003, the Company may redeem up to 35% of the aggregate
principal amount of the 10.25% Senior Notes at a redemption price of 110.25% of
the principal amount under certain conditions. Interest is payable semiannually
in arrears on January 15 and July 15, beginning on July 15, 2000, until
maturity.

     The 11.75% Senior Discount Notes are redeemable at the option of the
Issuers at amounts decreasing from 105.875% to 100% of accreted value beginning
January 15, 2005. At any time prior to January 15, 2003, the Company may redeem
up to 35% of the aggregate principal amount of the 11.75% Senior Notes at a
redemption price of 111.75% of the accreted value under certain conditions.
Interest is payable semiannually in arrears on January 15 and July 15, beginning
on July 15, 2005, until maturity. The discount on the 11.75% Senior Discount
Notes is being accreted using the effective interest method. The unamortized
discount was $196.5 million at December 31, 2000.

     In March 1999, Issuers issued $600.0 million 8.250% Senior Notes due 2007
(the "8.250% Senior Notes"), $1.5 billion 8.625% Senior Notes due 2009 (the
"8.625% Senior Notes"), and $1,475.0 million 9.920% Senior Discount Notes due
2011 (the "9.920% Senior Discount Notes"), collectively referred to as the
"Charter Holdings Notes". The net proceeds were $2.9 billion, after giving
effect to discounts, commissions and expenses.

     The 8.250% Senior Notes are not redeemable prior to maturity. Interest is
payable semiannually in arrears on April 1 and October 1, beginning October 1,
1999, until maturity.

     The 8.625% Senior Notes are redeemable at the option of the Issuers at
amounts decreasing from 104.313% to 100% of par value plus accrued and unpaid
interest beginning on April 1, 2004, to the date of redemption. At any time
prior to April 1, 2002, the Company may redeem up to 35% of the aggregate
principal amount of the 8.625% Senior Notes at a redemption price of 108.625% of
the principal amount under certain conditions. Interest is payable semiannually
in arrears on April 1 and October 1, beginning October 1, 1999, until maturity.

     The 9.920% Senior Discount Notes are redeemable at the option of the
Issuers at amounts decreasing from 104.960% to 100% of accreted value beginning
April 1, 2004. At any time prior to April 1, 2002, the
                                       F-17
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                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Issuers may redeem up to 35% of the aggregate principal amount of the 9.920%
Senior Discount Notes at a redemption price of 109.920% of the accreted value
under certain conditions. Thereafter, cash interest is payable semiannually in
arrears on April 1 and October 1 beginning April 1, 2004, until maturity. The
discount on the 9.920% Senior Discount Notes is being accreted using the
effective interest method. The unamortized discount was $397.8 million at
December 31, 2000, and $497.2 million at December 31, 1999.

     The Charter Holdings Notes and the January 2000 Charter Holdings Notes rank
equally with current and future unsecured and unsubordinated indebtedness
(including accounts payables of the Company). The Issuers are required to make
an offer to repurchase all of the Charter Holdings Notes, at a price equal to
101% of the aggregate principal or 101% of the accreted value, together with
accrued and unpaid interest, upon a change of control of the Company.

  Charter Holdings Senior Bridge Loan Facility

     On August 4, 2000, Charter Holdings and Charter Holdings Capital entered
into a senior bridge loan agreement providing for senior increasing rate bridge
loans in an aggregate principal amount of up to $1.0 billion.

     On August 14, 2000, Charter Holdings borrowed $1.0 billion under the senior
bridge loan facility and used substantially all of the proceeds to repay a
portion of the amounts outstanding under the Charter Operating and the Falcon
revolving credit facilities. The bridge loan initially bore interest at an
annual rate of 10.21%.

     The net proceeds from the sale of the Charter Convertible Notes were
contributed as equity to Charter Holdings. Charter Holdings used substantially
all of the net proceeds to repay a portion of the amounts outstanding under the
Charter Holdings senior bridge loan facility. In January 2001, the bridge loan
was repaid (see Note 21).

  Renaissance Notes

     In connection with the acquisition of Renaissance Media Group LLC
(Renaissance) in 1999, the Company assumed $163.2 million principal amount at
maturity of senior discount notes due April 2008 (the "Renaissance Notes"). As a
result of the change in control of Renaissance, the Company was required to make
an offer to repurchase the Renaissance Notes at 101% of their accreted value. In
May 1999, the Company made an offer to repurchase the Renaissance Notes pursuant
to this requirement, and the holders of the Renaissance Notes tendered an amount
representing 30% of the total outstanding principal amount at maturity for
repurchase. These notes were repurchased using a portion of the proceeds from
the Charter Holdings Notes.

     As of December 31, 2000 and 1999, $114.4 million aggregate principal amount
at maturity of Renaissance Notes with an accreted value of $94.6 million and
$83.0 million, respectively, was outstanding. Interest on the Renaissance Notes
shall be paid semiannually at a rate of 10% per annum beginning on October 15,
2003.

     The Renaissance Notes are redeemable at the option of the Company, in whole
or in part, at any time on or after April 15, 2003, initially at 105% of their
principal amount at maturity, plus accrued and unpaid interest, declining to
100% of the principal amount at maturity, plus accrued and unpaid interest, on
or after April 15, 2006. In addition, at any time prior to April 15, 2001, the
Company may redeem up to 35% of the original principal amount at maturity with
the proceeds of one or more sales of membership units at 110% of their accreted
value, plus accrued and unpaid interest on the redemption date, provided that
after any such redemption, at least $106 million aggregate principal amount at
maturity remains outstanding.

                                       F-18
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                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Avalon Notes

     The Company acquired CC V Holdings, LLC (Avalon) (formerly known as Avalon
Cable LLC) in November 1999 and assumed Avalon's 11.875% Senior Discount Notes
due 2008 (the "Avalon 11.875% Notes") and 9.375% Subordinated Notes due 2008
(the "Avalon 9.375% Notes"). After December 1, 2003, cash interest on the Avalon
11.875% Notes will be payable semiannually on June 1 and December 1 of each
year, commencing June 1, 2004.

     In January 2000, the Company, through change of control offers and
purchases in the open market, completed the repurchase of the Avalon 9.375%
Notes with a total outstanding principal amount of $150.0 million for a total of
$153.7 million. Also in January 2000, the Company repurchased a portion of the
Avalon 11.875% Notes with a total outstanding principal amount of $16.3 million
for a total of $10.5 million. The repurchase of the Avalon 9.375% Notes and the
Avalon 11.875% Notes was funded by a portion of the cash proceeds from the
issuance of the January 2000 Charter Holdings Notes. The unamortized discount
related to the Avalon 11.875% Notes was $48.1 million as of December 31, 2000,
and $66.8 million as of December 31, 1999.

  Falcon Debentures

     The Company acquired CC VII Holdings, LLC (Falcon) (formerly known as
Falcon Communications, L.P.) in November 1999 and assumed Falcon's 8.375% Senior
Debentures Due 2010 (the "Falcon 8.375% Debentures") and 9.285% Senior Discount
Debentures Due 2010 (the "Falcon 9.285% Debentures"), collectively referred to
as the "Falcon Debentures".

     In February 2000, the Company, through change of control offers and
purchases in the open market, completed the repurchase of the Falcon 8.375%
Debentures with a total outstanding principal amount of $375.0 million for a
total of $388.0 million. Also, in February 2000, the Company, through change of
control offers and purchases in the open market, repurchased the Falcon 9.285%
Debentures with an aggregate principal amount of $435.3 million for a total of
$328.1 million. The repurchase of all the Falcon Debentures was funded by a
portion of the proceeds from the January 2000 Charter Holdings Notes.

  Charter Operating Credit Facilities

     As of December 31, 2000, the Charter Operating Credit Facilities provide
for two term facilities, one with a principal amount of $1.0 billion that
matures in 2007 (Term A), and the other with the principal amount of $2.45
billion that matures in 2008 (Term B). The Charter Operating Credit Facilities
also provide for a $1.25 billion revolving credit facility with a maturity date
of September 2007 and at the options of the lenders, supplemental credit
facilities, in the amount of $400.0 million available until March 18, 2002.
Amounts under the Charter Operating Credit Facilities bear interest at the Base
Rate or the Eurodollar rate, as defined, plus a margin of up to 2.75% (8.39% to
9.27% as of December 31, 2000 and 8.22% to 8.97% as of December 31,1999). A
quarterly commitment fee of between 0.25% and 0.375% per annum is payable on the
unborrowed balance of Term A and the revolving credit facility. As of December
31, 2000, the unused availability on the Charter Operating Credit Facilities was
$268.0 million.

  Avalon Credit Facilities

     In connection with the Avalon acquisition, the Company entered into a new
credit agreement (the "Avalon Credit Facilities"). The Avalon Credit Facilities
have maximum borrowings of $300.0 million, consisting of a revolving facility in
the amount of $175.0 million that matures May 15, 2008, and a Term B loan in the
amount of $125.0 million that matures on November 15, 2008. The Avalon Credit
Facilities also provide for, at the options of the lenders, supplemental credit
facilities in the amounts of $75 million available until December 31, 2003.
Amounts under the Avalon Credit Facilities bear interest at the Base Rate or the

                                       F-19
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                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Eurodollar rate, as defined, plus a margin up to 2.75% (8.19% to 9.5% as of
December 31, 2000 and 7.995% to 8.870% as of December 31, 1999). A quarterly
commitment fee of between 0.250% and 0.375% per annum is payable on the
unborrowed balance.

     On January 2, 2001, Charter Holdings contributed all of its equity
interests in CC VIII Holdings, LLC to CC V Holdings, combining the cable systems
acquired in the Avalon and Bresnan acquisitions. In connection with this
combination, all amounts due under the Avalon credit facilities were repaid and
the credit facilities were terminated.

  Fanch Credit Facilities

     In connection with the acquisition of cable systems of Fanch Cablevision
L.P. and affiliates (Fanch), the Company entered into a new credit agreement
(the "Fanch Credit Facilities"). The Fanch Credit Facilities provide for two
term facilities, one with a principal amount of $450.0 million that matures May
2008 (Term A), and the other with the principal amount of $400.0 million that
matures November 2008 (Term B). The Fanch Credit Facilities also provide for a
$350.0 million revolving credit facility with a maturity date of May 2008 and at
the options of the lenders, supplemental credit facilities, in the amount of
$300.0 million available until December 31, 2004. Amounts under the Fanch Credit
Facilities bear interest at the Base Rate or the Eurodollar rate, as defined,
plus a margin of up to 3.00% (8.15% to 9.55% as of December 31, 2000 and 8.12%
to 8.87% as of December 31, 1999). A quarterly commitment fee of between 0.250%
and 0.375% per annum is payable on the unborrowed balance. As of December 31,
2000, unused availability was $305.0 million. However, debt covenants limit the
additional amounts that can be borrowed to $153.5 million at December 31, 2000.

  Falcon Credit Facilities

     In connection with the Falcon acquisition, the existing Falcon credit
agreement (the "Falcon Credit Facilities") was amended to provide for two term
facilities, one with a principal amount of $196.0 million that matures June 2007
(Term B), and the other with a principal amount of $294.0 million that matures
December 2007 (Term C). The Falcon Credit Facilities also provide for a $646.0
million revolving credit facility with a maturity date of December 2006 and at
the option of the lenders, supplemental credit facilities in the amounts of
$700.0 million with a maturity date of December 2007. Amounts under the Falcon
Credit Facilities bear interest at the Base Rate or the Eurodollar rate, as
defined, plus a margin of up to 2.5% (8.14% to 9.50% as of December 31, 2000 and
7.57% to 8.73% as of December 31, 1999). A quarterly commitment fee of between
0.25% and 0.375% per annum is payable on the unborrowed balance. As of December
31, 2000, unused availability was $196.1 million.

  Bresnan Credit Facilities

     In connection with the Bresnan acquisition, the existing Bresnan credit
agreement (the "Bresnan Credit Facilities") was amended and restated to provide
for borrowings of up to $900.0 million, consisting of three term facilities, one
with a principal amount of $403.0 million that matures June 30, 2007 (Term A),
and one with a principal amount of $297.0 million that matures February 2, 2008
(Term B). The Bresnan Credit Facilities also provide for a $200.0 million
revolving credit facility that may not have a maturity date earlier than six
calendar months after the maturity date of the Term B loan facility. Amounts
under the Bresnan Credit Facilities bear interest at the Base Rate or Eurodollar
rate, as defined, plus a margin of up to 2.5% (8.44% to 9.30% as of December 31,
2000). A quarterly commitment fee of between 0.25% and 0.375% per annum is
payable on the unborrowed balance. As of December 31, 2000, unused availability
was $188.0 million.

     On January 2, 2001, Charter Holdings contributed all of its equity
interests in CC VIII Holdings, LLC to CC V Holdings, combining the cable systems
acquired in the Avalon and Bresnan acquisitions. The Bresnan
                                       F-20
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                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

credit facilities were amended and restated to, among other things, increase
borrowing availability by $550.0 million.

     The indentures governing the debt agreements require issuers of the debt
and/or its subsidiaries to comply with various financial and other covenants,
including the maintenance of certain operating and financial ratios. These debt
instruments also contain substantial limitations on, or prohibitions of
distributions, additional indebtedness, liens, asset sales and certain other
items. As a result of limitations and prohibitions of distributions,
substantially all of the net assets of the consolidated subsidiaries are
restricted for distribution to Charter Holdings, Charter Holdco and Charter.

     Based upon outstanding indebtedness at December 31, 2000, 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, aggregate future principal payments on the total borrowings
under all debt agreements at December 31, 2000, are as follows:



YEAR                                                AMOUNT
----                                              -----------
                                               
2001............................................  $        --
2002............................................      130,140
2003............................................      353,417
2004............................................      418,872
2005............................................    1,340,332
Thereafter......................................   11,484,873
                                                  -----------
                                                  $13,727,634
                                                  ===========


8. FAIR VALUE OF FINANCIAL INSTRUMENTS:

     A summary of debt and the related interest rate hedge agreements as of
December 31 follows:



                                              2000                        1999
                                    ------------------------    ------------------------
                                     CARRYING        FAIR        CARRYING        FAIR
                                      VALUE         VALUE         VALUE         VALUE
                                    ----------    ----------    ----------    ----------
                                                                  
DEBT
Charter Convertible Notes.........  $  750,000    $  876,563    $       --    $       --
Charter Holdings Debt.............   4,780,212     4,425,631     3,072,151     2,834,313
Credit Facilities.................   7,302,000     7,302,000     4,791,500     4,791,500
Other.............................     228,243       194,729     1,072,804     1,065,850




                                     2000                               1999
                        -------------------------------   --------------------------------
                        CARRYING    NOTIONAL     FAIR     CARRYING    NOTIONAL      FAIR
                         VALUE       AMOUNT      VALUE     VALUE       AMOUNT      VALUE
                        --------   ----------   -------   --------   ----------   --------
                                                                
INTEREST RATE HEDGE
  AGREEMENTS
Swaps.................  $(1,306)   $1,942,713   $ 5,236   $(6,827)   $4,542,713   $(47,220)
Caps..................       --        15,000        --        --        15,000         16
Collars...............       --       520,000    10,807     1,361       240,000       (199)


     As the long-term debt under the credit agreements bears interest at current
market rates, their carrying amount approximates market value at December 31,
2000 and 1999. The fair values of the notes and the debentures are based on
quoted market prices.

     The weighted average interest pay rate for the Company's interest rate swap
agreements was 7.61% and 8.06% at December 31, 2000 and 1999, respectively. The
weighted average interest rate for the Company's
                                       F-21
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                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

interest rate cap agreements was 9.0% at December 31, 2000 and 1999. The
Company's interest rate collar agreements are structured so that if LIBOR falls
below 5.3%, the Company pays 6.7%. If the LIBOR rate is between 5.3% and 8.0%,
the Company pays LIBOR. The LIBOR rate is capped at 8.0% if LIBOR falls between
8.0% and 9.9%. If rates rise above 9.9%, the cap is removed.

     The notional amounts of interest rate hedge agreements do not represent
amounts exchanged by the parties and, thus, are not a measure of the Company's
exposure through its use of interest rate hedge agreements. The amounts
exchanged are determined by reference to the notional amount and the other terms
of the contracts.

     The fair value of interest rate hedge agreements generally reflects the
estimated amounts that the Company would (receive) or pay (excluding accrued
interest) to terminate the contracts on the reporting date, thereby taking into
account the current unrealized gains or losses of open contracts. Dealer
quotations are available for the Company's interest rate hedge agreements.

     Management believes that the sellers of the interest rate hedge agreements
will be able to meet their obligations under the agreements. In addition, some
of the interest rate hedge 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 position or results of operations.

9. SHAREHOLDERS' EQUITY:

     At December 31, 2000 and 1999, 1.75 billion and 1.5 billion shares,
respectively, of $.001 par value Class A common stock, 750 million shares of
$.001 par value Class B common stock, and 250 million shares of $.001 par value
preferred stock are authorized. At December 31, 2000, 233.8 million shares of
Class A common stock, 50,000 of Class B common stock and zero shares of
preferred stock, were issued and outstanding. At December 31, 1999, 221.7
million of Class A common stock, 50,000 shares of Class B common stock and zero
shares of preferred stock, were issued and outstanding. The Class A common stock
includes 0.3 million shares and 26.8 million shares classified as redeemable
securities at December 31, 2000 and 1999, respectively (see Note 16).

10. INCOME TAXES:

     Certain indirect subsidiaries of Charter Holdings are corporations and file
separate federal and state income tax returns. Results of operations from these
subsidiaries are not material to the consolidated results of operations of the
Company. Income tax expense for the year ended December 31, 1999, represents
taxes assessed by certain state jurisdictions. Deferred income tax assets and
liabilities are not material.

     Charter files separate federal and state income tax returns and is
responsible for its share of taxable income (loss) of Charter Holdco as
determined by partnership tax rules and regulations and Charter Holdco's limited
liability company agreement (see Note 2). Management does not expect Charter to
pay any income taxes in the foreseeable future. Any net deferred income tax
assets are offset entirely by a valuation allowance because of current and
expected future losses.

                                       F-22
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                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. REVENUES:

     Revenues consist of the following for the years and period ended:



                                                                    PERIOD FROM
                                                                    DECEMBER 24,
                                                                       1998,
                                        YEAR ENDED DECEMBER 31,       THROUGH
                                        ------------------------    DECEMBER 31,
                                           2000          1999           1998
                                        ----------    ----------    ------------
                                                           
Basic.................................  $2,249,339    $1,002,954      $ 9,347
Premium...............................     226,598       124,788        1,415
Pay-per-view..........................      28,590        27,537          260
Digital...............................      91,115         8,299           10
Advertising sales.....................     220,205        71,997          493
Data services.........................      63,330        10,107           55
Other.................................     370,045       182,562        2,133
                                        ----------    ----------      -------
                                        $3,249,222    $1,428,244      $13,713
                                        ==========    ==========      =======


12. OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES:

     Operating, general and administrative expenses consist of the following for
the years and period ended:



                                                                      PERIOD FROM
                                                                      DECEMBER 24,
                                                                         1998,
                                          YEAR ENDED DECEMBER 31,       THROUGH
                                          ------------------------    DECEMBER 31,
                                             2000          1999           1998
                                          -----------    ---------    ------------
                                                             
Programming.............................  $  736,043     $330,754        $3,137
General and administrative..............     543,865      237,480         2,377
Service.................................     192,603       99,486           847
Marketing...............................      63,789       23,447           225
Advertising sales.......................      56,499       31,281           344
Other...................................      58,554       15,509           204
                                          ----------     --------        ------
                                          $1,651,353     $737,957        $7,134
                                          ==========     ========        ======


13. RELATED PARTY TRANSACTIONS:

     Charter Investment provides management services to the Company including
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.
Certain costs for services are billed and charged directly to the Company's
operating subsidiaries and are included in operating costs. These billings are
allocated based on the number of basic customers. Such costs totaled $50.8
million, $18.8 million and $128 for the years ended December 31, 2000 and 1999,
and for the period from December 24, 1998, through December 31, 1998,
respectively. All other costs incurred by Charter Investment on behalf of the
Company are recorded as expenses in the accompanying consolidated financial
statements and are included in corporate expense charge -- related party.
Management believes that costs incurred by Charter Investment on the Company's
behalf and included in the accompanying financial statements are not materially
different than costs the Company would have incurred as a stand-alone entity.

     The Company is charged a management fee as stipulated in the management
agreement between Charter Investment and Charter. To the extent management fees
charged to the Company are greater (less) than the corporate expenses incurred
by Charter Investment, the Company records distributions to (capital contribu-

                                       F-23
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                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

tions from) Charter Investment. For the year ended December 31, 1999, the
Company recorded distributions of $10.9 million, a portion of which have been
allocated to minority interest. For the year ended December 31, 2000, and for
the period from December 24, 1998, through December 31, 1998, the management fee
charged to the Company approximated the corporate expenses incurred by Charter
Investment on behalf of the Company. The credit facilities and indebtedness
prohibit payments of management fees in excess of 3.5% of revenues until
repayment of such indebtedness. Any amount in excess of 3.5% of revenues owed to
Charter Investment based on the management agreement is recorded as deferred
management fees -- related party.

     In December 2000, Charter Communications Ventures, LLC (Charter Ventures),
a subsidiary of Charter Holdings, and Vulcan Ventures, Inc. (Vulcan), an
affiliate of Mr. Allen, invested $37.0 million and $38.0 million, respectively,
in High Speed Access Corp. (HSA) which provides high speed Internet access to
certain of the Company's cable customers. The investments took the form of
convertible preferred stock, that may be converted into HSA common stock. In
addition, Charter and Vulcan own equity interests or warrants to purchase equity
interests in HSA. As of December 31, 2000, Charter earned 1,932,931 warrants
under certain agreements. Additional warrants may be earned by Charter based
upon the number of homes passed. Under the terms of a network services
agreement, Charter splits revenue with HSA based on set percentages of gross
revenues in each category of service. Certain officers and directors of Charter
serve as directors of HSA. For the years ended December 31, 2000 and 1999,
revenues earned from HSA were $7.8 million and $461, respectively. Charter paid
HSA $3.6 million, and $0.7 million, for the years ended December 31, 2000 and
1999, respectively, relating to monthly subscriber fees and equipment purchases.
Charter Venture's investment is accounted for under the equity method, with a
carrying value of $36.0 million as of December 31, 2000.

     Charter Ventures is a party to a joint venture with General Instrument
Corporation (doing business as Broadband Communications Sector of Motorola,
Inc), Replay TV Inc. and Interval Research Corporation, an entity controlled by
Mr. Allen, to develop and integrate digital video recording capabilities in
advanced digital set-top boxes. The joint venture will focus on creating a
set-top based digital recording platform that will be designed for storing
video, audio and Internet content. In connection with the formation of the joint
venture, Charter Ventures contributed $3.2 million in October 2000. Charter
received management fees of $9.0 million for the year ended December 31, 2000.

     ZDTV, L.L.C. (operating as techtv) operates a cable television channel,
which broadcasts shows about technology and the Internet. Vulcan and its
affiliates own a 97% interest in techtv, and certain directors and officers of
Charter serve as directors or officers of techtv. Through December 31, 2000,
techtv has agreed to provide Charter no cost programming for broadcast over
Charter systems. Effective January 1, 2001, Charter will pay a monthly per
customer fee to techtv for cable systems that distribute techtv on a level of
service received by fewer than 80% of the total system's customers. In addition,
Mr. Allen is the 100% owner of the Portland Trailblazers, a National Basketball
Association Team, and Trail Blazers, Inc. Expenses in connection with the cable
broadcast of Portland Trail Blazers Basketball games were $993 and $727 for the
years ended December 31, 2000 and 1999, respectively.

     Mr. Allen and certain affiliates of Mr. Allen own equity in and are
directors of USA Networks, Inc. (USA Networks). USA Networks operates USA
Network and the Sci-Fi Channel, which are cable television networks. USA
Networks also operates Home Shopping Network, which is a retail sales program
available via cable television systems. The Company pays USA Networks a monthly
fee for programming services based on the number of subscribers. For the years
ended December 31, 2000 and 1999, the Company paid USA Networks approximately
$25.0 million and $16.7 million, respectively. In addition, the Company receives
commissions from USA Networks for home shopping sales generated by its customers
and for promotion of the Home Shopping Network. Such revenues for the years
ended December 31, 2000 and 1999, were $26.5 million, and $1.8 million,
respectively.

                                       F-24
   91
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Charter, Mr. Allen and certain affiliates of Mr. Allen also own equity
interests or warrants to purchase equity interests in various entities that
provide services, programming or equipment to the Company, including WorldGate
Communications, Inc. (WorldGate), Wink Communications, Inc. (Wink), Oxygen Media
Inc. (Oxygen Media), Digeo Broadband, Inc., RCN Corporation, TV Gateway LLC,
Vulcan and Interval Research Company. In addition, certain officers or directors
of the Company also serve as directors of Oxygen Media, RCN Corporation and
InfoSpace, Inc. The Company and its affiliates do not hold controlling interests
in any of these companies. The Company has paid less than 1% of operating costs
for the year ended December 31, 2000 and 1999, and for the period from December
24, 1998, through December 31, 1998, for these services and equipment purchases.
In addition, the Company receives revenues from Worldgate related to TV-based
Internet access. Such revenues for the years ended December 31, 2000 and 1999,
and for the period from December 24, 1998, through December 31, 1998, were less
than 1% of total revenues.

14. MINORITY INTEREST AND EQUITY INTERESTS OF CHARTER HOLDCO:

     Minority interest represents total members' equity of Charter Holdco
multiplied by 59.2% as of December 31, 2000, and 59.4% as of December 31, 1999,
the ownership percentages of Charter Holdco not owned by Charter, plus preferred
equity in an indirect subsidiary of Charter held by certain Bresnan sellers,
less a portion of redeemable securities. Members' equity of Charter Holdco was
$7.7 billion as of December 31, 2000, and $9.1 billion as of December 31, 1999.
Gains (losses) arising from issuances by Charter Holdco of its membership units
are recorded as capital transactions thereby increasing (decreasing)
shareholders' equity and (decreasing) increasing minority interest on the
consolidated balance sheets.

     Changes to minority interest consist of the following:



                                                               MINORITY
                                                               INTEREST
                                                              -----------
                                                           
Balance, December 31, 1998..................................  $ 2,146,549
  Distributions to Charter Investment.......................       (8,698)
  Transfer of Marcus Holdings' operating subsidiaries to
     Charter Holdco.........................................    1,252,370
  Transfer of Rifkin equity interests to Charter Holdco.....      180,710
  Equity of a subsidiary issued to Falcon and Rifkin
     sellers................................................      683,312
  Equity of a subsidiary issued to Vulcan Cable for cash....    1,894,290
  Exchange of Charter Holdco units for Charter common
     stock..................................................     (638,561)
  Equity classified as redeemable securities................      (50,151)
  Minority interest in loss of a subsidiary.................     (572,607)
  Option compensation expense...............................       75,486
  Gain on issuance of equity by Charter Holdco..............      413,848
  Other.....................................................        4,783
                                                              -----------
Balance, December 31, 1999..................................    5,381,331
  Equity of subsidiaries issued to Bresnan sellers..........    1,014,110
  Equity of subsidiaries classified as redeemable
     securities.............................................   (1,095,239)
  Minority interest in loss of a subsidiary.................   (1,226,295)
  Option compensation expense...............................       24,573
  Loss on issuance of equity by Charter Holdco..............      (55,534)
  Redeemable securities reclassified as minority interest...       49,316
  Other.....................................................       (2,933)
                                                              -----------
Balance, December 31, 2000..................................  $ 4,089,329
                                                              ===========


                                       F-25
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                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The preferred equity interests in Charter Holdco held by the Rifkin sellers
were exchangeable into Class A common stock of Charter at the option of the
Rifkin sellers only at the time of the initial public offering. In November
1999, preferred equity interests of $130.3 million were exchanged into common
stock of Charter. The membership units of Charter Holdco held by the Falcon
sellers were exchangeable into Class A common stock of Charter. The units are
also puttable to Mr. Allen for cash. In November 1999, membership units of $43.4
million were put to Mr. Allen and $506.6 million were exchanged into the Class A
common stock of Charter. For a two-year period from acquisition date, equity
held by the Rifkin and Falcon sellers may be put to Mr. Allen for cash.

     Pursuant to a membership interests purchase agreement, as amended, Vulcan
Cable contributed $500.0 million in cash on August 10, 1999, to Charter Holdco,
contributed an additional $180.7 million in certain equity interests acquired in
connection with the acquisition of Rifkin in September 1999, to Charter Holdco,
and contributed $644.3 million in September 1999 to Charter Holdco. All funds
and equity interests were contributed to Charter Holdings. Concurrently with
closing of the initial public offering, Vulcan Cable contributed $750 million in
cash to Charter Holdco.

     In February 2000, Charter Holdco and Charter Holdings completed the
acquisition of Bresnan. The Bresnan sellers obtained equity interests in Charter
Holdco and preferred equity interest in a subsidiary of Charter Holdings. The
holders of the preferred equity interests are entitled to a 2% annual return.
All of the membership units received by the sellers are exchangeable on a
one-for-one basis into shares of Class A common stock of Charter. Equity held by
the Bresnan sellers may be put to Mr. Allen for cash during a 60-day period
commencing on February 14, 2002.

15. OPTION PLAN:

     In accordance with an employment agreement between Charter Investment and
the President and Chief Executive Officer of Charter and a related option
agreement with the President and Chief Executive Officer, an option to purchase
7,044,127 Charter Holdco membership interests, was issued to the President and
Chief Executive Officer. The option vests over a four-year period from the date
of grant and expires ten years from the date of grant.

     In February 1999, Charter Holdings adopted an option plan providing for the
grant of options. The plan was assumed by Charter Holdco. The option plan
provides for grants of options to employees, officers and directors of Charter
Holdco and its affiliates and consultants who provide services to Charter
Holdco. Options granted vest over five years from the grant date, commencing 15
months after the date of grant. Options not exercised accumulate and are
exercisable, in whole or in part, in any subsequent period, but not later than
ten 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.

                                       F-26
   93
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     A summary of the activity for the Company's option plan for the years ended
December 31, 2000 and 1999, and for the period from December 24, 1998, through
December 31, 1998, is as follows:



                                      2000                     1999                    1998
                             ----------------------   ----------------------   ---------------------
                                           WEIGHTED                 WEIGHTED                WEIGHTED
                                           AVERAGE                  AVERAGE                 AVERAGE
                                           EXERCISE                 EXERCISE                EXERCISE
                               SHARES       PRICE       SHARES       PRICE       SHARES      PRICE
                             -----------   --------   -----------   --------   ----------   --------
                                                                          
Options outstanding,
  beginning of period......   20,757,608    $19.79      7,044,127    $20.00            --    $   --
Granted
  Pre IPO Grants...........           --        --      9,584,681     20.04     7,044,127     20.00
  Post IPO Grants..........   10,247,200     18.06      4,741,400     19.00            --        --
Exercised..................      (16,514)    20.00             --        --            --        --
Cancelled..................   (2,505,937)    18.98       (612,600)    19.95            --        --
                             -----------    ------    -----------    ------    ----------    ------
Options outstanding, end of
  period...................   28,482,357    $19.24     20,757,608    $19.79     7,044,127    $20.00
                             ===========    ======    ===========    ======    ==========    ======
Weighted Average Remaining
  Contractual Life.........    8.6 years                9.2 years              10.0 years
                             ===========              ===========              ==========
Options Exercisable, end of
  period...................    7,026,346    $19.98      2,091,032    $19.90     1,761,032    $20.00
                             ===========    ======    ===========    ======    ==========    ======
Weighted average fair value
  of options granted.......  $     12.34              $     12.59              $    12.50
                             ===========              ===========              ==========


     The Company uses the intrinsic value method prescribed by Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, to
account for the option plans. Option compensation expense of $41.0 million,
$80.0 million, and $845 for the years ended December 31, 2000 and 1999, and for
the period from December 24, 1998, through December 31, 1998, respectively, was
recorded in the consolidated financial statements since the exercise prices were
less than the estimated fair values of the underlying membership interests on
the date of grant. Estimated fair values were determined by the Company using
the valuation inherent in the Paul Allen Transaction and valuations of public
companies in the cable television industry adjusted for factors specific to the
Company. Compensation expense is being recorded over the vesting period of each
grant that varies from four to five years. As of December 31, 2000, deferred
compensation remaining to be recognized in future periods totaled $31.6 million.
No stock option compensation expense was recorded for the options granted after
November 8, 1999 (Post IPO), since the exercise price was equal to the estimated
fair value of the underlying membership interests on the date of grant. Since
the membership units are exchangeable into Class A common stock of Charter on a
one-for-one basis, the estimated fair value was equal to the quoted market
values of Class A common stock.

                                       F-27
   94
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     SFAS 123, Accounting for Stock-Based Compensation, requires pro forma
disclosure of the impact on earnings as if the compensation costs for these
plans had been determined consistent with the fair value methodology of this
statement. The Company's net loss would have been increased to the following pro
forma amounts under SFAS 123 for the years and period ended:



                                                                     PERIOD FROM
                                                                     DECEMBER 24,
                                          YEAR ENDED DECEMBER 31,      THROUGH
                                          -----------------------    DECEMBER 31,
                                             2000         1999           1998
                                          ----------    ---------    ------------
                                                            
Net loss:
  As reported...........................  $(828,650)    $(66,229)       $   (2)
  Pro forma.............................   (883,096)     (68,923)           (2)
Loss per common share, basic and
  diluted:
  As reported...........................      (3.67)       (2.22)        (0.04)
  Pro forma.............................      (3.91)       (2.31)        (0.04)


     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, 2000 and
1999, and the period from December 24, 1998, through December 31, 1998,
respectively: risk-free interest rates of 6.5%, 5.5%, and 4.8%; expected
volatility of 46.9%, 43.8% and 43.7%; and expected lives of 10 years. The
valuations assume no dividends are paid.

16. COMMITMENTS AND CONTINGENCIES:

  Leases

     The Company leases certain facilities and equipment under noncancellable
operating leases. Leases and rental costs charged to expense for the years ended
December 31, 2000 and 1999, and for the period from December 24, 1998, through
December 31, 1998, were $14.2 million, $11.2 million and $70, respectively. As
of December 31, 2000, future minimum lease payments are as follows:



YEAR                                                 AMOUNT
----                                                 -------
                                                  
2001...............................................  $11,077
2002...............................................    7,557
2003...............................................    5,242
2004...............................................    4,101
2005...............................................    3,173
Thereafter.........................................   10,364


     The Company also rents utility poles 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, 2000 and 1999, and for the period from December 24,
1998, through December 31, 1998, was $31.6 million, $14.3 million and $137,
respectively.

  Litigation

     The Company is a party to lawsuits and claims that arose in the ordinary
course of conducting its business. In the opinion of management, after
consulting with legal counsel, and taking into account recorded liabilities, the
outcome of these lawsuits and claims will not have a material adverse effect on
the Company's consolidated financial position or results of operations.

                                       F-28
   95
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Redeemable Securities

     In connection with the acquisitions of Rifkin, Falcon, and Bresnan, sellers
who acquired Charter Holdco membership units or, in the case of Bresnan,
additional equity interests in a subsidiary of Charter Holdings, and the Helicon
sellers who acquired shares of Class A common stock in Charter's initial public
offering may have rescission rights against Charter and Charter Holdco arising
out of possible violations of Section 5 of the Securities Act of 1933, as
amended, in connection with the offers and sales of these equity interests.
Accordingly, the maximum potential cash obligation related to the rescission
rights, estimated at $1.1 billion as of December 31, 2000 (see Note 21), has
been excluded from shareholders' equity or minority interest and classified as
"redeemable securities" on the consolidated balance sheet. One year after the
dates of issuance of these equity interests (when these possible rescission
rights will have expired), the Company will reclassify the respective amounts to
shareholders' equity or minority interest, as applicable. Certain of these
rescission rights expired during the year ended December 31, 2000, and were
reclassified to minority interest and equity, as applicable.

  Regulation in the Cable Industry

     The cable television industry is subject to extensive regulation at the
federal, local and, in some instances, state levels. The Cable Communications
Policy Act of 1984 (the "1984 Cable Act"), the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act" and together with
the 1984 Cable Act, the "Cable Acts"), and the Telecommunications Act of 1996
(the "1996 Telecom Act"), establish a national policy to guide the development
and regulation of cable television systems. The Federal Communications
Commission (FCC) has principal responsibility for implementing the policies of
the Cable Acts. Many aspects of such regulation are currently the subject of
judicial proceedings and administrative or legislative proposals. Legislation
and regulations continue to change, and the Company cannot predict the impact of
future developments on the cable television industry.

     The 1992 Cable Act and the FCC's rules implementing that act generally have
increased the administrative and operational expenses of cable television
systems and have resulted in additional regulatory oversight by the FCC and
local or state franchise authorities. The Cable Acts and the corresponding FCC
regulations have established rate regulations.

     The 1992 Cable Act permits certified local franchising authorities to order
refunds of basic service tier rates paid in the previous twelve-month period
determined to be in excess of the maximum permitted rates. During 2000 and 1999,
the amounts refunded by the Company have been insignificant. The Company may be
required to refund additional amounts in the future.

     The Company believes that it has complied in all material respects with the
provisions of the 1992 Cable Act, including the rate setting provisions
promulgated by the FCC. However, in jurisdictions that have chosen not to
certify, refunds covering the previous twelve-month period may be ordered upon
certification if the Company is unable to justify its basic rates. As of
December 31, 2000, approximately 17% of the Company's local franchising
authorities are certified to regulate basic tier rates. The Company is unable to
estimate at this time the amount of refunds, if any, that may be payable by the
Company in the event certain of its rates are successfully challenged by
franchising authorities or found to be unreasonable by the FCC. The Company does
not believe that the amount of any such refunds would have a material adverse
effect on the consolidated financial position or results of operations of the
Company.

     The 1996 Telecom Act, among other things, immediately deregulated the rates
for certain small cable operators and in certain limited circumstances rates on
the basic service tier, and as of March 31, 1999, deregulated rates on the cable
programming service tier (CPST). The FCC has taken the position that it will
still adjudicate pending CPST complaints but will strictly limit its review, and
possible refund orders, to the time period predating the sunset date, March 31,
1999. The Company does not believe any adjudications

                                       F-29
   96
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

regarding their pre-sunset complaints will have a material adverse effect on the
Company's consolidated financial position or results of operations.

     A number of states subject cable television systems to the jurisdiction of
centralized state governmental agencies, some of which impose regulation of a
character similar to that of a public utility. State governmental agencies are
required to follow FCC rules when prescribing rate regulation, and thus, state
regulation of cable television rates is not allowed to be more restrictive than
the federal or local regulation.

17. EMPLOYEE BENEFIT PLANS:

     The Company's employees may participate in 401(k) plans (the "401(k)
Plans"). Employees that qualify for participation can contribute up to 15% 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)
Plans totaling $6.1 million, $2.9 million and $20 for the years ended December
31, 2000 and 1999, and for the period from December 24, 1998, through December
31, 1998, respectively.

18. RECENTLY ISSUED ACCOUNTING STANDARDS:

     SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,
as amended by SFAS 137, Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of FASB Statement No. 133, and SFAS
138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities, is effective for the Company as of January 1, 2001. SFAS No. 133
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or liability
measured at its fair value and that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. Special accounting for qualifying hedges allows a derivative's gains and
losses to offset related results on the hedged item in the income statement, and
requires that a company must formally document, designate and assess the
effectiveness of transactions that receive hedge accounting. Adoption of these
new accounting standards is expected to result in a cumulative effect of a
change in accounting principle that increases net loss by approximately $23.9
million.

                                       F-30
   97
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

19. PARENT COMPANY ONLY FINANCIAL STATEMENTS:

     As the result of limitations on and prohibition of distributions,
substantially all of the net assets of the consolidated subsidiaries are
restricted for distribution to Charter, the parent company. The following
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.

               CHARTER COMMUNICATIONS, INC. (PARENT COMPANY ONLY)

                            CONDENSED BALANCE SHEETS



                                                                    DECEMBER 31,
                                                              ------------------------
                                                                 2000          1999
                                                              ----------    ----------
                                                               (DOLLARS IN THOUSANDS)
                                                                      
ASSETS
Cash and cash equivalents...................................  $      465    $   19,369
Other current assets........................................         464           694
Investment in Charter Holdco................................   4,227,531     3,762,016
Notes receivable from Charter Holdco........................     750,000            --
                                                              ----------    ----------
                                                              $4,978,460    $3,782,079
                                                              ==========    ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities.........................................  $       --    $    9,175
Payables to related party...................................         929        10,888
Convertible Notes...........................................     750,000            --
Redeemable securities.......................................   1,104,327       750,937
Shareholders' equity........................................   3,123,204     3,011,079
                                                              ----------    ----------
     Total liabilities and shareholders' equity.............  $4,978,460    $3,782,079
                                                              ==========    ==========


               CHARTER COMMUNICATIONS, INC. (PARENT COMPANY ONLY)

                       CONDENSED STATEMENTS OF OPERATIONS



                                                                                     PERIOD FROM
                                                                                     DECEMBER 24,
                                                                                        1998,
                                                          YEAR ENDED DECEMBER 31,      THROUGH
                                                          -----------------------    DECEMBER 31,
                                                             2000         1999           1998
                                                          ----------    ---------    ------------
                                                                  (DOLLARS IN THOUSANDS)
                                                                            
REVENUES
Interest income.........................................  $   9,222     $    570         $--
Management fees.........................................      4,957          716          --
                                                          ---------     --------         ---
     Total revenues.....................................     14,179        1,286          --
EXPENSES
Equity in losses of Charter Holdco......................   (828,650)     (66,229)        (2)
General and administrative expenses.....................     (4,957)        (716)         --
Interest expense........................................     (9,222)        (570)         --
                                                          ---------     --------         ---
     Total expenses.....................................   (842,829)     (67,515)        (2)
                                                          ---------     --------         ---
  Net loss..............................................  $(828,650)    $(66,229)        $(2)
                                                          =========     ========         ===


                                       F-31
   98
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

               CHARTER COMMUNICATIONS, INC. (PARENT COMPANY ONLY)

                       CONDENSED STATEMENTS OF CASH FLOWS



                                                                                    PERIOD FROM
                                                                                    DECEMBER 24,
                                                                                       1998,
                                                        YEAR ENDED DECEMBER 31,       THROUGH
                                                        ------------------------    DECEMBER 31,
                                                          2000          1999            1998
                                                        ---------    -----------    ------------
                                                                 (DOLLARS IN THOUSANDS)
                                                                           
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss............................................  $(828,650)   $   (66,229)       $(2)
  Equity in losses of Charter Holdco..................    828,650         66,229          2
  Change in assets and liabilities....................    (18,904)        19,369
CASH FLOWS FROM INVESTING ACTIVITIES:
  Investment in and receivables from Charter Holdco...   (750,000)    (3,290,436)        --
  Payment for acquisition.............................         --       (258,434)        --
CASH FLOWS FROM FINANCING ACTIVITIES
  Issuance of Class B common stock to Mr. Allen.......         --            950
  Net proceeds from initial public offering of common
     stock............................................         --      3,547,920         --
Borrowing from convertible notes......................    750,000             --         --
                                                        ---------    -----------        ---
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS.........................................    (18,904)        19,369         --
CASH AND CASH EQUIVALENTS, beginning of period........     19,369             --         --
                                                        ---------    -----------        ---
CASH AND CASH EQUIVALENTS, end of period..............  $     465    $    19,369        $--
                                                        =========    ===========        ===


20. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):

     Year ended December 31, 2000:



                               FIRST           SECOND          THIRD           FOURTH
                            ------------    ------------    ------------    ------------
                                                                
Revenues..................     $ 721,604       $ 794,780       $ 838,961       $ 893,877
Loss from operations......      (224,273)       (241,047)       (237,337)       (268,777)
Loss before minority
  interest................      (449,620)       (494,136)       (523,464)       (587,725)
Net loss..................      (180,714)       (196,821)       (210,018)       (241,097)
Basic and diluted loss per
  common share............         (0.81)          (0.89)          (0.93)          (1.03)
Weighted-average shares
  outstanding.............   221,917,083     222,089,746     224,965,289     233,738,668


                                       F-32
   99
                 CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Year ended December 31, 1999:



                                     FIRST       SECOND        THIRD         FOURTH
                                    --------    ---------    ---------    ------------
                                                              
Revenues..........................  $160,955    $ 308,038    $ 376,189       $ 583,062
Loss from operations..............   (31,792)     (39,775)     (38,296)        (76,572)
Loss before minority interest.....   (83,175)    (140,930)    (164,153)       (250,578)
Net loss..........................       (33)         (57)         (35)        (66,104)
Basic and diluted loss per common
  share...........................     (0.67)       (1.13)       (0.70)          (0.56)
Weighted-average shares
  outstanding.....................    50,000       50,000       50,000     118,124,333


21. SUBSEQUENT EVENTS:

     In January 2001, Issuers issued the January 2001 Charter Holdings Notes
with an aggregate principal amount at maturity of $2.075 billion. The January
2001 Charter Holdings Notes are comprised of $900.0 million 10.75% Senior Notes
due 2009, $500.0 million 11.125% Senior Notes due 2011, and $350.6 million of
13.5% Senior Discount Notes due 2011 with a principal amount at maturity of
$675.0 million. The net proceeds were approximately $1.72 billion, after giving
effect to discounts, commissions and expenses. Charter Holdings used all the net
proceeds to repay all remaining amounts outstanding under the Charter Holdings
senior bridge loan facility and the Fanch revolving credit facility, a portion
of the amounts outstanding under the Charter Operating and Falcon revolving
credit facilities, and for general corporate purposes.

     In February 2001, all of the remaining possible rescission rights with a
maximum potential obligation of $1.1 billion expired without these parties
requesting repurchase of their securities (see Note 16).

     In February 2001, the Company entered into several agreements with AT&T
Broadband, LLC involving several strategic cable system transactions that will
result in a net addition of approximately 512,000 customers (unaudited) for the
Charter cable systems. In the pending AT&T transactions, the Company expects to
acquire cable systems from AT&T Broadband serving approximately 574,000
customers (unaudited) in Missouri, Alabama, Nevada and California for a total of
$1.79 billion. A portion of the purchase price will consist of Charter cable
systems valued at $249.0 million serving approximately 62,000 customers
(unaudited) in Florida. Of the balance of the purchase price, up to $501.5
million will be paid in Class A common stock and the remainder will be paid in
cash. Charter Holdings and Charter Communications Holdings Capital Corporation
have a commitment for a bridge loan from Morgan Stanley Senior Funding, Inc. and
Goldman Sachs Credit Partners LP for temporary financing of the cash portion of
the purchase price. The Company expects to obtain permanent financing through
one or more debt or equity financing transactions or a combination thereof. The
acquisition transactions are expected to close in the second and/or third
quarters of 2001, subject to certain closing conditions and regulatory review.

                                       F-33
   100

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications Properties Holdings, LLC:

     We have audited the accompanying consolidated statements of operations,
changes in shareholder's investment and cash flows of Charter Communications
Properties Holdings, LLC and subsidiaries for the period from January 1, 1998,
through December 23, 1998. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

     We conducted our audit in accordance with auditing standards generally
accepted in the 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 audit provides a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of the operations and the cash flows of
Charter Communications Properties Holdings, LLC and subsidiaries for the period
from January 1, 1998, through December 23, 1998, in conformity with accounting
principles generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

St. Louis, Missouri,
February 5, 1999

                                       F-34
   101

        CHARTER COMMUNICATIONS PROPERTIES HOLDINGS, LLC AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS



                                                              PERIOD FROM
                                                               JANUARY 1,
                                                                 1998,
                                                                THROUGH
                                                              DECEMBER 23,
                                                                  1998
                                                              ------------
                                                              (DOLLARS IN
                                                               THOUSANDS)
                                                           
REVENUES....................................................    $ 49,731
                                                                --------
OPERATING EXPENSES:
  Operating, general and administrative.....................      25,952
  Depreciation and amortization.............................      16,864
  Corporate expense allocation -- related party.............       6,176
                                                                --------
                                                                  48,992
                                                                --------
  Income from operations....................................         739
                                                                --------
OTHER INCOME (EXPENSE):
  Interest expense..........................................     (17,277)
  Interest income...........................................          44
  Other, net................................................        (728)
                                                                --------
                                                                 (17,961)
                                                                --------
     Net loss...............................................    $(17,222)
                                                                ========


  The accompanying notes are an integral part of this consolidated statement.
                                       F-35
   102

        CHARTER COMMUNICATIONS PROPERTIES HOLDINGS, LLC AND SUBSIDIARIES

         CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S INVESTMENT



                                                   COMMON    PAID-IN    ACCUMULATED
                                                   STOCK     CAPITAL      DEFICIT       TOTAL
                                                   ------    -------    -----------    --------
                                                              (DOLLARS IN THOUSANDS)
                                                                           
BALANCE, January 1, 1998.........................   $--      $ 5,900     $ (7,875)     $ (1,975)
  Capital contributions..........................    --       10,800           --        10,800
  Net loss.......................................    --           --      (17,222)      (17,222)
                                                    ---      -------     --------      --------
BALANCE, December 23, 1998.......................   $--      $16,700     $(25,097)     $ (8,397)
                                                    ===      =======     ========      ========


  The accompanying notes are an integral part of this consolidated statement.
                                       F-36
   103

        CHARTER COMMUNICATIONS PROPERTIES HOLDINGS, LLC AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS



                                                              PERIOD FROM
                                                               JANUARY 1,
                                                                 1998,
                                                                THROUGH
                                                              DECEMBER 23,
                                                                  1998
                                                              ------------
                                                              (DOLLARS IN
                                                               THOUSANDS)
                                                           
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss..................................................   $ (17,222)
  Adjustments to reconcile net loss to net cash provided by
     operating activities --
     Depreciation and amortization..........................      16,864
     Noncash interest expense...............................         267
     Gain on disposal of property, plant and equipment......         (14)
  Changes in assets and liabilities, net of effects from
     acquisition --
     Receivables............................................          10
     Prepaid expenses and other.............................        (125)
     Accounts payable and accrued expenses..................      16,927
     Payables to manager of cable systems -- related
      party.................................................       5,288
     Other operating activities.............................         569
                                                               ---------
          Net cash provided by operating activities.........      22,564
                                                               ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property, plant and equipment................     (15,364)
  Payment for acquisition, net of cash acquired.............    (167,484)
  Other investing activities................................        (486)
                                                               ---------
          Net cash used in investing activities.............    (183,334)
                                                               ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings of long-term debt..............................     217,500
  Repayments of long-term debt..............................     (60,200)
  Capital contributions.....................................       7,000
  Payments for debt issuance costs..........................      (3,487)
                                                               ---------
          Net cash provided by financing activities.........     160,813
                                                               ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS...................          43
CASH AND CASH EQUIVALENTS, beginning of period..............         626
                                                               ---------
CASH AND CASH EQUIVALENTS, end of period....................   $     669
                                                               =========
CASH PAID FOR INTEREST......................................   $   7,679
                                                               =========


  The accompanying notes are an integral part of this consolidated statement.
                                       F-37
   104

        CHARTER COMMUNICATIONS PROPERTIES HOLDINGS, LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)

1. ORGANIZATION AND BASIS OF PRESENTATION:

     Charter Communications Properties Holdings, LLC (CCPH), a Delaware limited
liability company, formerly Charter Communications Properties Holdings, Inc.,
through its wholly owned cable television operating subsidiary, Charter
Communications Properties, LLC (CCP), commenced operations with the acquisition
of a cable television system on September 30, 1995. Prior to February 19, 1999,
CCPH was wholly owned by Charter Investment, Inc. (Charter Investment).

     Effective December 23, 1998, as part of a series of transactions, through
which Paul G. Allen acquired Charter Investment, Mr. Allen acquired CCPH for an
aggregate purchase price of $211 million, excluding $214 million in debt assumed
(the "Paul Allen Transaction"). In conjunction with the Paul Allen Transaction,
CCPH was converted from a corporation to a limited liability company. Also, in
conjunction with the Paul Allen Transaction, Charter Investment for fair value
acquired from unrelated third parties all of the interest it did not already own
in CharterComm Holdings, LLC (CharterComm Holdings) and CCA Group (comprised of
CCA Holdings, Corp., CCT Holdings Corp. and Charter Communications Long Beach,
Inc.), all cable television operating companies, for $2.0 billion, excluding
$1.8 billion in debt assumed. Charter Investment previously managed and owned
minority interests in these companies. In February 1999, Charter Investment
transferred all of its cable television operating subsidiaries to a wholly owned
subsidiary of Charter Communications Holdings, LLC (Charter Holdings), Charter
Communications Operating, LLC (Charter Operating). Charter Holdings was a wholly
owned subsidiary of Charter Investment. The transfer was accounted for as a
reorganization of entities under common control similar to a pooling of
interests.

     The accompanying consolidated financial statements include the accounts of
CCPH and CCP, its wholly owned cable operating subsidiary (collectively, the
"Company"). The accounts of CharterComm Holdings and CCA Group are not included
since these companies were not owned and controlled by Charter Investment prior
to December 23, 1998.

2. 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 that approximates market value.

  Property, Plant and Equipment

     Property, plant and equipment is recorded at cost, including all direct and
certain indirect costs associated with the construction of cable transmission
and distribution facilities, and the cost of new customer installations. The
costs of disconnecting a customer are charged to expense in the period incurred.
Expenditures for repairs and maintenance are charged to expense as incurred,
while equipment replacement and betterments are capitalized.

     Depreciation is provided on the straight-line basis over the estimated
useful lives of the related assets as follows:


                                                
Cable distribution systems.......................  3-15 years
Buildings and leasehold improvements.............  5-15 years
Vehicles and equipment...........................   3-5 years


     For the period from January 1, 1998, through December 23, 1998,
depreciation expense was $6.2 million.

                                       F-38
   105
        CHARTER COMMUNICATIONS PROPERTIES HOLDINGS, LLC AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Franchises

     Costs incurred in obtaining and renewing cable franchises are deferred and
amortized over the lives of the franchises. Costs relating to unsuccessful
franchise applications are charged to expense when it is determined that the
efforts to obtain the franchise will not be successful. Franchise rights
acquired through the purchase of cable systems represent management's estimate
of fair value and are generally amortized using the straight-line method over a
period of 15 years. The period of 15 years is management's best estimate of the
useful lives of the franchises and assumes substantially all of those franchises
that expire during the period will be renewed by the Company.

  Other Assets

     Debt issuance costs are being amortized to interest expense using the
effective interest method over the term of the related debt. The interest rate
cap costs are being amortized over the terms of the agreement, which
approximates three years.

  Impairment of Assets

     If facts and circumstances suggest that a long-lived asset may be impaired,
the carrying value is reviewed. If a review indicates that the carrying value of
such asset is not recoverable based on projected undiscounted net cash flows
related to the asset over its remaining life, the carrying value of such asset
is reduced to its estimated fair value.

  Revenues

     Cable television revenues from basic and premium services are recognized
when the related services are provided.

     Installation revenues are recognized to the extent of direct selling costs
incurred. The remainder, if any, is deferred and amortized to income over the
estimated average period that customers are expected to remain connected to the
cable system. As of December 23, 1998, no installation revenue has been
deferred, as direct selling costs have exceeded installation revenue.

     Fees collected from programmers to guarantee carriage are deferred and
amortized to income over the life of the contracts. Local governmental
authorities impose franchise fees on the Company ranging up to a federally
mandated maximum of 5.0% of gross revenues. Such fees are collected on a monthly
basis from the Company's customers and are periodically remitted to local
franchise authorities. Franchise fees collected and paid are reported as
revenues and expenses.

  Interest Rate Hedge Agreements

     The Company manages fluctuations in interest rates by using interest rate
hedge agreements, as required by certain debt agreements. Interest rate swaps,
caps and collars are accounted for as hedges of debt obligations, and
accordingly, the net settlement amounts are recorded as adjustments to interest
expense in the period incurred. Premiums paid for interest rate caps are
deferred, included in other assets, and are amortized over the original term of
the interest rate agreement as an adjustment to interest expense.

     The Company's interest rate swap agreements require the Company to pay a
fixed rate and receive a floating rate thereby creating fixed rate debt.
Interest rate caps and collars are entered into by the Company to reduce the
impact of rising interest rates on floating rate debt.

     The Company's participation in interest rate hedging transactions involves
instruments that have a close correlation with its debt, thereby managing its
risk. Interest rate hedge agreements have been designated for hedging purposes
and are not held or issued for speculative purposes.
                                       F-39
   106
        CHARTER COMMUNICATIONS PROPERTIES HOLDINGS, LLC AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Income Taxes

     The Company filed a consolidated income tax return with Charter Investment.
Income taxes were allocated to the Company in accordance with the tax-sharing
agreement between the Company and Charter Investment.

  Use of Estimates

     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. Actual results could differ from those estimates.

3. ACQUISITION:

     In 1998, the Company acquired a cable system for an aggregate purchase
price, net of cash acquired, of $228.4 million, comprised of $167.5 million in
cash and $60.9 million in a note payable to the seller. The excess of the cost
of properties acquired over the amounts assigned to net tangible assets at the
date of acquisition was $207.6 million and is included in franchises.

     The above acquisition was accounted for using the purchase method of
accounting, and accordingly, results of operations of the acquired assets have
been included in the financial statements from the dates of acquisition. The
purchase price was allocated to tangible and intangible assets based on
estimated fair values at the acquisition date.

     Unaudited pro forma operating results as though the acquisition discussed
above, excluding the Paul Allen Transaction, had occurred on January 1, 1998,
with adjustments to give effect to amortization of franchises, interest expense
and certain other adjustments are as follows:



                                                              PERIOD FROM
                                                               JANUARY 1,
                                                                 1998,
                                                                THROUGH
                                                              DECEMBER 23,
                                                                  1998
                                                              ------------
                                                              (UNAUDITED)
                                                           
Revenues....................................................    $67,007
Loss from operations........................................     (7,097)
Net loss....................................................    (24,058)


     The unaudited pro forma information has been presented for comparative
purposes and does not purport to be indicative of the results of operations had
the transaction been completed as of the assumed date or which may be obtained
in the future.

                                       F-40
   107
        CHARTER COMMUNICATIONS PROPERTIES HOLDINGS, LLC AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. ALLOWANCE FOR DOUBTFUL ACCOUNTS:

     Activity in the allowance for doubtful accounts is summarized as follows:



                                                              PERIOD FROM
                                                               JANUARY 1,
                                                                 1998,
                                                                THROUGH
                                                              DECEMBER 23,
                                                                  1998
                                                              ------------
                                                           
Balance, beginning of period................................     $   52
  Acquisition of system.....................................         96
  Charged to expense........................................      1,122
  Uncollected balances written off, net of recoveries.......       (778)
                                                                 ------
Balance, end of period......................................     $  492
                                                                 ======


5. INCOME TAXES:

     Deferred tax assets and liabilities are recognized for the estimated future
tax consequence attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
basis. Deferred income tax assets and liabilities are measured using the enacted
tax rates in effect for the year in which those temporary differences are
expected to be recovered or settled. Deferred income tax expense or benefit is
the result of changes in the liability or asset recorded for deferred taxes. A
valuation allowance must be established for any portion of a deferred tax asset
for which it is more likely than not that a tax benefit will not be realized.

     No current provision (benefit) for income taxes was recorded. The effective
income tax rate is less than the federal rate of 35% primarily due to providing
a valuation allowance on deferred income tax assets.

6. RELATED-PARTY TRANSACTIONS:

     Charter Investment provides management services to the Company including
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.
Certain costs for services are billed and charged directly to the Company's
operating subsidiaries and are included in operating costs. These billings are
determined based on the number of basic customers. Such costs totaled $437 for
the period from January 1, 1998, through December 23, 1998. All other costs
incurred by Charter Investment on behalf of the Company are expensed in the
accompanying consolidated financial statements and are included in corporate
expense allocations related party. The cost of these services is allocated based
on the number of basic customers. Management considers these allocations to be
reasonable for the operations of the Company.

     Charter Investment utilized a combination of excess insurance coverage and
self-insurance programs for its medical, dental and workers' compensation
claims. Charges are made to the Company as determined by independent actuaries,
at the present value of the actuarially computed present and future liabilities
for such benefits. Medical coverage provides for $2.4 million aggregate stop
loss protection and a loss limitation of $100 per person per year. Workers'
compensation coverage provides for $800 aggregate stop loss protection and a
loss limitation of $150 per person per year.

     The Company is charged a management fee based on percentages of revenues as
stipulated in the management agreement between Charter Investment and the
Company. For the period from January 1, 1998, through December 23, 1998, the
management fee charged to the Company approximated the corporate expenses
incurred by Charter Investment on behalf of the Company.

                                       F-41
   108
        CHARTER COMMUNICATIONS PROPERTIES HOLDINGS, LLC AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. COMMITMENTS AND CONTINGENCIES:

  Leases

     The Company leases certain facilities and equipment under noncancellable
operating leases. Leases and rental costs charged to expense for the period from
January 1, 1998, through December 23, 1998, was $278.

     The Company also rents utility poles 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
period from January 1, 1998, through December 23, 1998, was $421.

  Litigation

     The Company is a party to lawsuits that arose in the ordinary course of
conducting its business. In the opinion of management, after consulting with
legal counsel, the outcome of these lawsuits will not have a material adverse
effect on the Company's consolidated financial position or results of
operations.

  Regulation in the Cable Television Industry

     The cable television industry is subject to extensive regulation at the
federal, local and, in some instances, state levels. The Cable Communications
Policy Act of 1984 (the "1984 Cable Act"), the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act" and together with
the 1984 Cable Act, the "Cable Acts"), and the Telecommunications Act of 1996
(the "1996 Telecom Act"), establish a national policy to guide the development
and regulation of cable systems. The Federal Communications Commission (FCC) has
principal responsibility for implementing the policies of the Cable Acts. Many
aspects of such regulation are currently the subject of judicial proceedings and
administrative or legislative proposals. Legislation and regulations continue to
change, and the Company cannot predict the impact of future developments on the
cable television industry.

     The 1992 Cable Act and the FCC's rules implementing that act generally have
increased the administrative and operational expenses of cable systems and have
resulted in additional regulatory oversight by the FCC and local or state
franchise authorities. The Cable Acts and the corresponding FCC regulations have
established rate regulations.

     The 1992 Cable Act permits certified local franchising authorities to order
refunds of basic service tier rates paid in the previous twelve-month period
determined to be in excess of the maximum permitted rates. As of December 31,
1998, the amount refunded by the Company has been insignificant. The Company may
be required to refund additional amounts in the future.

     The Company believes that it has complied in all material respects with the
provisions of the 1992 Cable Act, including the rate setting provisions
promulgated by the FCC. However, in jurisdictions that have chosen not to
certify, refunds covering the previous twelve-month period may be ordered upon
certification if the Company is unable to justify its basic rates. The Company
is unable to estimate at this time the amount of refunds, if any, that may be
payable by the Company in the event certain of its rates are successfully
challenged by franchising authorities or found to be unreasonable by the FCC.
The Company does not believe that the amount of any such refunds would have a
material adverse effect on the financial position or results of operations of
the Company.

     The 1996 Telecom Act, among other things, immediately deregulated the rates
for certain small cable operators and in certain limited circumstances rates on
the basic service tier, and as of March 31, 1999, deregulates rates on the cable
programming service tier (CPST). The FCC has taken the position that it will
still adjudicate pending CPST complaints but will strictly limit its review, and
possible refund orders, to the time period predating the sunset date, March 31,
1999. The Company does not believe any adjudications

                                       F-42
   109
        CHARTER COMMUNICATIONS PROPERTIES HOLDINGS, LLC AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

regarding their pre-sunset complaints will have a material adverse effect on the
Company's consolidated financial position or results of operations.

     A number of states subject cable systems to the jurisdiction of centralized
state governmental agencies, some of which impose regulation of a character
similar to that of a public utility. State governmental agencies are required to
follow FCC rules when prescribing rate regulation, and thus, state regulation of
cable television rates is not allowed to be more restrictive than the federal or
local regulation. The Company is subject to state regulation in Connecticut.

8. EMPLOYEE BENEFIT PLANS:

  401(k) Plan

     The Company's employees may participate in the Charter Communications, Inc.
401(k) Plan (the "401(k) Plan"). Employees that qualify for participation can
contribute up to 15% of their salary, on or before tax basis, subject to a
maximum contribution limit as determined by the Internal Revenue Service. The
Company contributes an amount equal to 50% of the first 5% of contributions by
each employee. The Company contributed $74.0 for the period from January 1,
1998, through December 23, 1998.

  Appreciation Rights Plan

     Certain employees of Charter participated in the 1995 Charter
Communications, Inc. Appreciation Rights Plan (the "Plan"). The Plan permitted
Charter Investment to grant 1,500,000 units to certain key employees, of which
1,251,500 were outstanding at December 31, 1997. Units received by an employee
vest at a rate of 20% per year, unless otherwise provided in the participant's
Appreciation Rights Unit Agreement. The appreciation rights entitled the
participants to receive payment, upon termination or change in control of
Charter Investment, of the excess of the unit value over the base value (defined
as the appreciation value) for each vested unit. The unit value was based on
adjusted equity, as defined in the Plan. Deferred compensation expense was based
on the appreciation value since the grant date and was being amortized over the
vesting period.

     As a result of the acquisition of Charter Investment by Mr. Allen, the Plan
was terminated, all outstanding units became 100% vested and all amounts were
paid by Charter Investment in 1999. The cost of this plan was allocated to the
Company based on the number of basic customers. The Company considers this
allocation to be reasonable for the operations of the Company. For the period
January 1, 1998, through December 23, 1998, the Company expensed $3,800,
included in corporate expense allocation-related party and increased
shareholder's investment for the cost of this plan.

9. ACCOUNTING STANDARD NOT YET IMPLEMENTED:

     In June 1998, the Financial Accounting Standards Board adopted SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133
establishes accounting and reporting standards requiring that every derivative
instrument, including certain derivative instruments embedded in other
contracts, be recorded in the balance sheet as either an asset or liability
measured at its fair value and that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. Special accounting for qualifying hedges allows a derivative's gains and
losses to offset related results on the hedged item in the income statement, and
requires that a company must formally document, designate and assess the
effectiveness of transactions that receive hedge accounting. SFAS No. 137,
Accounting for Derivative Instruments and Hedging Activities -- Deferral of the
Effective Date of FASB Statement No. 133 -- An Amendment of FASB Statement No.
133, has delayed the effective date of SFAS No. 133 to fiscal years beginning
after June 15, 2000. The Company has not yet quantified the impact of adopting
SFAS No. 133 on the consolidated financial statements nor has determined the
timing of its adoption of SFAS No. 133. However, SFAS No. 133 could increase
volatility in earnings (loss).

                                       F-43
   110

                          INDEPENDENT AUDITORS' REPORT

The Common Member and Manager
  Bresnan Communications Group LLC:

     We have audited the accompanying consolidated balance sheets of Bresnan
Communications Group LLC and its subsidiaries as of December 31, 1999 and
February 14, 2000, and the related consolidated statements of operations and
members' equity (deficit) and cash flows for the year ended December 31, 1999
and for the period ended February 14, 2000. These consolidated financial
statements are the responsibility of the Bresnan Communications Group LLC'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 generally accepted auditing
standards. 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 Bresnan
Communications Group LLC, as of December 31, 1999 and February 14, 2000, and the
results of their operations and their cash flows for the year ended December 31,
1999 and the period ended February 14, 2000, in conformity with generally
accepted accounting principles.

                                          /s/ KPMG LLP

Denver, Colorado
April 20, 2000

                                       F-44
   111

                        BRESNAN COMMUNICATIONS GROUP LLC

                          CONSOLIDATED BALANCE SHEETS



                                                              DECEMBER 31,    FEBRUARY 14,
                                                                  1999            2000
                                                              ------------    ------------
                                                                 (AMOUNTS IN THOUSANDS)
                                                                        
ASSETS
Cash and cash equivalents...................................   $   5,995       $       --
Restricted cash (note 3)....................................         290              301
Trade and other receivables, net............................       9,006            9,062
Property and equipment, at cost:
  Land and buildings........................................       6,879            7,271
  Distribution systems......................................     534,812          546,939
  Support equipment.........................................      62,283           60,747
                                                               ---------       ----------
                                                                 603,974          614,957
  Less accumulated depreciation.............................     228,868          233,810
                                                               ---------       ----------
                                                                 375,106          381,147
Franchise costs, net........................................     328,068          354,887
Other assets, net of amortization...........................      19,038           18,746
                                                               ---------       ----------
          Total assets......................................   $ 737,503       $  764,143
                                                               =========       ==========
LIABILITIES AND MEMBERS' EQUITY (DEFICIT)
Bank overdraft..............................................   $      --       $    1,542
Accounts payable............................................      18,900           20,776
Accrued expenses............................................      35,613            8,240
Accrued interest............................................      11,748            1,459
Debt (note 4)...............................................     895,607          963,292
Other liabilities...........................................      10,020           10,604
                                                               ---------       ----------
          Total Liabilities.................................     971,888        1,005,913
Members' deficit............................................    (234,385)        (241,770)
                                                               ---------       ----------
Commitments and contingencies
          Total liabilities and members' deficit............   $ 737,503       $  764,143
                                                               =========       ==========


          See accompanying notes to consolidated financial statements.
                                       F-45
   112

                        BRESNAN COMMUNICATIONS GROUP LLC

      CONSOLIDATED STATEMENTS OF OPERATIONS AND MEMBERS' EQUITY (DEFICIT)



                                                                              PERIOD FROM
                                                                               JANUARY 1,
                                                               YEAR ENDED       2000 TO
                                                              DECEMBER 31,    FEBRUARY 14,
                                                                  1999            2000
                                                              ------------    ------------
                                                                 (AMOUNTS IN THOUSANDS)
                                                                        
REVENUE.....................................................   $ 283,574       $  37,102
Operating costs and expenses:
  Programming (note 6)......................................      72,355          10,178
  Operating.................................................      31,624           4,857
  Selling, general and administrative (note 6)..............      67,351          10,414
  Organizational and divestiture costs......................       5,281             865
  Depreciation and amortization.............................      59,752           8,095
                                                               ---------       ---------
                                                                 236,363          34,409
                                                               ---------       ---------
     Operating income.......................................      47,211           2,693

OTHER INCOME (EXPENSE):
  Interest expense:
     Related party (note 4).................................        (152)             --
     Other..................................................     (67,139)         (9,522)
  Gain (loss) on sale of cable television systems...........         556              --
  Other, net................................................        (900)           (106)
                                                               ---------       ---------
                                                                 (67,635)         (9,628)
                                                               ---------       ---------
Net earnings (loss).........................................     (20,424)         (6,935)

MEMBERS' EQUITY (DEFICIT):
  Beginning of period.......................................     381,748        (234,385)
  Capital contributions by members..........................     136,500              --
  Capital distributions to members..........................    (732,209)           (450)
                                                               ---------       ---------
  End of period.............................................   $(234,385)      $(241,770)
                                                               =========       =========


          See accompanying notes to consolidated financial statements.
                                       F-46
   113

                        BRESNAN COMMUNICATIONS GROUP LLC

                     CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                              PERIOD FROM
                                                                               JANUARY 1,
                                                               YEAR ENDED       2000 TO
                                                              DECEMBER 31,    FEBRUARY 14,
                                                                  1999            2000
                                                              ------------    ------------
                                                                 (AMOUNTS IN THOUSANDS)
                                                                        
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss..................................................   $ (20,424)       $ (6,935)
  Adjustments to reconcile net earnings to net cash provided
     by operating activities:
     Depreciation and amortization..........................      59,752           8,095
     Amortization of debt discount and deferred financing
      costs.................................................      18,683           2,345
     Gain on sale of cable television systems...............        (556)             --
     Other, net.............................................          --             689
     Changes in operating assets and liabilities, net of
      effects of acquisitions:
       Change in receivables................................         621             (56)
       Change in other assets...............................         429              37
       Change in accounts payable, accrued expenses, accrued
        interest and other liabilities......................      25,457         (34,227)
                                                               ---------        --------
          Net cash provided by (used in) operating
            activities......................................      83,962         (30,052)
                                                               ---------        --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expended for property and equipment and for
     franchise costs........................................     (90,879)         (6,642)
  Cash paid in acquisitions.................................     (78,680)        (36,177)
  Cash received in disposals................................       4,956             200
  Change in restricted cash.................................      46,999             (11)
                                                               ---------        --------
          Net cash used in investing activities.............    (117,604)        (42,630)
                                                               ---------        --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Change in bank overdraft..................................          --          (1,542)
  Borrowings under note agreement...........................     597,530          67,000
  Proceeds from Senior Notes................................     170,000              --
  Proceeds from Senior Discount Notes.......................     175,021              --
  Repayments under note agreement...........................    (294,672)         (1,405)
  Deferred finance costs paid...............................     (19,169)             --
  Contributions by members..................................     136,500              --
  Distributions to members..................................    (732,209)           (450)
                                                               ---------        --------
          Net cash provided by financing activities.........      33,001          66,687
                                                               ---------        --------
          Net decrease in cash..............................        (641)         (5,995)
CASH AND CASH EQUIVALENTS:
  Beginning of period.......................................       6,636           5,995
                                                               ---------        --------
  End of period.............................................   $   5,995        $     --
                                                               =========        ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION --
  Cash paid during the period for interest..................   $  58,695        $ 17,603
                                                               =========        ========


          See accompanying notes to consolidated financial statements.
                                       F-47
   114

                        BRESNAN COMMUNICATIONS GROUP LLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    DECEMBER 31, 1999 AND FEBRUARY 14, 2000
                             (AMOUNTS IN THOUSANDS)

(1) BASIS OF PRESENTATION

     Bresnan Communications Group LLC and its subsidiaries ("BCG" or the
"Company") are wholly owned by Bresnan Communications Company Limited
Partnership, a Michigan limited partnership ("BCCLP"). BCG is a Delaware limited
liability company formed on August 5, 1998 for the purpose of acting as
co-issuer with its wholly-owned subsidiary, Bresnan Capital Corporation ("BCC"),
of $170,000 aggregate principal amount at maturity of 8% Senior Notes and
$275,000 aggregate principal amount at maturity of 9.25% Senior Discount Notes,
both due in 2009 (collectively the "Notes"). Also, at this time, BTC borrowed
approximately $508,000 of $650,000 available under a new credit facility (the
"Senior Credit Facility"). (See Note 4, Debt.) Prior to the issuance of the
Notes on February 2, 1999, BCCLP completed the terms of a contribution agreement
dated June 3, 1998, as amended, whereby certain affiliates of AT&T Broadband and
Internet Services, formerly Tele-Communications, Inc. ("TCI"), contributed
certain cable television systems along with assumed TCI debt of approximately
$708,854 to BCCLP which was repaid with the proceeds of the Notes and the Senior
Credit Facility. In addition, Blackstone BC Capital Partners L.P. ("Blackstone")
and affiliates contributed $136,500 to BCCLP. Upon completion of the Notes
offering on February 2, 1999 BCCLP contributed all of its assets and liabilities
to BCG, which formed a wholly owned subsidiary, Bresnan Telecommunications
Company LLC ("BTC"), into which it contributed all of its assets and certain
liabilities. The above noted contributed assets and liabilities were accounted
for at predecessor cost because of the common ownership and control of TCI and
have been reflected in the accompanying financial statements in a manner similar
to a pooling of interests.

     The consolidated financial statements include the accounts of BCG and those
of its wholly owned subsidiary, BTC, subsequent to the aforementioned formation
transaction.

     The Company owns and operates cable television systems in small- and
medium-sized communities in the midwestern United States.

     Prior to the transactions noted above, TCI and William J. Bresnan and
certain entities which he controls (collectively, the "Bresnan Entities"), held
78.4% and 21.6% interests, respectively, in BCCLP. As of February 2, 1999, TCI,
Blackstone and the Bresnan Entities held 50.00%, 39.79% and 10.21% interests,
respectively. On February 14, 2000, these interests were sold to Charter
Communications Holding Company, LLC. (See Note 8, Sale of the Company.)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  (a) Cash Equivalents

     Cash equivalents consist of investments which are readily convertible into
cash and have maturities of three months or less at the time of acquisition.

  (b) Trade and Other Receivables

     Receivables are reflected net of an allowance for doubtful accounts. Such
allowance at December 31, 1999 and February 14, 2000 was not significant.

  (c) Property and Equipment

     Property and equipment is stated at cost, including acquisition costs
allocated to tangible assets acquired. Construction costs, including interest
during construction and applicable overhead, are capitalized. During the year
ended December 31, 1999 and the period ended February 14, 2000, interest
capitalized was $1,027 and $137, respectively.

                                       F-48
   115
                        BRESNAN COMMUNICATIONS GROUP LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Depreciation is computed on a straight-line basis using estimated useful
lives of 3 to 15 years for distribution systems and 3 to 40 years for support
equipment and buildings.

     Repairs and maintenance are charged to operations, and renewals and
additions are capitalized. At the time of ordinary retirements, sales or other
dispositions of property, the original cost and cost of removal of such property
are charged to accumulated depreciation, and salvage, if any, is credited
thereto. Gains or losses are only recognized in connection with the sales of
properties in their entirety.

  (d) Franchise Costs

     Franchise costs represent the difference between the cost of acquiring
cable television systems and amounts allocated to their tangible assets. Such
amounts are generally amortized on a straight-line basis over 40 years. Costs
incurred in negotiating and renewing franchise agreements are amortized on a
straight-line basis over the life of the franchise, generally 10 to 20 years.

  (e) Impairment of Long-Lived Assets

     Management periodically reviews the carrying amounts of property and
equipment and identifiable intangible assets to determine whether current events
or circumstances warrant adjustments to such carrying amounts. If an impairment
adjustment is deemed necessary, such loss is measured by the amount that the
carrying value of such assets exceeds their fair value. Considerable management
judgment is necessary to estimate the fair value of assets. Accordingly, actual
results could vary significantly from such estimates. Assets to be disposed of
are carried at the lower of their financial statement carrying amount or fair
value less costs to sell.

  (f) Financial Instruments

     The Company has entered into fixed interest rate exchange agreements
("Interest Rate Swaps") which are used to manage interest rate risk arising from
its financial liabilities. Such Interest Rate Swaps are accounted for as a
hedge; accordingly, amounts receivable or payable under the Interest Rate Swaps
are recognized as adjustments to interest expense. These instruments are not
used for trading purposes.

     The Financial Accounting Standards Board recently issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"), which is effective for all fiscal years
beginning after June 15, 2000. SFAS 133 establishes accounting and reporting
standards for derivative instruments and hedging activities by requiring that
all derivative instruments be reported as assets or liabilities and measured at
their fair values. Under SFAS 133, changes in the fair values of derivative
instruments are recognized immediately in earnings unless those instruments
qualify as hedges of the (1) fair values of existing assets, liabilities, or
firm commitments, (2) variability of cash flows of forecasted transactions, or
(3) foreign currency exposures of net investments in foreign operations.
Although management has not completed its assessment of the impact of SFAS 133
on its combined results of operations and financial position, management
estimates that the impact of SFAS 133 will not be material.

  (g) Income Taxes

     The majority of BCG's net assets were historically held in partnerships. In
addition, BCG has been formed as a limited liability company, to be treated for
tax purposes as a flow-through entity. Accordingly, no provision has been made
for income tax expense or benefit in the accompanying combined financial
statements as the earnings or losses of Bresnan Communications Group LLC will be
reported in the respective tax returns of BCG's members. (See Note 5, Income
Taxes).

                                       F-49
   116
                        BRESNAN COMMUNICATIONS GROUP LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  (h) Revenue Recognition

     Cable revenue for customer fees, equipment rental, advertising,
pay-per-view programming and revenue sharing agreements is recognized in the
period that services are delivered. Installation revenue is recognized in the
period the installation services are provided to the extent of direct selling
and installation costs. Any remaining amount is deferred and recognized over the
estimated average period that customers are expected to remain connected to the
cable distribution system.

  (i) Statement of Cash Flows

     Except for acquisition transactions described in Note 3, transactions
effected through Members' equity (deficit) have been considered constructive
cash receipts and payments for purposes of the statement of cash flows.

  (j) Advertising Costs

     All advertising costs are expensed as incurred.

  (k) Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.

  (l) Recent Accounting Pronouncements

     In December 1999 the SEC released Staff Accounting Bulletin ("SAB") No.
101, "Revenue Recognition in Financial Statements," which provides guidance on
the recognition, presentation and disclosure of revenue in financial statements
filed with the SEC. Subsequently, the SEC released SAB 101A, which delayed the
implementation date of SAB 101 for registrants with fiscal years beginning
between December 16, 1999 and March 15, 2000. The Company has not yet assessed
the impact, if any, that SAB 101 might have on its financial position or results
of operations.

(3) ACQUISITIONS AND SYSTEM DISPOSITIONS

     In 1999, BCG acquired three cable systems that were accounted for under the
purchase method. The purchase prices were allocated to the assets acquired in
relation to their fair values as increases to property and equipment of $24,098
and franchise costs of $54,582. In connection with two of the acquisitions, the
aforementioned third party intermediary disbursed $46,999 of cash to complete
the reinvestment in certain identified assets for income tax purposes.

     Also, in 1999, BCG disposed of cable systems for gross proceeds of $4,956,
which resulted in a gain of $556.

     In 2000, BCG purchased two cable systems for a total of $36,177. The
purchase prices were allocated to the assets acquired in relation to their fair
values as increase to property and equipment of $8,581 and franchise costs of
$27,596.

     The results of operations of these cable television systems have been
included in the accompanying combined statements of operations from their dates
of acquisition or their disposition, as applicable. Pro forma information on the
acquisitions and dispositions has not been presented because the effects were
not significant.

                                       F-50
   117
                        BRESNAN COMMUNICATIONS GROUP LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(4) DEBT

     Debt is summarized for December 31, 1999 and February 14, 2000 as follows:



                                                                1999         2000
                                                              ---------    ---------
                                                              (AMOUNTS IN THOUSANDS)
                                                                     
Senior Credit Facility(a)...................................  $534,200     $599,900
Senior Notes Payable(b).....................................   170,000      170,000
Senior Discount Notes Payable(b)............................   190,132      192,222
Other debt..................................................     1,275        1,170
                                                              --------     --------
                                                              $895,607     $963,292
                                                              ========     ========


---------------

(a) The Senior Credit Facility represents borrowings under a $650,000 senior
    reducing revolving credit and term loan facility as documented in the loan
    agreement as of February 2, 1999. The Senior Credit Facility has a current
    available commitment of $650,000 of which $599,900 is outstanding at
    February 14, 2000. The Senior Credit Facility provides for three tranches, a
    revolving loan tranche for $150,000 (the "Revolving Loan"), a term loan
    tranche of $328,000 (the "A Term Loan" and together with the Revolving Loan,
    "Facility A") and a term loan tranche of $172,000 (the "Facility B").

    The commitments under the Senior Credit Facility will reduce commencing with
    the quarter ending March 31, 2002. Facility A permanently reduces in
    quarterly amounts ranging from 2.5% to 7.5% of the Facility A amount
    starting March 31, 2002 and matures approximately eight and one half years
    after February 2, 1999. Facility B is also to be repaid in quarterly
    installments of .25% of the Facility B amount beginning in March 2002 and
    matures approximately nine years after February 2, 1999, on which date all
    remaining amounts of Facility B will be due and payable. Additional
    reductions of the Senior Credit Facility will also be required upon certain
    asset sales, subject to the right of the Company and its subsidiaries to
    reinvest asset sale proceeds under certain circumstances. The interest rate
    options include a LIBOR option and a Prime Rate option plus applicable
    margin rates based on the Company's total leverage ratio, as defined. The
    rate applicable to balances outstanding at February 14, 2000 ranged from
    7.28% to 8.50%. Covenants of the Senior Credit Facility require, among other
    conditions, the maintenance of specific levels of the ratio of cash flows to
    future debt and interest expense and certain limitations on additional
    investments, indebtedness, capital expenditures, asset sales and affiliate
    transactions. In addition, the Company is required to pay a commitment fee
    on the unused revolver portion of Facility A which will accrue at a rate
    ranging from .25% to .375% per annum, depending on the Company's total
    leverage ratio, as defined.

(b) On February 2, 1999, the Company issued $170,000 aggregate principal amount
    senior notes payable (the "Senior Notes"). In addition, on the same date,
    the Company issued $275,000 aggregate principal amount at maturity of senior
    discount notes, (the "Senior Discount Notes") for approximately $175,021
    gross proceeds (collectively the "Notes").

    The Senior Notes are unsecured and will mature on February 1, 2009. The
    Senior Notes bear interest at 8% per annum payable semi-annually on February
    1 and August 1 of each year, commencing August 1, 1999.

    The Senior Discount Notes are unsecured and will mature on February 1, 2009.
    The Senior Discount Notes were issued at a discount to their aggregate
    principal amount at maturity and will accrete at a rate of approximately
    9.25% per annum, compounded semi-annually, to an aggregate principal amount
    of $275,000 on February 1, 2004. Subsequent to February 1, 2004, the Senior
    Discount Notes will bear interest at a rate of 9.25% per annum payable
    semi-annually in arrears on February 1 and August 1 of each year, commencing
    August 1, 2004.

                                       F-51
   118
                        BRESNAN COMMUNICATIONS GROUP LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

    The Company may elect, upon not less than 60 days prior notice, to commence
    the accrual of interest on all outstanding Senior Discount Notes on or after
    February 1, 2002, in which case the outstanding principal amount at maturity
    of each Senior Discount Note will on such commencement date be reduced to
    the accreted value of such Senior Discount Note as of such date and interest
    shall be payable with respect to the Senior Discount Notes on each February
    and August 1 thereafter.

    The Company may not redeem the Notes prior to February 1, 2004 except that
    prior to February 1, 2002, the Company may redeem up to 35% of the Senior
    Notes and Senior Discount Notes at redemption prices equal to 108% and
    109.25% of the applicable principal amount and accreted value, respectively,
    with proceeds of an equity offering. Subsequent to February 1, 2004, the
    Company may redeem the Notes at redemption prices declining annually from
    approximately 104% of the principal amount or accreted value.

    Bresnan Communications Group LLC and its wholly owned subsidiary Bresnan
    Capital Corporation are the sole obligors of the Senior Notes and Senior
    Discount Notes. Bresnan Communications Group LLC has no other assets or
    liabilities other than its investment in its wholly owned subsidiary Bresnan
    Telecommunications Company LLC. Bresnan Capital Corporation has no other
    assets or liabilities.

    Upon change of control of the Company, the holders of the notes have the
    right to require the Company to purchase the outstanding notes at a price
    equal to 101% of the principal amount or accreted value plus accrued and
    unpaid interest. (See Note 8 "Sale of the Company"). Subsequent to the
    period end, the Senior Notes and Senior Discount Notes were repaid by the
    Company at a price equal to 101% of the principal amount or accreted value
    plus accrued and unpaid interest.

    The Company entered into interest rate swap agreements to effectively fix or
    set maximum interest rates on a portion of its floating rate long-term debt.
    The Company is exposed to credit loss in the event of nonperformance by the
    counterparties to the interest rate swap agreements.

    At February 14, 2000, such interest rate swap agreements effectively fixed
    or set a maximum LIBOR base interest rates between 8.0% and 8.02% on an
    aggregate notional principal amount of $50,000, which rates would become
    effective upon the occurrence of certain events. The effect of the interest
    rate swap on interest expense for the period ended February 14, 2000 was not
    significant. The expiration dates of the interest rate swaps ranges from
    April 1, 2000 to April 3, 2000. The difference between the fair market value
    and book value of long-term debt and the interest rate swaps at December 31,
    1999 and February 14, 2000 is not significant.

(5) INCOME TAXES

     Taxable earnings differ from those reported in the accompanying
consolidated statements of operations due primarily to differences in
depreciation and amortization methods and estimated useful lives under
regulations prescribed by the Internal Revenue Service. At February 14, 2000,
the financial statement carrying amount of the Company's assets exceeded its tax
basis by approximately $396 million.

(6) TRANSACTIONS WITH RELATED PARTIES

     BCG and its predecessor purchased, at TCI's cost, substantially all of its
pay television and other programming from affiliates of TCI. Charges for such
programming were $62,502 and $8,535 for the year ended December 31, 1999 and the
period ended February 14, 2000, respectively, and are included in programming
expenses in the accompanying consolidated financial statements.

     Prior to February 2, 1999, certain affiliates of the partners of BCCLP
provided administrative services to BCG and assumed managerial responsibility of
BCG's cable television system operations and construction. As compensation for
these services, BCG paid a monthly fee calculated pursuant to certain agreed
upon formulas. Subsequent to the TCI Transaction on February 2, 1999, certain
affiliates of a partner of BCCLP provide

                                       F-52
   119
                        BRESNAN COMMUNICATIONS GROUP LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

administrative services and have assumed managerial responsibilities of BCG. As
compensation for these services BCG pays a quarterly fee equal to approximately
3% of gross revenues. Such aggregate charges totaled $10,498 and $1,389 and have
been included in selling, general and administrative expenses for year ended
December 31, 1999 and the period ended February 14, 2000, respectively.

(7) COMMITMENTS AND CONTINGENCIES

     The Cable Television Consumer Protection and Competition Act of 1992 (the
"1992 Cable Act") imposed certain rate regulations on the cable television
industry. Under the 1992 Cable Act, all cable systems are subject to rate
regulation, unless they face "effective competition," as defined by the 1992
Cable Act and expanded in the Telecommunications Act of 1996 (the "1996 Act"),
in their local franchise area.

     Although the Federal Communications Commission (the "FCC") has established
regulations required by the 1992 Cable Act, local government units (commonly
referred to as local franchising authorities) are primarily responsible for
administering the regulation of a cable system's basic service tier ("BST"). The
FCC itself directly administered rate regulation of any cable programming
service tier ("CPST"). The FCC's authority to regulate CPST rates expired on
March 31, 1999. The FCC has taken the position that it will still adjudicate
CPST complaints filed after this sunset date (but no later than 180 days after
the last CPST rate increase imposed prior to March 31, 1999), and will strictly
limit its review (and possible refund orders) to the time period predating the
sunset date.

     Under the FCC's rate regulations, most cable systems were required to
reduce their BST and CPST rates in 1993 and 1994, and have since had their rate
increases governed by a complicated price structure that allows for the recovery
of inflation and certain associated costs, as well as providing some incentive
for expanding channel carriage. Operators also have the opportunity to bypass
this "benchmark" regulatory structure in favor of the traditional
"cost-of-service" regulation in cases where the latter methodology appears
favorable. Premium cable service offered on a per-channel or per-program basis
remain unregulated, as do affirmatively marketed packages consisting entirely of
new programming product.

     The management of BCG believes that it has complied in all material
respects with the provisions of the 1992 Cable Act and the 1996 Act, including
its rate setting provisions. If, as a result of the review process, a system
cannot substantiate its rates, it could be required to retroactively reduce its
rates to the appropriate benchmark and refund the excess portion of rates
received. Any refunds of the excess portion of CPST rates would be retroactive
to the date of complaint. Any refunds of the excess portion of BST or equipment
rates would be retroactive to one year prior to the implementation of the rate
reductions.

     Certain plaintiffs have filed or threatened separate class action
complaints against certain of the systems of BCG, alleging that the systems'
practice of assessing an administrative fee to the subscribers whose payments
are delinquent constitutes an invalid liquidated damage provision and a breach
of contract, and violates local consumer protection statutes. Plaintiffs seek
recovery of all late fees paid to the subject systems as a class purporting to
consist of all subscribers who were assessed such fees during the applicable
limitation period, plus attorney fees and costs.

     BCG has additional contingent liabilities related to legal proceedings and
other matters arising in the ordinary course of business. Although it is
possible that BCG may incur losses upon conclusion of these matters and the
matters referred to above, an estimate of any loss or range of loss cannot
presently be made. Based upon the facts available, management believes that,
although no assurance can be given as to the outcome of these actions, the
ultimate disposition should not have material adverse effect upon the combined
financial condition of BCG.

     The Company entered into a letter of intent with a cable operator pursuant
to which the Company acquires a small cable television system in Minnesota. The
transaction would result in a net cost of approximately $13,000 and will be
funded by cash flow from operations and additional borrowings.

                                       F-53
   120
                        BRESNAN COMMUNICATIONS GROUP LLC

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     BCG leases business offices, has entered into pole attachment agreements
and uses certain equipment under lease arrangements. Rental expense under such
arrangements amounted to $3,547 and $405 during the year ended December 31, 1999
and the period ended February 14, 2000, respectively.

     Future minimum lease payments under noncancelable operating leases are
estimated to approximate $2,240 per year for each of the next five years.

     It is expected that, in the normal course of business, expiring leases will
be renewed or replaced by leases on the same or similar properties.

(8) SALE OF THE COMPANY

     In June 1999, the Partners of BCCLP entered into an agreement to sell all
of their partnership interests in BCCLP to Charter Communications Holding
Company, LLC for a purchase price of approximately $3.1 billion in cash and
equity instruments of Charter and its subsidiaries (including the Company) which
will be reduced by the assumption of BCCLP's debt at closing. In conjunction
with the sale of the partnership interests, Charter assumed the Company's
outstanding indebtedness under the Senior Credit Facility (See Note 4, Debt.)
The accompanying financial statements do not reflect the effect of the
adjustments, if any, resulting from the sale of the partnership's interests on
February 14, 2000.

                                       F-54